Your Salary Is Not Enough: Get a Used Car Loan

When you first started earning your own cash, you had the power to buy anything you wanted. You probably shopped for gadgets or clothes, or even bought a new pair of shoes you have been eyeing for a month. Sooner or later, you would probably start thinking of buying something more useful, yet expensive, like a car. Buying a car, however, would not be possible only through your salary. Applying for a loan, such as a used car loan, would be your best option.

It is a fact that not everyone has enough money to buy a car with their salary alone. To buy one, it is either they have another source of income or have saved up all their lives. There is another way though, through a new or used car loan. People would likely prefer to buy a brand new car than a used one; however, because of the current situation, selecting a used car is a wise and practical decision.

Used auto loans in a nutshell

Availing used car loans gives people a chance to purchase a car without being harassed of high interest rates and installment fees compared to applying for a new car loan. It is suitable for people who are on a tight budget but are responsible enough to pay their debts. When buying a car, you have to be realistic about what you can afford or not. Used auto loans are secure ways of purchasing a car you need despite the low salary or budget.

Auto loan process online

Go online and you will find many auto loan dealerships which offer new and used auto loans, auto loans for people with bad credit, or refinance car loan. Finding a lender online is convenient and fast because you can compare rates from various lenders by asking for free quotes on their rates. This will help you find great terms and deals you can work with. Once you have found a reliable company, fill out their secured application form with your details to assess your request.

These online companies usually take a few hours to a few days to assess your application. This method is rather fast compared to traditional process of car loans you get from banks and credit unions. Some companies can even get you approved of a loan within minutes. After getting approved, you can choose the car you want depending on the limitations set for you and soon enough, you will be driving your own car.

Refinancing your loan

Some people do not know the purpose of refinancing your auto loan. Whether it is a new or used automobile loan, people can have their loans refinanced after a few months to get even lower interest rates. A refinance auto loan can help you proactively make efforts to lower your monthly payments and save more money during the life of your loan.

Used car loans can help you save the car you want and need without fasting every day saving up for it. You can conveniently manage your money without neglecting your own needs. Find a company which offers auto loans online where the loan process is easier, faster, and more convenient.

Terms Used With Car Finance and Bad Credit Car Loans

The terms used with car finance and bad credit car loans can be confusing, so here are some of these and an explanation of what they mean. After reading this, terms such as balloons, auto equity and debt to income ratio will never confuse you again. Learn their language so you can speak to them on equal terms.

APR

The Annual Percentage Rate, or the true interest rate charged for a loan over a year – whether regular car finance or a bad credit loan.

Auto Equity Loan

When you purchase a car you normally get the papers or title to the vehicle. However, with many bad credit car loans, the lender gets the title in return for the cash to enable you to pay for it. You get the title once you have repaid the loan. This way, if you default on your payments, the lender keeps the car and can sell it to use the equity on the car to repay the loan. If there is any cash left after the sale, then you might be given this.

Balloon Payment

If you believe that you will have more money available close to the end of the loan period, you can arrange a balloon payment. Your monthly repayments will be less, and you make the final lump sum payment when it is due. Balloon payments are useful when you have an insurance maturing at the end of the period, or expect to have been able to save up a lump sum to make the final payment.

Debt to Income Ratio (DTI)

This is the ratio of a borrower’s total debt as a percentage of their total income. Some lenders set a maximum DTI above which you cannot borrow any more money – 36% is an average figure. Include all other debts you have, not just your car loan.

Depreciation

The depreciation is the amount by which your vehicle loses value with age, wear and tear. The same term applies to the value of money, and while the value of your car depreciates, the value of your dollar can also depreciate. Fundamentally, the resale value of your car will depreciate every calendar year, most depreciation taking place between being completely new and having been used.

Equal Credit Opportunity Act (ECOA)

This is a federal act by which all creditors must make credit equally available to all buyers irrespective of race, color, religion, national origin, gender or age. However, lenders are not obliged to offer credit if they believe it may not be repaid, so not everybody is entitled to bad credit car loans – or even to car finance of any kind if the lender has valid reasons not to offer it.

Equity

Equity is the difference between the resale value of a property (e.g. your car) and what you still owe on it. So if your car has a resale value of $5,000 and you still owe $3,000 to the lender, your equity is $2,000. This is known as positive equity. Negative equity is as this example but you still owe $5,001!

