What Is the Average Used Car Loan Rate?

October 30, 2018 &• 4 min read by Brooke Niemeyer Comments 0 Comments

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Article originally published July 13th, 2016. Updated October 30th, 2018.

More people are opting to lease their new set of wheels instead of purchasing them, according to Q2 2018 data from Experian.

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The number of auto loans grew to an all-time high, with leasing surpassed 30% of all new consumer vehicle sales. But the interest rates consumers are getting on these loans has stayed low, especially for used cars. In fact, Experian reported that average loan rates saw some increases, but still remain historically low.

Loan rates for a new car in Q2 of 2018 were 5.76%, up from 5.20% a year prior. Franchise used rates are 8.28% (down from 7.88% in Q2 2017), while independently used rates are 11.87% (down only 0.17% from Q2 2018).

The Experian Automotive scoring deems prime consumers as those with scores of 661 to 850, nonprime users with scores of 601 to 660, and subprime users as those with scores of 300 to 600. Consumers on all risk tiers are increasingly choosing to lease over purchasing cars, according to the report.

The number of prime consumers choosing used vehicles increased from 55.61% in Q2 2016 to 55.79% in Q2 2018. The number of nonprime and subprime consumers also saw increases, from 21.75% to 22.05% and decreases of 25.71% to 25.05%, respectively.

Experian reported that the increased number of prime consumers choosing used vehicles resulted in “score increases, greater percentages of used financing in the prime risk tier and lower average used rates.”

If you’re thinking about buying a used car and taking out an auto loan to do it, it’s a good idea to review your credit first. Having a good credit score can help you qualify for better terms and conditions on your financing. (To find out where your credit stands, you can see two of your credit scores for free, updated every 14 days, on Credit.com.)

And when you’re figuring out how much you can afford, remember to consider not only how much your monthly car payment will be but also how much the loan will cost you in the end, by considering the interest rate and length of the loan term. (The longer the loan term, the more interest you will pay.)

If you aren’t happy with what you see, don’t worry — you may be able to improve your credit scores by paying down any big credit card balances, disputing errors and limiting credit inquiries until your score has had time to rebound.

When attempting to get a used car loan, you will want to gather all the necessary documentation including the following:

  • Your Driver’s License
  • Proof of all of your income- this can be a paycheck stub or even a tax return
  • A utility or phone bill to prove your residency
  • Your social security number so they can run your credit check

These days, you can often apply for the used car loan right online or even by phone which makes it the process that much easier and accessible.

It is always a good idea to start with your own bank or credit union for financing because you have already established history and relationship with them. Typically, you will be able to find the absolute best rates and more favorable terms if you go through your own bank.

They will also be able to advise you on all the options that are available to you as you begin the journey toward car ownership.

You never want to settle on the first rate you are given; don’t be afraid to shop around to see if you can find something better than the typical auto loan rates. You will find the best auto loan rates if you have good credit. Additionally, if you apply for multiple loans within a 14 day period, it will only count as one hard inquiry so that you can find the best rate possible.

Typically, you will find that the car loan rate on a used car is going to be a bit higher than the rates you would find with a newer car. For example, good credit car loans can see an interest rate as low as 3.9% for a newer model and a little more than 5% for its older version.

The following are the average rates you may find for a used car loan that carries a 60-month repayment term based on a range of different FICO Scores.

With a credit score between 500 and 589, you may be looking at interest rates on the loan as high as 16%. A bad credit score also makes it a lot harder to get approved for the car loan initially as well.

A credit score in between 590 and 619 will typically see the 15% mark, and the percentages get lower from here with the lowest coming in at 4.39% with a credit score between a 720 and 850.

A longer loan term will usually mean you will have a lower monthly payment, but you will also accrue more in interest with a longer loan term.

When determining the average used car loan rate and the amount of interest you may have to pay on a loan, you will want to check all three of your credit reports, examine your credit score and credit history and determine what steps you can take to improve your credit, so you can qualify for a lower interest rate.

Again, if you bank with a credit union, always start there first because the lender will already be able to see if you are high risk or not. Car buyers should always take their time, do their research, and tackle the work of fixing their credit prior to obtaining a loan for a car. It is always best to shop smarter and save money in the long run.


Source: credit.com

4 Questions to Ask Yourself Before Leasing or Buying a Car

According to Kelley Blue Book, the average price for a light vehicle in the United States was almost $38,000 in March 2020. Of course, the sticker price will depend on whether you want a small economy car, a luxury midsize sedan, an SUV or something in between. But the total you pay for a vehicle also depends on a number of other factors if you’re taking out a car loan.

Get the 4-1-1 on financing a car so you can make the best decision for your next vehicle purchase.

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Decide Whether to Finance a Car

Whether or not you should finance your next vehicle purchase is a personal decision. Most people finance because they don’t have an extra $20,000 to $50,000 they want to part with. But if you have the cash, paying for the car outright is the most economical way to purchase it.

For most people, deciding whether to finance a car comes down to a few considerations:

  • Do you need the vehicle enough to warrant making a monthly payment on it for several years?
  • Does the monthly payment work within your personal budget?
  • Is the deal, including the interest rate, appropriate?

Factors to Consider When Financing a Car

Obviously, the first thing to consider is whether you can afford the vehicle. But to understand that, you need to consider a few factors.

  • Total purchase price. Total purchase price is the biggest impact on how much you’ll pay for the car. It includes the price of the car plus any add-ons that you’re financing. Depending on the state and your own preferences, that might include extra options on the vehicle, taxes and other fees and warranty coverage.
  • Interest rate, or APR. The interest rate is typically the second biggest factor in how much you’ll pay overall for a car you finance. APR sounds complex, but the most important thing is that the higher it is, the more you pay over time. Consider a $30,000 car loan for five years with an interest rate of 6%—you pay a total of $34,799 for the vehicle. That same loan with a rate of 9% means you pay $37,365 for the car.
  • The terms. A loan term refers to the length of time you have to pay off the loan. The longer you extend terms, the less your monthly payment is. But the faster you pay off the loan, the less interest you pay overall. Edmunds notes that the current average for car loans is 72 months, or six years, but it recommends no more than five years for those who can make the payments work.

It’s important to consider the practical side of your vehicle purchase. If you take out a car loan for eight years, is your car going to still be in good working order by the time you get to the last few years? If you’re not careful, you could be making a large monthly payment while you’re also paying for car repairs on an older car.

Buying a Car with No Credit

You can buy a car anytime if you have the cash for the purchase. If you have no credit or bad credit, your options for financing a car might be limited. But that doesn’t mean it’s impossible to get a car loan without credit.

Many banks and lenders are willing to work with people with limited credit histories. Your interest rate will likely be higher than someone with excellent credit can command, though. And you might be limited on how much you can borrow, so you probably shouldn’t start looking at luxury SUVs. One tip for increasing your chances is to put as much cash down as you can when you buy the car.

If you can’t get a car loan on your own, you might consider a cosigner. There are pros and cons to asking someone else to sign on your loan, but it can get you into the credit game when the door is otherwise barred.

Personal Loans v. Car Loans: Which One Is Better?

Many people wonder if they should use a personal loan to buy a car or if there is really any difference between these types of financing. While technically a car loan is a loan you take out personally, it’s not the same thing as a personal loan.

Personal loans are usually unsecured loans offered over relatively short-term periods. The funds you get from a personal loan can typically be used for a variety of purposes and, in some cases, that might include buying a car. There are some great reasons to use a personal loan to buy a car:

  • If you’re buying a car from a private seller, a personal loan can hasten the process.
  • Traditional auto loans typically require full coverage insurance for the vehicle. A personal loan and liability insurance may be less expensive.
  • Lenders typically aren’t interested in financing cars that aren’t in driving shape, so if you’re buying a project car to work on in your garage during your downtime, a personal loan may be the better option.

But personal loans aren’t necessarily tied to the car like an auto loan is. That means the lender doesn’t necessarily have the ability to repossess the car if you stop paying the loan. Since that increases the risk for the lender, they may charge a higher interest rate on the loan than you’d find with a traditional auto loan. Personal loans typically have shorter terms and lower limits than auto loans as well, potentially making it more difficult for you to afford a car using a personal loan.

Steps You Should Follow When Financing a Car

Before you jump in and apply for that car loan, review these six steps you should take first.

1. Check your credit to understand whether you are likely to be approved for a loan. Your credit also plays a huge role in your interest rate. If your credit is too low and your interest rate would be prohibitively high, it might be better to wait until you can build or repair your credit before you get an auto loan. Sign up for ExtraCredit to see 28 of your FICO scores from all three credit bureaus.

