Getting an auto loan approved is dependent on a number of factors such as the 
credibility of the borrower, the repayment capacity, the source of the income as well as the credit history. The lenders need to be assured about the applicant’s regular source of income and his capability to re-pay the amount borrowed within the stipulated time frame. This is not it. Before approving the auto loan, the lenders tend to check the credibility of the borrower. This means that they would check the creditor’s past credit scores and records. Arrears, delayed payments, defaults, filing bankruptcy are some of the aspects which the lenders treat as vulnerable credit behavior and creditors with such tags are refereed as bad credit borrowers. And when it comes to approving a loan application of these creditors, the lenders usually hesitate.
However, with the slowdown of the global economy, there are there has been an upturn in this situation. Bad credit was no longer any exception as the instable financial market due to recessionary saw millions of bad credit borrowers. Bad credit borrowers thus can get auto loans approved, but have to pay a little extra rate of interest. In the following paragraphs, we will discuss some of the viable processes that can ensure instant approval of bad auto credit loans thus minimizing the hassle of the creditors.
Assessing the Credit Score: The first and the foremost thing that a borrower needs to follow before seeking for auto loan is a clear idea about his current credit status. The credit status can be found out from the credit score and is provided by the credit bureaus free of cost. Here, the creditors can find every detail regarding their past credit. Once this thing is assessed, the creditor comes to know whether his credit score is at par with a particular lender’s terms and conditions. There are some lenders who approve the loans of the creditors with good credit rate and hence assessing one’s own credit score will help an individual to avoid the humiliation of loan disapproval. A person with a bad credit history can search for the bad credit lenders and apply for auto loans.
Considering the Budget and deciding On the Loan Amount accordingly: After you have analyzed the credit status, it is time for estimating the budget. Always remember, that there is a few or no auto financing firm that will offer you full finance on your vehicle. Hence, it is necessary to chalk out your budget and decide on the amount you wish to borrow, accordingly. Auto loans will require you to pay a monthly installment and the higher the amount and the period of the loan, the higher will be the interest rate. Thus, it is also necessary to evaluate your own capability to pay the installments. Bad Auto credit loans generally come with a higher rate of interest and it is always smart to opt for minimum loan amount and higher down payment.
Comparing the Loan quotes: The rate of interest on bad auto credit loans varies with one lender to the other and hence to get a fair deal, it is smart to compare the loan quotes of multiple lenders. The loan quotes can be availed for free and look to settle with one that offers low rate of interest. As a creditor, you also need to apply for auto loan from a lender which does not impose hidden charges such as early payment penalty, processing fee etc.
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One reason why people have as much money as they do is that they’ve learned to spend less than they make and save or invest the difference. It doesn’t matter how much or how little you make. If you always spend less than your income and invest or save the extra, you’ll always be rich.
There are people making $500,000 a year who are just as broke as someone making $20,000 a year. That’s because the person making $500,000 a year has bills that equal $500,000 a year and the person making $20,000 a year has bills that equal $20,000 a year. If your bills always equal or exceed your income, you’ll always be broke no matter how much you make.
So when I say spend less money, I’m not saying you can’t enjoy the good things in life. I’m saying that you must always spend less than you make. We all want nice things – a new car, a large home, better clothes. But true wealth comes from being able to purchase what you desire while making more than you spend.
People who drive around in a new Porsche aren’t necessarily rich. They could be in debt and barely scraping by, but they look rich because of the car they drive. Likewise, people who drive an older car aren’t necessarily poor. They could be saving and investing their money instead of buying a car that depreciates the second it’s driven off the dealer’s lot.
Once you start making more money, it’s hard not to spend more. If you start making a lot of money but spend more than you make, you could end up right back where you were or even worse.
Grab a hold of a painful memory like the job you dislike, the stress that lack of money causes, or the things you could not provide your family because lack of money, and let that be your conscience on where to put your newfound wealth. Spend less than you make, invest the difference back into savings, don’t overleverage, and you will be on your way to life-long financial independence.
The next time you want to buy something, just ask yourself this question: Do I need it or do I want it? Getting to your desired level of success takes a few changes, and living within your means is an important one. You’re not going to live conservatively for the rest of your life, just long enough to pursue your long term goal of financial independence. As your income slowly grows, so will your available budget of fun money. And one day you’ll look around and realize that you’re making more money than you ever thought possible because you’re spending less.
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As President Obama unveiled the 2013 fiscal year budget, the nation’s financial situation came back into sharp focus. Experts say partisan gridlock in Washington means the budget will probably go nowhere.
Considering this is an election year, however, expect politicians to harp on facts, figures and terms that most Americans weren’t taught in high school. To help out, it’s time to dredge up lots of scary facts to make you pay attention.
Before we get going, a quick primer on the number TRILLION:
- $1 trillion = $1,000 billion or $1,000,000,000,000 (that’s 12 zeros)
- How hard is it to spend a trillion dollars? If you spent one dollar every second, you would have spent a million dollars in 12 days. At that same rate, it would take you 32 years to spend a billion dollars. But it would take you more than 31,000 years to spend a trillion dollars.
