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An Industry on Auto-Drive: Car Buyers Embrace Fintech Applications 



The average cost of buying a new automobile soared to almost $40,000 in 2020 and the cost of owning one topped $9000 per year. While used car buyers may spend less, they’re still shelling out plenty of cash: the average price of a used car was over $21,000. Used car prices spiked in response to the COVID-19 economic crisis, which left a record number of Americans unemployed and the remainder uneasy and steering clear of new car expenses. Either way, car owners are looking to save money wherever they can. And financial technology companies in three sectors—auto insurance, auto financing, and its best friend, credit repair—are lending a  hand. 

Background: Growth of the Fintech Industry  

A cooperative study performed by the World Bank and the Cambridge Centre for Alternative  Finance found that many financial technology firms aren’t just surviving, but thriving in the  COVID-19 economy. In some parts of the world, fintech companies experienced jaw-dropping growth rates of up to 40% in the first half of 2020. Consumer lifestyle changes brought on by the pandemic—the fact that we’re staying home more and increasingly unwilling to visit businesses in person—are contributing to the industry’s growth. But the growth has been steady for some years. Case in point: The share of venture capital going to fintech startups over the past decade has increased by 60%. Since 2015, the amount has doubled and reached a high of $43 billion in  2019. In 2020, the number of fintech startups topped 10,000 in the Americas alone. Consumers continue to clamor for more ways to live their lives online and accessing financial services digitally is one thing they’ve increasingly demanded. 

Fintech’s Influence on the Auto Financing Experience 

Auto shoppers no longer have to listen to long-winded, in-person sales pitches. For years they’ve been able to research car features online at all auto manufacturers’ websites, complete with 360˚ virtual vehicle tours. They’re able to narrow down their purchase choices without leaving home to the point that they need only take a few test drives to decide on a new ride.  

But financing their purchases has been another story. Comparing auto loan rates and applying for financing has historically been a wearisome process. Many consumers experienced the frustration of being turned down for a loan, only to have to start all over again. And their credit scores took a hit each time a new lender made a hard credit inquiry. 

Enter fintech to take the time and hassle out of finding a loan. Auto loan marketplace sites allow car buyers to compare the rates, terms, and qualification factors associated with multiple loans with just a few keystrokes. Some provide credit tools that help borrowers figure out where they stand on certain credit qualifications. These sites return detailed loan quotes within a matter of seconds. Most can do so without doing a hard credit pull and adversely affecting a car buyer’s credit. Auto loan marketplaces also centralize and streamline the loan application process, delivering an up or down decision to consumers more quickly. When it comes to speed, fintech-powered lending leaves traditional auto financing in the dust.  

Simplifying Auto Insurance 

Auto insurance represents one of the greatest annual expenses of owning a car. New car owners who never even leave their driveways are still looking at an average insurance bill of over $2000.  For many, shopping for the best auto insurance means shopping for the best price. Layer on the complexity of deciding on coverage and consumers are once again looking for a simple solution to purchasing auto insurance. 

Forbes Magazine added the insurance category to its top 50 list of fintech companies, noting that investors poured $4.4 billion into insurance technology companies in 2020. These companies are replacing live agents and phone calls with a fully digital experience that allows car buyers to compare plans and pricing and purchase a policy in minutes. Industry analysts advise that auto insurance companies that don’t embrace new fintech solutions will be left behind. They’ll lose out on the operations efficiencies offered by new technology and alienate the growing percentage of insurance customers who demand the speed and simplicity of an online buying experience. From grocery shopping to banking, mobile access is another key feature customers are demanding. It’s no surprise they’re insisting insurers deliver it, too. The best-known insurance brands now offer proprietary apps that allow customers to purchase and manage their policies more conveniently. And mirroring the auto finance industry, auto insurance is frequently purchased on insurance marketplaces. Brand loyalty is declining as an insurance purchase motivator. Customers are looking for the best deal, plain and simple.  Insurance marketplaces generally offer instant quotes from multiple insurers and make finding a  great deal a painless process.  

Fintech Fueling the Credit Repair Industry 

Both auto finance and insurance companies take customers’ credit profiles into account when deciding what kind of deals they want to offer. The best interest rates and terms and policy deals are reserved for customers with stellar credit profiles. Nowadays, consumers are recognizing the advantage of maintaining a high credit score and in 2020, the average credit score in the US rose to 710 points. The credit repair industry, powered by fintech, is helping consumers address their credit problems. Credit repair is a long, tedious road that many consumers are loath to take on their own. Using artificial intelligence, credit repair companies deliver reliable results and lift a significant burden for consumers who want to reap the financial benefits of having good credit. 

What’s Next? 

From investment management to real estate to cryptocurrency trading, the fintech frontier is vast and expanding all the time. Check back with Techbullion frequently for new product news and trend reporting. Stay informed on an industry that’s already transformed business and insight you can use to make better business decisions.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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