Showing posts with label auto loans. Show all posts
Showing posts with label auto loans. Show all posts

Saturday, June 18, 2022

Different Types of Loans and How They Can Help You

Saving up for a big purchase is always a good idea, but in reality, it's simply not always possible. This is especially true when it comes to paying for huge expenses such as land, a home, your college education, and any other purchase with a price tag reaching the thousands or even millions.

Fortunately, when you can't save up money in advance, there's a wide variety of loan options out there to choose from.

Personal Loans

As one of the broadest loan categories, personal loans provide funding for a wide variety of uses ranging from weddings and vacations to home renovations and debt consolidation

Most personal loans can be easily applied for online and feature repayment terms ranging from 24 to 84 months.

Auto Loans

An auto loan is a type of secured loan available solely for the purchase of a new or used vehicle. With most auto loans, borrowers can expect to pay an interest rate as low as three percent for excellent credit or as high as 10 percent for borrowers in the sub-650 range. 

Auto loan terms can range anywhere from 36-84 months and are often at the discretion of the borrower. However, as with any type of loan, the longer the term, the greater the amount of interest paid.

Mortgage Loans

Similar to auto loans, mortgage loans are secure loans, only they are for much more money and typically require regular monthly payments for up to 30 years. 

There are several types of mortgage loans, and while credit unions and banks are the most common mortgage lenders, they sometimes sell their qualified mortgage loans to federally-sponsored entities like Fannie Mae and Freddie Mac. Government-backed loan programs are also available for certain homebuyers.

Land Loans

With limited inventory and sky-high home prices, more and more people are buying raw land these days. However, the land isn't exactly cheap either, which is where a raw land lender comes in, someone like Raw Land Lenders

Land loans allow adventurous borrowers to buy raw land in order for them to build their dream house, create a mini-farm, and virtually anything else they choose to do with what they buy. 

While land loans generally have higher interest rates than mortgage loans, they also feature shorter terms and require less of down payment, making it possible for almost anyone to achieve their dream of land ownership.

Student Loans

Student loans are unsecured loans meant to pay for college tuition, fees, books, and living expenses. Unlike personal loans, which can be used for anything, student loans can only be used for education-related expenses at accredited schools. 

There are both private and federal student loans, and both often come with low-interest rates and flexible repayment terms.

As you can see, there are several different loan options available to fund just about whatever you need. Deciding on the right type of loan really just depends on what you plan on using it for. 

For example, if you plan on buying a car then obviously an auto loan would be of the most benefit to you. Meanwhile, a raw land loan can help you build a home while a mortgage loan allows you to pay for a home that’s already built.

Sunday, February 9, 2020

5 Tips for Building a Great Credit Score

Building an excellent credit score is a hard task. Even if you miss one payment, it can take a drastic toll on your FICO. Here are five tips that can help you to ensure your credit score is in the prime category, and you can buy whatever you need.

Don’t Pull Too Many Inquiries

When shopping for a loan, it may seem reasonable to look around. However, be careful about pulling too many “hard-hits” on your credit. You can pull your own score and know where you stand before you head to the dealership or a lender. 

When you make an inquiry on your report it’s not as damaging as when a company does it. Both types of hits will stay on your credit for 12 months. So make sure to allow people to pull your credit wisely.

Keep Your Credit Utilization Percentage Low

When you have credit cards and equity lines of credit, it’s easy to overspend. Some people feel that when they have plastic to spend that they can be freer than they can with cash. 

However, if you have more than 30 percent of your credit spent, then you will get a knock on your credit report. If you have a credit card with a $1,000 limit, then you need to spend no more than $300 of that credit. The less you spend, the better.

Don’t Go Over Your Debt to Ratio

Your income is a guideline that is used to see how much credit you can be awarded. However, a bank will only allow you a certain percentage of borrowing power based on that income. If you are beyond the 33 percent threshold, then you will be denied for loans. Additionally, your credit score will take a hit.

Diversify Your Credit

Never put all your “eggs” in one basket? You want to make sure that you have a nice mix on your report. You don’t want 12 credit cards and no auto loans as it looks odd to lenders. They see these credit cards as a potential for you to get into trouble. So it’s best to diversify your spending power to enhance your report.

Never Miss a Payment

Life happens, and there may be times when you are unable to pay a bill. Always call the lender or credit card services and make arrangements so that the late payment doesn’t show up on your credit report. 

Most companies will work with you. If you get a ding for a late payment, it sends a big red flag to potential lenders that there is an issue making payments on time. Your payment history will make or break your credit score.

Finally, building a great credit score isn’t going to happen overnight. It takes time and patience to get your FICO where it needs to be. Be careful when you spend money where your credit is concerned, and always pay your bills on time.

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