Refinancing your car loan means taking out a new auto loan in order to pay off the one you already have—but what happens when you refinance a car? Is it something everyone should do, or will it worsen your financial situation? When you refinance your car, you can get better terms on your car loan and save money over time, but there are some important things to think about before you decide to refinance your car loan. Let’s take a look at how auto refinancing works and how it could help or hurt your finances long-term.
1. How Does Refinancing a Car Work?
If you’re looking to get a lower interest rate on your auto loan, or if you’re trying to consolidate debt, it can be tempting to refinance a car with another lender. To refinance your auto loan, all you have to do is pick up the phone and call your existing bank. If they don’t offer refinancing options, they can help direct you to a lender that does.
The best time to refinance your auto loan depends on a number of factors. Depending on these factors, you may be able to get lower monthly payments or a shorter loan term. So is it possible to refinance a car loan with bad credit? Yes, but it will depend on many factors. They include both personal and financial circumstances that would make a creditor more likely to want to take another chance on your finances.
2. When should you consider refinancing your car?
Many consumers refinance their car loans without a clear reason for doing so. Knowing when you should refinance your auto loan can help you make an informed decision about whether or not it is right for you. Some lenders look for a FICO score of 680 or higher. Anything below that might get you denied. If your score is closer to 600, you should check out alternative auto loans before you refinance. Don’t make a quick decision unless you know what will happen. Stay safe.
The Automotive Finance Experts at Lantern by SoFi break down what you need to do before and after you decide to refinance a car loan. They also tell us how often Americans are refinancing their auto loans as an alternative or in addition to buying new cars. While most people understand that they will have monthly payments for 3-6 years when they buy a car, many don’t know about car loan options like interest-only payments and biweekly payments.
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3. Pros and Cons of Refinancing a Car Loan
The term of your auto loan determines how long you’ll be making payments on your car. Lengthening or shortening your term can save you money, but it can also come with some other consequences.
• Save on interest
• Reschedule your monthly payment
• Consolidate two or more loans
• Get cash for other financial needs
• Lower your rate
• Change to a lower, fixed-rate
• Change from variable to fixed rate
• Your interest rate and payment could increase
While a refinance can lead to lower payments, your current terms might include certain benefits that are lost once you enter into a new loan contract with a new lender. For example, if you have an auto loan with your employer-provided credit union, your car might be fully insured through work or included in a program that allows you to select a special warranty; depending on your current deal, some of these perks may not transfer to your new loan.
It’s easy to talk yourself out of refinancing, especially if you don’t have enough money saved up for a down payment. But it may still be worth exploring what financing options are available to you. According to Lantern by SoFi, “If your credit score isn’t very high, refinancing with a co-signer could also help you pay less in interest.”
Many things happen when you refinance a car. Depending on your situation, it can be one of three things: good, bad, or neutral. Be sure to learn all of these options before making a decision, and if you need help, talk to someone with experience in financing vehicles.
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A Guide To The High-Frequency Trading Strategy in Singapore
In recent years, high-frequency trading (HFT) has become increasingly popular among traders in Singapore. HFT involves using computers to trade stocks, options, futures, and other securities at very high speeds.
The appeal of HFT is that it can potentially generate large profits in a short period. However, it should be noted that HFT is a highly risky strategy and is not suitable for everyone. This article will provide an overview of the high-frequency trading strategy and discuss some of the risks involved.
What is High-Frequency Trading?
High-frequency trading is a type of algorithmic trading that uses high-speed computer systems to place orders on behalf of human traders. The orders are generated based on algorithms, which are sets of rules that determine when and how to trade.
HFT firms typically use high-speed connections to exchanges and use sophisticated software to make trading decisions. The goal of HFT is to profit from small price discrepancies in the market.
For example, an HFT firm might place a buy order for a stock that it believes is undervalued and simultaneously place a sell order for the same stock at a higher price. If the stock price rises, the HFT firm will profit from the difference between the two prices.
HFT firms often make hundreds or even thousands of trades per day. Because they are placing many such orders, they can potentially make a lot of money if even a tiny percentage of their trades are profitable.
How Does High-Frequency Trading Work?
HFT firms need to have access to high-speed computer systems and high-speed connections to exchanges to trade at high speeds. They also use sophisticated software that is designed to make trading decisions quickly.
The software used by HFT firms typically includes algorithms that automatically place orders based on certain conditions. For example, an algorithm might place a buy order when a stock price falls below a certain level or sell order when the stock price rises above a certain level.
In order to make money from HFT, firms need to be able to place their orders faster than other traders. This requires having access to high-speed connections and fast computers.
