Entries from March 2011 ↓

Applying for a Car Loan with Bad Credit

transforming debt into wealth

Unfortunately, having bad credit makes getting a car loan difficult and extremely limits your finance options. When you are shopping for a car, if your credit score range is below 600 you will find that most dealerships will not be able to finance you. They consider your credit rating sub-prime, and most of their zero down, zero percent financing offers you see on television are for those with excellent credit, around the 700+ range. This means if you have bad or poor credit, you probably will not be able to walk into your closest Honda dealership and walk away with a car. Fortunately, with more and more Americans receiving bad credit ratings, there have been more and more sub-prime lenders opening for business, so while you may not qualify for the best deals, all hope is not lost.  Here are a few tips to help you apply for a car loan with bad credit.

First, unless you are applying for an extremely small auto loan (less than $4000) you will probably be looking at buying a new car instead of a used car. I know this may sound strange, buying a new car with bad credit, but in the eyes of the lenders it makes more sense. There are a lot of things that can go wrong with a used car, making them less valuable and therefore harder for the lender to recoup any loss if you default on the car loan. Lenders look at new cars as less of a risk because if you default on the loan within the first year (which is the average time frame) the car will still hold a lot of value and be easier to resell to recover the loss of the loan.

Second, you will absolutely need a down payment. The bigger the down payment the more attractive the loan will look to lenders, you should be prepared to put a down payment of 10-15% if you have a bad credit rating. If you owe $17,000 to the bank, but they own a $20,000 car, they can actually end up better off if you default the loan and they have to repossess your car. In fact most lenders offering bad credit loans guaranteed approval will want a significant down payment.

What Stated Income Loans Can Do For You

The stated income loan is a debt instrument for mortgage purposes.  For this reason, it has been one of the hardest hit debt instruments of the economic crisis of 2008.  More than half of the bad debts that lead to the closure of financial institutions began with mortgage closures.  For this reason, the current mortgage rates will border between the median amounts.    The stated loan requirements will be simple, which is to provide your basic information the so-called “income” that you earn.  This is where the lying portion comes in as you get to state any range of profit as you are unable to provide proof.

On this loan application, there is the underlying agreement between the parties there will be no income verification to be conducted.  This loan product is perfect for home mortgage borrowers who are unable to give documentation for their proof of income.  These debtors will have acceptable credit, but will only lack one requirement, which is the profit statement.  This is the debt instrument that is mostly applicable to those self-employed persons.  Hence, the only solution for them to get their dream houses would be the stated loans and debts.

One major hand-up of this loan type is that the lender will require the borrower to apply and sign for an IRS Form 4506.  This is a loan requirement that will authorize the lender to conduct tax return investigations.  This will delve into the checking of the tax returns of the borrower for the past two years.  This is only a collateral issue that will act as a way to curtail the large income pronouncements of the borrower.  This is a way to encourage the debtor to try to set their income only to a smaller degree that is nearer to what they really earn.

It is said that these lenders may agree not to check the stated income.  However, they will certainly do check the source to the income for which you claim to have.  As an additional requirement, the lenders may ask that you must have worked in the same business for at least two years.  Alternatively, if you are a project and salaried employee, you must have worked in the same industry.  This is because they will make the necessary research on the industry and will base it on the average level, whether the profits you listed will be in a level to that.  

Records of Hawaii Bankruptcy Filings Drop 1 Percent in February

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Records of total Hawaii bankruptcy filings fell to 288 last February from 291 in February last year. There was nearly a 4 percent drop in bankruptcy liquidation cases filed under Chapter 7 from 239 in 2010 to 230 in 2011 while filings under Chapter 13 increased nearly 14 percent. Recorded Chapter 13 bankruptcy filings in 2010 are 51 while there is a total of 58 in 2011. Under Chapter 11 for Business reorganization there was no recorded filing in 2011 with 1 filing in 2010 according to the US Bankruptcy Court Records of the District of Hawaii.

If a homeowner is threatened with foreclosure, as a wage earner he can file bankruptcy under Chapter 13 to work out a plan to pay his loans over a period of three to five years. A Hawaii bankruptcy lawyer is the best person to advice you on your options regarding filing for Chapter 13 bankruptcy. Usually the banks find it costly to modify loans, so going to the bank is not a good option. The federal government has been trying to reduce foreclosures but have not been very successful.

Bankruptcy courts are part of the federal court system and although the bankruptcy code is the same throughout the US, each bankruptcy district controls the procedure for filing documents, calculating deadlines and paying fees. The state median incomes by household size varies per state and each state can choose to use the standard federal property exemptions or drawing up a list of its own exemptions. In Hawaii there is a federal bankruptcy court district located in downtown Honolulu.

The median income for a single wage earner in Hawaii is $52,784 in 2009 and $66,337 for a family of two. An applicant for Chapter 7 bankruptcy must have an income below the median annual income for the corresponding household size under according to a table published by the U.S. Census Bureau. In Hawaii, an initial bankruptcy petition can be filed and the other required documents filed within 15 days. Failure to do so may cause the petition to be dismissed and this cannot be re-filed for 180 days. Then the list of all interested parties and/or creditors has to be submitted and they will get notified.

The Slippery Slope of Credit

Credit can be a handy financial tool. It makes it possible to use the money of others (sometimes even interest free) while leaving your own money in the bank earning interest. Used in the best possible situations, credit can even make money and not just save it for the user.

The problems begin when the credit is not monitored or maintained with extreme scrutiny. A house of financial credit cards can tumble into chaos with just a few wrong moves. Recognizing the slippery slope of credit can help you keep from sliding down into the financial hole of out-of-control debt.

