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Can You Return a Financed Car Back to the Dealer?

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Returning a vehicle to a dealership isn’t as simple as returning a shirt that didn’t fit right. If you’re in a position where you need to return a car, you may have a few options, but your loan balance plays a key role in what you can do.

Returning a Car to a Dealer

Can You Return a Financed Car Back to the Dealer?The hard truth is that most auto dealers aren’t going to let you return a vehicle that you’re financing. Some dealerships have a return policy – sometimes around a seven-day guarantee when you’re financing a car sight-unseen without a test drive – but most don’t offer one. It won’t hurt to give your dealer a call and ask, but most franchised dealerships don’t have return policies.

When you finance a vehicle with an auto lender, the car’s title has a lien on it, which names the lender as the lienholder. This gives them ownership rights, and prevents you from transferring ownership of the vehicle until the loan is paid off.

Once the loan is complete, the lien is removed and the car is yours. If you need to get out of the auto loan before your loan term is over, you can sell the vehicle privately and pay off the car loan. Selling the vehicle to a private party may get you enough money to remove the lien and relinquish yourself from the auto loan pretty easily. You wouldn’t be returning the car to the dealer, but you can get out of the auto loan this way.

If you try to sell it back to the dealership, they may not offer you enough money to cover your loan balance. Trade-in values are typically less than the actual cash value (ACV) of the vehicle.

If you find yourself in a negative equity position where you owe more on the car loan than the vehicle is worth, you may have a more difficult time selling the car early to repay your loan. However, if you’re in this position, you still may have a way to get out of the loan and get into another vehicle.

Rolling Over Your Auto Loan

Some auto lenders offer loan rollovers. Put simply, you add the remaining balance of your current car loan onto your next one.

It works like this:

You have an auto loan with a balance of $15,000, and you want another vehicle that’s selling for $16,000. You sell your car back to the dealer because it’s not the right fit for you, but the dealership only offers you $10,000 for it. That $5,000 still needs to be paid, so it’s added to your next auto loan balance of $16,000, turning the balance into a grand total of $21,000.

While you got to sell your vehicle and get into something else, you’re starting out a loan with a lot of negative equity. If you need to sell this next car for something else, it means you may have to roll over negative equity again … and maybe again. This is called the trade-in treadmill, and once you get running on it, it’s hard to get off.

Rolling over negative equity onto your next auto loan should be considered one of the last resorts if you really need to sell your vehicle. However, there is one actual last resort if you want out of your car loan.

The Actual Last Resort: Giving the Vehicle Back

If you can’t sell the vehicle to a private party, a dealer won’t buy it, and you don’t have the option to roll over your auto loan, then you may have to consider voluntarily surrendering the car to the dealership.

This is commonly called a voluntary repossession. Voluntary or not, it’s classified as a repossession on your credit reports. Once you return the vehicle, it’s considered a default because you’re no longer making payments. The car is then prepped to be sold at auction, and the proceeds from that are applied to your remaining loan balance. If the loan isn’t completely paid off, called the deficiency balance, you still owe that to the lender.

Having a repossession listed on your credit reports, and the possibility of still owing your lender money after the auction sale, is why a voluntary repo should be considered a last resort. You may be better off to continue making the payments on the vehicle, since a repo can make it difficult to get into another auto loan with most lenders for at least one year.

Refinancing Your Car Loan

If you’re thinking about returning your car to the dealer because you can’t afford the payments, but still want to keep the vehicle, then consider refinancing the auto loan after one year. Most refinancing lenders consider a car loan for refinancing after hitting that one-year mark.

Refinancing is replacing your current auto loan with another one, hopefully with better terms. Nearly everyone that refinances is looking for a more affordable monthly payment. Refinancing can give you the chance to qualify for a lower interest rate than what you initially got, and it could give you the opportunity to extend your car loan, which lowers the monthly payment as well.

To refinance, you must have had your auto loan for at least one year, and lenders typically require that you haven’t had any missed or late payments on the loan. Generally, your vehicle should have less than 100,000 miles and be less than 10 years old to qualify, too.

If you think refinancing is the right path for you, click here for more information.

Need Another Auto Loan?

