Your Financing Strategy
Ask questions from your bankers which of one these will benefits you most and which one could be costly to you. You can also get free checks when you open your account, you do not need to pay for checks. All checks are processed the same way that is up to you and how you manage your money.
-Savings Accounts: Custom Savings, Money Market Account Checking Accounts: Economy Checking, Express Checking, -Regular Checking, Senior Checking, Student checking
-Your Debit/Visa Card to use for shopping could be free when you open your account, make sure you ask for it, at times they will ask you if you want one or not. Where you use your Debit/Visa Card to withdraw money matters to your bank, it could cost you for using it at the wrong places, ask your banker for information where you could use your card without paying extra charges...
Some banks charges between $1.00 up to $3.00 if you use their card to withdraw money from another bank that they do not do business with. It is your money...
Each one of the above has advantages and dis-advantages, be careful when you are opening your accounts; you could loose money to the bank right away. You also need to know if your monthly statements are going to be free or not, when you make inquiries, the bank could be charging you for too many inquiries. Some things are free from the big banks and something's are cheaper from the community banks.
Basic Requirements for lending you money:
· Savings and Checking Account
· (2) Good Credit or No Credit it depends where you are getting the money.
· (3) Collateral such as your House, Car, Boat, Gold/diamond or any valuable assets they can hold on
· Driver's License,
· Social Security numbers
· Good Employment, at least for six months.
Lenders Information:
Big Bank requirements-
Can be very tough to meet because they have to abide by the 'Federal Reserve Bank or Federal Deposit Insurance Corporation (FDIC)' regulations. They got their money from the Federal Reserve Bank at a lower rate, however, they could turn around and loan it to the smaller banks at a higher rate, and the smaller banks loan it at higher quote rate to the public.
Community Bank requirements/Credit Union:
Well, the community bank is no different either, they turn to the big banks to borrow money at a lower rate so that they can loan it to their customers/clients at a higher rate to make some profit to stay in business.
Private Capital market requirement:
This is where the business gets tougher. The Capital Market enterprise is a big boy on the Wall Street, where they can finance just about anything they like, because they are not being regulated by the government, it is an individual rich businessmen that have money to loan out at a higher rate. They are not required to follow financing rule rigidly as the bank does, but they still have follow the consumer law that protect all of us from being taken advantage of.
Family friends requirement:
This one is your best source of financing, if you could find a rich friend or family friends that can loan you money without any attachment or collateral. They may ask you to pay them some small interest, or none it all depends what you are using the money for, at they would like to get a piece of the apple when they know you are going to make a lot profit.
Collateralization:
There some companies out there that would loan you money to meet your emergency needs, but becareful, they may ask you to give them your house, car, motor cycle or any of your valuables for collateral just in case you were unable to pay them back, but, they are very quick to take your valuables and you may not have any re-course to take them to court for doing so. I would stay away from such financing unless you have to...
There is going to be a time when we are going to need finance or re-finance our mortgages, car, motorcycle, big boat, air-planes etc., that we cannot come up with up-front lump sum money to pay for it This force us to turn to our bank, family friends, private capital market, small loan companies to loan us that money. This is where we are being taken advantage of by offering us some sort of un-affordable rates. At first you would think this a great opportunity that it will not be problem, you could afford that payment being offered to you by your lender, you better think again before you sign that dotted line. They could be collecting interest from you money for long time without any of it going to your principle.
Pay attention to dotted Line and Small print in the loan documents:
The loan documents can be very tricky to read when you are not an attorney, the small fine prints areas are very important areas to pay attention to, because this is where they hid rates, timeline, and warrante, but if you don't pay attention to the rates they quote or offer to you in the loan document that you are going to sign you could be losing a lot of money. You probably better off to take to your attorney before you sign the dotted line.
In the fine print of the loan documents is where they hid most important information that your lender did not want you to know about, especially mortgage and credit card documents. It sounds strange, but it is true, If you don't believe what I said here in this document, go to your loan documents and read the small prints in there you may find out something that you would not like to see or hear about, or if don't believe what I said here, ask yourself a question of why didn't they just print the whole loan documents in a readable format with nice fonts that an average third grader can read and understand it without having to scratch their head or look up words in the webster dictionary for interpretation of words, after all you are the consumer paying them for this services and they will be collecting interest from your financing for such a long time. 95% of mortgage homeowner never gets to the point of paying principle or their mortgage finance off before being taken away from them, but the bank or private investor already started to benefit. Yes, I understand they took the risk to finance us.
I think what is fair is fair, they should make the loan documents more readable for us, and there should be no small prints that is had to read on any loan documents. They should be in a readable format that average Joe can understand; my question all the years was why are they making it so complicated to read if they do not have anything to hide? I also think the loan documents should not have so many pages when we are talking about saving the threes... Not too many consumers read all these pages, it has no value to have so many pages when no one really reads it, of course the attorney will not be making money if they these document could be reduced to minimum.
