What is Cross-Collateralization?

Financing_imageYou may have run across the term cross-collateralization if you are looking for an auto loan with a credit union instead of a bank, but you may not be familiar with the term. What is cross-collateralization? And what do you need to know about it?

Collateral in a loan is security for the lender. If the borrower puts up collateral for the loan, it means the lender can take the collateral if the borrower fails to pay the loan back.

That means cross-collateralization is when collateral for one loan can be used as the collateral for another loan as well. For example, a home loan and an auto loan can be used as cross-collateral for one another if they are borrowed from the same lender.

The problem with cross-collateralization is that you can have property seized from you if you fail to pay. You could pay your auto loan completely, but your car could still be taken for failure to pay your home loan or others loans you may have. A credit union could also prevent you from selling your vehicle if it is being used as collateral for other loans.

Stay informed about the different parts of a loan and never sign anything unless you fully understand it! It is best to consider all your options for financing before you pick one.

How to Get the Most Money for Your Trade-In

When you are looking for a new car you are probably also looking to trade-in your old one. Check out a few tips below to help you get the best deal for trading-in your vehicle!

Do research – Before you go to a dealer, you should do some research online to see what your car is worth and how much money you can get for it. You will want to go into a meeting with a dealer with some background knowledge because that will help you decide if the dealer offer is a good one.

Separate the trade-in and new car purchase – This can put you at an advantage or it might not. The reason people often tell you to separate the purchase and the trade-in is the fact that you do not want any other factors affecting your trade-in. You want to get the best value for your car based purely on that car.

Don’t just accept the first dealer price – Remember, you are not obligated to accept the first offer that you get on your trade-in. You can try to negotiate that price or you can go to a different dealership and see if you can get a better offer.

Understand the perspective of the dealer – This step is equally as important as the last step. While you don’t necessarily want to accept the first offer you get, you have to understand the dealer has the experience to determine what the car is worth and if it will sell well

How to Protect Yourself Against Identity Theft

Identity theft is when a person steals your personal information. This is usually done to get access to and take from your financial accounts. It is a scary thought for someone to have access to all your financial documents and to steal your money and ruin your credit, so there are a few things you can do to help protect yourself.
1. Shred – The first one is to shred documents that contain personal or financial information. Don’t just throw them away because someone could take those documents out of your trash and steal that information.
2. Lock – Make sure your information is safe by locking it away. For paper documents this could be in a safe, but for online accounts make sure you have good passwords for all of your devices and your accounts.
3. Secure – You will always want a secure connection when you log on to financial accounts, so you don’t want to do this on public Wi-Fi or in a place where you think your information can easily be taken. At home, you will want to encrypt and password protect your Wi-Fi.
4. Monitor – Another thing you will want to make sure to do is to check your accounts regularly. An identity thief could start by taking small amounts so their theft isn’t as noticeable, but if you check your accounts you will be able to tell if there is suspicious activity.
To avoid identity theft you will want to follow those steps and remember to never give out financial or personal information to someone you don’t trust. No one wants their identity stolen, so be sure to follow the steps to protect yourself against identity theft!

What is an Auto Loan Prepayment Penalty?

When you set up a payment plan for the loan, the borrower and lender agree on a term of the loan. This means the loan will be paid off in a certain amount of months. The lender charges interest to the borrower, so the longer the term is the more interest the lender makes. That means, if possible, a borrower wants to pay off the loan early, but the lender does not want them to. This can result in the lender adding a prepayment penalty.

A prepayment penalty is when the lender requires the borrower to pay a fee if they pay off a debt early. This is so the lender can still make money if the borrower pays the loan off early.

If you plan to pay off your loan early, you want to avoid a loan with a prepayment penalty. A prepayment penalty would have to be in the contract, so read the contract entirely and don’t sign it if there is a prepayment penalty that you do not like.

To avoid the potential costs of a prepayment penalty, simply ask your bank or credit union about a contract with no prepayment penalty.

Don’t Be a Delinquent: How to Avoid Auto Loan Delinquency

Bills tend to have a way of piling up, and paying everything on time can often be easier said than done. Delinquency on an auto loan is something to avoid because you will be charged a fee and you will risk your loan’s interest rate increasing. However, with a little planning, you can avoid being delinquent.

