Loan Payments « auto loan rates

August 16, 2010

An auto loan to improve credit?

rjon17469 asked:

I’m currently 22 and am a senior in college (although I’m going for one more year and then possibly grad school). I would like the possibility of being able to buy a house in two to three years, and therefore am looking for ways to improve my credit. I opened a credit card ~9 months ago with a $3,000 limit. Currently the limit on it is $4,500, all payments have been on time, and the balance is my previous month’s purchases (around $100).

In reading, many people recommend having either one or two revolving credit lines, and one or two fixed credit lines, for a total of three lines of credit. My credit card is one revolving credit line. I’m curious if taking out say a four year auto loan and making payments on time would substantially improve my credit score three years from now. The loan amount would likely be $7,000 to $8,000, giving monthly payments of around or under $200, which I can realistically afford. I’ve been paying my own college tuition and rent since the second semester of my freshman year of college, so I somewhat have of a grasp of my expenses.

On a side-note, I’m under the impression that I would be stuck with the interest rate I initially receive. I could refinance, but wouldn’t that close out the line of credit and begin a new line of credit, potentially lowering my score?

The follow-up questions are, would it be in my best interest to open a second credit card for additional feedback on my credit history? Also, I currently have a good amount of student loans, all of which are in deferment until I graduate (if I attend grad school, they will remain in deferment through that period). Do these loans count towards my credit score as fixed lines of credit? Some are federally-funded, while others are through private institutions.

For what it’s worth, Credit Karma reported my credit score at 722 as of a week ago, and TransUnion reported it at 764.

Delores

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August 1, 2010

Low Interest Auto Loans – Tips on How to Get the Lowest Rate Auto Loan Possible

Filed under: Finance — Tags: Acceptable Limits, Car Loans, Consistent Sources, Credit Card Accounts, Debt To Income Ratio, How To Manage Money, Installment Payments, Installments, Loan Arrangements, Loan Payments, Low Interest Auto Loans, Proven Track Record, Rate Of Interest, Steady Influx, Verifiable Income — @ 6:00 am

Bob Simmins asked:

There is a lot of competition these days to get your business. This is true with car loans as much as any other consumer effort. For some people, this can mean the ability to obtain low interest auto loans. However, not everyone will qualify for these highly competitive loan arrangements. Here are some indications that you are the ideal candidate for a car loan at a low rate of interest.

First, your credit rating must be impeccable. That means your credit report is clear of any negative reports, indicates that you are not behind on any payments on credit card accounts, and that you are generally living within your means. When creditors look at a credit report, what they want to see is a strong indication that the individual knows how to manage money, and has a proven track record of paying his or her bills on time.

Next, you must be able to demonstrate the presence of steady and consistent sources of income. This may be income earned from a job or your own home business, or some sort of steady influx of revenue such as stock dividends, spousal support, or proceeds from a trust fund. Along with being fiscally responsible, lenders who extend low interest auto loans want to make sure you do have incoming revenue that can reasonably be expected to go toward making those monthly installment payments.

Even if your past credit is excellent, but you currently have no means of paying the loan installments, you will be declined. Last, your debt to income ratio must be within acceptable limits. This means that the lender can look at the open items on your credit report, calculate your usual living expenses, and compare that figure to your verifiable income. If it appears you have enough net income to continue paying all your bills and also pick up the loan payments without creating a financial hardship, chances are you will qualify for one of the low interest auto loans. However, if your debt to income ratio places you very close to the edge, you may not be able to command the lowest rate available.

Carol

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June 11, 2010

Lowest Auto Loan Rate – Tips on How to Get Approved Fast!

Filed under: Finance — Tags: Auto Loan Rate, Auto Loans, Creditors, Due Diligence, Economic Situation, Finance, Interest Rate, Lenders, Loan Companies, Loan Payments, Loan Providers, Repossession, Risk, Secured Loans, Unsecured Loans — @ 3:48 am

Brian G Cooper asked:

In recent times due to the poor economic situation, quite a few creditors are accepting a lot of clients. In contrast to what you may think there is actually a improved possibility of getting approved for a loan now then ever. Loan providers realize times are tough right now, and as long as there’s a profit to be made they will be there.

