DATE: 26 Sep 2007, 1:44 pm / MOOD: Other

Everyday many people resort to car dealership financing in order to purchase a car. What not everybody knows is that car dealerships offer financing at excessively high interest rates and that there are other financial alternatives that can provide the funds needed for purchasing a car at more reasonable costs.

There are traditional banks and lenders offering car loans and non traditional lenders too offering car loans for people with bad credit or financial difficulties. Thus anyone seeking finance to purchase a car can get approved with significantly lower costs than financing with a car dealership the purchase of the vehicle.

Car Dealership Financing’s Drawbacks
Financing through a car dealership can be extremely expensive. The interest rate charge by dealerships is almost doubling the interest rate charged by traditional lenders. These high prices are due to the fact that when you resort to car dealerships for financing there is a third party that provides the funds. Thus you are paying for the services of two roles: The actual lender and the intermediary.

Besides, car dealerships only offer financing for the cars that they sell. Thus, your options as regards to brands and models are limited. And if you happen to find a private lender offering for sale the car of your dreams at a very advantageous price, you can never resort to a car dealership in order to get the funds for purchasing the car.

Traditional Lenders and Banks
Banks and traditional lenders offer finance for car purchases at very reasonable rates. Car loans are secured loans and thus carry low interest rates compared to personal loans that are unsecured. However, in order to get approved you need to show proof of a clean credit report and a steady income that will let you afford the monthly payments.

A car loan offered by a traditional lender will let you purchase any car you want and also if you visit car dealerships after getting approved for a car loan you can always bargain the price of the cars with the dealer and have more options as to the brand and model of the car that you’ll purchase.

Non Traditional Lenders
Car loans offered by non traditional lenders provide financing for those with irregular credit and income situations. You need to always show proof of a suitable income, but you don’t need to prove that you’ve been in the same job for many years or that your wage is deposited into your bank account.

Besides, the credit requirements are relaxed and anyone can get approved for a car loan as long as there are no mayor delinquencies in their recent credit history. Someone with bad credit, no credit at all or even a past bankruptcy on his credit report can obtain car loan financing through these non traditional lenders.

Where to Find Them?
The best way to obtain finance through a non traditional car loan lender is to seek lenders online. You can do a quick search for bad credit car loans online and you’ll find many online lenders willing to offer you finance regardless of your credit.

You may have to face slightly higher rates but the monthly payments are always affordable enough so any budgets with a regular income can meet them without sacrifices.
 

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DATE: 26 Sep 2007, 1:40 pm / MOOD: Other

Debt consolidation can save you from debt problems, can improve your credit score and save you thousands of dollars. However, not all debt can be consolidated and given that there are different consolidation programs you should check if the one you chose or the one that the agent chose for you is really to your advantage.

There are many reasons why debt consolidation may not be the right solution for you. Debt consolidation cannot solve debt problems for all kind of debts. Debt consolidation may be too expensive if debt has already affected your credit and you don’t have collateral. And certain debt consolidation programs may be nothing but scams. Thus, you need to be well aware of what you are getting into.

Debt Not To Be Consolidated

For starters, you should understand than not all debt is suitable to be consolidated. The reasons for this are varied. Most subsidized loans already carry very low interest rates and thus, it makes no sense to consolidate those loans by using a more expensive loan. This is always true, unless of course what you need is to reduce the monthly payments by extending the loan repayment period.

There are many subsidized loans. Government loans for students, private loans for students, government loans for first time home buyers, government loans for starting businesses, government loans for research disciplines, etc. are just a few examples of subsidized loans that are not suitable for consolidation.

There are loans that being secured are not suitable for consolidation. Though refinancing can be a form of consolidation if other loans and debt are repaid with the exceeding cash obtained from a cash-out refinance loan, truth is that very seldom a home loan or home equity loan is included in a debt consolidation program.

Debt Suitable For Consolidation

Generally speaking only debt which is unsecured in nature and secured debt taken when your credit score was low (bad credit debt) is suitable for debt consolidation. The latter will be suitable only if your credit score has improved or if you can provide better collateral and thus obtain a more competitive interest rate.

Examples of unsecured debt are: unsecured personal loans and personal lines of credit, credit card debt, store card debt, pay day loans, cash advance loans, certain student debt, bank account overdraw agreements, bank pre-approved personal loans. All of these can be consolidated into a single loan or the terms negotiated by a debt consolidation agent.

Debt consolidation in the form of a loan carries the advantage of obtaining a single and lower monthly payment that will simplify your budget while you work on your expenses. Debt consolidation in the form of negotiation is also an excellent tool that can provide a solution by reducing rates, eliminating debt generated by interests or extending the repayment programs so as to make debt more affordable.

And finally, both methods can be combined offering an excellent way of eliminating debt, managing finances and improving credit score in the same debt consolidation program. 

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DATE: 26 Sep 2007, 1:37 pm / MOOD: Other

Home equity lines of credit can provide you with all the financing and flexibility your new business project requires to start growing. All the initial steps for starting your own business can easily be financed with the funds obtained from a home equity line of credit and the flexibility for repayment will provide you with the ease you need to concentrate specifically on your business instead on repaying the loan.

The characteristics of home equity lines of credit are perfect for this purpose. In this article we will analyze the concepts of home equity and home equity lines of credit and explain why these particular lines of credit are perfect tools for starting new businesses and what the benefits that these financial products provide are.

Defining Equity

Equity is the difference between the current value of your property and any pecuniary obligations that it is guaranteeing. These obligations can be liens, mortgages, etc. The amount of available equity is obtained by subtracting the amount of the outstanding obligations to the valuation price of the property.

Thus, if you own a property that is worth $120,000 and your current mortgage balance is around $70,000 that means that you still have $50,000 of available equity on your home that you can use for obtaining a loan or line of credit and use it for any purpose you can think of. Following we will analyze home equity lines of credit for starting businesses.

Lines Of Credit for Businesses

Lines of credit are revolving sources of funds that can provide you with all the finance you need for starting a business if they are based on sufficient equity. The idea is that you are granted credit up to a certain amount limit which is guaranteed with your home equity. In the above example you would count with up to $50,000 on your line of credit to start your own business.

There is no need for you to withdraw the whole amount and as long as you don’t request money, the line of credit won’t generate interests. You’ll only have to pay a small maintenance fee. Moreover, say you withdraw $10,000, the interest rate will only be charged over that $10,000.

Once you repay the amount, it will stop generating interests and you can withdraw that amount or any amount up to the credit limit whenever you want.

As regards repayment, it is also very simple. You will only be required to repay a minimum amount every month, just like with credit cards. This minimum almost always consists on the interests and sometimes a small portion of the principal. This provides you with a lot of flexibility.

When starting a business you can’t be suffering pressure from lenders because you need to concentrate on generating income rather than repaying a loan. Thus, home equity lines of credit provide you with all the finance you need and don’t asphyxiate your business with high monthly payments.

Once your running business generates enough income for you to cope with higher payments, you can start repaying the principal at your best convenience.

Moreover, you can easily fix the interest rate (that is otherwise always variable) and turn the home equity line of credit into a home equity loan.
 

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