Loan Strategies I Used to Pay Off My Car

Written by adminAugust 15, 2018
Student Loan Consolidation

Your car or truck is your pride and joy. You love driving it and you consider it the pearl of the road. Maybe you’ve even named it and treat it well, like a member of the family. You get regular oil changes, take it in for a tune-up, and keep it clean. If you got a loan for your vehicle, you might be locked into a long-term relationship.

This is only part of your responsibility as a car owner. I do the same for my truck to keep it running as long as it can. But something I didn’t like doing was paying for my truck every month. As my budget tightens and I have other bills I need to pay for, I decided to look for ways I can pay off my loan sooner.

Another reason why this is important is to avoid paying more than the vehicle is worth. If you’re paying off a loan, then you’re most likely paying thousands of dollars of extra interest as well. By paying it early, you can save yourself the extra cash and own your vehicle outright.

Also: http://financialhelpers.com/americans-are-now-paying-a-lot-more-in-credit-card-fees/

Here are the 5 strategies I used to pay off my truck loan sooner.

1) Instead of Making One Payment Every Month, I Made Two

This is sort of a brilliant trick. Most loaners will allow you to make as many payments as you want. Instead of paying only once per month, pay half in the middle of the month. By doing this, you’ll make 26 half-payments instead of 12 regular payments, which means you’ll end up paying 13 full payments overall. That’s squeezing in an entire extra month of payments.

To look at it another way, rather than paying off the loan during the 60 months you planned, you can be finished with it in 54 months just by making two half-payments per month.

2) I Rounded Up When Making Payments

When you pay your monthly bill (or bi-monthly if you use the step above), a large portion of it goes towards interest. Anything above that threshold is payment towards your vehicle. If you decide to round up to the nearest $50 increment, you can cut a 60-month loan down to 47 months and save over $500 in interest.

For example, if your monthly bill is $208, but you decide to pay $250, that extra $42 goes directly towards your vehicle, not the interest, meaning you can pay off the loan faster and save on the interest you would’ve had to pay if you just paid the minimum. It would add up to an extra $512 paid towards the loan in a year.

3) I Made Several Larger Payments

This is an obvious point, but it certainly helps to make an additional larger payment or two if you can afford it. You might want to spend that money on something else, but the more you can put into it during the year, the faster you’ll pay off the loan and the less you’ll thrown down in interest.

4) I Never Missed a Payment

This is a big one. Since getting a truck loan, my credit score has gone up significantly. One of the major reasons for that is I have 100% on-time payments. If you do miss a payment, it can reflect negatively on your credit score.

While some lenders do allow for a missed payment a couple times a year (hey, stuff happens), missing that payment will just add more interest and take you longer to pay it off. Do your diligence. If you have to cut back on other bills, do it. Once you’re clear and free of the loan, you’ll have a lot more money in your pocket.

5) I Was Able to Refinance

I mentioned in the point above that making on-time payments significantly improved my credit score. When you get a loan, the interest rate is based on that score, as it offers a picture to the lender about your ability to pay it back. If your score goes up after a decent amount of time of regular payments, you’re more trustworthy.

You might be able to get lower monthly payments, less interest, and a shorter term by refinancing. If you can’t get all three, then it might not be worth it. Even if you can get lower payments, still paying the amount you were before will only help you pay it off that much quicker.

For me, these steps were part of a greater strategy. I had a poor credit score with little history. By showing some fiscal responsibility, I was able to improve my score and pay off my vehicle in a lot shorter of a time. It’s small steps like this that can get you closer to true financial freedom.

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Another State to Sue Navient Over Student Loan Deception

Written by adminJuly 2, 2018
Student Loan Consolidation

In the waning days of President Obama’s administration, the Consumer Financial Protection Bureau began to take notice of Navient’s loan practices. Complaints were coming in from all corners of the country, eventually leading to the company getting sued.

As light began to shine upon their deception, which have cost their customers millions of dollars, whole states began to jump into the mix. Illinois, Pennsylvania, Washington, and now California joins in the suit against them.

As one of the largest loan collection agencies in the country, they are the one of the eight companies hired by the government to reclaim the over $1.4 trillion worth of debt owed. Navient services 12 million borrowers themselves.