2. Research auto loan options to find the ones that are right for you. Avoid applying too many times, as these hard inquiries can drag your credit score down with hard inquiries. The average auto loan interest rate is 27% on 60-month loans (as of April 13, 2020).

3. Get your trade-in appraised. The dealership might give you money toward your trade-in. That reduces the price of the car you purchase, which reduces how much you need to borrow. A few thousand dollars can mean a more affordable loan or even the difference between being approved or not.

4. Get prequalified for a loan online. While most dealers will help you apply for a loan, you’re in a better buying position if you walk into the dealership with funding ready to go. Plus, if you’re prequalified, you have a good idea what you can get approved for, so there are fewer surprises.

5. Buy from a trusted dealer. Unfortunately, there are dealerships and other sellers that prey on people who need a car badly. They may charge high interest or sell you a car that’s not worth the money you pay. No matter your financial situation, always try to work with a dealership that you can trust.

6. Talk to your car insurance company. Different cars will carry different car insurance premiums. Make a call to your insurance company prior to the sale to discuss potential rate changes so you’re not surprised by a higher premium after the fact.

Next to buying a home, buying a car is one of the biggest financial decisions you’ll make in your life, and you’ll likely do it more than once. Make sure you understand the ins and outs of financing a car before you start the process.

Source: credit.com

How to Deal with an Underwater Car Loan When You Can’t Sell

In the complicated world of credit scores there is one fact pretty much everyone assumes is true: Late payments are bad for your credit scores. After all, negative information like late payments can stay on your credit reports for up to seven years, so the first sign of a late payment on your credit reports signals years of impending credit doom, right? Actually, that isn’t always the case.

How Are Late Payments Affecting Your Score?

It’s essential that you find out exactly how late payments are affecting your credit. Here are a few ways you can do that:

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  1. Get your free credit score from Credit.com. Our Credit Report Card will show you the factors having the greatest impact on your score, including delinquencies, and what you can do about them.
  2. Sign up for an ExtraCredit account. For less than $25 a month, you can access 28 of your FICO scores from all three major credit bureaus. You won’t find these scores all together anywhere else. An ExtraCredit account also offers $1 million in identity theft insurance, dark web and account monitoring, exclusive discounts for credit repair services, and opportunities to earn cash when you are approved for qualified offers.
  3. Get your free annual credit reports from each of the three major credit reporting agencies—Equifax, Experian and TransUnion—so you can see whether your reports contain late payments. From now until April 2021, you can get your credit report from each bureau for free every week.

Financial institutions, insurance companies and utility companies use credit scores as a way to predict how risky a customer you will be. If your credit score is low, it indicates that you are more likely to make late payments or file costly insurance claims. In turn, this means the creditor is more likely to lose their investment by lending you money.

How Long Do Late Payments Stay on a Credit Report?

Most negative items, including late payments, can stay on your credit reports for seven years, but not all negative information is equally damaging. Here’s the first late payment secret you need to know: A payment that is 30 or 60 days late isn’t going to have as serious an effect on your credit score as a payment that’s 90 days past due.

Because scoring systems are focused on predicting whether or not you’ll go at least 90 days late, a 30- or 60-day late payment that occurred long ago is actually not that damaging to your credit scores, as long as it is an isolated incident. It’s when your accounts are recently reported 30 or 60 days past due on your credit reports that your credit scores plummet temporarily.

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How Much Does a Late Payment Hurt My Credit Score?

If 30- or 60-day late payments are an infrequent occurrence, they shouldn’t cause lasting damage to your credit score unless they are recent (last two years or so) or occur on a regular basis. In this case, the fact that you are habitually late with your payments can cause long-term damage to your credit scores.

It’s a whole new ballgame once you have a 90-day late payment, however. If you have been more than 90 days late (even just once), the credit scoring models consider you much more likely to do it again. One 90-day late payment will damage your credit for up to seven years. From a scoring perspective, a single 90-day late payment is as damaging to your credit scores as a bankruptcy filing, a tax lien, a collection, a judgment or repossession. Being 90 days late causes you to be viewed as a possible “repeat offender” and a higher risk to creditors. Here’s a summary of how late payments impact your credit scores:

  • 30 days late: This record will damage your credit scores most when it is recent. The exception is if you are 30 days late often. Otherwise, a single 30-day late payment should not cause lasting damage.
  • 60 days late: Similarly, recent 60-day late payments cause the most damage. Again, the exception is if you are 60 days late often which will certainly hurt your scores. Otherwise, one late payment should not cause long term damage.
  • 90 days late: This record will damage your credit scores significantly for up to seven years. It doesn’t make a difference whether or not your account is currently 90 days late. Remember, the goal of the scoring model is to predict whether or not you will pay 90 days late or later on any credit obligation. If you have already done so you’re considered more likely to do it again compared to someone who has never been 90 days late. As such, your credit scores will drop.
  • 120+ days late: Late payment reporting beyond the initial 90-day missed payment does not cause additional credit score damage directly. However, there is an indirect impact to your scores. At this point, your debt is usually “charged off” or sold to a third-party collection agency. Both of these occurrences are reported on your credit files and will lower your credit scores further.

If you continue to miss your payments beyond 90 or 120 days, the following records may also harm your credit score:

  • Collections: Collections are the result of late payments. There are two types of collections: Those that have been sold to a third-party collection agency or those that have been turned over to an internal collection department. Regardless of which one shows up on your credit reports, your scores will suffer.
  • Charge-offs: If you fail to make payments on a credit account for 120 days or longer, the creditor may mark the account as “charged off,” meaning they have written off your debt as a loss. A charge-off is a negative notation on your credit report (it can remain there for seven years), because it shows you did not repay the account as agreed, even if you later pay off the debt. And just because the creditor doesn’t expect to get that money back doesn’t mean the debt disappears. The creditor or the third-party collector it sold the debt to can continue to try to collect the debt as long as the state’s statute of limitations allows it to.
  • Repossessions or Foreclosures: Having a home foreclosed upon or a car repossessed are both considered serious delinquencies and will lower your credit scores considerably for up to seven years. The assumption normally made by the consumer is “Hey, I gave the home or car back to the lender, why are they going to show me as delinquent?” The answer you’ll get from lenders is that you signed a contract with them to buy a home or car and pay it in full over a period of time. You failed to do so; therefore they consider you to be in default of your agreement with them and will report this on your credit reports.

Now that our late payment secrets have been revealed, let’s look at what it means to you: You should avoid making late payments whenever possible. But we now know that one 30- or 60-day late payment isn’t the end of the world. Since 90-day late payments are the real credit score busters, you should avoid a 90-day late payment at all costs.

Can You Remove Collection Accounts From Your Credit Report?

If you already have a 90-day late payment record on your credit history, your scores are already suffering. Be certain that the information is accurate on your credit reports. If it isn’t, you have the right to dispute it not only with the credit reporting agencies but also with the lenders who reported it. Your goal is to have the error corrected or removed, and once it is, your credit scores should recover.

You may have heard that you can negotiate a “pay for removal” deal with a debt collector or creditor, but these companies will likely tell you the contracts they have with the credit agencies prohibit them from doing so — otherwise, people’s credit reports wouldn’t accurately reflect their payment histories.

It’s also important to know paying off a collection account does not remove it from your credit report or improve your credit scores much. (In some newer credit score models, paid collection accounts do not have a negative effect on credit scores, but at the moment, those scoring models are the exception, not the rule.)

If your credit reports are accurate, there are still things you can do to to improve your credit scores, despite the late payments dragging them down. First of all, you’ll want to make on-time payments going forward and wait for the negative information to age off your credit reports. Beyond that, you can focus on paying off debts, using as little of your available credit on your credit cards as possible and only applying for new credit when it’s necessary. The information you get when you check your credit scores on Credit.com should help you identify which areas need your attention most as you work to improve your credit.

This article has been updated. It was originally published November 01, 2016.

Source: credit.com

20 Communication Tips for Teams Working Remotely

Should there be a difference between how you interact with your employees in-person versus how you interact with them digitally? Absolutely.

Virtual interactions lack some of our most subtle and important communication tools, like body language, tone of voice, and spatial awareness in relation to others — like whether a coworker is taking notes or scrolling through their phone. As a remote manager or business owner, it’s up to you to ensure that your employees communicate effectively and efficiently, all while feeling supported in their roles and like they’re part of your team.

