| When Is An Auto Loan Actually Necessary?
I dont mean that you dont need the car. The choice is about auto loans, personal loans or home equity loans. Depending on the situation, you will find each one more interesting than the other. We wish to analyze the possibilities and open the stakes to options that not everybody takes their time to look into. Features Of An Auto Loan These are loans that are granted regardless of the credit scoring and the homeownership of the borrower. Although the credit rating will affect the interest rate in a way, it will not have any action on whether the loan is granted or not. The reason for this is the main feature of an auto loan, which is the usage of the car itself as collateral. Should a borrower not pay the monthly installments, the vehicle will eventually be repossessed to make up for the default.
Every extra dollar counts
Tens of thousands of dollars can be saved by shortening the life of a mortgage and most strategies do not require big changes, local lenders say. BankSA general manager Chris Ward said switching from monthly to weekly repayments was a great saver. "This allows you to match your salary cash flow and constantly chip away at the outstanding balance of the loan, and that's important when interest is calculated daily," he said. "For example, if repayments on a $175,000 home loan at 8.07 per cent per annum were converted from monthly instalments of $1369 to weekly repayments of $342.25, the total amount of interest saved during the life of the loan would be $58,979 and the loan term would be reduced by almost 5 1/2 years (for a 25 year loan)." This adds up to an extra month's payment per year.
Banks’ rural foray drives up defaults
Aggressive expansion by banks and non-banking finance companies (NBFCs) in retail loans is now taking its toll. Delinquencies across some of the asset classes like personal loans and two-wheeler loans have increased. And one of the major reasons behind this seems to be the change in the customer profile, with banks and NBFCs tapping smaller towns and cities and customers with high risk profile. As competition in the retail asset space increased in the past couple of years, banks and NBFCs started expanding to smaller towns and cities, after exhausting the low-hanging fruit in terms of salaried individuals, self-employed professionals and lower income groups. According to Fitch Ratings associate director Peeyush Pallav, personal loans have seen the highest delinquencies across all asset classes.
Swimming In Bills? A Debt Consolidation Loan May Be The Answer
Every day, individuals are faced with mounting debt that is gradually getting out of control. Once credit cards reach their limits, payments are late or interest skyrockets, it literally becomes a battle of sink or swim in the debt pool. Consumers often turn toward a debt consolidation loan if their current debt can be combined into a smaller monthly payment. The most popular reason for a debt consolidation loan is to get rid of high interest credit cards. It is a well known fact that credit cards carry a much higher interest rate than secured loans, including home and auto. By paying only the minimum payment, it will typically take 15 to 30 years to pay off most credit card debts. The reason is because the majority of each month's minimum payment is swallowed up by interest with very little, if any, money going toward the actual balance.
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