New car financingWritten by Jakob Jelling
Most people go shopping for a new car and then consider their financing options. While this is standard method it may not be your best option. Just like shopping for your new car, you need to carefully research your financing options and be prepared for it. Being prepared will ensure that you get best possible solution and rates, thus saving you possibly thousands of dollars in interest over term of your loan.When it comes to financing, tiny differences can mean a lot to how much you pay. Consider a $20,000 loan for 5 years at 11% and 9% interest rates. At 11% your monthly payment will be $434.85 and you will pay a total of $5,879.70 in interest. However, at 9% your monthly payment will be $415.17 and you only pay $4,740.98 in interest. Over term of your loan you will save more than a $1,000 by getting a 2% break in your interest rate. For this reason it makes sense for you to research your financing options before finding a vehicle you wish to purchase. The first step to researching your financing options is to examine your credit file and score. One in four credit reports contains information that is wrong and could result in you paying a higher interest rate than you should or perhaps even being denied your loan. Another important aspect of your credit file is your FICO score. This score will determine interest rate lenders will give you. It is important to know what interest rate is fair for you to be paying for two reasons. First it will allow you to know when you are getting a good deal thus making negotiating process easier for you. Second, it will help you to make sure lenders are being fair and honest. It is not uncommon for lenders to misrepresent your actual credit score or to add a few percent to your loan in order to increase their profits.
| | Direct loans, the new way to fund going to collegeWritten by Jakob Jelling
Going to college can be an expensive proposition for both student and government. Many people are finding that going to college is an impossible dream due to raising tutitions and cost of living unless they receive help in form of a scholarship or loan. Of course raising costs of everything are no reason that any bright child should not receive a higher education and achieve all they can aspire to.In past federal government has had a lending program to assist people with funding their secondary education costs but this system has it draw backs. The old system of student loans was fraught with fraud, was time consuming and very confusing to most people. With old system there was more than 7.000 lenders with 65 secondary markets and 35 guaranty agencies. For one loan most students would have to fill out countless forms and apply to numerous agencies until they finally got answer they needed. The other big problem with old lending system was cost of administrating loans. On average it cost government $11 per $100 loaned to manage accounts. The solution to this is simplified Direct Loan system that is now in place. The Direct Loan system is exactly what it sounds like; government lends money directly to you thus eliminating middleman and much of cost of lending money to students. When applying for a Direct Loan you will have two options, a subsidized or unsubsidized loan. A subsidized loan is generally for people who would not normally be able to afford going to college at all. With a subsidized loan government pays all interest on loan until your schooling is finished at which point you must begin to repay loan. An unsubsidized loan is standard Direct Loan for most people. With an unsubsidized loan you must pay interest on loan while you are in school and then begin to repay loan after you graduate. You do have option of deferring interest payments while you are in school. If you elect for this option amount of interest is added to principal of loan each month until you graduate.
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