5 Things to Consider Before Applying for a Car Title Loan

Car Title Loan Reflection (Photo credit: Jeremy Brooks)

While your car may not precisely be deemed an asset because of how quickly it loses value, it does have some amount of value as collateral, so long as it's in good, running condition. And this means you can use it to secure a car title loan, whereby you can get the money you need (or a portion of it, at least) based on the estimated value of your vehicle, amongst other criteria. 

Of course, you will have to hold your car title (as in, own it outright), you'll probably need full coverage insurance, you'll need to provide proof of employment, and you might even have to offer references (and deal with the embarrassment of having a car title lender calling your family and friends). 

But once you've filled out a mound of paperwork you're all set, supposing you pass the background checks. The thing is, unless you're really desperate for cash and you'll find yourself in dire straits without it, a car title loan may not be your best option due to the astronomical interest rates you'll end up paying and the fact that your car will be seized should you fail to pay in a timely manner. 

Here are just a few things you'll want to consider before you sign on the dotted line.

1. Why you want the money. This is important. If you are so strapped for cash that you're going to, say, lose your home if you're unable to pay the mortgage, then virtually trading in your car for your house (at least temporarily) could allow you to stay in your home until your ship comes in. But if you're using the money to take a vacation, buy holiday gifts, or otherwise spend on things you simply don't need, you should check yourself and take a long, hard look at your choices. Living beyond your means is going to catch up to you eventually, and the result, if you get a car title loan for unnecessary expenditures, could be that you end up losing your car.

2. Your credit score. Car title loans are generally reserved for those who don't have the option of opening a home equity line, taking out a personal loan from the bank, or otherwise securing the funds they need. Unfortunately, the fact that you've exhausted other options doesn't mean you're going to get a car title loan without a decent credit rating. If you pose too great a risk where repayment is concerned, you're simply not going to qualify, even with your car as collateral.

3. The value of your car. If your car is more than a few years old, damaged, or undesirable in some way that has depreciated the value, your chances of getting a car title loan are probably pretty slim. The main thing required for this type of collateral is value, and this is generally based on the Kelley Blue Book estimate, as well as a visual inspection by the lender. And don't expect to get more than half the agreed-upon value of your car when you take out this type of loan (as it will continue to depreciate while you pay off the amount borrowed).

4. Alternative options. There are all kinds of alternatives to taking out a car title loan, such as borrowing from family members, opening a home equity line, selling valuables, or perhaps even applying for a personal loan. So before you put your car up as collateral and agree to pay an exorbitant interest rate, try absolutely every other avenue available to you.

5. Comparison shopping. If you've decided that a car title loan is the only feasible option for getting the money you desperately need, it's important to comparison shop in order to ensure you get the most money, the lowest interest rate, and the best terms overall. In case you didn't know, there are many lenders to choose from, and you can get a title loan online, as well. You're the one who will have to pay, so make sure you do your homework and find the best possible deal.

What Are The Alternatives To Savings Accounts?

Have you taken a look at how much interest you get on your savings account recently? If you have, the chances are that you are feeling pretty depressed. If you are very lucky, you may be earning over 1%, but the chances are you are getting considerably less. At these rates, you are actually losing money when you take inflation into account. There has to be some other way that delivers better returns.

Actually, if you are looking for a zero-risk investment – one that is federally insured – then you are going to struggle to find many other alternatives. For example, a certificates of deposit (CD) used to be quite an attractive investment. However, when you consider how Fed policy suppresses CD rates now, you are still only likely to earn around 1%. You may add a little bit more if you’re willing to make a long-term commitment – say 5 or 10 years – but locking up your money for that period of time may not be a good idea given that interest rates are at historic lows.

Another risk-free investment is treasury bonds. Provided that you are willing to make a long-term commitment, you can get 2.75% for a 10-year bond and 3.75% for a 30-year bond right now – which is a better rate than you would get with a savings account or a CD. However, the same issue applies as with CDs – you are locking up your cash for a long period of time. Actually, you can sell treasury bonds after you have bought them, so your money isn’t completely tied up. However, you are only guaranteed to get back your principal – the amount that you paid for the bond originally – when it expires. If you sell before that and interest rates go up – which is quite likely – then other investors will only buy your bond for a discounted price.

If you are willing to take a little more risk, then corporate bonds may be a better option than treasury bonds. You are likely to get a better rate, and your investment is still fairly secure provided that you buy bonds from blue-chip companies. However, remember that no corporate investment is completely secure – for example, General Motors went into bankruptcy in 2009, and IBM nearly went broke in 1993. As a minimum, try to invest in companies that have at least an AA rating, and steer clear of junk bonds entirely, unless you can take the risk.

