How To Avoid A Rejected Car Loan

When attempting to obtain car financing, it is important to check your credit score first. Borrowing money for car loans can be difficult if you do not have the minimum credit score necessary to obtain the loan. It can be a great disappointment to be rejected for a car loan because your credit score was just below the minimum credit score.

Proper Preparation Is Key

Success in obtaining the car loan depends on the steps you take to avoid a rejected car loan. Gain access to your yearly free credit report before shopping for a new car. The credit report will have all the necessary information to determine if you qualify for car financing. If the credit rating is in good to excellent standing, a car loan rejection is unlikely. People who have a credit rating below 630 may themselves automatically disqualified from borrowing money through traditional bank loans.

Get Your Credit Score Higher

If your credit score is below the 630 points target, it is time to work on repairing the credit rating in order to obtain a car loan. The first necessary step is to pay off all old debts that may be outstanding. The credit rating will not sky rocket because the debts are paid off, but it will help increase the credit score to the higher level that it needs to be to obtain a loan.

Errors are sometimes made on credit reports. If there is incorrect information on the credit report, it is essential to contact the reporting agency through the dispute center. There are three reporting agencies; therefore, it is necessary to contact all agencies if the error is on all three reports. The agencies will make contact with the company who reported the information to settle the dispute.

The change in the credit report should appear within a month, shortly after the dispute has gone in your favor. Companies must have your permission to run a hard inquiry. If someone ran a hard inquiry on your credit report, dispute it as soon as possible. Never give permission to anyone to run a credit report if it is uncertain whether you will be rejected for the loan. If you are rejected for the loan based on the credit report, it will have a negative impact on your credit and can remain there for the two year period. Guard your credit report as though your life depended on it.

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Credit Card Balance Transfer Loans

A debtor who has several credit cards may be interested in receiving credit card balance transfer loans. Balance transfer loans are advances that are integrated into certain credit cards. The special advances allow a debtor to carry balances from other credit cards onto the new card. Consumers can sometimes eliminate high interest debt by taking advantage of balance transfer loans.

Cards with the balance transfer option are usually available to consumers of varying credit classes. The applicants do not have to have excellent credit. However, most lenders require their applicants to have at least good credit.

Credit Card Balance Transfer Loans vs. Personal Loans

Credit card balance transfer loans vary from other types of loans in several ways. They are different from personal advances because they only allow for the transference of credit card balances. A consumer can use personal loans for any purpose, including paying credit card debt. Although in some instances, credit card companies can offer you personal checks or the ability to sign the check to yourself with the same 0% APR terms.

A balance transfer loan usually offers a period in which the customer does not have to pay any interest rate. A consumer can take advantage of the introductory period and make significant payments on the account. Personal advances usually do not come with this amazing introductory period. However, a personal loan can sometimes be a low fixed rate loan.

Consolidation Loans

Another type of loan that a debtor may request to help with credit card debt is a consolidation loan. A consolidation loan is different from a credit card balance transfer loan in size, interest rate, and terms. A person can use a consolidation loan to pay for any credit item such as mortgage, auto loan, credit card, personal loan, short-term loan, student loan, and the like. Consolidation loans generally have excellent interest rates. However, the interest rates for these types of an advances are usually not as good as the 0 percent introductory rate of many balance transfer loans.

Things to Watch for With Credit Card Balance Transfer Loans

Balance transfer loans can be tricky if the consumer is not careful and he or she does not ask questions. Some balance transfer cards have handling fees. A handle fee or a balance transfer fee is a charge that some lenders incorporate for processing the transfer. This fee can come as quite a surprise to a person who thinks that he or she will not have to pay extra money. The best way to avoid such a surprise is to read terms very carefully and ask questions before signing a credit card agreement.

Debtors should also watch out for the end of the zero percent introductory period. This period can last from 90 days to 18 months. The individual should use this time to make double payments to get the balance down as much as possible. The zero percent introductory period is one of the best benefits of having credit card balance transfer loans. Allowing it to go to waste is not productive.

To apply for credit card balance transfer loan, the debtor needs to complete an application online. Some lenders will give an immediate answer while other may take up to 30 days to respond.

Tags: Credit Card Balance Transfer Loans vs. Personal Loans

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