The best time to start planning to avoid delinquency is right when you start thinking about getting that auto loan. You have to make sure all the numbers add up from the beginning. You will want to consider all the factors associated with your vehicle like maintenance and repair work, insurance premiums, and hidden costs associated with your vehicle.

Then take time to make sure you can afford the payment by creating a budget of all your other non-car related expenses. This will help you figure out how much money you will have for your vehicle payment.

Once you have been approved for a loan, you will want to check with your lender about available payment protection options. These options could help you if you are unable to make regular payments for any kind of unforeseen reason.

The most important part of taking out a loan and avoiding delinquency is planning ahead. Make sure you know what you are getting into, so you can be prepared well in advance.

Auto Loans for Recent College Grads

studentThinking of purchasing a new or used vehicle for yourself for a graduation gift? Buying a car by yourself for the first time can be intimidating. As a recent college graduate, you know that you need to do some research prior to making those big decisions.

Obtaining an auto loan for a first car can be difficult, so consider working with Yes 4 Credit Oregon, as we have special programs for first timers.

Graduation season is huge for dealerships because they know recent graduates and their parents are itching to get some new wheels for a good deal. It’s important to be careful if you head directly to the dealership; if a deal sounds too good to be true, then it most certainly is.

The salesmen are ready to talk you into that shiny new car that you most definitely cannot afford on top of those student loans that you will be responsible for here shortly. They may offer you pretty good deals that will save you around $500-$1,000, but do you really want to pile on a car loan on top of the heap of student loan debt you’ve acquired over the last 2-4 years?

I didn’t think so.

In order to be an educated consumer, it’s important to know that there are tons of potential deals out there, and you don’t have to settle. Make sure you “shop around” for an auto loan that works best for you.

You should check your credit standing prior to any loan or car shopping—this way, you will know exactly what you can and cannot afford. Search online for things like payment calculators and car ratings.

Whether you have a credit card or not, you may not have built up enough credit over time to get those low interest rates that you are shooting for. To receive a better offer, consider having a cosigner—maybe a parent or relative, who can vouch for you and be a reliable “back-up” if you are unable to afford the payment one month.

Read the reviews of credit bureaus and dealerships. Try Cars.com, Kelley Blue Book and Consumer Reports websites.

Having all of the research done prior to heading to the dealer will make you feel confident and cool to get you that great deal you’ve worked so hard for.

Pros and Cons of Credit Cards

Financing_imageIt seems like everyone has at least one credit card these days. Whether you have a credit card issued by your bank, another credit card company, or from a specific store for perks, it is important to consider the “pros and cons” before making the commitment. Simply applying for a credit card can affect your credit history so proceeding with caution is advised when someone offers you the chance.

Read below for the pro/con list relating to using credit cards

Pros

—Convenience: You can pretty much use a credit card anywhere you want, including online.

—Discounts: Some credit cards offer incentives and rewards. If you have a credit card open with a specific store, then you will most likely receive some sort of discount or reward based on a points system.

—Build credit history: Stay on top of your monthly payments and build your credit. A good credit score will help you obtain loans with affordable rates.

—Monitor your financing: Credit card companies keep record of your payments so you can monitor your activity.

Cons

—Overspending: Sometimes folks with credit cards get the urge to spend more than they have with a credit card. Spending money you don’t have is an easy way to put yourself in debt.

—Interest/Late fees: These unfortunate costs can build up, which can dig you further into debt, which will eventually ruin your credit history.

—Bankruptcy: Credit card debt has been linked to people who have filed for bankruptcy. Although it isn’t a direct correlation, you are more likely to file for bankruptcy if you have a history of being in debt.

—Fraud: Credit card fraud is real and it can happen to anyone with a credit card.

So how do you start off on the right foot with a credit card? The reality is that most adults will have a credit card in their lifetime, as they are extremely common. Avoid those cons by making sure you do the following:

—Review your monthly statements

—Create a monthly budget for yourself

—Don’t spend more than you can afford

—Make sure to pay balance by the end of the month

—Make sure you are purchasing from reliable vendors should you shop online

If you find yourself in a poor credit bind and are in need of a loan, check out Yes 4 Credit Oregon. We specialize in working with folks with poor credit history to get the best financing options.

