Secure Your Down Payment
When you buy a car, you’ll typically provide a down payment. This payment goes directly toward the purchase of your vehicle, and the remaining amount of the purchase will be financed and paid back over time. When buying a car, the more you can put down, the lower your loan amountand monthly paymentcan be. Additionally, a larger down payment reduces risk to your lender, which may help you secure a lower interest rate on your loan and save you money over time.
Coming up with a down payment isn’t always easy, though, so you may consider delaying your car purchase to save for a larger one. Doing this could make you a more competitive applicant, lower the amount you owe and help you lock in a lower interest rate.
Car Loan Refinancing: How To Keep Add Or Drop A Cosigner
- May 10, 2018
- Refinance
When you refinance a car loan, youre replacing an existing loan with a new loan, with better rates and terms. When it comes to a cosigner, youll have the option to keep them, remove them, or add one if necessary when you refinance. But whether or not you can refinance at all depends on your credit and how much it has improved since first taking out your loan.
The New Loan Holder Applies For The Loan
At this point, the new loan holder has to apply individually for the loan. If its you, its essential that you know you cant just transfer the loan to yourself from yourself.
If the loan holder is applying to your same lending institution, theyll need to fill out a new application with the same terms and conditions of your current loan agreement. In some instances, your lender may require them to cosign on your loan rather than giving them total control over the loan.
If youre refinancing your car through a new loan, youll also need to apply for that loan with your new lender. In other words, whoever is taking responsibility for the loan balance must be approved before any further considerations.
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Guarantors And Their Role
A person willing to make your payments, should you find yourself unable to make them during the term of your car finance agreement, is called a guarantor. With a reliable guarantor named on your application, a finance company will feel more secure in offering you finance regardless of your credit history, whether it is poor or just limited.
Always obtain the consent of your guarantor first before making any applications, as its their history of credit that will be checked before any car loan will be offered to you.
Alternatives To An Auto Loan Consolidation
If youre considering combining two car loans into one, it makes sense to rule out other options first before going through with the auto consolidation. You could instead:
- Refinance one or both of the car loans to a lower rate, but dont combine the two loans.
- Continue to pay off both car loans as they are. Here are hacks to pay off your car loan faster.
- Sell one car, if you can get more than the loan payoff, and use the proceeds to pay down the loan for the other car. Heres how to sell your car on Craigslist.
- Trade in one or both of your cars for less expensive vehicles.
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What Is Refinancing
To add a co-borrower to your existing car loan, you have to refinance it in order to get their name on the loan. Refinancing is when you replace your existing loan with a new one, hopefully with better terms.
When you refinance, you can lower the monthly payment either by extending the loan term or qualifying for a better interest rate. You can refinance with your current lender, but youre going to want to work with a different lender most of the time.
In order to qualify for refinancing, you generally have to meet these five requirements:
Make sure that you let the lender know ahead of time that you’re adding a co-borrower to the new loan.
How Adding A Co
Adding a co-borrower to an existing auto loan can help you out. If you put your spouse on the loan you can combine incomes and qualify for the new loan together, which could open the door to better loan terms than you’d be able to get on your own. This may allow you to save even more money over the remainder of the loan term.
In order for someone to be a co-borrower, in most cases, they must have a credit score thats as least as good as yours. Once your co-borrower signs the loan papers, they have equal ownership of the vehicle.
If they decide they no longer want to be on the loan, they cant just walk away you must refinance again and remove them from the loan. Therefore, this isn’t a situation to enter into lightly. Make sure to discuss the matter with your co-borrower before taking any action.
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Check Your Credit And Improve It If You Can
It’s always a good idea to get a free copy of your credit reports and score before making a major purchase that will require a credit check. By doing so, you’ll know what a lender will see when evaluating your credit.
When you check your credit well in advance, you can even give yourself the chance to make adjustments and potentially increase your scores before you submit an application. Improving your scores may help you get better terms and a lower interest rate, which should save you money over time. Here are tips for improving your credit scores:
- Pay all your bills on time.Payment history is one of the most important aspects of your credit, and keeping a spotless record one of the best ways to maintain good credit scores. If you have any past-due payments or accounts in collections, pay those accounts as well.