My solution to this big fat loan documents should be to reduce them to minimum, all it should it be contain is, who own the house, the rate, how long is going to be paid, warranty, borrower's and co-borrower, and all other very valuable information it should not be more than 10 pages long.
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Bad Credit Auto Financing - Lenders Vs Dealers
Bad credit sometimes stands in the way of getting a car loan, but it doesn't have to. Information is king and whomever is the most informed usually walks away the winner, although in this case driving away is the goal. Let's face it; its 2014 and the Internet provides the ability to access information from anywhere in the world has changed the way we all do business. This kind of access to information can be to your benefit or your demise! Your credit score is one of the most important forms of information that potential creditors want to access to qualify and rank you as a potential customer. These creditors are not the enemy. In fact they are our friends (at least we should pretend they are). They literally hold the keys to your new auto loan. Bad credit aside, the credit report tells the auto lender how much risk is involved with lending you their money. Playing The Game I am going to side bar for a second and talk about "Why you don't NEED the bad credit auto lenders money!" Well actually you do need their money to successfully finance your auto loan but there is a key difference I would like to point out. Simply do not "Act" as if you absolutely need their money, that is you have to play the game just as they do. Desperation is your worse enemy if you have bad credit and are in dire need of a new car. Lenders don't make money from lending you money and having you only pay back what you borrowed. They make money from interest on your car loan, and those interest rates can get pretty outrageous. Upwards of 20% depending on the lender, but can average around 15% for those with low credit scores. My point is that you must not give in to the first loan offer, you must NEGOTIATE! Lenders understand that you have probably been turned down multiple times (in fact they can absolutely tell from simply looking at your credit report) and now that you have been approved you will simply roll over at any loan terms they offer. Do not be afraid to let them know that you are interested but the interest rate is too high, or the total monthly payments are a bit much for you to sign for the loan that day. This tip is more mental but very much so practical and effective. Know Their Playbook Your credit score is a snapshot of the past but an indicator of how doing business with you in the future might look like. Auto lenders are only interested in the risks vs. rewards. Now I have purposely not used the terms "car dealer" or "auto dealership" for a reason. I wanted you to begin to separate the idea between lender and dealer. Your local car dealerships do not lend money, nor do they have any to lend you! (I am sure they would if they could) The dealerships are simply a middle man, they hold car inventory and have all the local resources necessary to sell the vehicles and negotiate the terms and conditions of the loan between the lender and yourself. Here are some useful tips for you to consider so that you are not easily taken advantage of while working with the bad credit auto dealers in your area. Check them out: Shady Tactics - You should never be required to buy an extended service or warranty agreement. Dealers like to pull this little sneaky trick because it puts profit directly into their pockets. This is where my above rants on the differences between dealers and lenders come in to play. Dealers make their money on the differences between what they owe the car manufacture and what they sold it to you for. (They also get bonuses for meeting monthly, quarterly and annual volume goals). This shady tactic is simply about leveraging your desperation and squeezing extra profit from you in a time of need. Luckily the ease and access to quality information comes full circle, because you are here to increase your knowledge and hopefully that will bring you one step closer to a new or used car loan. Know Your Score - This is as simple as it gets. This is not a step you should ever skip. You should absolutely know your score before you even step into a dealership. Bad credit loans typically come with high interest rates and sometimes require larger down payments. Dealers cannot really adjust or play with that fixed interest rate because that comes directly from the bank. However they routinely lie about how much of a down payment is required to secure your new loan. The lender could request a $2500 down payment but the dealership would tell you that a $5000 down payment is required. Again their intent is to pocket the extra $2500 as profit. They normally can squeeze this extra cash out of you by simply lying about the credit score that came back and scaring you into thinking that $5000 was required by the bank to get the loan done. Like I said "Know Your Score!". Enough said. Total Price Is KING - If you have bad or damaged credit it is probably for this simple reason: At some point you owed more money than you had to pay out and things got ugly. Well typically this type of history follows behind a shortage of cash or inadequate monthly income sources. In turn you simply begin to manage and think about all financial decisions as a monthly payment. This is not inherently a bad practice however you must remember that your auto loan is going to come with a pretty hefty annual interest rate. This can blind you while you considering your needs for a new car. Monthly payment... Monthly payment..that's your typical mantra as you approach the dealership looking for a car. However this is the mantra of the salesperson as well. That's a problem and here is why: You should be interested in negotiating total price because that is the only way you are going to truly save some money. The dealer is interested in negotiating monthly payment because that keeps your attention away from the fact that they are not discounting the price of the car. It also keeps your attention away from the fact that your monthly payment will mainly be made up of your interest due and only a small part of your principal balance. So if you are even mildly interested in saving some money, which I know you are, then focus on the only area you can actually do so: Total price of the car, not the monthly payment.