It can be stressful if you want out of your current car loan, or if you simply don’t want the vehicle anymore. This circumstance can be even more frustrating if you have poor credit. It can be tough to find auto financing with a lower credit score, but we’ve made it easier here at Auto Credit Express.

We’ve cultivated a network of dealerships that spans the whole country, and we want to look for a dealer that’s signed up with bad credit lenders just for you. Get started with zero-obligation and no cost whatsoever by filling out our free car loan request form. We’ll get right to work finding a local dealership that can assist people in unique credit situations.

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Call a Reconsideration Line for a Second Chance at a Credit Card

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Illustration for article titled Call a Reconsideration Line for a Second Chance at a Credit Card

Photo: F8 studio (Shutterstock)

Getting rejected for a credit card can feel like a low blow, especially if you’ve fallen on hard times. But you still have a lesser-known, last-ditch option available—the reconsideration line, which allows borrowers to appeal their rejection directly with their lender. Here’s how to use it.

First, understand why you were rejected

Your credit card application can be rejected for a number of reasons, like a bad credit history, low income, outstanding debt payments, having too many credit cards, and employment history. By law, card issuers must give you a reason why your application was rejected, so read your rejection notice carefully and know why you were turned down.

Some of these reasons can be obvious: As an example, you wouldn’t expect to qualify for a premium credit card with a high limit if you have a terrible credit score. However, since the initial application is automated, a lot of borderline cases simply don’t qualify for credit. Fortunately, that’s where reconsideration lines kick in: You can call an actual human on the phone and make your case for approval—if you’re lucky, they’ll overturn the rejection.

Prepare for the call

There are no guarantees, but if you plead your case as a responsible potential customer, the lender might be convinced. Prepare for the call by knowing your outstanding debts, income, and credit score. If you’re rejected because of your credit score, you have the right to request a free copy of the credit report used by the lender within 60 days. Review the report and look for errors (they do happen). If you find any, dispute them and mention this in your call. Otherwise, be polite, as the person on the other end of the line is under no obligation to reverse the lender’s initial decision. Hopefully, after pleading your case, your application might be accepted, after all.

Reconsideration lines for major banks

Below are the phone numbers for dedicated reconsideration lines (if available), although note that they tend to change frequently. If your bank isn’t on the list, call their customer service number and ask if there’s someone you can talk to. Also, make sure you call within 30 days of your rejection, as applications typically expire after 30 days, forcing you to apply again (and incur a hard pull on your credit history, which can lower your credit score).

  • American Express has a reconsideration line that can be reached by calling 1-800-567-1083, Monday to Friday from 8:00 a.m. – midnight ET, and 10:00 a.m. – 6:30 p.m. ET, on Saturday.
  • Bank Of America used to have a dedicated reconsideration line but it looks like calling 1-877-721-9405 during business hours is your best option.
  • Barclay’s reconsideration line is 1-866-408-4064 and can be reached Monday through Friday, 8:00 a.m. – 5:00 p.m. ET.
  • Capital One doesn’t have a dedicated reconsideration line, but you can try general customer service line, 1-800-951-6951, or application services, at 1-800-625-7866, during normal business hours.
  • Chase has a reconsideration team can be reached by calling 1-888-270-2127 between 7:00 a.m. – 10:00 p.m. ET, Monday through Friday, and 8:00 a.m. to 1:00 p.m., ET, on Saturdays.
  • Citibank can be reached by calling 1-800-695-5171, between 8:00 a.m. – midnight ET, every day.
  • Discover doesn’t have a reconsideration line, and they don’t have a reputation for overturning rejecting credit card applications, but you could try their 24-hour customer service line, 1-800-347-2683.
  • US BANK doesn’t seem to have a dedicated reconsideration line anymore, but you can call 1-800-947-1444 (Monday through Friday from 8:00 a.m. to 8:00 p.m. ET, and Saturday from 9 a.m. to 6 p.m. ET).
  • Wells Fargo has a reconsideration department that can be reached by calling 1-866-412-5956, between 9:00 a.m. – 9:00 p.m. ET, Monday through Friday, or by calling 1-800-967-9521, between 8:00 a.m. – 7:00 p.m. ET, on Saturdays.

This post was originally published in 2013 and has been updated Jan. 20, 2021 to include updated information.