As an alternative to corporate bonds, you could put your money into dividend-paying stocks. With these, the dividend can reach as high as 6% per year of the cash that you have invested. For example, AT&T is currently running at around 5.2%, and Verizon is at approximately 4.2%. However, remember that unlike corporate bonds, you have no guarantee that you are going to get your principal back in the future. You are exposed to ups and downs in the stock market, and while high-quality stocks tend to go up over time, you cannot automatically assume this is going to be the case. Furthermore, dividends are tied to earnings, so they are not guaranteed either.

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Taking The Burden Off Your Kids: 5 Saving Tips For Your Golden Years

Most people do not look forward to getting older as there are many changes that accompany getting to our so-called golden years. For instance, the children that seniors once cared for frequently have to take care of their parents as they age. Here are some tips that can help take some of the financial burden off of children. Saving for a good retirement is something that people both young and old and start to focus on to make for a better life and truly make their final years golden.

1. Take Advantage of Discounts

Ben Franklin once quipped that "a penny saved is a penny earned." There are many opportunities for senior citizens to save money through senior discounts. Every penny saved is one penny that a senior or his or her children do not have to spend at a later date. Many grocery and restaurant chains offer discounts that sometimes start as early as AARP eligibility at age 50. These are definitely worth looking into.

2. Cash in on Travel Rewards

Many seniors live at some distance from their adult children and grandchildren. Most of these elders will want to visit with family at some point during the year. Rather than having children foot the bill for travel, seniors can sign up for frequent flyer accounts and hotel rewards programs that can pay off in free flights or free hotel stays. The reduced cost of travel can fit a retired senior's schedule much easier than a working child.

3. Downsize

The American Dream for a large segment of society includes owning a large home. After a couple begins to experience an empty nest, there is no longer a need for 4,000 square feet of living space. One of the best ways to free up some additional cash during retirement can come from downsizing. A two- or three-bedroom home will probably suffice for most retirees. Getting rid of a five- or six-bedroom house can be a great move to reduce financial burdens later in life.

4. Look into Assisted Living

Many children feel obligated to take care of their aging parents. These same adult children will frequently need to be a part of a two-income household just to make ends meet. Getting into an assisted living environment can provide for some of the care that a senior needs while also allowing children to continue working. However, you can plan ahead and avoid ending up somewhere you don't like. Looking into assisted living in Clermont FL and other warm weather locales is often preferable.

5. Set up an HSA

When getting closer to retirement age, a good idea is setting up a Health Savings Account. These accounts can pay for some of the routine medical expenses that Medicare might not cover, and this can help take a big burden off of children.

There are many ways for senior citizens to save their adult children some stress. Whether it is looking into assisted living or cashing in frequent flyer miles for a visit, these tips can save money for seniors, and they can also help lessen the financial and psychological burden that their children might feel.

Money Management Tips for Seniors

When it comes to senor money management, there are a few important aspects to keep in mind, since older individuals often have to have a different approach to spending and managing money. While some people start saving for their retirement immediately after they start their first job, others wait until they only have a few years left before they start saving for their retirement.

In order to have enough for your retirement you need to calculate your current lifestyle requirements; you need to maintain at least 70% to 80% of your current working income. However, you might outlive your income or you might not have time to save enough to maintain your lifestyle. Retirement experts believe that you should not use more than 5% of your savings every year, should you need it, so that you don’t run into trouble when it comes to retirement time.

Consider Health Care Expenses

Healthcare expenses can make out a huge part of your retirement savings, especially if you have a chronic illness or an unforeseen accident. Ensuring that you have a proper medical aid plan can make this much easier to manage, which is why you need to consider medical coverage early on in your career.

Consider things like Medicare Savings Programs where you can reduce your co-payments and save money in the process. There are four different programs to read about, so you can choose the one that suits you best. Each of these programs has different income limits so you can compare them to see which one will suit you. 

Daily Money Management

Senior citizens can benefit from daily money management (DMM) services as this will allow them to have someone take care of their bookkeeping requirements. This can include writing checks for bills to be paid, keeping records of all payments made and received. This will give the individual, as well as their families, peace of mind, knowing that bills are paid and that money is not wasted on unnecessary purchases.

Money management and retirement savings don’t have to be difficult to manage. You can get help from a licensed financial advisor to guide you throughout this process, which is a great help for many individuals. Always make sure that you verify these individuals, though, to ensure that they have the skills and experience necessary to handle your finances and give you professional, practical advice. 

There are a few other aspects to consider:

• Senior discounts. Many retailers are happy to offer senior discounts on specific days of the week or month.
• Community service. Some senior programs provide payment for services, so you can get paid for giving back.
• Stay at home. If you own a home, it’s a huge asset. Stay there and save money on old age homes where possible. 

Saving for your retirement is just as important as properly managing your finances when you are retired. With a few tips and clever choices you can make sure that you live a comfortable life after retirement. It’s a good idea to work with a financial planner if you are still in the early stages of saving for retirement, making it easier to make the right decisions and know how much money to save.