Communication Tips for Remote Teams

Here are some tips you can use to improve and hone the communication techniques you use in your remote workplace.

1. Invest in Remote Communication Tools

In a remote team, you rely on software to replace in-person conversations and interactions. The better the software, the easier it will be for your team members to use and adapt to. Stick to popular and well-known tools that provide frequent updates, news, and tech support to you and your staff.

This will make it easier to navigate any issues or changes and onboard new hires because they’ll likely be familiar with the most popular communication tools.

Look into different platforms for different purposes like project management, video calls, and messaging to find the applications that make sense for your business and team.

Some of the most prevalent communications platforms for remote teams include:

Purchase enough subscriptions for your entire team and provide access and setup instructions for each new employee or any time you add or change a communication method.

2. Provide High-Quality Hardware

The hardware you provide to your remote workers is essential when it comes to good communication among your staff. Whether you ship hardware out to new hires or provide a spending allowance, you need to ensure that your remote team is equipped for effective communication.

You can facilitate and encourage smooth communication within your team by providing:

  • A laptop or desktop computer
  • A high-quality webcam and microphone
  • Headphones or earbuds
  • A mouse and keyboard

High-quality hardware can help to avoid technical difficulties, poor connections, and substandard video and audio feeds, all of which make virtual communication arduous and problematic.

By giving your team the tools they need to succeed, you benefit from better virtual communication experiences and less time lost due to failing hardware.

3. Clarify Expectations About Availability

With a remote workforce, it’s common to have staff members spread out across different states or even countries. And, as with many remote teams, they probably all choose their own hours while working in various time zones, meaning different remote employees are available at different times.

Although it may seem like a lot to juggle, it’s important for you to be aware of the different time zones that your employees are working in and to clarify your expectations about how they handle communications like emails, messages, and calls outside of their preferred work hours.

For instance, when you schedule a meeting at 4pm your time but it’s 7pm for one of your staff members, are they expected to attend even if they already worked a full day? What about when they receive a message or email outside of their own office hours, but within another staff member’s?

Be clear and upfront about how you expect your staff to work within different time zones so that they can adjust their schedules and hours to fit your business needs.

4. Use the Right Communication Method For the Job

A lot of remote workplaces get stuck using the same communication method for everything. Maybe you’re a video-centric office, or maybe you favor Slack. But it’s vital that you use the communication method that’s best suited for the task at hand.

Determine which communication methods you prefer to use for what tasks and use different tools to your advantage. For example, video conferences are great for brainstorming sessions while instant messaging channels can be used to share basic information or ask direct questions. You might send urgent questions or requests via text message but less timely messages that can wait until the next workday via email or Slack.

Take time to define what channels your team should use for what kinds of tasks and messages. This ensures everyone stays involved and active in work-related conversations while alleviating the need for employees to monitor email or Slack at all times of day and night to avoid missing something important. Plus, it helps to reduce burnout or boredom from using the same methods over and over, or from sitting through a video conference that should have been an email.

5. Schedule Consistent Check-Ins

One of the biggest challenges in managing a remote team is figuring out how to substitute face-to-face time with video chats and phone calls.

Schedule consistent, frequent check-ins with any of your staff members who are working from home. This could mean having a weekly one-on-one video conference or sending brief check-in messages on a daily basis depending on the employee and their role.

Have a few go-to questions to ask, like whether they need any help with their current tasks or what kind of progress has been made on a specific project, as well as how they’re doing.

Even if the conversation only lasts for five minutes, it still helps to create a connection between you and your remote workers and helps to avoid miscommunications and misunderstandings by giving everyone an opportunity to ask questions or request support.

6. Make Time for Fun

Working remotely means that you miss out on all of the in-person interactions that come with an office. This makes it harder for staff members to get to know each other and to participate in social events. But there are still many ways for you to encourage remote workers to have fun together, all while supporting team building and employee engagement.

Many remote teams get creative by doing social activities like:

  • Creating messaging channels for water cooler chats, recipe sharing, memes, jokes, and more
  • Hosting virtual contests and activities
  • Having video conference happy hours
  • Playing online games
  • Scheduling team lunches or coffee breaks
  • Hosting virtual celebrations for seasonal holidays

7. Be Aware of Your Virtual Body Language

Body language can tell you a lot about what someone means when you have an in-person conversation. From emphasizing a point to communicating enthusiasm or disagreement, a lot of these subtle queues are lost in video chats because a webcam is focused on your face and doesn’t always clearly show posture, gestures, or where your eyes are focused.

When video conferencing with staff, make eye contact, sit up straight, and use your words to back up your feelings and to explain what you’re doing.

For example, if you’re taking notes so that you can reference them later, let others know so that they understand why you aren’t looking into the camera. Or, if you really like an idea but aren’t sure whether your facial expressions are translating properly, make a point of vocalizing your interest in and support of the suggestion.

It can be hard to focus on one person in a video chat, especially when multiple employees are in attendance, so make sure to reinforce your body language with clear statements so that your staff members know where you stand.

8. Communicate Consciously

Because you can’t rely on body language or in-person interactions in a remote workplace, you need to be conscious of how you communicate with your employees when it comes to your tone, language, and response time to direct messages and emails.

For example, telling someone they’ve done well in written text isn’t always as straightforward as it may seem. The way that you type your message can affect how it’s interpreted. Consider how you read these variations:

  • Good work on the last report you handed in!
  • Good work on the last report you handed in
  • Good work on the last report you handed in 🙂
  • Good work on the last report you handed in…
  • hey, good wrk on your last reprot

As you can see, the punctuation and spelling you use can have a considerable effect on how an employee may read your message. Choose punctuation and wording thoughtfully and always proofread before you hit send.

Another pointer is to do your best to respond to messages in a timely manner. As a business owner or manager, you have a lot on your plate. But, depending on the platform, employees can see when you’ve received a message and when you’re online, so if they ask a question or send you something to review, do your best to at least acknowledge it instead of not responding at all.

If you don’t have time to answer the question right away, just say so. Knowing that you got the message and will get to it when you have time will allow the employee to move on to other tasks instead of waiting around for you to answer in the hopes that you’ll get back to them right away.

If you use emojis, gifs, or memes when communicating with staff, make sure they’re appropriate, relevant, and easy-to-understand. Not everyone will get references from your favorite TV show, so when in doubt, stick to a clear, straightforward message instead.

9. Understand Synchronous and Asynchronous Communication

You may not realize it, but you probably use both asynchronous and synchronous communication in your remote workplace all the time.

  • Synchronous communication is when you’re having a conversation in real-time, whether it’s on the phone, through a video meeting, or in person. Team members are expected to respond immediately and to actively participate in a discussion. Although synchronous communication can be scheduled or spontaneous, it’s most often used for meetings, brainstorming sessions, and training.
  • Asynchronous communication is when a conversation can take place over a period of time due to the method of communication that you use — think emails, direct messages, mailed letters, or comments and tags in project management tools or digital documents. Correspondence is not scheduled and doesn’t need to take place between two or more people at the same time.

The most successful remote workplaces find a healthy balance between synchronous and asynchronous communication. Be conscious of which method you use — and when — to help you handle various time zones, improve time management, and build out a strategy for your remote communication best practices.

10. Create Documentation for Communication Best Practices

When it comes to remote workplaces, the tools, expectations, and best practices vary from one company to another. Although the way your team communicates digitally may seem standard to you, newcomers may feel differently.

To set new staff up for success and to make sure that everyone is on the same page, create documentation for the communications channels and methods that you use, along with best practices and expectations at your workplace.

For example, when should staff members use Slack versus email, and how quickly do you expect them to respond? Should project-related questions be asked in a private message or group channel?

Go through how you use different communications methods and when you use them during your employee onboarding process to help new employees understand how to interact with your team, avoid accidental miscommunications, and streamline their workflow.

11. Communicate Clearly

Plain language is key when it comes to digital conversations. Because tone, body language, and environmental factors are all lost during virtual discussions, you need to rely on the language that you use to convey your messages to staff members in the right way.

Here are some tips you can use:

  • Don’t be vague. Give specific answers to questions and include dates, times, and other details when relevant.
  • Make sure you understand a question or request before you answer it by reading it over more than once.
  • Proofread your responses to make sure they’re correct and that they provide the necessary information.
  • If a conversation is too complicated to have over email or messaging, schedule a phone call or video chat.
  • Stay on topic until the question is answered and everyone is on the same page.
  • Give employees a chance to ask questions and offer them opportunities to do so.

