Posts from the ‘repossession’ Category

Qualifications for a loan modification

Americans who plan to purchase a vehicle and go for an auto loan  generally does not have enough income to buy a car at a shot. agree to pay monthly payments plus interest rate till the date when they pay all their installments. However, things don’t go as planned and people face a credit crunch due to which they are unable to make their payments which leads them to a situation wherein their car gets repossessed.

To the car from repossession, people for a loan modification. Applying for an auto loan modification is not simple. There are a set of qualifications which should match your situation to convince the loan modification service providers to conduct a loan modification procedure for you.

The borrower must be able to convince the loan modification company about their financial crisis and the causes for it. If suppose a person’s job is lost or he recently had a divorce, his financial condition might not be stable. Thus, this particular situations needs to be explained to loan modification service provider.

This also helps the modification companies to renegotiate the loan terms with the banks/ lenders. If the borrow is unable to explain his financial situation and the reasons behind the non-payment of installments then the loan modification companies might also reject the application. It is because they will not have an appropriate reason to convince banks to ignore repossession and lower the monthly payments.

It is always better to present your financial condition by revealing facts and figures. If you show numbers there is a higher chance of getting your loan modification application accepted. Collect all your bills and expenditures which happened in the months of non-payments of auto loan bills and take time to explain what exactly had happened.

Once the application for an auto loan modification is accepted by the modification service provider, do not expect it to be modified at a shot. Documentation process, negotiation with banks, etc take some time. Loan modification service provider takes anywhere between 3  to 5 weeks to complete the entire loan modification procedure. The borrower must have the patience to get their loan modified.

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Laws of Auto Repossession

Repossession is basically categorized in two types; voluntary and involuntary repossession. A voluntary repossession is a situation when the borrower decides to contact the lender/ bank that he is unable to make any further payments for the car loan.

The car is voluntarily handed over to the lender which saves the cost of repossession which if incurred will be borne by the borrower. On the other hand, involuntary repossession is a decision taken by the lender when borrower misses out on payments. The lender has the authority to repossess the vehicle after a single non-payment. Usually the lender will call up a repossessing company to tow the car from the borrower’s place and all expenses have to be paid by borrower. There is not much difference on the credit score for both types of repossession. It will ultimately lower the credit score of the borrower and will remain there for at least seven long years.

Following is the standard process for auto repossession:

  • In the first step, a lender sends a mail warning the borrower regarding the delayed payments. It does not always happen as there is no such law to send a warning mail before repossessing the vehicle. However, if the contract contains such terms then a mail will be sent.
  • A follow up call will be made to the warning.
  • The borrower then generally requests for grace period to make those delayed payments.
  • If still the payment has not been made, the borrower will once again receive a warning mail from the bank/ lender.
  • After this second warning, the car will be repossessed. It will be taken away from your office, home or where ever it is.
  • After repossession, the lender will send a document stating that the vehicle has been taken and what will be the procedure to get back the vehicle.
  • The borrower has to find ways to make payments. If he does find then he has to pay the delayed fees, repossession fees, towing charges, impound charges, storage fees and various other fees incurred by the company that repossessed the car.
  • If there is no way where borrower can pay the fees, then he loses the car completely. The lender then will have complete right over the vehicle and will search for a new buyer.
  • The borrower’s credit card report will be updated on account of the repossession of vehicle.

Some contract agreements allow the car owners to reclaim their vehicle even after repossession. For this, the borrower has to pay all the delayed installments/ payments with additional repossession fees and any other miscellaneous charges which may have occurred during the process of repossession of vehicle.

The repossessed vehicle will be under the lender and the borrower will have to pay monthly payments till the date it is sold. For example – if a car is repossessed in the month of March and gets sold by December, then the borrower or the previous owner of the vehicle has to make the payments for 9 months. Suppose, the lender is not able to pay this amount after repossession, it will be debited to his account after the vehicle has been sold. Also if the car is sold to another buyer at a price lower than the actual price, then the balance amount will have to be paid by the borrower. Hence, there is no way to escape from these payments and it must compulsorily be paid to avoid any further harm to your credit standing in the market.

To avoid repossession, people opt for loan modification. Apart from automobiles; boat, trucks, SUVs and RV loan modification can also be done to increase savings and reduce monthly payments.

Auto loan payments if avoided can be a pain in the neck for many years. Thus, be careful when you pay your bills on priority basis. Keep your auto loan bills at the top of the list.

