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Millions Have Applied for Auto Loans Through Ally in 2021. Should You?

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This year is full of financial surprises. For example, the unusually red-hot housing market shows few signs of cooling. And as the global pandemic continues to rage, there’s a shortage of new and used cars caused by an electronic chip shortage.

Despite mini-financial shockwaves, Ally auto loans is having a banner year, making decisions on nearly 7 million loan applications according to their earning reports. Halfway through the year, Ally has reported more than $4 billion in adjusted net revenue. Ally has long been known for their personal loans, but the high demand for new vehicles has pushed their auto loans into the spotlight.

What’s driving this uptick in Ally’s business, and should you consider applying for an auto loan from the growing company? Here, we look at the good, bad, and ugly characteristics of Ally’s auto loans.

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The good

One way Ally has grown so rapidly is by using artificial intelligence software to verify borrower documents and data in real time. This software makes it possible for Ally to confirm identity, employment, income, and other applicant details in little time — and it lets the lender quickly inform applicants of the decision.

Ally offers fixed-rate auto loans of $1,000 to $300,000, with terms from 12 to 84 months. While Ally doesn’t commit to a specific minimum credit score, anecdotes indicate a minimum score of 620 is typically required.

Here are the most attractive loan features Ally offers:

  • Borrowers can build the cost of wheelchair lifts and other mobility aids into their new vehicle.
  • The company finances the cost of installing right-hand drive capability.
  • It’s possible to snag an interest-free loan on manufacturers’ 0% APR promotions due to the number of vehicle manufacturers Ally works with.
  • Ally will refinance the loan on vehicles up to 10 years old.

The bad

Few companies are all good or bad, and Ally is no exception. Here are some of the less attractive features of Ally auto loans:

  • Ally auto loans are only available through specific dealerships.
  • Ally is an online bank, so it doesn’t offer in-person banking services. This may not bother everyone, but it’s an essential consideration for those who prefer personalized service.
  • Ally auto loans can’t be used to pay for vehicles over 10 years old or with more than 120,000 miles on the odometer.
  • It’s tough to pay an Ally auto loan off early as the lender doesn’t accept principal-only payments.
  • For those looking for an auto loan for low credit, other lenders may offer more competitive rates.

The ugly

While reviews must be taken with a grain of salt (usually, the unhappiest customers take the time to write reviews), online comments regarding Ally auto loans are quite harsh. The most significant number of complaints concern customer service. In addition to unwarranted late fees and payment confusion, poor communication on the part of Ally customer service is a frequent topic of discussion.

Still, as you rate shop for an auto loan, keep Ally in mind. Their loan flexibility and ease of application may be right for you.

Applying for Ally auto financing

If you’re accustomed to calling your local bank for an auto loan or checking online for the lender with the lowest rates, applying for a loan through Ally will be a little different. Here’s how it’s done:

  • Apply with several lenders to compare offers and choose the best option.
  • Use Ally’s dealer locator tool to find a dealership.
  • Gather the documents you’ll need to apply, including picture identification, proof of income, and banking information.
  • Visit a dealer and, if you find a car you like, take it out for a test drive.
  • Fill out a credit application at the dealership and let them also search lenders. Let them know that you’d like to view the offer from Ally.
  • Compare Ally’s offer to the offer you received before car shopping. If it’s better, it may be the best choice for you.

No lender offers a one-size-fits-all loan product. An Ally auto loan is worth considering if the interest rate and loan term fit your needs.

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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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