Co-Signing a Loan – Should you do it if someone asks?
March 5, 2016
Everything You Need to Know about Co-signing a Loan
Co-signing a loan may be a requirement by the lender when giving loan. This is the act agreeing to pay the debt if the borrower fails. Individuals with good credit score are often asked by their friend or a family member to co-sign. Although, you are willing to help; you must also be aware of its multifarious aspects. This article will focus on both the faces of co- signing the loan and help you make an informed decision.
What a co-signer is liable of:
When cosign a loan, he or she is pledged to pay the debt in-case the borrower defaults. Moreover, the cosigner is liable to pay the extra amount including late fees and collection money. The creditor has the right to collect the debt from the cosigner without even approaching the borrower (depending on the law of the state). Plus, they can sue or even seize salary.
So, make sure you can afford the amount and are willing to accept the responsibility.
Why would someone consider co-signing a loan?
You might want to co-sign a loan for your son and buy him his first car. You might also want to cosign someone’s education loan! The fact that, credit rejection is common; especially for people with low credit score; you can help them by cosigning a loan. This will help increase their credit score and credit history, as well as get them the transportation or education they need.
Things to Consider:
- Make sure that you can afford the debt amount
- Defaulting may get you sued or lose credit rating
- It may keep you from getting other loans
- Before cosigning, ask your creditor to quote the effective amount you will owe
- You could negotiate and limit your obligations to just the principal and not include the additional charges
- You must take the copies of all essential papers after cosigning
- Know your co-signer rights
Risks of Co-signing a Loan:
Co-signing a loan comes with a lot of risk, like increasing the DTI (debt-to-income) ratio. As a cosigner is an integral part of the loan; he/she must address the loan closing documents. The loan is reflected in the credit report and the monthly payment goes to the DTI ratio. Moreover, as the amount you owe is 30 percentage of the FICO score, hence lowers the credit score. More, is the debt amount, lower will be the credit score. Keep the DTI ratio below 36 percentage.
By co-signing, you are accepting the responsibility and are tied to it until the balance is paid off. There is no escaping once done. However, in certain cases like with student loan, you can avail release from being cosigner.
The bottom line is, if the needs of the borrower outweighs you personal preference, you should choose to cosign the agreement. However, it is advisable to judge you friends trustworthiness wisely. It might not be noble, but this may save you later.
How to Buy a Car
October 25, 2015
How to Buy a Car: Here’s What you Need to Know
Now that you are moving out of your comfort zone and actually willing to buy a car on your own; you will be needing a lot of help. Today, people make decisions hastily, unknown and unprepared about the many nuisances of making a deal. Eventually, most end-up buying a car they didn’t want and possibly at a higher price than they should have.
However, to make things easier, this article will focus on streamlining the complete car buying process in-to easy steps and help you land on a position to make an informed decision.
Choose the Car You Need!
You will find hundreds of make and design; each better than the other! But, you need to choose the model beforehand. Pick a car that fits your needs, lifestyle and budget. Narrow down you list to under five. Also consider the number of seats, size, performance, comfort, head-room and leg-room. Do a thorough research on the Internet, read blogs, review. You could go for a side-by-side comparison.
Know What You can Afford:
Soon after you choose your dream car, its affordability may start to get blur. Its many financing options will make things confusing or even worse. A wise man should figure this intricacies way before going for the purchase. He/She must be honest with the budget, needs and choose only the ones within the price range. Take into account you current car; its exchange value or sell value; calculate your down-payment; what you can afford to pay every month as well as for what duration. Don’t become greedy or impulsive; keep an open mind!
First, check your credit rating! If have a good rating, you are more likely to find a number of beneficial financing deals; like, getting a zero-percent interest finances. On the other hand, if you have a bad credit rate, you may wish to consider trying a buy here pay here car dealership which offers special financing options for those who can’t get financing elsewhere. So, make up your mind and choose the financing that fits your situation best.
You might be lured into buying an extended warranty; however, be wise because the type of contract vary greatly based on the company.
Insurance for Car:
Car insurance is essential, sometimes mandatory according to some laws in the state. For sports cars, turbocharged, supercharged and four-wheel drive vehicles, the insurance rate is higher, typically because of larger engines. Check rates with your insurance before making your purchase and if possible negotiate the price; you will save a lot.
These top tips will definitely get things moving. You should also talk to your friends, family members and neighbors to get real insights on local dealers. It will help a lot if you talk to someone who is experienced.
In Summary, how to buy a car is as much research as anything else. Do your homework and check out all your options.
What is a Doc Fee?
September 23, 2015
Explaining Doc Fees in Detail
Doc Fee? When it comes to buying a new or a used car, the price tag that you see kept on the top of it is not the only amount you have to pay to own it. A host of other charges applies as soon as you agree to own that piece of automobile such as licensee fee, title fee, sales tax, and various others. Dealers often add many other kinds of charges and this increases the selling price to several hundred dollars extra to what was initially agreed on. Hence, the final out-of-the-door prices that you are going to pay can be anything. These additional charges are often referred to as “doc fee” or “documentation fees” and it is highly suggested to determine them prior to making the full payment.
What is a Doc Fee?
Although the introductory paragraph might have given you a glimpse of doc fee, here is a complete explanation of what it actually is and what are its capacities.
A doc fee, also known as documentation fee, conveyance fee, or document fee – is the additional fee charged by car dealers for processing the vehicle’s paperwork. The fee covers the cost of all the big and small documents that get evaluated in the process such as the DMV, registration, preparation fees, VIN etching, etc.
