Pierre Money Mart Blog

Are you one of the many people who have credit problems? Bad credit is more common than you think. The good news is, more and more lenders are now targeting consumers with bad credit.

Even if you have bad credit, you can still qualify for an auto loan…and it’s become easier and less humiliating now due to the wonders of the internet. You can apply online, and not have to put up with the unneeded stress of trying to get financed through the dealership.

Here’s how to buy a vehicle if you have bad credit…

Set up financing before even stepping onto the car lot. You can get “pre-approvals” from many online lenders. This way you know when you walk onto the first car lot exactly how much you can spend, and how much your monthly payments will be. The lenders will approve you for the loan, and mail you a voucher that you give to the dealership once you work the deal on the car you want. You simply fill in the amount borrowed (up to your pre-approved limit,) sign, send your signed contract into the lender, and you’re done.

In order to qualify for a bad credit car loan, lenders look at some specific things. They will want to see if you have sufficient income to cover your current bills, the loan payment you are about to commit to, as well as the costs of maintaining and insuring your new vehicle. Most lenders also prefer that you’ve held your current job for about a year, and that you’ve had a consistent home address.

It sounds a bit simplistic, but don’t take on any more of a car payment than you can afford. Use this opportunity to rebuild your credit…make your payments on time, and when your credit situation improves, you can get your loan refinanced at a lower interest rate.

Like with any other buying situation, it is best to compare rates among different lenders. Be careful not to apply at too many places though, as too many credit inquiries will have a negative effect on your credit score. Should you need any recommendations, please go to http://www.pierremoneymart.com

Good Luck to you in that new car.

Bad credit auto loans have become increasingly common and more and more customers are enjoying the benefits of getting finance for the purchase of a car even with bad credit. Almost 20% of customers have bad credit so it is not strange that bad credit auto loans have become so popular. The financial industry always tends to provide solutions as long as the market is tempting enough and the auto loan market for people with bad credit meets this requirement.

Shopping Online

Getting a loan from a regular lender with bad credit can be difficult. However there are many online auto loan lenders willing to consider bad credit applications. As the auto loan business becomes more and more competitive lenders tend to reduce the interest rate they charge even for bad credit loans. This is the reason why it is not strange to find affordable bad credit loans these days. So just search around the net for bad credit loan lenders and request as many loan quotes as possible to compare interest rates and other loan terms. This way you will be able to get the best deal available for you.

Secured Or Unsecured

There are mainly two kind of bad credit auto loans, Secured auto loans and Unsecured auto loans. Secured auto loans require a form of collateral as a guarantee for the lender. This greatly reduces the interest rate charged compared to unsecured auto loans. On the other hand, unsecured auto loans do not require collateral driving away the risk of repossession. In order to decide which of these options is the best for you, you need to ponder the risk involved in the transaction if you use your home as collateral and the money you would save in interests.

Repayment Length

Repayment schedules can last between two to thirty years, it really depends on the borrowers income whether he should choose a shorter or longer repayment program. However, it is always the best to keep it as short as possible as this will save you thousands of dollars in interest. “Pay off the loan as early as possible” is definitely a good advice. If you think you might make additional payments due to having a variable income, make sure there are no prepayment penalties within the loan terms as you may end up paying more just because you want to cancel your loan sooner.

Down Payments

Some lenders require down payments in order to provide finance for the purchase of a car. Nevertheless, there are many lenders out there willing to finance 100% of the vehicle value. Bare in mind though, that if you can raise some money and set it aside for a down payment, you’ll be able to get a much better deal as lenders usually charge lower interest rates when the applicant is capable of making a down payment because it shows that you are able to save money and thus it is more likely that you will be able to repay the loan without any problems. It’s a great way to save thousands of dollars.

There are many finance companies online competing for your business, to finance your vehicle. Just beware of unethical lending practices. People with bad credit are often prey to lending scams. Bad credit borrowers have fewer lending options than other borrowers and some finance companies take advantage of that fact. Here are 3 things to do to protect yourself from an unethical auto finance company.