Gross Monthly Income

Your total monthly income before any deductions. Deductions include tax, child support, insurance, etc. Net monthly income is your income left after such deductions.

Lease

An alternative to buying a vehicle. If you lease a car, you fundamentally rent it, while the owner retains title to it. A lease is generally taken over a much longer period than a rental – many leases run for years.

Loan-To-Value Ratio

Also known as LTV, this ratio is the percentage of difference between a loan amount and a vehicles value. If your car finance is for $5,000 and the value of the car is $10,000, then the LTV is 50%. The loan is 50% of the value of the vehicle.

Monroney Sticker

This is a price sticker required on all new vehicles by federal law. The sticker lists all the options connected with the car together with the manufacturer’s suggested retail price (MRSP.) The MRSP can change if options are different between models or offers.

Payment to Income Ratio

The PTI is a figure stated by a lender that defines the maximum car loan the lender is prepared to offer based on the applicant’s income. This helps to avoid borrowers overextending themselves and being unable to make the monthly repayments. Current averages range from 10% to 15%.

Pink Slip

The Pink Slip is the title for the vehicle, and should be provided to each buyer of that vehicle down the line – just like the title deed for real estate property.

Term

This is the period of the loan from beginning to end, from the time the loan has been granted until it is due to be paid off in full.

Title Loan

Like the Auto Equity Loan, the car is the security for the loan, and the lender keeps the title for the vehicle until the loan has been repaid. This is a common arrangement for bad credit car loans.

Truth-in-Lending

This is a federal law that requires every lender to state the correct annual percentage rate (APR) to borrowers when purchasing a vehicle, whether this is a regular or bad credit car loan.

There are others, although these are the more important of the common terms you will come across when seeking car finance – whether regular car finance or bad credit car loans.

Car Loan – An Easy Access To Finance For Owning Dream Car

Owning a car of your dream is a reality these days. This is thanks mainly to car loan that is made available to each and every aspirant wishing to have a car of his own. The lenders have kept terms-conditions of car loans attractive for winning as many customers as possible in a tough car loan market, making the loan even easier to access. As per your requirements and as suits to your pocket, car loan is there for asking to buy either a new car or a used one. But before making a deal, it would be wise to have a close look of what is happening in car loan markets and what are basic aspects that one must be aware of in taking car loan.

One of the attractive feature of every car loan is that you do not have to look for a collateral is secured car loan is your option. it may be more beneficial if you can place any of your valuable assets like home as collateral with the lender. But if you do not like to risk home for the fear of its repossession, then the very car you intend to buy can easily secure the loan. all you have to do is to hand over the deal papers of the car to the lender who will return them after you have paid back the loan completely. In the meantime you can continue driving your car. But in case of payment default, you would be losing car to the lender.

Secured car loan have this advantage of lower interest rates and if your home secures the loan, the rate of interest goes down. The loan amount depends on equity in collateral like home or the price of the car. While you drive the car, the burden of the loan is lesser as the car loan can be repaid in 5 to 30 years. Larger repayment duration means you can reduced monthly payment towards installments.

Tenants or non-homeowners however can opt for unsecured car loan. Unsecured car loan comes without the clause of collateral, making the loan a completely risk free affair for the car owner. As there are risks for the lender, unsecured car loan come at higher interest rate making it costlier for the borrower. Unsecured car loan is solely offered on the basis of financial standing of tenants or non-homeowner. Income and employment documents are required from the borrower for ensuring safe return of the loan. you will be approved smaller amount for a shorter repayment duration as unsecured car loan.

Do not worry about bad credit. In case of secured car loan, as lenders have the borrower’s property as security, bad credit does not matters much to the lenders. For unsecured car loan however income and employment documents are must for showing to the lender. But bad credit borrowers will be approved the car loan at higher interest rate. At the same time one should note that if car loan installments are regularly cleared, the borrower’s credit score goes higher and loan availing in future becomes easier.

Buy a car from a reliable car dealer and check it for mechanical defects and quality. Compare different car loan providers who have showcased car loan interest rates and terms-conditions on websites. Apply to the suitable lender online for a fast processing and approval of car loan. Make sure to pay off loan installments in time for escaping debts.