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Why You Should Avoid Car Title Loans


Over the past few years, a new kind of subprime lending has spread across the nation. These new loans, often called car title loans, offers cash-strapped consumers with poor or no credit a lump sum of money in a loan secured by the title of a car that they own. In many places, these loans have replaced the payday loans that used to serve customers with low incomes or poor credit, as payday loans have been subjected to stricter regulations in many states. While car title loans may seem like a good idea on the surface, there are numerous reasons why you should avoid them.

Many Borrowers Cannot Repay The Loans

Companies that write car title loans can generally be found where the population is less affluent. Many of the individuals seeking these loans have limited financial means and are already living paycheck to paycheck. The people often resort to the car title loans because they believe that there are no other lending options available to them. The borrower’s ability to repay is not taken into consideration because the amount of the loan is based solely on the resale value of the vehicle. A high number of individuals are unable to repay the original amount when due, which typically indicates a predatory financial product.

The Interest Charged For The Loan Is Very High

The interest rate that lenders charge for car title loans are astronomical when compared to other financial products. The annual interest rate for a typical bank loan is around 5 percent and for a credit card can be as high as 25 percent. In comparison, the interest rate charged for a car title loan averages between 80 percent and 500 percent when all of the fees are factored in. In one case recently reported in the news, a man that took out a $4,000 car title loan was required to pay more than $9,000 total before the loan was cleared and his car was no longer under threat of repossession.

Many Borrowers End Up In A Vicious Debt Cycle

Many of the individuals that use car title loans get trapped into an endless cycle of debt. Many of them are unable to afford to pay off the entire loan when the loan period is up. The only way that they can pay off the current loan is to reapply for another loan as soon as their time is up with the first loan. Each time they renew the loan, more fees are added. The average individual using a car title loan renews the loan more than 5 times before it is paid off or the car is repossessed by the lender. Many car title loan recipients find themselves paying a great deal of money in fees to the lender over a long period of time with no recourse or relief.

The cons of taking out a car title loan outweigh the pros for all but the absolutely most dire cases. If you need some extra money, here are some better ways to obtain it.


Considering Buying A New Home In 2015? Here’s What You Should Know


If you are considering buying a new home in 2015, you are in luck. There are a number of benefits that can be realized by buying a new home in 2015, but only if you know what you should be looking for. The many opinions in the media of what the housing market is going to do in the near future has only served to confuse matters as consumers struggle with the question of whether or not to purchase a home in upcoming months. Here is what you should know about the current housing market.

Considerable Number Of Homes On The Market

The first thing you should know about buying a new home in 2015 is that there are a considerable number of homes on the market right now, which is good news for you. Having more homes on the market gives you a better chance of finding a home that is right for you at a price that you can afford. Sellers will be more likely to make concessions when there are plenty of homes on the market to choose from, so you may be able to get a better deal than you would have otherwise. If you are willing to carefully research your options before making a decision, you should be able to find a home that you like in a neighborhood that you desire for a reasonable price.

Interest Rates Are Beginning To Rise

While interest rates are still lower than they have been previously, they are beginning to rise again. Increases in the interest rate you must pay for a mortgage loan can cost you thousands of dollars over the life of the loan, so it make sense to lock in the lowest rate that you can. If current trends in the housing market continue, the longer you wait for buying a new home in 2015, the more you will pay as a result of higher interest rate. Obtain quotes from several lenders to see which ones are willing to offer you the lowest rates before making your decision.

Lending Standards Are Loosening

After the financial crisis in the housing market that began in late 2008, many lenders tightened their lending standards to the point where it was very difficult for many people to purchase new homes. As the crisis has eases and home prices have begun to rise again, lenders are loosening their lending standards enough to where anyone with an adequate down payment and a good credit score stands a good chance of being approved for a loan. If your credit is less than perfect and you get turned down by one lender, try again by submitting your information to a different lender. Since each lender has its own criteria for approving mortgage loans, you may find that a different lender will be willing to extend a loan for buying a new home in 2015.


Tips For Getting Great Mortgage Rates When Buying A Home


Buying a home may be the most expensive purchase that you make in your lifetime. The prices of homes are so high that few people are able to purchase the home that they want without securing some type of financing. To reduce the amount of money that you will ultimately pay to purchase your home, you will want to find the best mortgage rate you can get with your financial history. Here are some tips that you can use that will help you get the best mortgage rates available when buying a home.

Increase Your Credit Score Before Applying

Your credit score will be used to determine the interest rate that you are charged for the mortgage loan you are pursuing. The higher your credit score, the lower the interest rate you will be charged, which could save you thousands of dollars over the life of the loan. There are many ways to give your credit score a boost before buying a home. The best ways are paying down credit card balances, increasing your available credit, and removing any errors on your credit report that could be dragging your credit score down. You should also avoid applying for other credit products in the months before applying for a mortgage loan. Taking these steps could boost your credit score into the next highest category, reducing the interest rate you must pay considerably.

Obtain Several Quotes Before Choosing

Lenders have the power to set their own terms for the loans that they issue, so you may be able to find a better deal by shopping around. Before committing to buying a home, obtain quotes from several different lenders using basic information about your income and the home you would like to buy. This will allow you to compare the offerings of each lender side by side and see which ones are making the best offers. You may also be able to get prequalified for the amount that you would like to borrow, increasing your standing with realtors and sellers as a serious buyer.

Review Fees Carefully

It is very important to pay attention to the fees that are going to be charged for obtaining the loan as well as the fees you will pay when you buy the home. These fees can total thousands of dollars. With these fees, you typically have two choices. You can commit a large chunk of the money you were going to use to furnish the home to paying the fees or you can roll the fees into the principal of the loan to pay them off over time, but you will pay interest on the fees throughout the life of the loan. Make sure that you know what the fees will be and have a plan for paying them before signing any paperwork.


A Saving Method That Guarantees You’ll Meet Your Saving Goals


The act of saving money regularly can be difficult to turn into a habit, even though it is very important to your future financial security. There are so many products and services being advertised as necessary for the improvement of your life that it is very easy to spend every dollar you have and still not be satisfied. Fortunately, there is a saving method that you can use that ensures that you will save regularly and meet your savings goals. Here are the steps you can take to use this saving method effectively.

Establish An Affordable Amount For Regular Saving

The first step in reaching your saving goals is establishing an affordable amount that you can save from your paycheck each pay. This will be your baseline saving amount to get you started on your way to being a regular saver. It is recommended that you try to save at least 10 percent of your earnings, but if your budget is tight, start by saving $50 per pay. Over time, this small amount will snowball into a considerable sum that can be used for unexpected expenses and future needs. If you can, automate your saving and have the amount direct-deposited into your savings account each week.

Pledge To Save Half Of Any Lump Sum Payment

Once you have established your base saving amount, pledge to save at least half of any additional money you receive in the future. For example, if you receive a holiday bonus, an income tax refund, or other lump sum payment, put at least half of the amount into your savings account before you begin spending the rest. This allows you to increase the amount of your savings by a significant amount each time while still having part of the money available for your immediate needs.

Increase Base Amount When You Receive Salary Increases

In the future, you should increase the base amount you are saving from your salary every time you receive a salary increase. These increases usually come in the form of a pay raise or an adjustment from moving from one employment position to another one. If you are having a percentage of your income direct-deposited into your savings account, this adjustment is already being made for you. If you are transferring the money into your savings account yourself, you will need to calculate how much money the increase is adding to each check and then take half of that amount to add to your base amount each pay period. If you follow these three steps, you will find yourself saving a significant amount towards your saving goals without sacrificing your current quality of life.