Xavier Becerra, Attorney General of California, said he was going to push a lawsuit with the Superior Court to look at how Navient potentially misguided borrowers on how they should get their debts paid. Using deception, they were able to scam their customers out of millions all over the country.

“Navient’s loan servicing abuses have compounded the misery of parents and students who sacrificed to pay for college,” Mr. Becerra said in a statement that includes accusing Navient of breaking state laws that include false advertising and prohibiting competition.

Of course, Navient disputes the charges by calling them unfounded and vows to fight back. They feel that too many families get angry at the system and the banks who give student loans instead of the education system itself.

John F. Remondi, the chief executive at Navient, said, “this is another attempt to blame a single servicer for the failures of the higher education system and the federal student loan program to deliver desired outcomes.”

Despite their denial of having done anything wrong, this isn’t the first time Navient has been accused of defrauding borrowers and so far, it’s not looking too good for them going forward. Navient requested in Pennsylvania to have the federal consumer bureau’s lawsuit tossed out, but the judge denied the request.

Individual borrowers are seeking lawsuits as well. A case in Florida was ordered to move forward after the company sought to declare they are exempt from having a borrower sue them, which is a federal law.

This is an obvious nightmare situation for Navient, who is fighting tooth and nail to keep these cases from ever making it to court.

The moral of the story? Do your own research when it comes to your student loans. There are legitimate government programs out there designed to help you. The banks and loan companies aren’t looking out for your best interest and will find any opportunity to gouge you out of more money if you’re not careful.

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Why Consider a Personal Loan

Written by adminJanuary 4, 2017
Personal Loans

Would you like to consolidate your credit cards, pay your taxes, or finance an unexpected expense? You might be able to qualify for a personal loan from a bank or other financial institution.

The Basics of Personal Loans

These are the basic things to know about personal loans:

  • They are usually offered in amounts from $500 to over $50,0000, depending upon need, income, and credit history.
  • As with all other loans, good credit helps, but some lenders are willing to offer loans to people who have had some challenges or haven’t had a chance to build much of a credit history.
  • These are unsecured loans, so they don’t require putting up any property to secure them.

As with almost any other type of loan, good credit helps people qualify for a larger loan and lower interest rates. According to NerdWallet, a credit union or P2P lending site may offer the lowest interest rates to people who don’t have great credit. Alternatives to personal loans may include secured loans, like home equity loans, or even introductory offers on credit cards with a low or even 0% interest rate.

However, people who can qualify for a personal loan might find that they are relatively hassle free and better for their own situation. For example, some borrowers might not have home equity to borrow against. Others may not care to apply for another credit card because they are trying to get credit cards paid off or consolidated.

What’s Needed to Apply for a Personal Loan?

To apply for a personal loan, you’ll typically need to supply your lender with these things:

  • Identification: You’ll need to provide the lender with an official ID and proof of residence. You’ll also probably need to give them information that they need to run a credit check.
  • Income verification: You might need to prove your income with paycheck stubs or past tax returns.
  • Financial verification: For larger loans, you might have to prepare a statement that includes your current expenses, debt, and so on.

Cautions for Shopping for Personal Loans

It’s important for prospective borrowers to pay attention to the terms of their loans. For example, some lenders may charge modest interest rates that are comparable to regular credit cards, but some may charge interest rates that are so high that they really don’t make these loans a sensible option. Of course, people with poor credit are most likely to get offered the highest interest rates.

Besides the interest rate, these are some things to watch out for:

  • Pre-payment penalties: If you want to pay your personal loan off early, some creditors may slap you with a pre-payment penalty.
  • Late-payment penalties: Some lenders may slap you with a large fee if you miss a payment, and they might even increase your interest rate.
  • Overdrafts: Some lenders will want to automatically debit your payments, so it’s important to be sure you have enough money in your account to cover it to avoid an accidental overdraft on your checking account.
  • Scam artists: The terms of some of these loans are so terrible that they may make getting out of debt almost impossible, so check out your lender with the FTC and BBB to learn about other borrower’s experiences.

Get Help Comparing Quality Personal Loan Providers

If you need a personal loan, FinancialHelpers.com is here to help. Compare interest rates and terms from multiple lenders to get the best possible deal before you decide to sign any contracts.

SEE IF YOU QUALIFY NOW »

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