Secured Or Unsecured

There are mainly two different types of loans, Secured and Unsecured auto loans. Secured loans have to have a form of collateral as a guarantee for the lender. This greatly reduces the interest rate charged when compared to unsecured auto loans. On the other hand, unsecured loans usually do not call for collateral driving away the risk of repossession. To be able to determine which of these solutions is the best available for you, you have to consider the danger involved with the transaction if you are using your own home as collateral and the funds you’d conserve in interests and get you the lowest auto loan rate.

Down Payments

Many loan companies have to have down payments in order to provide finance for the purchase of a car. Even so, there are numerous lenders on the market prepared to fund 100% of the vehicle value. Bare in mind though, that whenever you can raise some money and set it apart for a down payment, you can get a better offer as loan providers usually charge lower rates of interest once the candidate is capable of making a down payment since it shows that you are able to save money and so it’s more likely that you will be able to repay the loan without any problems. So remember do your due diligence and search for the lowest auto loan rate.

Wilma

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May 7, 2010

RV Loans vs. Home and Auto Loans

Filed under: Finance — Tags: Auto Financing, Auto Loans, Car Loans, Credit Card Payments, Debt To Income Ratio, Even Boats, Favorable Terms, Financing Home, Gross Income, Home Mortgages, Loan Approval, Loan Payments, Loan Value, Necessary Loan, Retail Value — @ 8:01 pm

Barry Wilder asked:

Most lenders who specialize in RV loans base their underwriting criteria on different factors than other loans, such as home mortgages and auto financing. Home and car loans are considered to be “necessities”, while RV loans are considered to be more of a “luxury” type loan.

Even though statistics show that RV loans have a lower default and late payment percentage; these same statistics show that most people, when strapped for cash, will pay their “necessary” loan payments first. Because of these statistics, lenders will normally implement more stringent underwriting guidelines for RVs and even boats.

The number one factor that impacts RV loan approval is Credit History. Most lenders will want a credit score of at least 640, but a score of 700 or better is more likely to obtain an approval at the best rate and most favorable terms.

The second factor considered is your Debt-to-Income ratio. This is basically your monthly revolving debt, (mortgage, auto and credit card payments) divided by your monthly gross income. Most RV and marine lenders look for a maximum debt-to-income ratio of approximately 45% or less, however some will go as high as 50% or more with excellent credit.

The third factor considered is the Loan Value of the RV. Each lender has their own formula for determining the amount they will loan on any particular RV. Most lenders will loan somewhere between wholesale and retail, depending on the previous factors listed above. Some will loan up to the RV’s retail value on refinancing. Again, the better the credit history, the more flexible the lenders are likely to be.

Other factors are considered when determining interest rate, such as the age of the RV and the total amount financed. The higher the loan amount, the lower the interest rate, with common break points commonly set at amounts such as: $25,000 – $50,000 – $100,000, etc. Also, the older the unit, the higher the interest rate, but this also varies.

Many online financing sources specialize in RV loans – and it’s your right as a consumer to find what is best for you. You should however be aware that each time you submit an application, your credit history may be pulled up from 1 to 2, or even more times. Each time a company accesses your credit report, it can result in 2, 3 or even 5 points deducted from your credit score. You should always avoid lenders or brokers who “shotgun” your application to numerous lenders.

Your online rate and lender shopping can be done by going to your favorite search engine and typing in search terms such as: “RV loans”, “motor home financing”, etc. Normally, approval takes only a day or two, with loan completion and funding in about a week. Loan documents are usually sent directly to your home or work.

The best policy is to check rates with different financing sources without enabling them to pull your credit report until you are relatively sure you have found the company you would like to work with. At that time you should submit your actual application.

Happy RV’ing.

Jesse

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