Call us now at 1-855-YES-4CDT!

Do I Need a Cosigner?

So you want to IMG_1109purchase or lease a car, but you have little to no credit, or your credit is not in the best shape. After you’ve shopped around for loans and asked professionals for their opinion on the matter, you may come to the realization that you should have a cosigner.

There’s a reason that you haven’t been offered the best interest rates, but how do you build credit if you can’t obtain a loan?

With a cosigner, lenders are more likely to give you better rates because they are assured that they will receive payments on time. In turn, you are more likely to pay on time because you don’t want the responsibility of making a payment to fall back on your trusted cosigner. Although, things happen and a cosigner gives you time to come up with payments without falling behind if you are unable in a given month

When choosing a cosigner, make sure it’s someone who has exceptional credit history, to fill the areas in which you lack. This person should be prepared to make payments, should you have to miss one every once in a while.

Picture it as riding a bike with training wheels. A cosigner is a great opportunity for you to build credit, without the pressure of making payments on time. They are there for you to lean on, if necessary while you learn to ride (or make payments) on your own.

Yes 4 Credit Oregon wants you to get the best deal on your next auto loan. Call 1-855-YES-4CDT today to learn what we have to offer. Explore our website and read more of our blogs for additional information about financing, auto loans and budgeting.

What are Payday Loans?

money3Payday loans are short-term cash advances that borrowers with low cash flow can take advantage of. The trick is to make sure you aren’t being taken advantage of.

These types of loans are known to have extremely high interest rates; I’m talking 400% APR high.  Usually these loans are around $500 or less; however, they can also be as large as $1,000 and are paid back as soon as you receive your next pay check.

The lender will ask to have access to your checking account or for a check in the loan amount so they can cash the payment the day it’s due.

As far as acquiring a payday loan, it’s a lot less maintenance than a regular loan. The lender won’t check your full credit history. All you really need is a steady source of income and identification. Requirements and terms will vary between lenders.

Make sure you know everything you need to know about your lender for a safe loan. Explore all of your loan options to make sure a payday loan is right for you. It can sure help you in a bind, but isn’t something to rely on each paycheck.

Like any loan, if you pay it back on time, you have nothing to worry about! It’s when you start to miss payments when you will run into a sticky situation. Stay on top of your loan payments and communicate with your lender to have the best possible experience!

In addition, don’t forget to shop around for your loan as your time allows. The first lender you talk to doesn’t have to be the only lender.

Check out Yes4Credit Oregon’s other blogs for other tips for auto loans and financing! We would love to hear from you; call us at 1.855.YES.4CDT with any questions you have.

 

What are Car Title Loans?

If you currentlcouple with keysy have poor credit and are seeking an auto loan, you may have come across something called a car title loan. Although they sound pretty great for those who have little to no credit, it’s important to educate yourself on what exactly goes into this type of auto loan.

 

What is it?
A car title loan is a type of secured loan in which the lender has possession of your car title as collateral until you fully repay the loan. This is a short-lived loan that offers a small amount of money, usually repaid in about 15 to 30 days.

Benefits
Lenders of this particular type of loan aren’t usually looking at the driver’s credit history. Instead, the lender solely focuses on the value of your vehicle. This is good news for someone who has little to no credit history, and of course, those with poor credit backgrounds.

Set-backs
Unfortunately, you may land among a lender who could potentially take advantage of your poor financial situation. Car title loans are known for their unreasonably high interest rates because of their short lending period.

How to choose carefully
Don’t just accept loans from anyone. Just because you may not be in an ideal financial situation, doesn’t mean you should settle for a bad deal. Shop for an auto loan, just as you would if you had phenomenal credit. Additionally, seek advice from experts, such as your bank, to figure out your best option.

 

If you decide that a car title loan is the auto loan for you, then make sure you carefully and thoroughly review the terms of the loan. Know exactly what you’re agreeing to and beware of “ad-ons” that may increase the cost of your loan. Get to know your lender and ask every question you can think of—if it doesn’t sound right, don’t agree to the loan.

 
Have questions about auto loans? Contact Yes 4 Credit Oregon for more information about obtaining auto loans with poor credit. We specialize in helping those who are new to purchasing a car and those with little to no credit. Check out our website and contact us for more information.

 

 

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