Posts from the ‘Refinancing’ Category

Lending rates will go higher

It was due to recession, when Federal Reserve had lowered interest rates to help borrowers pay back their debts at low cost. However, with the improvement in economy, the lending rates are expected to increase. The cost of borrowing was quite low for the past many months due to the adverse effects of recession on American’s life.

Auto loans in March averaged about 4.4%, which was much lower than the 7.3% average back in March 2007, according to Edmunds.com, an automotive website. The lending rates will remain low for a quite a while as demand for auto loans is much lower than its supply. However, the interest rates will not remain low forever. It will increase with the improvement in market.

“When recession was at its peak, it was easier for us to negotiate loan terms with banks and other financial institutions/ lenders”. “It was easier to convince them that people are unable to pay their installments/ EMIs due to loss of job, income cuts, etc. However, with the rise in economy, people are getting their jobs back and banks can be rigid in changes the terms of loans. Hence, I advise to the people who require loan modification services to hurry up and sign up instantly for modification service. Recession recovery will take this full year.

Lenders hate wasting more time and money on “bad” deals and prefer to get constructive proposals that make sense. Hence, negotiation and renegotiation becomes easier, especially at times of recession. We understand the things people have been through during this difficult phase of recession hit economy. This is the reason why we commit ourselves to provide the best deal for you by lowering your monthly auto payments.

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Biggest Mistake By New Car Buyers

When a person thinks of buying a car, the first thing they consider is about the price of the car, and then the make, the brand, the specs and then goes on to the dream about the time they spend with their dates! But, not the most important thing they should know.

Most of our people know about their blood group, blood pressure and cholesterol level, though it is good news! But, only a very few people know their own credit score! And this is not a good news. It could be a good news for credit consultant like us, but it is not good for the general public and the real and biggest “beneficiary” would be the lender who claims higher interest from the consumers.

Credit score is the most vital thing that one should know when they think of purchasing a car. And it not just for the cars, but for purchasing every property, which involves installment and interest rates, because, it “CONTROLS the interest rate DIRECTLY” that they are going to pay on their loan.

The other mistake or a sequel of the previous mistake is that they go to the dealer directly without knowing their credit report and give them their checkbook even. A car dealer should never know more about your credit & credit history or any of your property details than you. It should be only you and not other should know about your personal property details.

“However there is one good thing about this recent recession is that it has created some awareness to many of our people that there is something called as Credit Score and is very important to purchase a loan. But it is always better to check and maintain the level of your credit score and avoid credit consultants like us. Else…”.

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Auto Finance: Banks Dominate the Lenders

In the recent past it is obvious that there has been a dip in the automobile sales but, even in this credit crisis of 2008 it is the Banks and the credit unions that have got some relatively good business comparing others.

Bank and the credit unions got their shares of outstanding loans increased comparing the independent finance companies. There is two possibilities for this, one could be the independent finance companies fear that the probability that the money lost through default will be too expensive than a loss of business. The second chance could be the over all drop resulting in frozen credit market and hence banks might be safe for both consumer and the dealer. Also banks & credit unions had (have) better liquidity than other lenders.

Banks increased their portfolio of $236 billion or 2.7% for outstanding automobile loan, at the same time credit unions have increased to $149 billion or 1.2% for the same. Recent record also shows that Chase Finance holds the top slot sending Toyota down followed by Wachovia, sending Honda & GM to lower spot.

Both these lenders (banks\unions and dealers) they give prime importance to the credit history of the customers, and it is very important to take care of it and is always advisable to consult an expert if any one suspects their credit score is low.

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Refinancing Commercial Vehicles

Unlike personal vehicle commercial vehicles are more important to its owner. The reason is, the vehicle is not just a medium of transport for them, it is their medium of income. In their balance sheet, it should not be considered as an expense but as an investment. But in this current economy these commercial automobile has shifted its side, it has become an expense since the return through them is not as it was initially. Now they are liable to pay the lender the same way they paid earlier. This will affect their balance sheet seriously. They are not just liable for the lender but also to the stake holders.

Since the commercial vehicles are operating more frequently than a personal automobile its depreciation too is relatively higher. This means these vehicles become old soon. Older the vehicle tougher it is to resell. Tougher is the resale, lesser is the chance for the lender to repossess which implies that a lender will have a little interest in letting the vehicle owner to run it for a long period. Instead the lender may try different (Harsh!) method to get the money he is supposed to get. Combining all these points together, it is important for the automobile owner to take care of both, his stake holder & his lender.

Since most of the commercial vehicle owners go for a comfortable sedans or limousines or RVs, they have to pay a ransom. And since this comes at a huge cost, their monthly installment would be high. Interest rate too would be high for a reason that it is commercial as well as luxury too. So it is very important for the owner to consider auto loan modification.

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Auto Refinance – Is it Really Good?

When it comes to going in for auto refinancing or loan modification, people are bit suspicious about loan modification companies. So it is important to clarify such a thought of people, particularly for an average American. He must not miss an important step in ensuring his financial stability. The biggest dilemma for those people is whether they refinance the car and save money or just reduce their monthly payment by extending the length of the loan. The answer is, ‘it depends on the customer and the financial advisor’.

It is important to understand that a great instrument like auto loan modification is viewed recklessly with a myopic sight. Primarily, refinancing is officially transferring the ownership of the vehicle’s tile. However this is possible only if you are still paying your car loan, else you can’t refinance it.

You can go for refinancing even if the credit score increases just by fifty points. Similarly, in a situation where, if the interest rate was high at the time the vehicle is purchased and now if it got reduced then too, refinancing is a best option. In other words, if the interest rate is lower than the current interest rate and if it would reduce the annual interest rate by just 1%, then too refinancing is a correct option.

The process of refinancing too is not complicated either; car loan modification companies like auto relief group are just a mediator, advisor or a negotiator in making the deal successful for the consumer. But, it is important to have a good company in preceding such process.

There is another loan modification strategy, which is a bit complicated, if you can afford it. This is to obtain a lower interest rate which results in lower monthly payment, but maintaining the same amount paid earlier. That is if you pay $500 a month at rate of 10% it will take 48 months to complete it. But if the interest rate was reduced to 7.5% (Reduction of 2.5% from the original interest rate) and keep on paying $500 a month, there is a chance that it may take only 42 or 45 months to complete the loan. Thus, saving a handsome amount of money that has to be paid for 36 months. (Figures are assumptions).

There are plenty of ways to save money through auto loan modification, but it is important to choose which way suits the individual’s financial position. It is also important for an individual to go for a loan modifier since, people normally think about loan modification only if they suffer a financial crunch and it is not advisable to experiment your financial stability in such a situation.