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Can You Refinance Your Car the Same Day You Buy It?



In a few fringe cases, it’s possible to refinance your vehicle immediately after purchase. However, if you don’t fall under a special case, then you have to wait. Here’s what we know about refinancing requirements on auto loans.

Can I Refinance My Car Right Away?

Can You Refinance Your Car the Same Day You Buy It?If you have great or near-perfect credit, you may be able to qualify for refinancing soon after, or the same day, as you purchased a vehicle.

It’s possible that your loan contract has a prepayment penalty in it if you complete the loan before its scheduled due date, but those aren’t so common anymore. We recommended contacting your lender and reading through your loan contract to double-check if there are prepayment fees for paying off your loan early.

However, if your credit score is worse for wear, you may have to wait to refinance your car until you’ve had the loan for at least 12 months.

Many refinancing lenders require that your credit score has improved during your current loan term or that you have good credit, and that you’ve maintained a good payment history for one year. If your credit history hasn’t been great historically, then a refinancing lender may require that you keep your loan as is until you’ve proven your ability to repay it.

Requirements of Car Refinancing

Refinancing lenders, as a general rule, want to refinance a car for its actual value. Remember that refinancing involves paying off your original loan to replace it with another one, and a lender may not want to pay out more than it’s worth.

Refinancing lenders don’t usually just rely on your credit score to see if you qualify. Other typical refinancing requirements include:

  • Your vehicle is less than 10 years old
  • The car has less than 100,000 miles on it
  • The vehicle has equity (car is worth more than the loan balance)

Even if you have the credit score to refinance your car soon after driving it off a dealer’s lot, you may not qualify if the vehicle doesn’t have equity. Many brand new vehicles experience rapid depreciation (loss of value) in the first few years of ownership – which could make the loan balance higher than its value.

If your vehicle doesn’t have equity and your credit score isn’t great, then refinancing may not be an option right away. To increase your odds of qualifying for refinancing, it may be worth it to pay down your loan as quickly as you can to get into an equity position, and make all your car payments on time to improve your credit score.

How to Refinance the Right Way

Most borrowers that refinance are looking to get a lower car payment. The majority of others are looking to reduce their interest rate. Refinancing can be a great way for borrowers to save money on their car loan – both monthly and long term.

However, you may have the option of just extending your loan term to get a lower payment, but be advised, this means paying more for the vehicle.

Nearly every auto loan out there today uses a simple interest formula. This means your loan’s balance and interest rate determine how much interest you pay the lender over time. Simple interest means your interest charges accrue daily, and the higher your loan balance and longer your term, the more you pay.

If you’re looking to save your car loan, then trying for a lower interest rate is the way to go instead of just extending your loan term.

On the Lookout for Auto Finance Resources?

Here at Auto Credit Express, we want to assist bad credit borrowers in everything auto finance. If you’re in need of refinancing connections, visit our resource center.

If refinancing isn’t an option for you right now, then it may be time to explore other auto loan options. Over the last 20 years, we’ve created a nationwide network of special finance dealerships that assist borrowers with credit challenges. Complete our free auto loan request form and we’ll look for a dealer in your local area at no cost and no obligation.

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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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