In fact, it can help to overcommunicate certain details like your expectations, deadlines, feedback, and new procedures or best practices. This reduces the margin for error and makes important information hard to miss or ignore.

12. Encourage Discussions and Collaboration

Lots of great ideas and solutions to problems are products of impromptu conversations between staff members from different departments or backgrounds. Encourage staff to have discussions and collaborate with one another, even if they’re working on different projects. Not only will it build camaraderie among your employees, but it will also help to keep everyone engaged and aware of what’s happening within your company.

Although some of this may happen naturally, creating opportunities for staff to interact with each other professionally will allow discussions and collaboration to become part of your workplace culture. Try it out by setting up virtual meetings for project kickoffs, staff updates, or company feedback sessions.

13. Create a Virtual Company Culture

Your team may be remote, but that doesn’t mean that you can’t have your own company culture. Workplace culture isn’t just about the gadgets and perks at the office, it’s about company values, communication techniques, and how flexible or restrictive you are.

For example, if you put a lot of emphasis on quality over quantity when it comes to deliverables, or you offer flexible hours and unlimited vacation time, that makes a significant impact on the talent that you attract and how your staff members work and behave while they’re on the clock.

Alternately, if you have strict deadlines in place for heavy workloads and expect remote workers to adhere to specific start and end times each day, you’ll present your company culture in a different light.

However you choose to build and foster company culture, do it deliberately and thoughtfully so that it accurately reflects and supports your workplace values, morals, and priorities.

14. Use Visual Communication

Visual communication tools like infographics, presentations, videos, slideshows, flowcharts, and graphs are excellent ways to illustrate new concepts, ideas, and project outcomes. They also give everyone a new way to digest information that’s otherwise presented in text or by spoken word, which can be a welcome change for telecommuting workers.

Visually pleasing designs can also make difficult content like human resource material or technical manuals easier to read and understand, so get your design team involved to make your written material easier to work through and absorb.

15. Trust Your Remote Team

As a remote manager or business owner, you don’t get to see who’s late coming to the office every day or who spends too much time making chitchat at the water cooler. But that’s just something you have to let go of if you plan to manage a team of virtual employees.

Micromanaging off-site staff by checking in too often or expecting them to be available to answer any and all workplace communications immediately will negatively impact both your company culture and turnover rate.

And although you can use time tracking apps and check messaging statistics to monitor when your employees are working, it’s better to focus on the quality of the work an employee brings to the table and whether they’re meeting your professional expectations. If your employees produce great work on time and within budget, you probably don’t need to worry about whether working from home is affecting their productivity.

If you do choose to use apps to monitor employees’ work hours or productivity, don’t go overboard. Use what you need to make sure that your business runs smoothly without making extra work for your employees or infringing on their privacy or peace of mind.

16. Avoid Unnecessary Meetings

As mentioned, remote teams are often working in different time zones and setting their own work hours, which can make it hard to get everyone together at once for a meeting. Too many meetings can cause disengagement, fatigue, and burnout among staff. That’s why it’s important to ensure that you’re meeting when it makes sense and using other communication methods when it doesn’t.

To avoid unnecessary meetings, try some of these tips:

  • Schedule meetings in advance and for a specific purpose
  • Only involve necessary staff members
  • Set time limits to keep meetings on track
  • Cap the number of meetings you have in one day
  • Make certain meetings optional
  • Find a balance between serious and casual meetings
  • Make time for one-on-ones
  • Use phone calls, direct messages, or emails as substitutes when possible

If you aren’t sure whether you’re having too many meetings or too few, start a discussion with your staff to see what they think. Find out which meetings are the most useful, which require some tweaks, and which you can do away with altogether.

17. Be Respectful of Different Workspaces

Some remote workers have dedicated home offices while others have to use a multifunctional area like a kitchen, living room, or bedroom. And multifunctional spaces can come with cameos from spouses, pets, children, or roommates during video calls. Although it’s reasonable to expect your employees to behave professionally while on camera, remember that many interruptions are unplanned and are par for the course when it comes to using your home as an office.

Be mindful that, as a remote employer, you experience your employee’s home life in a way that most in-office bosses don’t. Be respectful of their home and their space, and only bring up issues you see that affect productivity or professionalism as opposed to comments related to their personal decor or what their office area is like.

And, if you notice that certain aspects of your employee’s home office could use an upgrade like a new camera, microphone, or desk, consider providing a home office spending budget for them to use. Or give these items as gifts. Not only will it improve their work experience, but it will improve yours as well by upping your team’s video and audio quality for meetings and presentations.

18. Find Ways to Celebrate Successes and Milestones

As a remote employer, you might not be able take an employee out for a meal to celebrate a professional milestone like the end of a major project or a work anniversary, but there are still many ways to mark accomplishments. And making a point of observing achievements can go a long way in building and maintaining employee morale.

Here are a few ideas you can try:

  • Have a virtual lunch
  • Send cookie or cupcake deliveries to employees
  • Host a fun team meeting and offer prizes for games and contests
  • Send out digital gift cards
  • Mail a bottle of wine or spirits
  • Have a one-on-one with your employee and sincerely thank them for their contributions and hard work

19. Meet Face-to-Face

Meeting in-person isn’t always a possibility, but you should take advantage of it when it is. Some remote workplaces plan annual trips or retreats for staff members to attend, while others bring remote workers into the office for project onboarding, year-end meetings, or training.

When you can, and when it makes sense, get staff together to meet face-to-face. This can help to forge friendships and strengthen working relationships as well as give remote employees a chance to socialize and feel like they’re part of the bigger team.

20. Understand the Differences Between Remote Work Versus In-Office

If you’re an in-office manager who has both remote and in-house staff, make an effort to learn about how your remote team’s work experience differs from those who work in the office. From missing out on impromptu meetings and inside jokes to not being included in social events, remote staff can be left out of a lot of important interactions if you don’t make a point of including them.

Make time to talk to remote workers about what you can do to improve and support inclusion and communication, and do your best to accommodate the most relevant and helpful suggestions. Keep in-house staff informed of any changes in best practices or procedures to keep everyone on the same page and in the loop.

This will enable your staff to work better both individually and as a team.


Final Word

Being a manager to remote staff can take some getting used to. It’s not always easy to know how to adapt communication methods and best practices for a virtual workforce but focusing on how to be inclusive, conscious, and clear is a good place to start.

As you add to your communication toolset, ask for feedback from staff members to find out what’s working and what could use a tweak or two. This will help you to build an effective and efficient remote communication strategy while supporting your business and team.

Source: moneycrashers.com

I Was Denied an Auto Loan. Now What?

October 9, 2019 &• 7 min read by Steve Ely Comments 3 Comments

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Disclaimer

You’re in the market for a new car but you’ve been denied an auto loan. Now what? Here’s what you need to know about why you may have been denied and what to do to make sure it doesn’t happen again.

Why Do I Keep Getting Denied for Auto Loans?

Unfortunately, there are many reasons a bank might reject your application for a car loan. If your loan application has recently been denied or you keep getting denied, it might be due to one of these common reasons:

  • Application errors. Sometimes, the application could be rejected because of an error you made when filling it out. A missed section, some incorrect information, a missing form or another mistake can mean your loan is ultimately denied.
  • Bad credit. Bad credit is a common reason for auto loan denial. A score below 670 is usually considered a bad credit score, and this damages lenders’ trust in your ability to pay off a loan.
  • Too much debt. A high debt-to-income ratio can make lenders leery. If you have a number of loans or credit cards with large amounts of debt, this raises your DTI and may lower your chance of getting approved for future loans, car loans included.
  • No credit. Lenders look for proof of consistency in paying off past loans when reviewing your application. If you have no credit history, lenders may feel they don’t have enough information about your ability to pay off a future loan.

What Can I Do If My Loan Application Is Denied?

You have a few options when you’ve been denied an auto loan, depending on the reason you were rejected.

Application Error

If you were rejected because of an application error on your part, you should contact the bank as soon as you can. Hopefully, the mix-up can be resolved and your request will be approved. If not, the lender will tell you when you can reapply.

Poor Credit

If you were rejected because of poor credit, check your credit report so you can determine what is negatively impacting your score. Depending on what your report says, look into ways to improve your credit so you can be approved next time. Pay your bills on time, and use your credit cards to make and then repay smaller purchases. Keep in mind that building or rebuilding your credit can take a while. Don’t be disappointed if it takes months or even a year or two to really get your score where you want it.