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Debt consolidation programs: How they work

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If you’re trying to pay off debt, you’ve probably looked into the variety of options that could help. If so, you’ve likely come across debt consolidation programs — and may be wondering what they are.

Debt consolidation programs can help borrowers who may be overwhelmed by debt payments by combining multiple loans into a single payment. Typically, these programs are offered by credit counseling organizations. These organizations may offer guidance and financial planning in addition to helping consolidate debt.

A reputable credit counseling organization will likely incorporate guidance to help with managing debts, along with providing educational material, workshops and other ways to help borrowers work to develop a realistic budget.

A legitimate debt consolidation program should feature counselors who are certified and trained in offering advice on consumer finance issues in order to create a personalized plan, whether it’s to address credit card debt, bad credit or other needs.

Consolidating debt typically results in a refinanced loan, with a lower or more manageable interest rate and modified repayment terms. According to the Federal Trade Commission, it is recommended to find a local debt consolidation program offering credit counseling in person.

You may find these accredited, nonprofit programs are offered through channels like credit unions, universities, religious organizations, military bases and U.S. Cooperative Extension Service branches.

(It’s important to note that everyone’s debt payoff needs differ, so your mileage may vary.)

Related: Paying off debt—9 strategies to try

What Is a Debt Consolidation Program?

Debt consolidation programs can play two roles. For one, they help borrowers combine multiple loans into a single payment, which can make repayment less overwhelming. For another, they act as credit counselors.

With tools for loan repayment strategies and debt management, they can help lower or simplify monthly debt payments. These types of programs are usually managed by credit counseling companies.

It’s good to note the difference between debt consolidation programs and an actual loan opened to consolidate debt.

Qualifying consumers can use a debt consolidation loan (typically an unsecured personal loan) to combine multiple debts into a new single loan as well, possibly with a lower interest rate. But there is no counseling offered during the loan application process, and paying down the debt remains entirely the burden of the borrower.

The services outlined above can make a debt consolidation program different from other methods of consolidation or interest reduction, such as a balance transfer for a credit card, or a personal installment loan from a banking institution or lender.

Keep in mind that debt consolidation is also different from debt settlement, which is a process used to settle debts for less than what is owed.

When enrolled in a debt management program, which is one part of a debt consolidation program, a single monthly payment is sent to the credit counseling agency, which then distributes an agreed-upon amount to each credit card or loan company. The goal of the program is to act as an interlocutor for the debt between the borrower and creditor.

While most debt consolidation program companies are nonprofit organizations, nonprofit status does not guarantee services are free, or even affordable.

These organizations can, however, reach out to the lenders on behalf of the borrower to find an affordable repayment plan, which could take shape in the form of waived fees or penalties, lowering interest rates, in exchange for a specific timeline of usually three to five years for the debt to be repaid.

These programs are not loans, which would come from financial institutions. Perhaps most importantly, debt consolidation programs do not make any promises to reduce the amount of debt owed. Those are debt settlement programs, run by outside companies who negotiate payments with creditors, and can be for-profit, predatory or may not act in the best interest of the borrower.

A debt management program, on the other hand, could help set borrowers up for future success, when it comes to how to budget and manage money, educating consumers about cutting expenses or ways to increase income in order to gradually eliminate debt.

Pros and Cons of Debt Consolidation Programs

Debt consolidation is typically most beneficial to those struggling with high monthly debt payments. Paying just the minimum balance on debts every month means it could take a long time to pay off the debt, and interest costs could continue to add to the balance. Getting rid of high-interest debts can help make it easier to pay off the principal amount of the loan.

While having a lot of debt is certainly stressful, it’s worth weighing the pros and cons of any debt consolidation program before signing up. Here are some pros and cons to ponder:

Pros

  • Multiple payments are combined into one payment, likely making it easier to pay on time.
  • Credit counseling could help a borrower get back on track with tools like budgeting and other financial advice.
  •  Some programs can help negotiate lower interest rates, fees, possibly creating a more affordable payback plan.

Note: Because lowering interest rates may extend the number of time borrowers would pay their debt off, they may end up spending more on interest in the long run.

Cons

  • Debt consolidation programs do not reduce the principal amount of debt owed.
  • They can easily be confused for more predatory programs offered by some debt consolidation settlement companies.
  • Some programs might charge fees.

