What Are First Time Buyer Auto Loan Programs?Whether you are buying your first new or used car or are planning to apply for online auto loans for the first time, understanding how automobile dealerships and lenders see you, and what you can do to improve that image, can help you to be prepared in advance of applying for online auto loans for the first time, so that you will be in a better position to get approved for an car loan with a lower interest rate and better terms. After all, you want your monthly auto loan payment to be the lowest it can possibly be, right?Who might apply for first time buyer car loans? Some people that first time auto loan programs can help could be:* Teenagers, personally buying their first car in their own name will need to apply for first time buyer auto loans as they have no credit history behind them* College students living away from home for the first time frequently have not had time to build a credit history before leaving for school and so will often need to apply for first time buyer car loan programs* People that have always paid cash for a vehicles in the past, but now want to upgrade to a newer one or are forced to take out automobile loan because they do not have the cash funds to buy a vehicle at present* Immigrants that have moved here from other countries, and thus have left their credit histories behind, may need to apply for first time auto loan programs in order to start building a credit historyNot All First Time Auto Loan Borrowers are in the Same BoatThe first thing to realize is that not all first time borrowers are in the same boat. There can be a lot of differing factors that can either work in your favor, or against you when you are applying for online auto financing. For instance:* Are you employed full or part time? If you are not employed, do you have an income? Not being employed is not necessarily a game stopper, but if you plan to have your name on the title of the car and on the auto finance, you will need to demonstrate that you have either a job, regular income, or other funds that you will be paying your monthly auto loan payment from. Of course, the higher that your income is, the easier it will be to qualify for lower interest rate first time buyer auto loan programs.* Do you have no credit history, because you are just starting out your financial life, or do you have a bad credit history/low credit score because you have had a few credit slip-ups in the past? Dealerships will certainly work with you in either case. However, if you have a low credit score, depending on how bad your credit history is, the dealership may be inclined to offer you a higher rate of interest and a lower credit limit on first time buyer auto loans as opposed to someone that has not made any credit mistakes in their financial life yet.Note, see our recent article entitled “How to Get Approved for an Auto Loan with Bad Credit if you have Low Income” to learn how to get unwanted items removed from your credit report to bring up your credit score.* Will you have any funds available to make a down payment on your auto loan? Whether you are applying for first time buyer auto loans, or if you have had auto loans in the past and just need another one now, what every auto dealership or lender is going to take into consideration when assessing your application and the items on this list is; how much of a risk are they taking in making an auto loan to you and what if anything can they get you to do to mitigate that risk. Making a down payment is one thing that you can do to mitigate the dealership’s risk, making them more likely to quickly approve your automobile loan and to give you a more reasonable interest rate. In addition, a down payment will obviously bring down what you owe on the vehicle and so your monthly payments will be lower and more affordable. Down payments are usually not required to get online auto loans, but they can be very helpful when negotiating with a dealership. Even a small down payment can make a difference in how the dealership sees you.* Is there someone that you know that would be willing to cosign for you on your auto loan? Cosigners are not required in order to get online auto loans, even if you have bad credit or no credit history at all. However, the use of a cosigner can save you a lot of money and make the application process go much more quickly and smoothly. A cosigner is someone that puts their name on your loan application along with yours, guaranteeing that the loan will be repaid. The limit and maximum amount of your automotive loan will be determined by the cosigner’s income and credit standing, not yours. So, if you choose to have a cosigner, make sure to pick one that has a high credit score. With a cosigner, there is really no need to look for first time buyer auto loans because you will be treated by the dealership as though the higher credit score and income were yours.* What is the ratio of your monthly housing payment as compared to your income? A little known fact is that auto dealerships and lenders pay attention to this number. For instance, if you make $1,000 per month income, and your monthly housing cost is $300, then your housing cost takes 30% of your income. Anything over 40% will send up a red flag to the dealership/lender and they may need convincing that you can make your monthly payments on time. Take this into consideration when you complete your auto finance application.Taking the above items into consideration, you should be able to get a clearer picture of how automotive dealerships and automotive loan lenders see you, and what you can do to control that image, at least to some extent. Once you have submitted your application, the die has been cast and you will see what the dealership offers you at that point.
Monthly Archives: March 2023
Auto Loan Refinance – Is Refinancing The Right Option For You?
