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Is Trading In Your Car Worth It?

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For many borrowers, trading in their old car for something else is worth it. Two birds with one stone – out with the old and in with the new. However, selling your car yourself could yield more profit. What’s convenience worth to you?

Trading In vs. Selling Privately

Trading in your car can be worth it for convenience. Trading in your vehicle can be a quick and easy way to sell your car, and you can use the proceeds to lower the cost of your next one.

The dealership handles most of the trade-in paperwork, as well. Typically, the most you’re involved is during the evaluation process, negotiating, and then signing the title over to the dealer.

Is Trading In Your Car Worth It?Selling your car privately means taking care of the details yourself. You have to:

  • List the vehicle for sale
  • Find a buyer
  • Agree on a price
  • Draft a bill of sale
  • Sign the title over to the new buyer
  • Head to the Department of Motor Vehicles or Secretary of State to transfer ownership

Arguably, the toughest part of selling your car yourself is listing it and finding a buyer. This can take a while, and haggling is a common step in private-party transactions. And you may never actually find a buyer that’s willing to pay the price you’ve listed the car for!

When it comes to ease, convenience, and speed, trading in your car at a dealership is the clear winner. But what about the profit?

Which Gets Me More Cash?

While no one can guarantee that you’re likely to get more money by selling your car privately, it’s often the case.

There are different vehicle values: trade-in value, private-party value, and retail value. Trade-in value is what a dealer may pay you for your car, private-party value is the going price for a vehicle in the private market, and retail value is the price the car may be listed for on a dealer’s lot. These are all estimates, of course, and valuation websites offer these estimates to give you an idea of what your car is worth in the current market.

Trade-in value is almost always lower than private-party value. This is due to the fact that dealerships handle most of the paperwork involved in selling a vehicle, and most dealers sell the trade-ins that they buy. Dealerships have to take into account the labor involved in prepping a car for sale before trying to make a profit. While you may yield less cash by trading in, you can simply sign the title over and walk away without having to do more work yourself.

If you decide to sell your vehicle privately, you can list the car for whatever price you deem acceptable. The buyer and you handle all the paperwork yourselves, and there’s no overhead to worry about. However, the extra money you may gain from selling your car on the private market may mean having to spend more time and energy.

If you don’t have the bandwidth to sell your car yourself, then trading your car with a dealership can be worth it, even though you may get less cash out of the transaction. Additionally, if you have a clunker and a dealership can’t accept your car, visit our resource center to learn about a different way to sell your car.

Looking to Get a Car Loan?

If you’re selling your current vehicle with the intention of getting another car, and you need to finance, then your trade-in could help you meet the down payment requirement of an auto lender.

Your credit score is a large part of your ability to take on new credit. If your credit score isn’t great, then a trade-in is a great asset. With poor credit almost always comes a down payment requirement, but trade-in equity can help you meet or exceed a down payment requirement.

Typically, subprime lenders that assist bad credit borrowers at special finance dealerships require a down payment of at least $1,000 or 10% of the vehicle’s selling price. You could also combine cash and trade-in equity to make more of a dent in the cost of your next car.

Let’s Get You on the Road!

Having a trade-in when you have bad credit could assist you in meeting the requirements of an auto lender. However, it can be difficult to find a lender that’s able to work with tough credit situations. Here at Auto Credit Express, we want to make it easier for you to find a special finance dealership that’s signed up with bad credit lenders.

Complete our free auto loan request form, and we’ll look for a dealer in your local area. We have 20 years of experience in connecting bad credit borrowers to special finance dealerships, so get started today!

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Are Sallie Mae Student Loans Federal or Private?

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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

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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

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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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