Many of the legitimate counseling companies tend to follow a similar setup process, which typically includes an interview with a counselor to go over things like income, expenses, and current bills and loans. The counselor might suggest areas where spending could be reduced and offer educational materials.

The program may also help set up a budget and will send the proposal out to creditors to agree to any new monthly payments, fees, payment schedules, interest rates or other factors, Reputable programs should only charge for set-up and a monthly fee.

It is generally recommended to take extra care with any for-profit organizations requiring a lot of upfront fees, memberships, or fees for each creditor they work with on negotiation. There is no magic pill to reduce debt, so spending less and budgeting more have been key pillars of a healthy financial foundation.

No company should promise a quick turnaround for becoming debt-free overnight. Historically, credit repair has been a market tainted by fraud, so it’s recommended to tread carefully and do the research before signing on to any program.

Selecting a Debt Consolidation Program

One common and simple way to sign up for this type of debt management program is to contact a reputable nonprofit credit counseling agency. The U.S. Department of Justice offers a list of approved credit counseling agencies by state.

Along with ensuring the agency you’re considering is on this list, you may want to consider doing further research by asking your state attorney general and checking local consumer protection agency websites.

Debt settlement companies often try to sell themselves as the same service, so be wary and check to be sure the organization is offering financial counseling and not making promises to reduce the amount of debt owed.

Based on the interview and assessment of current income and debt, the counselor could either recommend a debt management program, or another solution which could be a personal loan, bankruptcy, or some other form of settlement.

The company should not promise any sort of quick fix or short-term solutions.

The National Foundation for Credit Counseling is responsible for certifying many of these counselors, who must complete a comprehensive training program certifying them to help and educate consumers regarding their finances.

Because most nonprofits are certified, it helps to read consumer reviews of these programs as well, to see how the company operates.

The next step is to check what services are offered and what fees will be charged, such as an initial sign-up fee and recurring monthly fee. Understanding the costs upfront is important, and can help someone avoid a possibly predatory, for-profit business.

Something else you may think to look out for: A settlement company may charge more fees initially on the promise to arrange a reduced lump sum payment of debts.

These companies often instruct  consumers to stop making payments entirely on their debt, which could affect credit rating and even may cause the creditor to send the debt to a collection agency. A legitimate program should offer financial advice and counseling on ways to help reduce debt.

Learn more:

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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Village of New Paltz might expand eligibility for revolving loan fund | Local News

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NEW PALTZ, N.Y. — The village is considering expanding eligibility for a little-used revolving loan fund to include the needs of businesses being hit hard by the COVID-related economic slowdown.



Village of New Paltz trying to help residents get refunds from waste haulers

Village of New Paltz Mayor Tim Rogers




Mayor Tim Rogers said Tuesday that the $500,000 loan fund could be used to help businesses with more than just the purchase of personal protective equipment allowed under state and federal programs.

“We’re trying to piggyback off of the existing language for the revolving loan fund,” he said. “We just wanted to make it somewhat broad in terms of recognizing COVID impacts.”

One thing the village is considering is eliminating the rule that prohibits the use of the fund for emergency situations or business operations.

“Here we are flipping it and saying that you can,” Rogers said.

Guidelines for the loan program, which was established with funding from the U.S. Department of Housing and Urban Development, were last updated in 2013. The loan fund’s current interest rate is 3%.

Rogers said the fund has received only two loan applications over the past six years, and one of those was rejected.

“There’s only been one that we awarded and one that we straight up denied,” he said, noting that the rejection was because of the applicant’s bad credit history.

Rogers said the COVID-19 pandemic has created something of an economic irony in the village: decreased foot traffic in the business district but a significant increase in applications for building permits.

“[Village Safety Inspector] Cory Wirthmann believes our busy Building Department is partially a function of people traveling or vacationing less,” the mayor said. “ Money they would have spent is now going to home improvement wish list projects or just deferred maintenance, like finally choosing to replace the old roof.”

Comments about expanding the revolving loan fund should be emailed to  assistant@villageofnewpaltz.org. A loan application and information about the process can be found online at bit.ly/npaltz-loans.

For local coverage related to the coronavirus, go to bit.ly/DFCOVID19.

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