Category Archives: Home Mortgage
Car Loan Market for Consumers with Bad Credit is Booming
Car loans offer lenders a big ticket item with limited risk. While a lender’s risks their entire investment on an unsecured personal loan a car loan represents less risk since the lender can take possession of the car if the loan is defaulted. Divorce often leads to bankruptcy and will impact on a consumer’s credit score long after they have recovered financially. Specialized lenders have recognized that a poor credit score may not reflect on a consumer ability to make payments and have placed less emphasis on credit history and more emphasis on ability to pay.
National and regional lenders have emerged to service the very competitive bad credit car loan market referred to as the “Special Finance” or “Sub-prime” market. These lenders have further divided the “Special Finance” market up into different levels of risks to such an extent that there are lender’s who has specifically targeted the most credit challenged consumer with the highest risk.
The good new is that no matter what your credit circumstances are, there is probably a lender out there for you.
Another phenomenon is the independent credit service that will process your request for credit and forward it to the lender that is most likely to approve the request. These services usually work with a car dealer who have access to both National and Regional lenders.
The Online Credit Application The independent credit service has successfully introduced the online credit application to the market. The online credit application offers a no hassle approach to applying for credit. Anyone who has sat in front of a loans officer and had to explain their credit history will find the online credit application a blessing. If you decide to complete an online credit application make sure that it is secure. Look for a security certificate. Comodo and Verisign are two companies that offer security certificates that I am familiar with. You should also look for a privacy policy to guarantee that your personal information will not be shared or sold.
A car loan is a big ticket item that can help rebuild your credit score. Some lenders will offer programs that will reduce your rate or allow you to renegotiate after a specified length of time if you have not missed or been late on a payment.
There are many lenders who specialize in products and services for consumers that have troubled financial histories including bankruptcy. An independent service will provide an online credit application and will give you access to network of lenders. Simply enter “car loans” in search box of your favorite search engine. Most of these service offer tools like loan and budget calculators.
What You Can Do The first step before shopping for a car loan is to evaluate your financial situation. By determining your income to debt ratio you can see what kind of monthly payment is feasible for you. You do not want to be overburdened by payments and find yourself in trouble again. Next you may want to check your credit rating and clean it up where possible. Your credit score is negatively affected by late payments, high debt to income ratio and past bankruptcy. Close any accounts that are not in use. Too many open accounts are a negative. Pay up any outstanding debts. If you have recently filed for bankruptcy and there are extenuating circumstances such as a lay off or divorce, consider writing a page of explanation to attach to your report.
Regardless of your past credit history there is almost always a lender who is willing to provide you with a car loan. The question is how much are you willing to pay for that loan? A few extra percentage points are worth the opportunity to rebuild your credit. But be sure that your financial house is in order before you apply so that you can qualify for the best rate and terms your current financial circumstance will allow.
Bridging Loans – How Quickly Could I Get One?
First of all, let’s just take a quick look at exactly what a bridging loan actually is. It’s a nightmare scenario. You’ve spotted the perfect new home. Right number of rooms. Good size, well looked after, not too far from work and with a great garden for the kids. The only fly in the ointment is that you’ve not managed to sell your own property yet.
That’s the end of that then, right? Well actually, not necessarily. Enter the bridging loan. As the name suggests, it’s a short term loan facility that provides a ‘bridge’ between one loan and another. In this case, the loan would allow you to go ahead and make the purchase of the second property. The facility would only need to be short term, typically between 4 and 12 months.
There are of course, quite a few other reasons why you could consider a bridging loan:
– you may be considering making a purchase of a property from an auction, in which case you need to raise the funds very quickly.
– you could be thinking about purchasing land or even, as all the property programmes on television are concentrating on at the moment, a property abroad.
– refurbishing an investment property with the intention of selling it on in a very short space of time.
– raising money to pay a tax bill
– covering temporary cashflow problems
– taking off on an impromptu luxury holiday
– your daughter’s getting married. She wants all the trimmings and you have to do your parental duty and cover the expense!
As the property merry-go-round has been spinning at full tilt in recent times, many people have found themselves in a situation such as described above and as a result, the volumes of bridging loans have increased accordingly. Lenders have provided more choice and options and have often been innovative in their approach to help their customers.
Clearly, the key principle of a bridging loan is providing the cash very quickly to the customer who, probably more than any other type of borrower, needs the cash immediately. The whole process is very often streamlined and simple in real terms. There are many online brokers that you could make an enquiry to and having done so, they will probably be in touch with you on the phone in a matter of only a few minutes and you could have a decision in principle within an hour or so.
As part of the application, the broker, on behalf of the lender, may ask you to supply some or all of the following supplementary documentation:
– proof of residency
– proof of income
– proof of ID
– buildings insurance certificate, and
– an independent valuation figure
Once received, the loan could be completed in somewhere between 2-10 days. Wow! Now that is fast! So if you need to raise finance quickly, you now know what to do.