If you need a loan sooner, consider adding a cosigner to your application that can be your backup if you fail to pay the loan. Lenders feel more comfortable with this method, and it’s a good way to prove dependability.

Debt

If you were rejected because you already have too much debt, it’s important to reduce that amount in steady increments. Set a budget and stick to it, tackling the largest debts first. Avoid adding any debt to what you already have. Examine your credit card usage for any unnecessary expenses and cut back on those in the future.

No Credit

If you don’t have a credit history, now’s the time to start. There are a lot of ways to start building your credit: you might be able to become an authorized user on someone else’s credit card or find a co-signer for your loan, for example. You also might want to apply for a secured credit card or credit card for no credit.

Find the right credit card for your needs. Learn more.

Does Getting Denied a Loan Hurt My Credit?

Getting denied for an auto loan doesn’t in itself hurt your credit score. The lender didn’t extend anything, so there’s nothing that can hurt your score. However, multiple denied applications at once could hurt your score.

A bank conducts a “hard inquiry” when you apply for a loan. This can cause a drop in your credit score slightly—about five to ten points—whether you’re accepted or not. If you apply for too many loans, numerous hard inquiries on your credit can cause a larger drop.

What Are My Other Options?

If you don’t have time to build or rebuild your credit, can’t get a co-signer, and need a car fast, there are two options to be considered as a last resort.

“Buy Here Pay Here” Dealers

Stop by your neighborhood “Buy Here Pay Here” (BHPH) auto dealer, and one way or another, it will probably get you into a car. It won’t be a new car, and it will probably have lots of miles on it, but at least you’ll get a car you desperately need to get you to and fro.

The BHPH dealer won’t want to talk to you about interest rates. Your local BHPH will focus on your expected monthly payment and ask for a really big down payment. They mostly care about whether or not you have a current, steady income. Based on that, they’ll determine how much they are willing to lend and which car options are available to you. It’s not a great way to buy a car, but for millions of Americans, it is the only way they can make this significant a purchase.

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Unfortunately, purchasing a car at a BHPH dealer isn’t a credit boost at all. They usually don’t report anything positive to credit reporting agencies, but they will report negative actions like a missed payment or repossession. Always ask about their late payment policies before making a decision.

Alternative Credit Bureaus

If your credit score is low or your credit history is light based on traditional credit trade lines (credit cards and loans), but you have a solid history of paying your everyday bills, you may be able to take advantage of alternative credit scoring methods. If you can prove your creditworthiness by having your everyday bills verified, some companies will work with alternative credit scoring methods to offer credit. Alternative credit generally doesn’t carry the same weight as traditional credit lines, so interest rates likely will not be as competitive.

At this point, you can go to any dealer and buy the car you really want instead of being limited to the inventory on a BHPH lot. If you can afford the payments, you can buy a new car that’s under warranty and has no mileage on the odometer. If you can continue to work on your credit and improve your credit score, refinancing may even be available down the road.

However, many lenders still do not use alternative credit and don’t view it as proof of reliability. Most of these alternative credit companies also don’t report your findings to the major credit bureaus. So, while these alternative creditors may be a short-term option, building credit through traditional methods should be a priority.

Why Would I Get Rejected for a Car Refinance?

If you were denied for refinancing, it’s probably because of a poor credit score or a high DTI. Usually, these are the same as the reasons you might be denied an auto loan. Your score may have been satisfactory when you purchased the vehicle but taken a few hits since its purchase.

How to Get Approved Next Time

Before you reapply for an auto loan, make sure all your information is in order. Gather your records and make sure everything is ironed out and correct before you go to a lender. For a better shot at loan approval, your credit score should be in a comfortable range, and you shouldn’t have any large outstanding debts. Always check your credit score before you apply. If it’s not high enough for loan approval, work to improve your credit first. Then, make sure you’ve determined what type of payments and interest you can afford.

If you do get denied, don’t worry! By making sure you meet all of the income, credit and debt requirements for an auto loan, you can increase your chance of getting accepted the next time you apply.


Source: credit.com

How to Include Remote Employees in Your Company’s Holiday Office Party

With the COVID-19 pandemic putting in-office employees at risk across the country, more companies than ever are allowing staff to work from home. Although this is an ideal way to keep everyone healthy and safe, motivating and engaging employees virtually can be a challenge, especially during the holiday season.

But just because you can’t have your traditional company holiday party or fly remote workers in to celebrate in-person doesn’t mean you can’t spread cheer this season. It just means you have to get creative when it comes to planning holiday activities and events for your remote team.

Ways to Include Remote Employees in the Holiday Festivities

Here are some ways you can keep things festive and fun for your remote workers this holiday season.

1. Host a Virtual Holiday Party

You might not be able to have an in-office holiday party this year, but that doesn’t mean you can’t celebrate the season with your remote colleagues.

Host a video conference holiday party during work hours so that all of your employees can attend. Be mindful of different time zones in case you have remote employees who are out of state.

If you have a large remote workforce, consider splitting parties into departments so that everyone has a chance to chat and participate in any activities.

Plan to do fun activities on the video conference, like enjoying a meal, a gift exchange (more on how to do this virtually shortly), or a holiday-themed decorating contest to keep everyone engaged and involved.

You can even prepare some icebreakers to get the ball rolling by asking questions about everyone’s holiday traditions or celebrations. For example, because your employees are spread out at different locations, have each one describe what their city or town does for the holidays, like tree lightings and caroling.

2. Throw a Virtual Cocktail Party

If your business typically throws a fancy cocktail party to celebrate the holidays each year, recreate it. Have employees mix up their preferred beverages and dress up in their party attire to help get everyone in the festive spirit. Offer a spending budget for drinks and hors d’oeuvres that employees can use to fund their evening.

If you don’t want to host an entire cocktail party or you’re looking for something more casual, opt for a virtual happy hour instead.

3. Have a Secret Santa or White Elephant Gift Exchange

You don’t need to be in a physical office to host a gift exchange. Use a service like Elfster to plan and organize a secret Santa gift exchange, or host a white elephant gift exchange and send gifts out to their recipients afterward.

Just make sure that with either gift exchange you:

  • Set a reasonable budget
  • Make participation optional
  • Give everyone enough time to purchase a gift
  • Select a date and time when everyone is available
  • Put someone in charge of planning and organizing
  • Send out gifts on time
  • Clarify any rules beforehand

Gift exchanges can be a great way to encourage seasonal team building, which can help remote workers feel connected and like they’re part of the team over the holidays.

4. Send Remote Workers a Gift From Your Company

If a gift exchange is too complicated, or you’d like to show your appreciation for your employees as a company, consider sending each of your workers a company gift.

Choose something that represents your company culture and that your employees will appreciate and use.

For example, if you have a tech startup or digital small business, wireless headphones and speakers, gift cards, branded home office supplies, and company swag can all make ideal gifts for employees who work from home.

Instead of sending a single gift, you can also fill up a stocking with a variety of gifts for each employee, like chocolates and candies, notepads, socks, coffee, tea, stickers, and other small items.

5. Give Remote Workers Extra Vacation Time

COVID-19 has made it a stressful and trying year for everyone. Although many people typically request time off over the holidays, this year rest and relaxation are more important than ever. If possible, offer your employees an extra couple of days off over the holidays to enjoy the season and spend time with their families.

If you aren’t able to provide additional days off, consider letting employees off early on Christmas Eve and New Year’s Eve. Having a little extra time to detach and partake in seasonal festivities will help your workers unwind and relax after a difficult year.

6. Plan Festive Activities and Contests

Holiday activities can be just as fun online as they are in-person. Entertainment like ugly sweater contests, decorating challenges, and festive games are excellent team-building activities that will get your remote team into the holiday spirit.

Potential holiday activities and contests can include:

  • Ugly holiday sweater contests
  • Home office or door decorating contests
  • Tree decorating contests
  • Pictionary using a Zoom whiteboard
  • Haikus and word games
  • Trivia
  • Festive bingo
  • Customized holiday playlists
  • Ornament decorating contests
  • Charades
  • Gingerbread house decorating contests
  • Karaoke

Promote and support teamwork by segmenting departments into teams for contests and activities.

7. Pay for a Holiday Meal

Because you can’t share a meal together, offer your remote team members a holiday meal budget. This could be for a meal to enjoy during your virtual holiday celebration or for any other workday you choose.

To make it easy, set a budget and define any limitations — for example, if you won’t pay for alcoholic beverages — and reimburse employees through your accounting department after they provide a receipt. Because many employers provide a holiday meal either at the office or at a seasonal party, a one-time celebratory meal budget is a great alternative.

