Be Sure That You Can Afford A Bridging Loan

Bridging Loans are short-term loans that are taken out pending a long-term or larger financing. A good example for the use of this loan is property. If you want to buy a new home but do not yet have the funds because your old house has not yet been sold, you can take out a this loan to pay for the new home, until the old property has been sold. The payment for the old house is the larger financing, but bridge loan is what you need in order to pay for the new house before someone else buys.

This type of loan can be risky. Before thinking of applying for one, consider first your other options. If you think you can raise the money to bridge the gap between the buying of the new house and the selling of the old house, by all means, do so. Bridging loans are considered as the last option because of the higher interest rates which can be anywhere from 11% to 15% and the shorter time to pay it which is usually from 1 week to 2 years. Most people who take out this loan have to mortgage their property or use it as collateral just to secure the loan.

There are two kinds of bridging loans on the market, the first being closed, this loan is only available to buyers who have already sold their property and are just waiting for the sale to be finalized. Since the exchange is basically a done deal sale, lenders are more prone to offering closed bridge financing. On the other hand, an open bridge is when the buyer wants to buy a new property but has yet to put their old property on the market. There is uncertainty in this type of loan and lenders will want to make sure that you have plenty of equity in your properties. Open bridge loans usually have a twelve-month limitation so be careful if you plan to take out this kind of loan.

If you are new to bridge loans, this is how it usually works. The lender or bank will want to see the offer on the new property you want to buy as well as proof than your old house is already in the market. The lenders, for their benefit and safety, will need to know how you intend to pay the loan as well as the interest rates. It is important for the person who wants to borrow to have a strategy or plan if the sale falls through. When it comes to interest rates, the borrower has two options. The borrower has the option to go with a lower arrangement fee or a lower rate of interest. Remember to choose carefully. If you think you can pay off the loan within weeks or months, it is better to get a loan with a lower arrangement fee but if you can’t pay it immediately, then the lower interest rate is a much better option to choose.

These types of loans are useful when you are in immediate need of cash. But always know your limits. If you are not confident that you can pay it, do not get bridging loans.

Bad Credit Borrowers Can Buy Their Dream Car with Dealership Financing

Cars are not just a materialistic invention anymore. They are part of us and we absolutely love them. Americans are extremely emotional towards automobiles. Owning that perfect car is everyone’s dream but not every American has the privilege to fulfill it. And, what acts as an obstacle in buying that perfect car? Bad credit – It’s one of the most dreaded situation in the world of auto financing.

People have faced their worst financial fears in the past few years. There have been lay-offs which have made regular payments difficult. All this has resulted in bad credit scores. A poor credit score guarantees high interest rates and unaffordable monthly payments. This means you never get to satisfy your car requirements. But, it’s time to say good-bye to these troubled times. Dealership financing is a ray of hope for troubled credit borrowers. Dealers understand that people are unable to purchase a car through credit unions and banks. Demand for bad credit loans is increasing ever and it makes sense to offer such a loan type. If poor credit is your story, dealers can help you.

Dealers and Finance

In dealership financing, dealers don’t finance your car. They act as an effective link between lenders and borrowers. They have a network of lenders and banks and this network provides car loans. Also, dealers work with car manufacturers’ “captive” finance company. This means you have greater chances of availing a bad credit auto loan because of several options.

How Can You Benefit From Dealership Financing?

When you have a bad credit score, lenders consider you very risky. They don’t want to lose money and so, shy away from offering car loans. For a poor credit borrower, a dealership can be a great option. Other than this, there are several other advantages when it comes to getting a loan from dealers.

1. It is quite simple and a rather quicker option.
2. One stop shop solution for all your car needs.
3. Tie-ups with several lenders mean easier car loans.
4. Owing to stiff competition, dealers offer several low-rate programs.
5. Banks have stringent lending rules and it may act reluctant in future for another loan. But, if you opt for dealer financing, your car is used as collateral so you get to keep your credit options open.
6. Lenders ask for detailed information about the car. But, as the dealers know about their own lot, undue scrutiny can be avoided and you won’t be required to give all the tiring details.

Precautions to Avoid Any Frauds

Dealership financing is often considered a sham to con borrowers. But, not all dealers cheat borrowers. They want to continue business and satisfying their customers is the only way to remain in business. Interest rates would be high because of your bad credit history, but by no means unfair.

Not every dealer will con you, but it is always important to be careful. Solve your doubts every step of the way. Understand each and every aspect of the deal. If you are not confident of the loan contract, take legal help. It’s always better to be clear from the beginning.

So, be cautious and get that car you always wanted with the help of dealership financing. Your automotive dream should no longer be left to fate. Don’t suffer because of bad credit history because your future looks great with car dealer financing.

Finding Bad Credit Auto Loan Financing Is Possible

If a person runs into difficulty with their finances and they start to miss payments on their bills or even go as far as being bankrupt all of this information goes onto their credit rating information. If they have applied for many loans in an attempt to get finance this will also show up. This all leads to them having a bad credit rating and financing companies being given a bad view of them as potential customers. When they want to buy a car and need finance but they know they have a bad credit rating there can be things they can do to get car loans with bad credit.

One thing they can do to improve their chances is to clean up their credit report. They can order a copy and then look at what if anything is giving them a bad rating. This can be anything from numerous accounts that have zero balance, defaults on debts and even bankruptcies. They need to work at fixing these issues and then they will have a better chance. The fewer issues they have on their report the easier it will be to borrow, it’s as simple as that.

The other way of course is to look at the best auto loans for bad credit. For this they have the best tool available to them in the internet. On there they will be able to compare bad debt loans and look at the difference between the interest rates offered and just what they can get. They need to be aware of their situation and what they can safely borrow before getting in touch with these companies. The company will also look at the client’s financial status with them and decide what a safe amount to lend them is.

No credit car loans will have more restrictions on the way they pay it back and they will take harder work to find but they are possible to get. They will also have more chance of getting a loan if they can get a co-signer with a good credit rating as this will give them more security for the loan. The main aim though of course is to get that loan so that they can finance your new car.

Auto loan pre approval is a way of getting finance and is a safer way for their finances. If the company agree to lend them money they will look at what the customer can afford to spend and what they can agree to lend to them. It’s important to know the limits of their finances and give them the best chance to pay back the loan back. They cannot go for an amount of money that they cannot afford to pay back and must be aware that the auto loan interest rate can be higher because of their credit rating. The credit rating has a huge effect on their ability to borrow money as this is the report that shows just how much they can be trusted by the company agreeing to lend them money. Many companies say no based on these reports for the simple fact they cannot take the risk that the customer can’t pay it back.

Borrowing money to purchase a car is available even if you have bad credit, as stated though it’s all down to how much the loan company can trust the customer. They have to show willingness and an ability to pay the money back and they have to agree to a plan and an amount of money that the company believe can be paid back without problems.