When you are thinking about secured loans for your financial troubles, you will need to keep in mind that these loans require a form of collateral for them to be approved. A lender of these loans will ask that you place something up against the money that you intend on borrowing from them, and the lender asks that the value of the collateral meets or exceeds the cost of the loan. This is simple if you own your own home, or you have something of substantial value to offer the lender for the loan. While all lenders are different, most will not argue with a form of collateral if it is valuable regardless of the fact that it may not be a home.
From Coins To Gold
If you do not have a home to offer a lender for secured loans to be approved, then you can always try smaller items as forms of collateral. Coin collections or pieces of art can be used as forms of collateral if the value is high enough and is able to be proven. Antiques and or jewelry can also be used as forms of collateral, but it is important to note that the lender will hold these items until the life of the loan has expired and all payments have been made. Because homes are too large to be held by lenders, they are not taken possession of unless there is a default. Smaller items however, can and will be held by the lender because it ensures that there are no issues with the collateral if the borrower does not repay.
Courts Side With Lenders
If you have fallen into default on secured loans you will first notice that there will be no leniency from the lender what so ever. First it is a business that the lender is running, and they are not in business to pay others for nothing. Second you will find that the lender was most lenient when you were actually making payments. The lender will easily have the courts on their side when they sue you for the remaining money. If they cannot extract the money from you this way, they will have no other alternative than to place your collateral up on auction to reclaim the money. While this may seem very harsh, you need to understand that you made a decision and signed a contract as a mature and responsible adult. You will have no one but yourself to blame if you fall into this position.
Honesty Goes Both Ways
When you have taken out secured loans, and you are feeling like you are struggling while making the required payments the best thing you can do is talk to your lender. The lender is not out to see you default, but they cannot know you are struggling unless they see the payments stop or you tell them so. A lender will respect you far more if you talk to them before a problem spirals out of control, rather than simply avoiding them or hiding. The lender will be more willing to listen and help come up with a solution, if they feel they can trust you and this will go a long way through the life of the loan.
By: Paul Rogers
Posts Tagged: Loan Payments
19
Oct 09
Secured Loans and the Collateral Required
23
Jul 09
RV Loans vs. Home and Auto Loans
Most lenders who specialize in RV loans base their underwriting criteria on different factors than other loans, such as home mortgages and auto financing. Home and car loans are considered to be “necessities”, while RV loans are considered to be more of a “luxury” type loan.
Even though statistics show that RV loans have a lower default and late payment percentage; these same statistics show that most people, when strapped for cash, will pay their “necessary” loan payments first. Because of these statistics, lenders will normally implement more stringent underwriting guidelines for RVs and even boats.
The number one factor that impacts RV loan approval is Credit History. Most lenders will want a credit score of at least 640, but a score of 700 or better is more likely to obtain an approval at the best rate and most favorable terms.
The second factor considered is your Debt-to-Income ratio. This is basically your monthly revolving debt, (mortgage, auto and credit card payments) divided by your monthly gross income. Most RV and marine lenders look for a maximum debt-to-income ratio of approximately 45% or less, however some will go as high as 50% or more with excellent credit.
The third factor considered is the Loan Value of the RV. Each lender has their own formula for determining the amount they will loan on any particular RV. Most lenders will loan somewhere between wholesale and retail, depending on the previous factors listed above. Some will loan up to the RV’s retail value on refinancing. Again, the better the credit history, the more flexible the lenders are likely to be.
Other factors are considered when determining interest rate, such as the age of the RV and the total amount financed. The higher the loan amount, the lower the interest rate, with common break points commonly set at amounts such as: $25,000 – $50,000 – $100,000, etc. Also, the older the unit, the higher the interest rate, but this also varies.
Many online financing sources specialize in RV loans – and it’s your right as a consumer to find what is best for you. You should however be aware that each time you submit an application, your credit history may be pulled up from 1 to 2, or even more times. Each time a company accesses your credit report, it can result in 2, 3 or even 5 points deducted from your credit score. You should always avoid lenders or brokers who “shotgun” your application to numerous lenders.
Your online rate and lender shopping can be done by going to your favorite search engine and typing in search terms such as: “RV loans”, “motor home financing”, etc. Normally, approval takes only a day or two, with loan completion and funding in about a week. Loan documents are usually sent directly to your home or work.
The best policy is to check rates with different financing sources without enabling them to pull your credit report until you are relatively sure you have found the company you would like to work with. At that time you should submit your actual application.
Happy RV’ing.
By: Barry Wilder
17
Jul 09
Car Loans For People That Have Bad Credit – An Easier Approval Process
If you don’t have any experience working in finance, you may be surprised to know that different banks have different standards that they apply when approving or disapproving car loans. For people that have bad credit and need car loans, it can be especially confusing in understanding exactly what requirements you have to meet to get approved. The lending requirements that each financial institution has is not something that is openly advertised or discussed.
This presents a “dilemma” if you have bad credit and need a car loan. You may find yourself having to go from one bank to another or to multiple car lots trying to find a reasonable deal on a car loan. Down payments in interest rates that are required can vary widely from one lending source to another. This can make for a very tiring experience.
One of the best ways of avoiding this is by using a website that will allow you to eliminate having to fill out multiple applications. Being able to be matched up with a lender based on their lending guidelines and your credit history is very convenient. While there are many illegitimate offers on the Internet, there are some really good sources that can help you.
Being able to save on interest rates and get a lower car payment without having to shop at every dealership in your area allows you advantages. You won’t have to have multiple credit inquiries that bring your credit score down even further and you can shop for a car with confidence, knowing what you qualify for a head of time.
There are a couple good sources online that can help you with this and you will be impressed with the level of service that some online lending services will serve you with.
By: Jason Lanier