This way, you don’t need to worry about the logistics or planning and can allow remote workers to choose their own meal from a favorite local restaurant.

8. Send Handwritten Holiday Cards to Remote Employees

The appreciation that you show to your employees can go a long way, especially with remote teams. A handwritten card from a manager, supervisor, or even the company’s CEO is an easy way to spread holiday cheer and add a personal touch to your business’s seasonal celebrations.

If physical cards aren’t an option, consider sending personalized digital cards with a thoughtful message for each of your employees. Both SmileBox and Paperless Post offer free and paid customizable digital cards for the holidays, with a variety of designs and messages to choose from.

9. Help Remote Workers to Give Back

The holidays are a perfect time to give back and support charities. With many local organizations avoiding in-person volunteering this year, they’ll need help to stay afloat and to continue the important work that they do.

Virtual team members who traditionally volunteer over the holidays may be unable to give back to their communities this year, but you can help. There are a few different ways you can support your employees giving to charities and nonprofits this year. For example, you might consider:

  • Donation Matching. Offer employee donation matching up to a certain amount. For example, you could set the limit to a maximum of $50 per employee. Have your company match any charitable donation your employee makes up to the limit, effectively doubling their contribution to a cause they care about..
  • Individual Donation Budgets. Give each employee a set amount — for example, $50 — to designate to a charity of their choice. Then have your company donate the gift in your employee’s name to the chosen charity.
  • Purchase Charitable Employee Gifts. Purchase employee holiday gifts that support charities. For example, World Wildlife Fund offers digital and plush symbolic animal adoptions that raise money for wildlife conservation and also bestow the donor with a plush and other gifts.

10. Create a Holiday Group Chat

Whether you use Slack or another communication tool to converse with your remote team, make sure to leverage its benefits over the holidays. Create a holiday-themed channel for your team and encourage them to share seasonal recipes, memes, favorite movies, and traditions. It’s an opportunity for employees to have typical watercooler chats even while working in separate locations.

These conversations can help remote workers to get to know each other on a personal level, build camaraderie, and spread holiday cheer. Use some simple questions to prompt employee engagement and participation, like:

  • What is your favorite holiday tradition?
  • Which holiday movie do you watch every year?
  • What’s your go-to holiday recipe?
  • Do you put up a real or fake tree or no tree at all?
  • How do you celebrate the holidays?

Make sure to be mindful of employees who celebrate the holidays differently or not at all. Keep the topics neutral and fun and avoid questions related to religion, culture, or personal beliefs. If you aren’t sure what’s OK to ask, have your human resources manager come up with a list of appropriate questions and topics.

11. Stream a Holiday Movie or Play

Festive movies are a major part of the holiday season, so try including them in your office celebrations. List a few movies for employees to choose from and have them vote on their favorite. Stream the most popular choice using Skype, Zoom, or Netflix Party (which works for both Netflix and Disney+) on a workday when all of your employees are available.

If streaming a movie for your entire workforce isn’t feasible, break it into groups by department or host a couple of movies over different weekdays to give everyone a chance to tune in.

12. Arrange a Cookie Exchange

From shortbread and gingerbread to sugar cookies and rum balls, baked goods are one of the best parts of the holidays. And most people have a favorite recipe they’d love to share. Set up a cookie exchange between interested employees and have them mail treats instead of exchanging them face to face.

Make sure to:

  • Set a mail-by date
  • Specify an amount — for example, a half dozen cookies to each participant
  • Consider any food allergies

Because COVID-19 is highly unlikely to spread through food or packaging, and the baked goods will be delivered by mail and not by hand, this is a great way to connect remote employees in a safe and festive way.

Host a video call so employees can get in some face time with one another once they’ve received their seasonal treats.


Final Word

As you can see, even during a pandemic, there are so many different ways for you to make your remote team feel festive, included, and appreciated over the holiday season. Planning activities and creating a cheerful and engaging work environment can go a long way in helping your employees to cope with the end of a trying and difficult year.

Work within your budget and consider your team members to choose holiday activities that are a fit for your business and employees. Try your best to include each and every one of your workers, whether they’re typically remote or not, and most of all, encourage everyone to enjoy the holiday season!

Source: moneycrashers.com

Should I Buy or Lease My Next Car?

Shopping for the best auto loans? Whether you are looking for the best car loan rates for a new or used vehicle, or you want to refinance an auto loan, we can help. Today’s auto loan rates are displayed in our helpful car loan calculator. Get the lowest rate when you compare rates from multiple lenders, even if your credit isn’t perfect.

With a lower interest rate, you’ll save money and pay off your car loan faster. It pays to shop for the best car loan rate! *

The single most important thing you can do to save money on an auto loan is to shop for the best auto loan rate before you set foot in a dealership. By knowing what kind of rate you qualify for before you try to buy a vehicle, you accomplish three things:

  1. You’ll know what kind of car payment you can qualify for
  2. You can focus your negotiations with the dealer on the vehicle price rather than on the financing
  3. You won’t end up getting stuck in a higher cost loan than you can qualify for

As you shop around for financing on a new or used vehicle, keep in mind the following factors that will affect your payment:

Length of loan:

Many buyers are opting for car loans that are five years or longer. Experian notes that in the last quarter of 2012, the average car loan length was 65 months. That’s almost five and a half years! The advantage of a longer car loan is that your payments will be lower. The disadvantage is that you may be “upside down,” – you owe more than the vehicle is worth – for a longer period of time.

Downpayment:

A larger down payment will reduce the amount you borrow and may make it easier to qualify for a better car loan rate. If you haven’t saved much for a down payment, you may be able to sell your current vehicle and use that money toward the down payment, or trade in your current vehicle to reduce the price of the car or truck you are buying. But if you are short on cash, don’t panic. Not all lenders will require a down payment.

Credit score:

Your credit score will be used to help determine the interest rate you’ll pay. But just because you have less than perfect credit, that doesn’t mean you can’t get a decent rate. The credit score that an auto lender uses may be somewhat different than the score you see if you get your own credit so don’t get too hung on up the number.

Refinance Auto Loans

Is your current auto loan rate higher than the rates you see in the loan rate comparison table above? If so, you may want to refinance your car loan. If you can get a lower rate, you’ll save money and you may be able to pay off your loan faster, too. Another option is to extend your loan term to make your payments more affordable. It’s easy. Just choose refinance from the options above and apply to see if you qualify for an auto loan refinance.

Bad Credit Auto Loans

If you have credit problems and need to buy a car or truck, you may be tempted to just use a Buy Here Pay Here (BHPH) car dealer that advertises it makes bad credit car loans. With one of these arrangements, the dealership arranges the financing and usually you make your payments to the dealer rather than a third-party lender like a bank or credit union.

Before you go this route, make sure you try to get preapproved for a car loan online or with a local financial institution. If you can get financing elsewhere then you’ll have more freedom to shop for the best deal on your car from a variety of sources, rather than limiting yourself to the cars available at that dealership. And when you do find a car or truck you like, you’ll be able to try to get the price down, rather than taking whatever they offer you.

Keep in mind that even if you are offered a high-rate auto loan online or through your bank or credit union, you can always ask the dealer to beat that rate – after you have negotiated the price for the vehicle you want.

Protect Your Credit When Auto Loan Shopping

Every time a lender checks your credit or requests your credit score, that fact will be noted on one or more of your credit reports as an “inquiry.” Your credit score can drop as a result. The good news is that most credit scoring models will ignore recent auto-related inquiries, and will count multiple inquiries from auto loan applications in a short period of time as one. To protect your credit, it’s best to shop for an auto loan in a focused period of time: two weeks or less is best to be safe.

You can check your credit score for free using Credit.com’s free Credit Report Card. Requesting your own credit score through this service will not affect your credit score.

Car Title Loans

If you are desperate to borrow money but you have bad credit, you may be tempted to get a car title loan. These loans require you to pledge your vehicle as collateral for the loan. They are not legal in all states, but where they are, they usually lend up to 25% of the value of the car or truck you own free and clear.

Watch out! Interest rates on auto title loans are very high; often 25% per month – or about 300% per year – according to the Center for Responsible Lending. According to the CRL report, the average car-title borrower renews a loan eight times, paying $2,142 in interest for $951 of credit. If possible, you should try instead to get a personal loan or, if you can’t, see whether a non-profit credit counseling agency can help you find another solution to your financial difficulties.

