How to choose the right loan company?
Secured loans have become very popular among people who need quick money in an emergency, a secured loan do not worry about your creditworthiness at all.
Getting quick money can be easy, but if you choose the wrong car loan company it can be hard to get out of, and worse, you could end up hijacking your vehicle and losing it for good.
But how do you know which company to choose? They all appear to be the same and they all seem to charge very high interest rates.
Are secured loans a good option when you need to earn money quickly? Are there any companies you can trust?
If you want to get a car loan, it’s best to make sure they are in line with Consumer Financial Protection Office (CFPB).
CFPB was created to protect all consumers from dishonest lenders and practices, so it is important that they comply with the law and are fully licensed to finance real estate loans in your state.
Watch out for car loans
If you are considering taking out a car loan, you need to be very careful. When searching, it is important to know what the interest rate is, some car loan companies charge over 300% APR!
Of course, choosing a company that charges three-digit interest rates is a company to stay away from.
Be careful with the 30-day terms of the secured loan, as the term is short, it can be difficult to have the money to pay off the secured loan.
Be very careful if the loan originator rolls over, it means that after the 30 terms of the secured loan have expired, and if you haven’t paid it back, the lender will roll over your interest and renew it for another 30 days.
Rollover loans are debt traps because many people can never get out of them because none of their payments go to their capital, everything goes to interest.
Interest only loans are another problem as well as all your monthly payments will never lower your principal balance, you will only pay interest and possibly late fees as well.
Non-credit check loans can also be very dangerous as the lender has no idea if you are able to make monthly payments, this is irresponsible borrowing.
Choosing the right loan company
Takeover of the vehicle with secured loans
There may be times when your vehicle is repossessed with a car loan, and for lenders who charge three-digit fees, it may be difficult to make monthly payments or ultimately you may not be able to repay your car loan.
Seizures occur with 30-day secured loans as the problem is that if you don’t have all the money to pay off the loan, the lender may decide to seize the car.
Some people who have renewed secured loans can never find a way out of this debt trap and their cars may eventually be bought back.
Some borrowers never see the end with interest-backed real estate loans, and if monthly payments are not paid, the borrower will lose the car.
Loan companies choose wisely
Are there good car loan companies? How do you find one you can trust? It’s up to you to do your homework, it will pay off, but you have to be very careful.
It can be very difficult to know which car loan company you can trust. So if you are thinking of getting it, here is some information for you to help you find it the right loan company.
The most important question you can ask when looking to get a car loan is what is the interest rate you are charging?
You need to stay away from backed-up three-digit loans, they are just too expensive, your monthly payments will be difficult to handle and there will be a greater chance of failing to meet your secured loan agreement.
If you are looking on the internet there are companies that give loans backed by 36% APR, this is obviously much more expensive than a bank loan but if your credit is weak the bank will not qualify you.
When you buy a car loan, it’s also important to ask how long their terms are, and once again you need to stay away from short term 30 car loans.
There are several companies that offer a car loan term of 24 months to 48 months with no pre-payment penalties, keeping your monthly payments low and affordable.
It will also be important to ask if there are any early termination fees, if you want to stay away from companies that charge prepayment penalties there are options at no extra charge.
The lender will use the wholesale value of your vehicle they can use Kelly Blue Book or NADA to find out your wholesale value and make sure you have sufficient capital in your car.
Some small lenders will lend you only 40% of the wholesale value, and some larger companies will lend you up to 85% of the wholesale value.
Online loans for reputation
Choosing a loan company can be tricky, but if you ask the right questions you have a much better chance of getting a car loan that will work for you and monthly payments manageable within your budget.
It will be important for you to do some research on the internet to find their reviews online. It will be helpful to have a discussion after reading their reviews on Google, Yelp, BBBor any other online review portal.
Remember that all car loan companies will have negative reviews, or at least they should, but when you browse the reviews, check that the company has responded to the customer.
If you find that the company never responds to their complaints then you can say that they don’t care about their customers, so it’s best not to go with them.
If you found out that there are a lot of negative reviews, that would be another good sign that the business wouldn’t be right for you.
Choose reputable loan companies
With so many different options available, another thing to look for is finding a company that has experience.
Some companies that have only been dealing with car loans for a few years do not have the experience and knowledge.
Large loan companies have a debt collection policy, so they will work with you, if you have difficulty making your monthly payments, new companies may just want to get your car back because they are nervous.
Experience can make a difference, large companies can make adjustments and sometimes different payments.
With small boutique-type lending companies, the benefits are that you’ll have a more intimate experience and you’ll be chatting with the same person during the approval process.
For small businesses, they will know your name or be familiar with you as they make reminders of your fundraising calls.
You won’t get this with large loan companies, but you will have more security with a large company as they are financially safer.
Finding the right real estate loan lender
There are much cheaper ways to get money, but they may not be available because of your loan, it’s important to research all the options before choosing a car loan.
For vehicle secured loans, some companies may offer you the money on the same day you apply, or they may also offer you the money within 24 hours.
Getting financing on the same day makes getting a secured loan very attractive, but make sure you have an exit strategy so you always know, in the worst case, how you are going to pay off that loan.
Finding the right loan company takes some work, but the savings are worth the effort. In some cases, it’s easy to get a car loan, but if you choose the wrong company, it can be very difficult to get out of.
Use all the resources you have to make the best decision, and if you need to get a car loan, you need to be very careful and choose the right company.
This article does not necessarily reflect the views of the EconoTimes editors or board