- And now, some scary facts about the debt and the deficit — some basics:
- Deficit = money government takes in — money government spends
- 2012 US deficit = $1.33 trillion
- 2013 Proposed budget deficit = $901 billion
- National debt = Total amount borrowed over time to fund the annual deficit
- Current national debt = $15.3 trillion (or $49,030 per every man, woman and child in the US or $135,773 per taxpayer)
let’s get started!
1. The U.S. national debt on Jan. 1, 1791, was just $75 million dollars. Today, the U.S. national debtrises by that amount about once an hour.
2. Our nation began its existence in debt after borrowing money to finance the Revolutionary War. President Andrew Jackson nearly eliminated the debt, calling it a “national curse.” Jackson railed against borrowing, spending and even banks, for that matter, and he tried to eliminate all federal debt. By Jan. 1, 1835, under Jackson, the debt was just $33,733.
3. When World War II ended, the debt equaled 122 percent of GDP (GDP is a measure of the entire economy). In the 1950s and 1960s, the economy grew at an average rate of 4.3 percent a year and the debt gradually declined to 38 percent of GDP in 1970. This year, the Office of Budget and Management expects that the debt will equal nearly 100 percent of GDP.
4. Since 1938, the national debt has increased at an average annual rate of 8.5 percent. The only exceptions to the constant annual increase over the last 62 years were during the administrations of Clinton and Johnson. (Note that this is the rate of growth; the national debt still existed under both presidents.) During the Clinton presidency, debt growth was almost zero. Johnson averaged 3 percent growth of debt for the six years he served (1963-69).
5. When Ronald Reagan took office, the U.S. national debt was just under $1 trillion. When he left office, it was $2.6 trillion. During the eight Regan years, the US moved from being the world’s largest international creditor to the largest debtor nation.
6. The U.S. national debt has more than doubled since the year 2000.
- Under President Bush: At the end of calendar year 2000, the debt stood at $5.629 trillion. Eight years later, the federal debt stood at $9.986 trillion.
- Under President Obama: The debt started at $9.986 trillion and escalated to $15.3 trillion, a 53 percent increase over three years.
FY 2013 budget projects a deficit of $901 billion in 2013, representing 5.5 percent of GDP, down from a deficit of $1.33 trillion in FY 2012, which was the fourth consecutive year of more than $1 trillion dollar deficits.
8. The U.S. national debt rises at an average of approximately $3.8 billion per day.
9. The US government now borrows approximately $5 billion every business day.
10. A trillion $10 bills, if they were taped end to end, would wrap around the globe more than 380 times. That amount of money would still not be enough to pay off the U.S. national debt.
11. The debt ceiling is the maximum amount of debt that Congress allows for the government. The current debt ceiling is $16.394 trillion effective Jan. 30, 2012.
12. The U.S. government has to borrow 43 cents of every dollar that it currently spends, four times the rate in 1980.
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Finance charge is actually the fee which is added to the total loan amount. The periodic finance charge can help bank and financial institutions earn money which can be further utilized for a planned business expansion. Even though these charges can fluctuate, a certain minimum finance charge is taken from the loan seekers irrespective of the kind of loan availed by him. In the next few paragraphs, let us know more about this finance charge.
What is a Finance Charge?
Finance charge levied on customers is a means for lenders to earn attractive returns over a long period of time. Every month, the customer has to pay a certain interest for the loan within a few days from the starting of the month. The financial institutions or credit card companies also reserve the right of charging extra finance charge in case the customer makes late payments. The finance charge demanded by the banks from their customers changes depending on the condition of the economy. In case there is pressure from increased inflation, then the finance charge may be raised as a measure to deal with the situation. Also the finance charge charged by government controlled banks and private banks would be different. Generally, it has been observed that private banks will ask for more interest.
Now, talking about credit cards, the credit card providers impose a minimum finance charge on the balance amount which is not cleared by the customer. This can be explained with the help of a simple example. Suppose you own a credit card and have kept an unpaid balance of one dollar on the card. Then, your lender would have the official authority to charge you an amount which would be the minimum finance charge of around half a dollar. Finally, what we conclude is that if the balance amount on your credit card is too meager, then you should immediately pay it off instead of paying your lender the minimum finance charge. Finance charge is also applicable in the case of extension of the credit amount availed.
Finance charges for the secured loans will be lesser and more attractive for customers than those for unsecured loans. The application of periodic interest rate to the balance of your account can give the finance charges. The calculation of periodic interest rate can be done by taking a ratio of the annual percentage rate and the number of billing periods. The finance charge can be different for different people such as businessmen or those applying for a personal finance. This is because business loans are generally sanctioned at high rates of interests as compared to other loans. The interest amount charged by private money lenders is always higher than that charged by banks.
Adjusted balance method is widely used by financial institutions to calculate finance charge. In this method, the new charges are added to the balance from your previous statement. Now, from this amount, the amount of money which you pay is subtracted and the remaining amount is multiplied with the interest rate number. In the previous balance method, your credit card provider will simply multiply the balance of your previous statement with the interest rate. Naturally, such methods are more profitable to the card issuers than the customers. At this point, it is very essential for all credit card customers to understand that the rules and regulations related to finance charge can vary from one service provider to another.
Hopefully, this information on finance charge will help you manage your finances well. So, take smart decisions today to secure your financial future.
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