-APR = Annual Percentage Rate. Rates based on credit worthiness and are subject to change without notice. Your actual rate and monthly payment may vary. Must be 18 years of age or older to apply. Loans subject to credit approval and could be subject to credit union membership.

* IMPORTANT NOTE FROM CREDIT.COM: Credit.com is not a lender. The above offers are provided by third-parties from whom Credit.com receives compensation. Credit.com will not call you about any loan application resulting from the above offers, and will not ask you over the phone, via email or otherwise for financial information or other sensitive personal data.

REMEMBER never to share any financial information or other sensitive personal data over the phone or via email without independently confirming the identity of the company calling first!

† Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom Credit.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). It is this compensation that enables Credit.com to provide you with services like free access to your credit scores at no charge. Credit.com strives to provide a wide array of offers for our members, but our offers do not represent all financial services companies or products.

Source: credit.com

10 Things You Need to Know before Buying a Car

According to Kelley Blue Book, the average price for a light vehicle in the United States was almost $38,000 in March 2020. Of course, the sticker price will depend on whether you want a small economy car, a luxury midsize sedan, an SUV or something in between. But the total you pay for a vehicle also depends on a number of other factors if you’re taking out a car loan.

Get the 4-1-1 on financing a car so you can make the best decision for your next vehicle purchase.

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Decide Whether to Finance a Car

Whether or not you should finance your next vehicle purchase is a personal decision. Most people finance because they don’t have an extra $20,000 to $50,000 they want to part with. But if you have the cash, paying for the car outright is the most economical way to purchase it.

For most people, deciding whether to finance a car comes down to a few considerations:

  • Do you need the vehicle enough to warrant making a monthly payment on it for several years?
  • Does the monthly payment work within your personal budget?
  • Is the deal, including the interest rate, appropriate?

Factors to Consider When Financing a Car

Obviously, the first thing to consider is whether you can afford the vehicle. But to understand that, you need to consider a few factors.

  • Total purchase price. Total purchase price is the biggest impact on how much you’ll pay for the car. It includes the price of the car plus any add-ons that you’re financing. Depending on the state and your own preferences, that might include extra options on the vehicle, taxes and other fees and warranty coverage.
  • Interest rate, or APR. The interest rate is typically the second biggest factor in how much you’ll pay overall for a car you finance. APR sounds complex, but the most important thing is that the higher it is, the more you pay over time. Consider a $30,000 car loan for five years with an interest rate of 6%—you pay a total of $34,799 for the vehicle. That same loan with a rate of 9% means you pay $37,365 for the car.
  • The terms. A loan term refers to the length of time you have to pay off the loan. The longer you extend terms, the less your monthly payment is. But the faster you pay off the loan, the less interest you pay overall. Edmunds notes that the current average for car loans is 72 months, or six years, but it recommends no more than five years for those who can make the payments work.

It’s important to consider the practical side of your vehicle purchase. If you take out a car loan for eight years, is your car going to still be in good working order by the time you get to the last few years? If you’re not careful, you could be making a large monthly payment while you’re also paying for car repairs on an older car.

Buying a Car with No Credit

You can buy a car anytime if you have the cash for the purchase. If you have no credit or bad credit, your options for financing a car might be limited. But that doesn’t mean it’s impossible to get a car loan without credit.

Many banks and lenders are willing to work with people with limited credit histories. Your interest rate will likely be higher than someone with excellent credit can command, though. And you might be limited on how much you can borrow, so you probably shouldn’t start looking at luxury SUVs. One tip for increasing your chances is to put as much cash down as you can when you buy the car.

If you can’t get a car loan on your own, you might consider a cosigner. There are pros and cons to asking someone else to sign on your loan, but it can get you into the credit game when the door is otherwise barred.

Personal Loans v. Car Loans: Which One Is Better?

Many people wonder if they should use a personal loan to buy a car or if there is really any difference between these types of financing. While technically a car loan is a loan you take out personally, it’s not the same thing as a personal loan.

Personal loans are usually unsecured loans offered over relatively short-term periods. The funds you get from a personal loan can typically be used for a variety of purposes and, in some cases, that might include buying a car. There are some great reasons to use a personal loan to buy a car:

  • If you’re buying a car from a private seller, a personal loan can hasten the process.
  • Traditional auto loans typically require full coverage insurance for the vehicle. A personal loan and liability insurance may be less expensive.
  • Lenders typically aren’t interested in financing cars that aren’t in driving shape, so if you’re buying a project car to work on in your garage during your downtime, a personal loan may be the better option.

But personal loans aren’t necessarily tied to the car like an auto loan is. That means the lender doesn’t necessarily have the ability to repossess the car if you stop paying the loan. Since that increases the risk for the lender, they may charge a higher interest rate on the loan than you’d find with a traditional auto loan. Personal loans typically have shorter terms and lower limits than auto loans as well, potentially making it more difficult for you to afford a car using a personal loan.

Steps You Should Follow When Financing a Car

Before you jump in and apply for that car loan, review these six steps you should take first.

1. Check your credit to understand whether you are likely to be approved for a loan. Your credit also plays a huge role in your interest rate. If your credit is too low and your interest rate would be prohibitively high, it might be better to wait until you can build or repair your credit before you get an auto loan. Sign up for ExtraCredit to see 28 of your FICO scores from all three credit bureaus.

2. Research auto loan options to find the ones that are right for you. Avoid applying too many times, as these hard inquiries can drag your credit score down with hard inquiries. The average auto loan interest rate is 27% on 60-month loans (as of April 13, 2020).

3. Get your trade-in appraised. The dealership might give you money toward your trade-in. That reduces the price of the car you purchase, which reduces how much you need to borrow. A few thousand dollars can mean a more affordable loan or even the difference between being approved or not.

4. Get prequalified for a loan online. While most dealers will help you apply for a loan, you’re in a better buying position if you walk into the dealership with funding ready to go. Plus, if you’re prequalified, you have a good idea what you can get approved for, so there are fewer surprises.

5. Buy from a trusted dealer. Unfortunately, there are dealerships and other sellers that prey on people who need a car badly. They may charge high interest or sell you a car that’s not worth the money you pay. No matter your financial situation, always try to work with a dealership that you can trust.

6. Talk to your car insurance company. Different cars will carry different car insurance premiums. Make a call to your insurance company prior to the sale to discuss potential rate changes so you’re not surprised by a higher premium after the fact.

Next to buying a home, buying a car is one of the biggest financial decisions you’ll make in your life, and you’ll likely do it more than once. Make sure you understand the ins and outs of financing a car before you start the process.

Source: credit.com

How Microlearning Can Level Up Your Knowledge

If you’re looking to advance your career or pivot to a new industry, then you’re probably checking out ways you can beef up your resume. Maybe you’re considering an MBA, a bootcamp, or browsing upcoming conferences. Or perhaps you’re considering the DIY route and looking for podcast and book recommendations. 

While any of these options will help you learn and could boost your resume, the best way to level up your career prospects is to dedicate yourself to becoming a lifelong learner, which is where microlearning comes into play. 

Conferences and classes are bursting with information, but you may feel limited by the course schedule and teaching style. This works for some people, but it can be expensive and hard to fit into a budget or daily schedule. Microlearning can help you take charge of your education by providing bite-sized lessons. Over time, you can build up your learnings for a more thorough and robust understanding of the subject. 

The best part is you can apply your specific lessons to your life, career, and goals to build each of these out over time and see what really works and what doesn’t. Your consistent growth can improve job satisfaction and career opportunities, putting you in the spotlight for the next raise or promotion. Learn more below or jump to our infographic to get started.

What Is Microlearning?

Microlearning has become a popular workplace trend as a learning process that breaks topics into highly specific, concise lessons. This allows the learner to build understanding and confidence at their own pace.

Microlearning is great for tackling new information and closing knowledge gaps. If you already have a foundation of knowledge for a topic, then it can be frustrating to wade through the basics for the few new ideas you were looking for. Khan Academy and TED Talks are a great example of how you may fill in knowledge gaps. 

The Benefits of Microlearning

The most important part of any lesson plan is that it’s tailored to a learner’s needs, and that the learner is actually able to retain information. Microlearning’s flexibility for learners is one of its biggest benefits.

illustration highlighting the benefits of microlearning

Here are some other reasons to consider microlearning:

  • Maximize time by preparing lessons for on-the-go and fitting them in during breaks or commutes.
  • Go in-depth to build a solid learning foundation and improve retention with practice. 
  • Find what works by experimenting with videos, articles, or podcasts to find what format works best for you. 
  • Save money with free resources like TED Talks, YouTube, and expert podcast hosts who provide episodic insights and lessons for you to follow. 
  • Fill knowledge gaps with lessons targeting exactly what you need to know instead of wading through beginner resources. 

