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Little-Known Facts Surrounding Car Repossession

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There are rules that lenders have to follow when moving forward with a repossession – and you have some responsibilities as well. The repo process can get complicated, so it’s important to know what’s right and what your rights are.

Things to Know About Repossession

Little-Known Facts Surrounding Vehicle Repossession Each state has its own rules and regulations when it comes to repossessions. In many states, a lender can repossess a vehicle without telling you the time or place, and even take the car right out of your driveway. Many borrowers think that their car is safe on their property – but unless it’s locked away, it can be towed away by a recovery company in most cases.

However, according to the legal site Nolo.com, a repo company can’t “breach the peace” while taking your car. This can include towing away your car while you’re in it, using law enforcement to assist in taking the vehicle, or break/unlock locks or destroy property in an attempt to get to a car.

Here are seven little-known facts about car repossession:

  1. You agreed to a repossession process – Signing an auto loan contract almost always means agreeing to allow the lender to repossess the vehicle if you fail to pay or break the contract another way.
  2. Your car can be repo’d for lacking insurance – If you remove the auto insurance from your vehicle, or lower your coverage below the lender’s requirements, they can repossess the car. A lender may also instate a force-placed auto insurance plan and add the payments to your auto loan payment if you drop coverage.
  3. A lender can get a court order – If you manage to keep your vehicle away from the recovery company, or they’re unable to tow it away, then your lender can likely get a court order.
  4. You can voluntarily surrender your car – If you know that your lender is about to repossess the vehicle, then you can opt to return it yourself. This can save you money and make the process less of a hassle.
  5. Repossession scars last on your credit – A repo can hurt your credit score for up to seven years. The first year after the repossession, it may be difficult for you to get approved for another car loan with most auto lenders. However, over time the impact of the repo lessens, and you can typically finance again after one year.
  6. Military borrowers – According to Nolo.com, if you’re in military service, a creditor must get a court order before they can repossess your vehicle. For this to be legitimate, you must have paid at least one car payment and signed the loan agreement before you entered the military.
  7. Auto lenders can’t keep your personal belongings – After a car is repossessed, you have the right to recover your things in the vehicle. The creditor or recovery company isn’t allowed to keep or try to sell your personal property. If some of your things are missing or lost after the car was repo’d, then you may be able to make a counterclaim for damages.

Repossession is serious business, and can drastically lower your credit score. If you think your car is about to be repo’d, then contact your lender right away about your options if you want to keep your vehicle.

What Happens After a Repossession?

After repossession, the car is typically stored until it’s put up for auction. Auto lenders usually sell repo’d vehicles in an attempt to cover your remaining loan balance. You also have the right to attend the auction and try to win your car back, if you wish. The lender is required to notify you about the time and place of the auction if it’s happening.

If the vehicle is sold and you didn’t win the auction, the proceeds from the sale are put toward your loan balance. Anything balance left, called the deficiency balance, is your responsibility to pay. The lender also typically adds the cost of hiring a recovery company and the storage fees to your deficiency balance as well.

Can I Get Another Car After a Repo?

There are dealerships able to assist borrowers with a repossession on their credit reports. For at least one year, you may have to get a car through a buy here pay here dealer, since they often skip the credit pull. Other bad credit auto lenders, such as subprime lenders signed up with special finance dealerships, may be able to assist you with a car loan after one year has passed after the repossession.

Here at Auto Credit Express, we’ve dedicated over 20 years to assisting bad credit borrowers in their car-buying journey. Using our nationwide network of special finance dealerships, we connect borrowers to dealers in their local area. Fill out our free auto loan request form, and we’ll look for a dealership that can assist with poor credit situations.

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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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