- Reduce your debt as much as possible. This not only puts you in a better financial position when applying for a loan, but it also improves your . Your utilization ratio is calculated by dividing your total revolving credit balances by your total credit limits. Experts recommend keeping your utilization ratio under 30%, or below 10% for the best scores.
- Take advantage of tools like Experian Boost. This revolutionary free service could improve your score instantly when you use it to add utility, cellphone, streaming and other bills to your credit file.
Try Selling Privately Instead Of Trading In
Trade-ins tend to involve a lot less hassle than selling a car yourself, but private sales often make more money than trade-ins.
Jack Gillis, executive director of the nonprofit Consumer Federation of America, says that in general, dealers will give you a wholesale price, whereas selling privately will get you a higher price, which is whatever potential buyers are willing to pay for it.
Salzberg says selling your car could be a good way to offset negative equity, although he cautions to check with the lender on your old cars loan before selling it. If you still owe money on the car, youll have to pay off your current loan in order to get the title from the lender so that you can sell it.
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How To Get A Car Loan With Bad Credit
Though it may seem impossible to get a loan with bad credit, the good news isit’s not. While having a good score may help you get approved for an auto loan with favorable terms, there are still options available for people with poor credit.
There’s no minimum credit score required to get an auto loan, which means people with poor credit may just need to find the right lender or loan in order to get behind the wheel. In fact, Americans with scores under 670which include consumers in the poor and fair credit tiershave the same number of auto loans listed in their credit report on average as those with higher scores, according to Experian data.
Delay New Car If You Have Negative Equity
It is especially important to try delaying the purchase of your next car if youre upside-down on the loan for your current car, multiple experts say. Sometimes you just need another car. Perhaps you got into an accident and totaled your old car, or maybe a major life event like loss of a job, health problems, or the birth of a child means you need a smaller or larger vehicle.
But if you can wait until you have positive equity on your existing loan, youre much less likely to be upside-down on the new one, which experts say is a bad place to be.
Gillis points out that if you need to unload the car quickly, or if it gets totaled in an accident, youll still have to pay off the balance of the loan, even though you no longer have the car. Salzberg says that taking on more debt when you buy a new car can affect your ability to qualify for credit cards, home loans, and other financial products.
If you must replace the car, dont feel pressured to buy a new car. A used car, even one that has some years on it, is a smarter move that can help you turn around your personal finances. Remember, cars are depreciating assets, and you dont get out of a hole by digging deeper.
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Can Someone Be On The Title Without Being On The Mortgage
Yes, adding someone to the title for your home without refinancing to include them on the mortgage is an option. This is something that is often done with a spouse, child or parent. The benefit to adding someone’s name to a title is that the home will legally transfer to that person after your death.
Getting this done is often just a matter of contacting your title company. While you can create a verbal agreement with the understanding that the person being added to the title will contribute to mortgage payments, they aren’t under any legal obligation to do this unless they are a co-borrower. Only by adding someone to your mortgage through a refinance can you make the other person legally responsible for the mortgage debt.
References
Dont Be Afraid To Walk Away
Buying a car is often a very high-pressure sale that can impact your credit score significantly, either in a good way or bad. Thats why it is so important to do your homework and take your time, regardless of how much you want a car.
If you like a vehicle that costs more than what you can afford, dont accept a longer loan term to achieve cheaper monthly payments. If you accept longer terms on a car loan, you will pay more in interest over the life of the loan and may pay more for the car than its actually worth over time.
Cars do not appreciate in value like houses. Its often said they depreciate the moment you drive it off the lot. Keep in mind that if you do get a longer term loan and are forced to sell the car before you have finished paying off that loan, you still have to pay back the balance on the loan.
Your best bet is to walk away from a car you know you cant afford and find a comparable vehicle that costs less.