The Disadvantages of Microlearning

Microlearning is great for career development, employee training, and specific topics that you could use a refresher on. However, they’re not a total replacement for other learning systems, and you should keep these in mind when you get started:

  • It’s not immediate and microlearning is about regular commitments to learning.
  • It isn’t easier, but it may feel easier. This is actually a benefit unless you assume it will be easy. You still have to actively learn and practice your lessons. 
  • Some topics just don’t work, including complicated topics like global economics. It’s great for learning about things like mortgages, but you likely won’t become an expert on personal finance in just a few lessons. 
  • There’s work upfront to finding and compiling the resources that fit your needs and that you trust. This work pays off in the long-run, though, with easy-to-access lessons. 

5 Ways to Begin Microlearning

You may not realize it, but you’ve probably already prioritized microlearning in your day-to-day life. If you’ve watched a YouTube video to learn how to change your oil or customize a spreadsheet, then you know exactly how beneficial short, specific, and detailed lessons can be. 

89% of employees feel more productive when their work is gamified with rewards

Here are some ways you can get started using microlearning as part of your professional development:

1. Game Groups

Gamifying your learning helps make the topic fun and builds a positive relationship with studying. You can get started by setting goals and rewards, or inviting peers to join you with a competitive leaderboard or a trivia night. 

2. Video Clips

Videos are designed to be relatively short and engaging, and YouTube has made learning largely accessible from anywhere. While YouTube playlists are a great place to learn, make sure you’ve done your research on any channels or personalities you’re watching to ensure your lessons are accurate. 

3. Podcast Playlists

Like videos, podcasts are a great way to consume information on the go and from personalities you enjoy and trust. They’ve become hugely popular because they’re easy to listen to while driving, working, or exercising, but it’s important that you give your playlist your active attention if you hope to learn effectively. 

4. Quiz Collections

Considering a quiz may bring flashbacks of test anxiety and stressful finals weeks, but in this scenario, quizzing isn’t about checking a box that you learned something new. Instead, it’s a means to practice your memory recall and retention so you can count on it when you need it most. 

5. Team Talks

Having a team to study with is not only great for motivation, but it can also improve your lesson retention. Active learning is the process of working or chatting through a subject or problem, and studies show this is the best way to learn and practice your skills. 

Keeping up with your professional development is the best way to impress your employer and expand your job prospects. Whether you want to climb the career ladder or ease your daily workload, microlearning can help you level up your skills, prove your value, and earn you more money come your next review.

infographic on microlearning techniques and benefits

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7 Things to Know About Giving (or Getting) a Car for Graduation

May 17, 2017 &• 6 min read by Sarah Beckham Comments 0 Comments

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Behind every diploma bestowed at high school and college graduations is a lot of hard work. And for some lucky grads, that hard work gets rewarded with a milestone gift: their own car. If you’re planning to buy a car for the new grad in your life, we’ve got some advice on making the right choice. And if you’re the recipient, we’ll share a few tips to help you drive into the future with confidence.

What to Consider If You’re Giving a Car to a New Grad

You’re so proud of your new grad for all their hard work that you’ve decided to shell out for a set of wheels to carry them on to their next adventures. Whether you’re getting your grad started with a well-loved (read: used) older car you bought from a neighbor or you’re splurging for a brand-new ride with all the bells and whistles, it’s important for you, the buyer, to take a moment to consider the realities of this major purchase — and of the needs of its soon-to-be owner.

1. Consider Total Cost of Ownership When Choosing a Car

First, let’s talk money. The car you buy should fit into your own budget, of course. But you also have to consider the total cost — including ongoing costs — of the car. Here are some things to think about.

Gas: If, for example, your child will be driving the car back and forth between home and an out-of-state university, would they (or you, if you’re footing the gas bill) be burdened by the costs of a gas-guzzling vehicle? If so, a fuel-efficient car might be a better option.

Insurance: This is the most expensive consideration after the vehicle itself. Neil Richardson, licensed insurance agent and adviser for The Zebra, says to keep insurance in mind right from the start as you shop for cars. If insurance is an afterthought when you’ve already purchased the car, you could be in for some unpleasant surprises. Further, the car you select will affect your insurance premium if your grad will be on your insurance policy (more on this below).

Maintenance: Consider the expenses related to repairing or replacing parts on the vehicle if it’s damaged in some way. Foreign car repairs may be much more expensive than domestic, but that’s not a hard-and-fast rule. Further, new cars may include manufacturer warranties or maintenance as part of your package, but if your grad is savvy with tools or has an interest in cars, they can take care of plenty of at-home car maintenance issues.

2. Prioritize Safety & Utility

When car shopping, safety should stay top of mind. The Insurance Institute for Highway Safety ranks the safest cars in different categories, from minis to large pickup trucks.

Also think about where and how much your recipient will be driving. If they’re headed for college or a new job in a crowded city, they’ll need a car that fits cramped streets and narrow parking spaces. A new college grad with a quick commute will appreciate a different kind of car than one whose new job requires them to be a road warrior.

3. Insure it

If your gift recipient is a high school grad who lives at your residence, they may get lower premiums if they stay on your policy, but whether that’s possible depends on your situation. If they’re headed to an in-state college or university, they can stay on your insurance policy as long as their primary residence is still your home address, Richardson says. Students leaving the state for college, though, may have to get coverage on their own, as rates are dependent on where the driver lives and “garages” the vehicle.

Remember that if your new grad is on your insurance policy, you could be held liable for damage they cause in an accident. For this reason, Richardson says it’s generally a good idea to go beyond the state-required minimums in liability coverage.

4. Get Your Paperwork in Order

Getting close to a decision? Before you seal the deal, prepare for some extra paperwork. Whether you’re heading to the dealer or buying a car privately, you’ll need to be prepared with the right documentation, such as the recipient’s driver’s license and current insurance, an IRS cash-reporting form and a security report. (Questions? Read more details about each of these documents.)

If You’re a New Grad Who’s Been Gifted a Car

So now you’re the proud owner of a new diploma and a car. Sweet! Take a moment to savor the payoffs for your hard work and generosity of your gift giver.

Once you’ve posted lots of photos of your new ride, you might be thinking about all the new freedom your car gives you or how you’re going to upgrade the stereo system. But there are some other things you need to keep in mind when it comes to how this car will affect your life. Nail down these details and you’ll be well on your way to acing this whole “#adulting” thing.

1. Know the Impact on Your Wallet

Even if you aren’t making payments on your new vehicle, a car can still have a huge impact on your wallet. (Here’s how car insurance affects your credit.) How much will you need to budget for gas, parking, insurance, registration and regular maintenance? Your folks or your generous benefactor may be picking up some of these expenses for you, at least in the short term. Be sure to establish clearly with others about who’s paying what and check in regularly to make sure necessary expenses related to your car are taken care of.

2. Your Insurance History Starts Now

We know that dealing with auto insurance for the first time is complicated, so it’s extra important to be clear on how your policy works, whether it’s in your name or you are on your parents’ policy for now. If you’re a registered driver of a registered vehicle, your insurance history starts now (even if you’re not paying for it), and a clean driving record and demonstrated history of continuous insurance coverage will mean huge savings on your insurance in the future.

If you’re in college, you can start building your insurance record by staying on your parents’ or legal guardians’ policies if they OK it. According to Richardson, as long as the parents’ address is still the primary residence of the student, on-campus housing is considered temporary since students have to leave at the end of each semester, so students can still be covered on their parents’ policy. Once they move off campus to a more permanent situation, i.e., a house or apartment, then they will need their own coverage. (Here are the states where your credit score really matters for car insurance coverage. No matter where you live, it’s a good idea to know where your credit stands — you can find out for free on Credit.com.)

If you’re not in college and you’ve moved away from your parents or guardians altogether and no longer share an address, you’ll have to have your own policy.

3. Keep That Car in Tip-Top Shape

Finally, regular preventive car maintenance will probably be the last thing on your mind as you adjust to college life or settle into a new job. So go ahead and set some reminders in your calendar to take care of oil changes, wiper fluid and other routine maintenance for your car. You’ll prolong the life of the car and make it less likely that problems will pop up just when you don’t need them — like on your Spring Break trip or on the way to a job interview.

Car not in your budget for a graduation gift? Consider these eight graduation gifts your kids will actually use. 

Image: kali9


Source: credit.com