There are many reasons why consumers choose to go through the auto loan refinance process, but many often fail to fully understand the process of refinancing a vehicle and pursue it just because they want to get a lower monthly payment.It may be the case that current tough economic times have got you in a tough spot leaving you unable to afford your current payment, or you simply want to lower your monthly payment so you have more money to spend on other bills or monthly expenses. Then an auto loan refinance can help you achieve a lower monthly payment.Current interest rates are at all new low levels due to the swing in recent market conditions, so now may be the perfect opportunity for you if you are considering an auto loan refinance.Auto Loan Refinance DefinedAn auto refinance loan is a loan that aims to pay off an existing loan more effectively by providing a lower interest rate, reducing the monthly loan premium that the borrower is responsible for, and reducing the overall costs that the borrower ends up paying above and beyond the initial value of the loan.Borrowers can refinance their vehicles by going through their current lender for the new loan, or they can research other lenders to see who has the best terms based on current market conditions.Should You Refinance Your Auto?Before you jump into the process of refinancing your vehicle, it might be a good idea to assess your particular situation in order to identify whether or not refinancing is the right decision for you. The decision you make will depend on what your goals are from a borrowing standpoint.You should consider refinancing if:You would like to get a lower interest rate in order to reduce overall interest costs on your loan. As mentioned before, interest rates are at all new lows. This means that a new loan with the same terms will cost less when all is said and done because of the lower interest rates. If your current loan has a 6% interest rate, and you now qualify for a 3% loan with the same terms, you will save dramatically on interest costs when your loan is finally paid off if you refinance instead of sticking with your current loan.You might also consider an auto loan refinance if you want to reduce your monthly payment. Your monthly payment can be reduced if you are able to get a new loan with a lower interest rate, you extend the payoff period of the loan, or you get a lower interest rate and extend the period of the loan. Keep in mind that simply extending the period of the loan with all other factors remaining the same may increase your total interest cost in the long run.How To Refinance Your CarThere are a number of options that you can choose from in order to refinance your current auto loan. The first and perhaps the simplest option would be to contact your current lender to see if they can offer you a better rate on your current loan or if they can simply extend the payoff period of your loan. Going through your current lender would save costs associated with lien transfer fees and would save you the hassle of having to find a new lender.If you’d rather not stick with your current lender, then you can shop around to find another lender who is willing to offer you the best rates and terms on your new loan. The quickest and easiest way to find a qualified lender with better loan rates is by searching on the internet. There are numerous online lender comparison tools designed to get you in front of multiple lenders in order to compare the different rates and terms that they have available.Once you locate your lender of choice, then all you have to do is apply for the refinance loan with them. They will normally check your credit score and if you are approved for the auto loan refinance, your new lender will pay off your current loan and your title will be transferred to them.Calculating The Cost Of Auto Loan RefinanceThe quickest and easiest way of determining how much it will cost to refinance your current auto loan is to use a refinance auto loan calculator. You simply input the total amount of the loan, the interest rate, the number of months it will take to pay off the loan, and any down payment that you will be making. The end result is the total cost of the new loan that you will be taking on based on the new refinance auto loan rates. You can use the loan calculator to perform the same calculation for your current loan in order to determine whether or not refinancing is more cost effective.Advantages and Disadvantages Of Refinancing Your VehicleThere are many advantages and disadvantages of refinancing a vehicle. In order to make the decision on whether or not refinancing makes sense for you, you have to consider the advantages and disadvantages and whether or not they apply in your particular situation.AdvantagesLower Interest Rate – One of the biggest benefits of refinancing that consumers aim to take advantage of during certain economic conditions is lower interest rates. Lower interest rates on loans help save the borrower money in the long run. This is due to the fact that lower interest rates result in lower overall interest costs on the loan.Reduce Monthly Payment – Another important advantage of the auto loan refinance is that it can help you reduce your monthly payment. Borrowers can reduce their monthly payment either by extending the term of the loan or by getting a lower interest rate.Stress Relief – Often times borrowers enjoy lower stress levels when they are able to refinance and get a lower monthly payment. If you have seen a drop in income, have more bills to pay, or simply need more money for other expenses each month, refinancing can help give you the financial relief that you need.DisadvantagesThe auto loan refinance can also have disadvantages that you might want to consider before going through the process.Increase Interest Cost – If you refinance simply to extend the term of your loan and get a lower monthly payment, the auto loan refinance will most likely end up costing more in the long run due to higher interest costs. This would be true if you refinanced with a loan that has the same interest rate and a longer payoff period.
Time Travel: It’s Been Done Before!