Is it legal? How can you know it is not fraudulent?
In most of the cases, the doc fee is not regulated by the dealer, but by the government. The dealers make a profit from the car that they sell to you at its selling price. Whatever money you are paying additional for the paperwork of the vehicle goes to the several departments of the government. However, if you are in a place where the state government does not regulate the fees, the dealer can hit any price on you.
Is it negotiable?
Generally, the doc fee is not negotiable. Only the selling price of the new or used car that you are going to purchase is negotiable. The doc fees are generally capped by Government and dealers are not allowed to make any changes to it. For those areas where dealers are regulating the fees, they might be negotiable.
Is it necessary to pay them?
The answer is a definite ‘yes’. The documents include the legal certificates and registration copies of the car that makes you eligible to own or drive it. You must ensure that all kinds of taxes, fees, and prices are paid before you take it out on the road. Because, if you get caught driving the vehicle with no or incomplete documents, you might have to pay a hefty fine.
Therefore, while purchasing the car, always ask the dealer for its overall price. This will include the selling price of the car, doc fees, sales tax, and other charges. Make sure with the dealer that no new fee crops up later that will modify the price. In case it does, you always have the option of shifting to some other honest dealer.
Why Do I Have a Bad Credit? And, How do I fix it.
July 25, 2015
Why Do I Have a Bad Credit?
You work hard to make sure that your credit score remain high, right! Unfortunately, all your hard work could be hurt by seemingly small things that could give a big impact on your credit history. From parking ticket to auto loans, irresponsibility could take down your credit score. Credit score is a tricky thing and some harmful action or behaviors can terribly impact your credit. Having a blemished credit history is likely to mean you are turned down when you apply for car loans or borrowing money, giving rise to think that your credit is blacklisted or bad credit rating. By understanding the biggest mistake determine or reduce problems that might affect your credit. Here are some of them:
Making late payments
Your credit history accounts 35% of your credit score. Late payments records hamper your ability to finance major purchases such as a car as much as a personal credit history full of mistakes. So, if you fail to make debt repayments on time, it will show a red flag to credit agencies.
Closing card account
Closing credit accounts is a bad idea to boost credit scores. A closed credit account will fall of your credit report sooner than later. The positive history associated with a account is removed from the credit report, if the account is closed. Credit history counts for 15% of FICO score. So, the one with younger credit are more risky then consumers with older history.
Over utilization of your available credit card limit
If you wish to establish a bad credit, charge your credit upto their limit and keep them there. Apparently not, because high balance on your credit cards takes your credit score down. The credit score is based on ratio of total, debt to total available credit. Your credit balance goes up, your credit score goes down. So, try your best reduce the percentage and pay them down as much as possible.
Error in credit report
Mistake on your credit report, which lenders check is an important part of credit score process. If there is some error in credit report related to debt or dues that does not apply on you then report the reference agency immediately. If you spot some case of fraud in your name without your acknowledgement then report to get investigated and removed.
Last but not the least, Bankruptcy is an undisputed champion in destroying an excellent credit rating. This undeniable one of the worst thing, which can cause a lose of 200points in credit score. It may take 10 years to fall from your report, but the impact will lessen over the time. Filling bankruptcy is like pushing a financial reset button. This is an important decision and needs precise concern and information. Take helpful suggestion before filling one.
If you see anything on the list you know you’re guilty of? Start taking necessary steps to properly address the problem as soon as possible. Be consistent in paying down bills and debt on-time and create a clean bill of credit.
Bad Credit Loan – What Interest Rate can I Expect?
August 24, 2014
Bad Credit Loan & Interest Rate
If you’re out shopping for credit or to make a purchase like a car or house, you’ll likely get feedback on your credit. Over 30% of Americans have credit issues of some kind and may need to find a bad credit loan.
Is the interest rate high?
Obviously, if you have perfect credit you can get a low interest rate on car loan almost anywhere. But not all of us have perfect credit, in fact, over 40 million americans have what credit bureaus describe as “very low credit scores” and 50 Million americans have no credit at all! If you’re in either one of these categories, you’re not alone and you’ll likely have to get a “bad credit loan.” In Utah, the interest rates for those with “bad credit” range typically from 12-38%.
What are the loan lengths?
Since we’re the bank, our interest rates and payments are affordable and we offer terms around 2-4 years to allow you to more quickly payoff your car. The finance company Lucky’s Auto Credit uses charges the same interest rate for all its customers, but the length of time you’re paying interest is often half the time of a 6-7 year term. Every car dealership will have a true cost of credit that will show you the cost of financing a car and how much interest and principle you’ll have paid over the life of the loan.
How do I Apply?
To apply for an interest rate car loan bad credit, click the apply now button at the top of this page. Or check out our awesome inventory by using this used cars inventory link. We get new inventory every week so check back often and be sure to come in to get approved beforehand! Chances are we’ll have the car that fits you perfectly.
Buy Here Pay Here – How does it work?
April 24, 2014
Lucky’s is the leader in Buy Here Pay Here lending in Utah, and is one of the fastest growing car dealerships selling used cars and trucks in Utah! The reason is simple: We take great care of our customers, we help you with funding when everyone else turns you down, and our short term loans give you the greatest chance to rebuild your credit and OWN the car you buy! We hope the pages below answer any questions you might have. The quickest way to know exactly how we can help is to visit one of our awesome locations and spend 5-10 minutes and complete an app. We don’t care about your credit, and EVERYONE gets approved with a plan! We have a zero-pressure sales process because our #1 goal is to help you succeed!