Signs that the Credit Situation is Heading Downhill

1.     The balance is not paid in full. It starts with just leaving a little balance each month. As things get tougher, the balance that rolls over continues to grow.  Soon there is no way to pay the balance in full because the amount has expanded beyond a controllable limit.

2.     New credit accounts are opened to pay off old credit. The concept is sound. Moving a high interest balance to a zero interest account. The problem starts when the new balance is not aggressively paid down to avoid the cost of interest that will occur down the road. Simply rotating balances is a sure sign that the slippery slope of credit is near.

3.     Credit accounts are used with the anticipation of money. Purchases are being made before money is available to cover the costs. When expected income does not become a reality then the credit accounts begin to build up balances and also incur high interest costs.

4.     Regular bills are being covered by credit accounts. Credit can be the easy alternative when the money for ordinary expenses comes up short. Leaning on credit instead of making tough cuts into the budget often leaves you sliding down into a debt hole that could have avoided just a few decisions back.

Tough times can call for tough decisions. Credit accounts make it possible to put off dealing with financial problems, but they quickly lead to even more troubles of their own. Too much trust placed on credit accounts leads down a slippery slope that ends in credit rating problems or a deep, debt hole that could take years to climb out.

Recover from Credit Issues

  • Stop using credit accounts completely. Some people have to just put all credit cards away. Others have to cut them up to keep them out of reach. Do what it takes to stop using the credit before the credit slides out of control and becomes a problem to tough to handle.
  • Ask for help. The sooner you ask then the easier the path to recovery will be in most situations. You may only need to contact the people that you owe to adjust payments, or it may be time to seek help with a financial professional to get your money situation back on track.
  • Make necessary changes. Tougher financial times require tighter decisions with the money. Stop spending on anything that is absolutely necessary until the budget situation has resolved.

Credit can be your friend. It provides a way to get what you want without using what you have – at least on a temporary basis. The problems start to rise up when credit becomes the fixing agent for financial troubles or the magic answer to all possible problems.

Avoid the slippery slope of credit by recognizing the danger signs. Take the steps to nip the problems in the bud. Keeping control of credit instead letting runaway credit control you will allow you to make the most of your financial choices.

Mark has been in the personal finance industry for 3 years; he currently helps people get a free credit score report and gives tips about where to find the best online brokers.

Bad credit auto loan

A bad credit auto loan is available to anyone regardless of the amount of debt that you may currently be responsible for. When you have access to these no credit car loans, you will always be able to get the money that you need for any reason at all. Most people would like to take a vacation during the year, but they lack the extra money needed in order to accomplish this. If you would like to take a vacation or pay for medical services or bills, you will be able to use this money in order to pay for anything that you need. One of the hardest things about dealing with a bank is the fact that you need to have great credit. If you lack this credit history, you will not be able to have the money that you need to do the things that you want. Everyone needs help sometime, there is nothing wrong with this.

However, when you have a poor credit history, it can be impossible to get a loan from a bank. Additionally, if you were to qualify for a loan, they would be able to determine what you can spend the money on. With no credit car loans, you will be able to get the cash that you need in order to buy anything that you want. The biggest advantage of these loans would be very low rates, but you would also be able to use these to buy anything that you want. Unlike when you get money from a bank, you are not controlled in terms of where you spend this money. If you are in need of cash, these bad credit auto loans would allow you to obtain the car you want without having to take on a large financial burden.

Various Methods for Reducing Debt

In a world full of various standards on what you should be wearing or what gadget you should have, it is very easy to be tempted to buy those things even if you know they are way beyond your budget. This is also the reason why more and more people are getting in too much debt trouble. Various creditors are making their payment schemes very tempting that it’s hard to resist applying for a loan. If you are in deep debt trouble, it doesn’t mean that there is no other means to get out of debt. There are various debt reduction strategies which you can do in order to be more in control of your debt problems.

To be more in control of your debt situation you have to take some time to really sit down and look at your whole debt situation. You can start by looking at all of your bills and list down all of your debt with all of their corresponding interest rates. By doing so, you are determining the exact digits of how much you owe and to whom. It is important that you sum up all of your debt so that you will be able to come up with a good plan on how you can distribute your money in order to pay for all of your debts.

Your next strategy is to create a budget; take a look at your monthly earnings and decide how much you can set aside to paying off all of your debt but still be able to afford your basic necessities. Also determine your usual monthly expenses, if you feel you can cut back on unnecessary purchases then do so. Getting out of debt is not an easy task to undertake, you will need to make a lot of sacrifices and even give up some of your favorite luxuries so that you will be able to live a less stressful life worrying about all of your debts. If most of your debts are due to your credit card spending, you may have to totally stop using your credit cards altogether. This is so that you will have a more solid idea of just how much you can spend based on the amount of money you have extra.

Now, all that’s left to do is to pay off all of your debts as much as you can. You can either start by paying off your biggest debt or you can start by removing all of your little debts. Whichever way you choose to pay them off, make sure that you never miss out on any of your monthly dues. You can delegate more of your payment to your bigger debt, but that does not mean that you will not be paying all of your other debts; make sure that you can pay even the minimum amount. This is to ensure that your smaller debts will not incur a lot of fees and turn out to be bigger than what you started with.

These are very basic debt reduction strategies that you can do in order to organize your debts and start making a more solid plan of attack to removing them off your list one by one. One rule that you have to keep in mind is to stick to whatever plan you have made, if you do financial freedom is never too far away.