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Dont Get Penalized For Good Behavior
Avoid getting a loan that has a prepayment penalty, so you dont end up having to pay extra if your financial situation changes and you decide to pay off the loan sooner. This flexibility is important to maintaining control of your finances. The quicker you pay off a loan, the less you pay in finance charges and the sooner you can start saving for the next vehicle, ideally accruing interest on your savings.
Hurdle #: The Bank Holds Your Title When You Finance A Car
When you buy a new car and finance it, you legally own your car, your name is on the title and registration, but maybe this slipped your mind: the bank is holding the title in their possession! Remember, you don’t have the title. This means you cannot sell the car to another person until you satisfy the car loan in full. If you fail to do this, the lender will still hold the title, and you cannot legally transfer the title to a buyer without having the title to sign it over.
The lender is listed on the front of the title as a lien holder. They hold the title so you can’t sell the car until you pay off your car loan. Vehicle titles are electronic when held by the bank and must be printed once the loan is paid off. Then the lender/lienholder sends you the title, now you can legally transfer ownership of your used car to the buyer.
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Vehicles To Be Launched By Kia Motors In India Including Sp Concept
South Korean carmaker, Kia Motors is all set for its entry into the Indian market with its 4 car models which will include the SP concept-based SUV. With the introduction of these 4 models, Kia Motors aims to bring more business to India and make it a global hub for manufacturing. The carmaker will target automotive suppliers of Tier I and Tier II cities which will aid the company to create cost-effective but superior quality products.
Kia Motors is a sister-concern of Hyundai and it intends to manufacture/assemble its vehicles in India. The pattern of the product launch is at the moment being worked upon. Meanwhile, the carmaker is looking for suppliers in India who can serve its vendors in South Korea. Kia Motors have set up a manufacturing plant in Andhra Pradesh where production will begin from August 2019.
6 June 2018
Buying A New Or Used Car May Be One Of The Biggest Purchases You Make In Your Lifetime With All The Moving Parts That Come With A Car Loan Figuring Out How To Pay For Your Ride Can Send You For A Spin
With the average price of a new car hovering around $35,000, according to a Consumer Financial Protection Bureau blog post published in 2018, chances are youll have to take out a car loan.
But before you pick out your next set of wheels, its a good idea to do a little homework on auto financing first. In this article, well take a closer look at the most common types of car loans, auto loan lenders, important key terms to know and how to prepare to apply.
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How Do I Transfer A Car Loan From One Car To Another
Hi, i have an existing finance agreement for 5 years and it’s only my 1st year. Another problem is that there’s a damage in the car bumper due to an accident. I would like to downgrade my car because my circumstances have changed and I can no longer afford my existing monthly payment. Is it possible to transfer my finance to another company or terminate the contract? What is the best option? Help please!
Unfortunately, every car loan is tailored to your individual circumstances and the vehicle youve financed so you cant just transfer a car loan from one car to another.
But that doesnt mean youre stuck with a car you no longer want or cant afford. You do have options, even if you havent yet reached the end of your agreement.
Pay the settlement figure
If youd like to settle your finance early and own or sell your car, you can request a settlement figure from your lender. Typically, the further you are into your finance agreement, the lower this figure will be. Once youve settled your finance, youll be free to do what you like with the car: keep it, sell it or part-exchange it to use as a deposit in a new agreement.
Refinance my car
Want to change your agreement but keep your car? You can look to refinance instead.
When your finance agreement can last anything up to seven years, its understandable that your circumstances can change. If you need to reduce your monthly outgoings or your financial situation has improved over time, a refinance deal could work for you.;
Automakers Looking To Earn Big On The Amt Demand
Major automobile manufacturers in India are looking to cash in on the increasing demand for automated manual transmission gearboxes. Maruti Suzuki, Tata Motors, and Hyundai have all begun to increase the number of AMT models.
Some automakers believe that in five years time, almost every second car in the country could be an AMT. Hyundai Motors have increased its share of AMTs to 9.8% from the previous 4% in 2015.
According to an executive from Maruti Suzuki, the popularity of AMT vehicles is due to the comfort and ease of operation and fuel efficiency. Maruti Suzuki is planning to sell around 2 lakh AMT vehicles in 2018-2019.
7 September 2018
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