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Auto repossession, so common now-a-days

Repossession happens every now and then after the global crisis which has led many people to quit the dream of owning a car. On one side banks, financial institutions and other lenders were not releasing enough credit for people to obtain a loan and on the other side consumers who were already suffering from a low credit score were unable to pay off their debts and installments of their current loan.

It has been revealed by financial researchers and economists that the economy will take some more time to stabilize and will then grow. Till then it is advisable that we secure ourselves with the job we currently have and make efforts to increase our balance on savings account. Savings is highly essential for unforeseen future which contains undisclosed uncertainties.

Repossession is very common now-a-days as people miss out on timely monthly payments. It really affects an individual’s credit score. Thus going for a loan modification helps lower the amount of monthly payments we must pay to avoid repossession. Following are the things that Auto Relief Group can do to save your car:

  • Car Loan Modification
  • Renegotiating car loans
  • Modifying car loans
  • Debt restructuring

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Car Repossession Procedure

The right to possess a vehicle remains with the lender until the borrower pays off all the debts against the vehicle. Till then the lender has complete right to repossess the vehicle if the borrower fails to pay the installments on time. Auto Relief Group, an expert in the loan modification industry, explains the auto repossession process. It usually goes like this:

  • The first step a lender takes is to send a mail warning the borrower to make the delayed payments. It does not always happen as there is no such law to send a warning mail before repossessing the vehicle. However, if the contract contains such terms then a mail will be sent.
  • A follow up call will be made to the warning.
  • The borrower then generally requests for grace period to make those delayed payments.
  • If still the payment has not been made, the borrower will once again receive a warning mail from the bank/ lender.
  • After this second warning, the car will be repossessed. It will be taken away from your office, home or where ever it is.
  • After repossession, the lender will send a document stating that the vehicle has been taken and what will be the procedure to get back the vehicle.
  • The borrower has to find ways to make payments. If he does find then he has to pay the delayed fees, repossession fees, towing charges, impound charges, storage fees and various other fees incurred by the company that repossessed the car.
  • If there is no way where borrower can pay the fees, then he loses the car completely. The lender then will have complete right over the vehicle and will search for a new buyer.
  • The borrower’s credit card report will be updated on account of the repossession of vehicle.

This repossession will reflect in the credit card report and its impact will stay for at least seven years. To avoid such situations one must opt for loan modification which can act as a savior during times of financial crisis.

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Don’t let your car shed your reputation

In 2010 more and more people will opt for all kinds of loan from home to estate to auto. While the economic crisis has just brushed away the sinking market, it’s time to invest wisely.  And as Obama keeps some of us sailing through our past hefty home loans through his “Mortgage Modification Program,” it’s important that you don’t lose your FICO scores in other acquired loans such as Auto.

FICO scores represent the credit worthiness of a person and his or her position to pay back the debts. Credit scores are calculated to gauge the risk of default by considering and taking in account of various factors of a person’s financial history. However, the actual formulae to understand the credit score is highly guarded, FICO has revealed the mechanism and components with which they provide weight age for each category;  where the highest component  of FICO  i.e. 35% includes card or automobile loan.

Auto loans are quite risky for people who have low credit scores. A person with low credit score when applies for auto loan would qualify for a higher interest rate compared to a person with good scored card. “It’s not only about money but the ability to manage it, and more importantly to have a reputation via financial stability.

“If you are in the midst of a bad loan or hit by bad credit score, you can still act smart and go for loan modification. Where the lender not only gives you options and guidance but also examines a full research report on your status.

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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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Financial Crisis had led to Repossessions

According to International Monetary Fund (IMF) American households are trying to save more by cutting down their spending in reaction to the global financial crisis. IMF says that on an average people are trying to save 5-6% of their disposable income. With the threat of job cuts, salary cuts, etc. Americans are trying to compromise on their other low priority expenses. They compromise on their car loan interest payments to make timely payment for their home mortgages. This is leading many banks and financial institutions to repossess their cars due to non-payment of interest amount.

“Having a personal car has become a basic necessity in today’s fast life. We have to go to office on time, attend meetings, drop our children to their school, and so many other things. It is impossible to imagine our lives without our car. On the other hand, with this economic downturn, job loss, less disposable income, and so many other barriers it becomes very difficult to make those monthly payments of your auto loan. We understand your situation and hence provide loan modification services for those who either do no have money to pay their monthly auto loan payments or are paying much more than it is worth it. Auto Relief Group helps you with negotiating loan amounts, interest rates and term extensions.

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