Common Mistakes to Avoid When Filing For Bankruptcy

Common Mistakes to Avoid When Filing For Bankruptcy

Many debtors file for bankruptcy when they are in a financial crisis. Applicants are supposed to put in a lot of effort and time for their applications to be considered.

Facts about Bank Loans

Facts about Bank Loans

People borrow money when they don’t have cash or when making a major purchase. Bank loans are known for offering flexible terms to their customers.

Benefits of Hiring a Cosigner When Applying For an Auto Loan

Benefits of Hiring a Cosigner When Applying For an Auto Loan

Are you planning to buy a big car? Taking a car loan can help you in purchasing the vehicle of your dream.

loan-money

Facts about Bank Loans

People borrow money when they don’t have cash or when making a major purchase. Bank loans are known for offering flexible terms to their customers. They are not as expensive expensive as advance or payday loans. You should consider the advantages and disadvantages associated with these loans before applying for a bank loan.

Benefits

Better Rates

interest rates

You can save money on interest by borrowing money from banks. People who borrow money using their credit card are required to pay a processing fee for the money borrowed. Credit card companies are also known for charging high interests rates when issuing cash. Individuals who need money can also apply for payday loans. However, these loans are known for carrying high interest rates of about 400 %.

Making Expensive Purchases

You can easily take a loan from banks when purchasing big-ticket or expensive items. For instance, you can use the money borrowed to purchase your first home, upgrade your cars or renovate your existing homes. You can also take advantage of bank loans to consolidate your current loans. Additionally, this is an ideal option for meeting your medical expenses which cannot be covered by insurance.

Long-Term Costs

Do you need money to buy an expensive item? Banks will give more time to service your loans. For instance, some home loans have along repayment period of up to 30 years. Car loans might take a short time, but it will take you several years to pay off the car loan. Loans that have along repayment periods have a high amount of interest.

Flexibility

Borrowers are given flexible terms of interest rates, allocation requirements, and fees. These variables can vary from one bank to the other. They can also be adjusted or negotiated. Borrowers have an opportunity of shopping around for the best terms which suit them. Borrowers are advised to work closely with the banks to get the best deal possible. You should avoid loans that have high interest rates as they can make your loan unpalatable.

Disadvantages

credit history

Credit History

Most banks will use the customer’s credit history before lending him/her money. People who poor credit cannot get favourable loan terms. Sometimes it might even be difficult to secure a loan if your credit score is poor. Borrowers can build up their credit by making repaying their loans successfully.

Strict Requirements

Some banks will require some forms of collateral to approve your loan. Many people avoid going for unsecured loans because they have high interest rates.

car loan

Benefits of Hiring a Cosigner When Applying For an Auto Loan

Are you planning to buy a big car? Taking a car loan can help you in purchasing the vehicle of your dream. However, some people have a poor credit score which ruins their chances of getting auto loan approval. If you are among them, you don’t have to worry anymore. Anyone who is having a poor credit score can get auto loan approval by reaching out to friends who have good credit scores. You can ask one of them to guarantee your auto loan as a cosigner. Individuals who have cosigners can easily qualify for auto loans.

loan approved

Cosigners are creditworthy people who agree to share the loan obligations of their friends. You can approach one to increase the chances of getting an auto loan approval. He or she will lend you a helping hand and help you in building your credit score. These are people who guarantee the lenders that borrowers are capable of making regular payments.

What Do You Need To Become A Cosigner?

  • Proof of your ability to pay– As a cosigner, you should prove that you have sufficient income to pay the auto loan. This means that your employment status must be stable. Otherwise, the borrower’s loan application may be rejected if the cosigner is unable to prove his/her financial capability.
  • Willingness to cosign your friend’s loan– you should be willing to repay the loan if your friend fails. He or she is equally responsible for the amount of money borrowed. The agreement made should be formal; in writing. Verbal agreements are not accepted.
  • Your residence and employment– You should have stable employment and residence. This is a prerequisite for loan approval. Lenders are comfortable when working with people who have worked.

Advantages of Using a Cosigner

loan payments

  • Credit score- This will give you a chance of rebuilding your credit score. You can do this by making regular payments to your lender.
  • Low interest rate– You will be given an opportunity of having a reliable option. This is the best way of avoiding high interest loans.
  • Experience matters-In addition to having a high credit score, he or she can provide you with sound financial advice.

What Happens When the Borrower Miss Payments?

Both the borrower and the cosigner are responsible for the loan. This means that the lender can sue both of them. This is something that can adversely affect your credit score as a cosigner.