1. Compare Rates Among at Least 3 Different Lenders Online – If you have 3 or more loan offers to compare, you are much less likely to take an offer from a lender who is charging excessive interest rates. If you have 3 or more interest rates to compare, you will have a good idea of what the average interest rate is that is being offered to people with credit problems for auto financing.

2. Get Financing Before You Visit a Dealer – If you are going to buy your car from a dealer, make sure you get your financing before you actually visit the an auto dealership. Dealers and lenders often make agreements to work together to charge the borrower a much higher interest rate than they could otherwise get by shopping around. If you have your financing ahead of time, you won’t have to accept the financing they offer you there.

3. Apply With Reputable Lenders – If you are applying with lenders who are established and reputable, you minimize your chances of being taken advantage of.

The federal government’s $40-billion economic stimulus package will only work if it’s well defined, Auditor General Sheila Fraser told a local crowd Monday.

That means not only defining clearly the criteria determining who gets the money, but also clearly defining success, said Fraser, who is about to take on the herculean task of ensuring the stimulus package is spent properly.

That money needs to get out the door quickly if it is not to hinder, rather than help, any economic rebound, Fraser acknowledged.

But the stimulus plan “should not be a licence to dispense with sound management practices,” she added.

Given the urgency of the spending plan, Fraser’s department plans to do “real-time” audits, looking at the spending as it happens rather than later.

Her role will include auditing the federal government’s loans to auto manufacturers and purchases of mortgages.

She said later that, given the scope of the spending, her department will rely greatly on the internal auditing departments of the federal ministries involved.

“We can’t audit everything that’s happening,” she said.

It’s a widely held misconception that Fraser is the watchdog of government, she said.

“In fact, it’s Parliament that is the watchdog,” said Fraser.

“Our role is to tell Parliament how well its decisions are being implemented.”

Fraser, who has been auditor general for the past eight years, spoke at the Brockville Country Club at a luncheon held by Brockville’s two Rotary Clubs and the Brockville and District Chamber of Commerce.

Her tenure has yielded reports into inappropriate spending leading to some of the largest political scandals of recent years, but Fraser insisted her mandate is not to remain highly visible.

“Our mission in life is not to get a lot of headlines in newspapers, nor to go on a witch-hunt,” she said.

Fraser was largely complimentary of the governments she has seen while in her office, including the vast bureaucracy entrusted with enacting policies that can rapidly shift direction, especially in a succession of minority governments.

“People really do work very hard to implement the decisions,” she said.

Sometimes, however, civil servants do things that raise an auditor’s eyebrows.

When asked to recall the most “interesting” expenses she has come across, Fraser cited the “horror stories” of $400 lunches and the case of one manager in a small agency who had not spent all its money by the end of the fiscal year.

“He divided it up amongst his employees,” said Fraser, to much laughter.

On the question of spending, however, Fraser said another common misconception involves complaints that items are promised in the federal budget, but take months to become a reality.

In fact, that’s how government is supposed to work, she said, noting that budgets are done in the winter while the fiscal year only starts April 1. In the meantime, the measures have to be designed, then approved by cabinet.

“The budget is merely a statement of intent.”

Fraser, whose department functions on an annual budget of $85 to $90 million and employs 630 people, will leave her job in 2011, when her 10-year, non-renewable term expires.

While audit reports do contain plenty of criticism of government activity, Fraser said her job really is to maintain Canadians’ confidence in their government by ensuring it acknowledges mistakes and inefficiencies and corrects them appropriately.

“Ultimately, I believe we have a constructive role to play,” she said.

ROBERT SAMUELSON © WASHINGTON POST WRITERS GROUP
Published: June 9, 2009

WASHINGTON To make sense of today’s most perplexing economic debate — whether we’re flirting with inflation or deflation — it’s worth recalling what happened after World War II. Under intense political pressure, Presi dent Truman lifted wage-price controls. All heck broke loose. Suppressed during the war, wages and prices exploded. Autoworkers, steelworkers, and others went on strike for higher pay. In 1946 and 1947, consumer prices rose 8.5 percent and 14.4 percent, respectively.