Could we really travel through time? The short answer is yes! That’s right. We all have the ability to leap forward through time, even if we don’t realize it. If you wanted to jump to the future, you can simply go to sleep and wake up a few hours later right? Of course that’s cheating the question. We want to be able to go back and redo those silly mistakes we made many years ago. who doesn’t wish they could go back and talk to their 15-year-old self? Tell them not to make the mistakes you did (or they will). Or perhaps you’d rather travel 500 years into the future and see those flying cars we were promised by the year 2000. Fortunately, time travel is theoretically possible.In fact there is no law in physics that prevents time travel. That’s right, according to all the laws of physics we know, it’s perfectly plausible to travel through time at will. But as the saying goes, with great power comes great responsibility. Time travel is an extremely dangerous endeavor with devastating consequences, and is also riddled with paradoxes.For example, what if I travelled back in time and prevented World War II? Sounds like a brilliant idea right? Countless lives would be saved, I’d be hailed as a hero! Not necessarily. Although I’d be saving lives, I’d also be destroying others. What about all the technology that we rely on today that was developed during the war, such as jet engines and nuclear power. In fact the world map could be completely different. We could actually be worse off than simply leaving history as it was.Another famous time travel paradox is the grandfather paradox, which basically states that if we were to say for instance, I travel back to a time before my parents were born and prevent my grandfather from meeting my grandmother. My parents couldn’t have met and thus, I would never have been born. So how could I have gone back in time to prevent my grandparents from meeting in the first place.So we can see that time travel could be a bad idea, but let’s say we really want to go back in time, how would we do it? Well first we need to understand how time works.Time is something we are all very familiar with, we all know what it is, but yet we can’t see it, touch it, we can’t seem to interact with it in any way, we can only observe it. Isaac Newton thought that time was constant and never deviated, which would of course make time travel impossible. Even Einstein believed it was impossible, yet it is his equations that make it possible. Einstein theorized that space and time are inexplicably linked in what he refers to as “space-time”. So in theory, if I was to warp space with something extremely powerful like a black hole, I would also be warping time. While this appears to be true and scientists continue to explore its possibilities, the real possibility for time travel, seems to be in his other theory; Relativity. In fact time travel using relativity isn’t just a theory, it’s actually been done, several times! Now you probably think I’m crazy but the secret seems to be in going extremely fast.According to Einstein’s theory of general relativity, no object with mass may travel faster than the speed of light, which is an astonishing 299,792,458 metres per second in a vacuum (that’s no air). That’s an incredible 1,080 million kilometres an hour! So according to General Relativity, we can only travel at 99.99% the speed of light. But lets say for instance that I’m sitting at the back of a plane travelling at the speed of light and I walk to the front of the plane from the back at a rate of 10 kilometres an hour. I’ll leave the equations out of this, but that would mean that my speed plus the speed of the plane would mean that I’m travelling at 1,080 million and ten kilometres an hour, which is 10km/h faster than light, right? Wrong. According the theory of relativity, time would actually slow down for me to prevent me from travelling faster than light. Sounds weird doesn’t it.Of course this scenario would never happen in real life, as I have already said we can’t travel at or faster than the speed of light. In fact you would need more than an infinite supply of fuel to travel faster than light, which is obviously impossible.So then what is relativity? Einsteins theory of relativity basically states that if I’m driving down the road at 50km/h and drive past someone standing on the side of the road, to them I would appear to be travelling at 50km/h, I’m sure you already know this. However to me in the car, they too would travel past me at 50km/h. But then if someone where to drive beside me in another car travelling at 50km/h, to them I would appear to be completely stationary. Hard to believe? It’s the same thing that makes it look the car driving beside you on the highway sometimes seems to be floating just outside your window. I’ll leave the complicated equations out of this for now, but you can use simple addition and subtraction to confirm this theory. If you’re travelling in the same direction as the object you’re observing, in this case the other car, you subtract your speed from theirs. So 50km/h minus 50km/h is equal to 0km/h. so they would appear to be stationary. If we’re traveling in the opposite direction we add our speed to theirs. So 50km/h plus another 50km/h is equal to 100km/h. So if we drove past the other car at the same speed in the opposite direction, they would appear to be travelling at 100km/h.So how does all this work, and more importantly, how did they actually manage to travel through time? Well as it turns out, the faster we travel, the slower time will pass. This was proven when scientists placed an atomic clock, which is an extremely accurate clock down to one billionth of a second, on the space shuttle and observed it its behavior. Before launch the clock was perfectly synced with another atomic clock here on earth, and once the shuttle had returned to earth they put the two clocks together. They then discovered the clock from the shuttle was slightly behind the clock that remained on earth. meaning time had past slower for the clock on the shuttle than the clock that remained on Earth.So basically astronauts are in fact also time travellers. Sergei Krikalev, the current record holder for the longest time spent in space (about 804 days or 2.2 years) is actually half a second behind the rest of the world. furthermore, scientists have actually calculated that if we could orbit the Earth at 99.99% the speed of light for 7 whole years, we would actually land back on earth 500 years in the future. This effect is known as Time Dilation. What a spectacular realisation! Time travel may actually be within our reach after all. The only problem is inventing a machine or vehicle capable of travelling that fast. Unfortunately it looks like that might be just out of our reach for now. We would actually need the power of a whole star to get to that speed.But what about travelling back in time? So far neither general or special relativity allow for travelling backwards in time and it appears as though no other laws of physics will allow travel to the past. Such travel to the past, as stated above would lead to paradoxes that could result in the collapse of an entire universe, or a completely new one to be formed. This is part of the Many World Interpretation of Quantum Theory. There are other theories to travel both forward and backwards in time such as black holes and wormholes, but I’ll discuss those in the future.So for now it looks like we could theoretically travel to the future, but unfortunately we can’t go back and tell our younger self not to buy that car from that dodgy looking salesman, or to buy stocks in Apple and Microsoft when they first start out. So we’ll just have to settle for travelling forwards in time at the same rate we always have, and just to wait to see what the future holds.