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What Is a Life Insurance Cash Surrender Value?

One of the most crucial features people look at permanent life insurance is the cash value it has. In most scenarios people who purchase the life insurance are not aware of the cash value substantially because it takes time to grow to a large amount, moreover, in some cases cash values that accumulate to a substantial amount can be used as additional leverage for other purposes. The public is unaware of the potential consequences of mishandling the cash surrender value. But when there is an substantial cash value and the policy holder decides they want to exit the policy then the cash value can be obtained. Because this activity is mainly engaged by elderly policy holders it's called senior settlements.

Facts behind cash surrender value

The monthly premium payment paid by the life insurance policyholder is divided by what is called the carrier. In this context, one portion acts as the insurance coverage, the other profit and the remainder deposited into the cash value account. In most cases, the last portion is an overpayment. Since the life insurance companies will pay the person in the event the person dies, the cost rises as the person approaches life expectancy age and this causes a surplus in payment. The company’s charges premiums higher than usual at the beginning in order to keep the payments level of the policy owner.

Function

The excess cash payment in the cash value account grows According to the policy; nevertheless, the cash value is reversed when the policy reaches where the owner’s payment is unable to cover the insurance cost. All the insurance costs are then covered by supplementing every premium made by the policyholder.

Time

The insurance company spends some of the money during the policy application phase, hence the policyholder will not see any substantial sum in the cash value account. Recuperating from these expenses requires time hence it will take a sometime before the owners can see sizable sums in their cash value account majorly after the company has recovered the bulk of the first outlay.

Advantages

The main idea behind cash value is to sustain a level premium for the policyholder. Without this kind of strategy, the premiums would rise considerably to a point where the policyholder is unable to pay. The cash value account is important in covering all the insurance cost in the event the owner is unable to pay his or her premiums as long as there is sufficient amount.

Most people have misconceptions of cash value due to the advertisements and unscrupulous sales tactics employed. Most of these ads claim that the policyholder can withdraw the cash anytime without any consequence this is however, not true. Cash value withdrawals are supposed to be replaced by the insured person for the premium to stay at a steady level, if not the premiums will rise steadily. One of the benefits of the cash value is that it can be an additional leveraging bargain. Read more.

How to Save on an Extended Car Warranty Find Out

An extended warranty safeguards against any unforeseen, expensive car repairs. This type of warranty is different than the one you received from your dealer when you purchased your automobile. They are actually service contracts because they are sold separately and have a different price. In addition, the warranty covers the unforeseen repairs but also the regular maintenance. If you are the type who likes to be prepared in the event that anything happens to your vehicle, you’ll definitely want an extended warranty. However, you don’t have to pay the full price. Here are some tips to help you get the best price on an extended warranty.

Shop Around

You may want stay with the auto dealer you purchased your automobile from. However, it pays to shop around. You can search for quotes online or through other vehicle service contract providers. Be careful. According to EnduranceWarranty.com, just because the provider has a cheaper or more expensive price doesn’t mean that you receive the same type of coverage. Make sure you know the answers to:

What is covered?

Every extended warranty is different. However, it should include cover specific things like turbochargers and overheating.

How are the warranty claims handled?

There are some common restrictions included in each warranty like using certain repair facilities to paying upfront before work is completed. Find out how claims are handled so you won’t be surprised later.

What service plan do you qualify for?

It will help you understand if the extended warranty offered meets your criteria.

Regardless of the answers to the questions listed above, more than one quote. This will give you a lot of power later to get a better deal later.

Search for Online Codes

There are a lot of coupon codes online to make an extended warranty cheaper. You can redeem them online will getting a quote or sometimes with the provider you call.

Ask if the Auto Warranty Provider Offers Discounts

Many auto warranty providers won’t mention this, but they do offer discounts depending on your situation. For instance, providers often offer discounts to seniors and the military. There is another type of discount called first-call discount. This type of warranty discount is offered when you first contact the provider. It’s akin to the provider rewarding you for contacting them. Use whatever discount applies to you and situation you could save as much as $400 on your extended warranty—or more.

Be Willing to Negotiate

If the quoted price is too high, you don’t have to accept it. Negotiate a lower price. With more than one quote from more than one provider, you can negotiate for something lower. If the provider doesn’t want to work with you, then you have more providers on your list.

Find a Reliable Provider

If you negotiate a great deal with a company you have to make sure that this company is reliable. In order to save some of your time, we came across two different reliable review websites for the 2014: Top Ten Reviews and TheTopTens.com have both listed the top ten best extended auto providers in the United States.

Whether you go through a third party provider or your manufacturer you shouldn’t pay more than you need to for an extended warranty. Remember, as the customer you have the negotiating power. Use it to get the best deal possible.