What’s instructive is that prices then stabilized. There was no upward wage-price spiral as occurred in the 1960s and 1970s. True, a mild recession in late 1948 and 1949 helped temper price increases. But inflation subsided mainly because people didn’t expect it to continue. They’d lived through the Depression, when prices declined. They knew that, except for the impact of wars, American prices were usually fairly stable.

The lesson for today: Psychology matters. What economists call “expectations” shape how workers, managers, and investors behave. If they fear inflation, they act in ways that bring it about. The converse is also true, as the late 1940s remind. The lesson provides context for today’s debate. Are the Federal Reserve’s easy-money policies laying the groundwork for higher inflation? Or will these policies prevent deflation — a broad decline of prices — that would deepen the economic slump?

THE QUESTIONS arise from the Fed’s strenuous efforts to contain the economic crisis. It has cut the overnight Fed funds rate almost to zero. It has made loans when private lenders wouldn’t — in the commercial paper market, for instance. To lower long-term interest rates, it has pledged to buy $1.25 trillion of mortgage securities backed by Fannie Mae and Freddie Mac and $300 billion of long-term Treasury bonds. All these measures are without modern precedent.

Precisely, say the inflation worriers. Once the economy recovers, the easy money and credit will spawn inflation. Cheap loans will bid up prices; wages may follow. Low interest rates will encourage spending and deter saving. The Fed will be “under pressure from Congress, the administration, and business . . . to prevent interest rates from increasing,” warns economist Allan Meltzer of Carnegie Mellon University. With huge budget deficits, the White House and Congress will want to hold down borrowing costs. Inflation psychology will emerge.

Nonsense, say deflation worriers. Inflation results mainly from too much demand chasing too little supply. Today, too much supply chases too little demand. High unemployment and slack business capacity (idle factories, vacant office suites, closed mines) impede wage and price increases. If the Fed doesn’t maintain cheap credit, shrinking demand might cause prices and wages to spiral down. “Deflation, not inflation, is the clear and present danger,” retorts Princeton economist and New York Times columnist Paul Krugman.

It seems impossible for both arguments to be correct; but they may be. As Krugman notes, inflationary pressures are almost nonexistent. In the past year, the Consumer Price Index has been roughly stable. In May, unemployment rose to 9.4 percent from 8.9 percent. A survey by Challenger, Gray & Christmas found that 52 percent of firms had frozen or cut salaries. GM’s bankruptcy is but one indicator of excess industrial capacity. The surplus is worldwide, finds a study by Joseph Lupton and David Hensley of J.P. Morgan. Inflationary expectations are low.

ALL THIS GIVES the Fed maneuvering room. Expectations matter; inflation won’t burst forth instantly. Even Meltzer doesn’t see an immediate surge. “When will it come? Surely not right away,” he writes.

Still, Meltzer’s warning remains relevant. The Fed has often overdone expansionary policies and fostered inflationary expectations. In the 1960s and 1970s, that occurred through excess demand and a classic wage-price spiral. The danger now might emerge through exchange rates and commodity prices. Inflation fears could raise prices of commodities (oil, metals, foodstuffs) and depress the dollar. Imports would become costlier, allowing domestic producers to raise prices. Once inflationary practices take hold, high inflation and unemployment can coexist: dreaded “stagflation.” In 1977, both inflation and unemployment were about 7 percent.

There’s evidence (better housing and auto sales, stronger growth in “emerging markets”) that the danger of a deflationary economic free fall is ebbing. Someday, the Fed will have to raise interest rates. Fed Chairman Ben Bernanke has pledged to pre-empt high inflation. Will the Fed get the timing right and resist contrary political pressures? Will the pledges reassure markets?

One reason they might not is that Bernanke’s term as chairman expires in January. Any replacement named by President Obama would be seen, fairly or not, as more beholden to the administration. The president could eliminate that perception by offering Bernanke — who has performed well in the crisis — a second four-year term and, if he accepts, announcing the reappointment. That would not settle today’s deflation-inflation debate; only time will do that. But it would remove a needless uncertainty.