Benefits of High-Frequency Trading
HFT has been gaining popularity among traders and investors in Singapore due to its many benefits.
HFT can help traders take advantage of arbitrage opportunities that may arise due to market inefficiencies.
Profit from Small Price Movements
Secondly, HFT can allow traders to profit from small price movements that would be too difficult to predict or capitalize on.
Reduce Transaction Costs
Finally, HFT can help traders reduce their transaction costs by using high-speed order execution and data feeds.
What are the Risks of High-Frequency Trading?
HFT is a high-risk strategy that can lead to significant losses if done incorrectly. Here are some of the risks involved in HFT:
Use of Sophisticated Software
HFT firms rely heavily on sophisticated software to make trading decisions. If this software fails or malfunctions, the firm could lose a lot of money.
HFT firms need to trade very quickly to profit from minor price discrepancies. This can lead to trades being placed inadvertently or too late.
No Human Intervention
Because all the trading is done by computer, there is no human intervention to stop a trade from going bad. This could lead to significant losses if the trade goes against the HFT firm.
HFT can sometimes contribute to increased volatility in the markets. When there is high volatility, prices can move quickly, and investors can lose money.
There is always the risk of manipulation by HFT firms or other traders. If someone can manipulate the market in their favour, they can quickly make a lot of money.
While there are risks associated with any trading, HFT carries a higher level of risk than some other strategies. It is essential to understand these risks before deciding whether or not to use this strategy. New traders who want to trade options in Singapore can contact a reputable and experienced online broker from Saxo Bank.
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Confused About Whether to Avail of a Personal Loan? Read on to Get Clarity.
With easy-to-use and simplified features such as online application, instant approval & disbursal, affordable loan tenures, personal loan in Delhi, personal loan in Hyderabad or in any other city has become extremely popular among individuals. While there are various options available that can make you confident about the application process, it is crucial to remember that every lender or bank comes with its own set of distinct eligibility criteria that decides whether you qualify for a loan. Such eligibility parameters involve credit score, salary, location, age, and KYC documents.
A common misconception that applicants, particularly first-time applicants, make is applying to the lenders without knowing or checking your eligibility criteria. An applicant who submits a loan application without meeting the lender’s basic personal loan eligibility criteria would be rejected automatically. Once you are aware of the lender’s eligibility criteria, you will understand whether you can qualify for a personal loan from that lender. Ensure to always apply for the lenders where you mitigate the minimal qualifying criteria to avoid rejection of your personal loan application. Check out here some of the important parameters that would provide clarity on what you must do when applying for a personal loan.
∙ Keep all Your Finances in Check
Excellent credit history is one of the crucial criteria that lenders look at when reviewing your loan application. When you borrow the money from a lender or bank, all details regarding your repayment history get recorded by the credit bureaus like the CIBIL. A good credit score proves that you are a credible individual who can be thoroughly trusted with loan repayments. Having a positive mark on credit history not just enhances your personal loan eligibility for borrowing larger amounts in the future; lenders and banks also will provide you with a better rate of interest and repayment tenures.
However, credit score in India is not the only parameter that the lenders use when assessing your request for a loan. Other crucial parameters include your employment history, income, monthly average balance (MAB), FOIR or fixed obligation to income ratio. Lenders evaluate such factors from the applicant’s past three months bank statements. Thus, enhance your chances of availing the approval by ensuring you have nonexistent or low debts, maintaining a high bank balance and ensuring your overall expenses are low. If any of the factors are not up to the mark, try and wait for nearly 1 to 3 months to improve your finances and credit behaviour before applying for your personal loan.
∙ Factor in all Your Loan Criteria
When it is about money, we all love saving some additional funds to get a great deal. This is also very commonly found in those looking to avail of a personal loan as they are out shopping for the lowest rate of interest. While the rate of interest is a crucial parameter to consider, it must not be a deciding factor for assessing your personal loan deal. When looking for a personal loan, you must factor in the processing charges and other charges as well apart from the interest rate. You must also factor in how much would be your monthly EMI as per your repayment capacity.
Monthly EMI is also one of the important parameters to factor in as your potential to repay it with ease would impact several various other factors like credit score your eligibility to avail of the loan in future. As many applicants want to keep their thorough rate of interest low, they end up repaying much higher EMIs or lowering their balance EMIs where the initial instalments are high. Thus, when you consider a personal loan, use an EMI calculator to compute how much your EMI would come up to. Having knowledge about the EMI amount and repayment tenure as per your affordability would lower a burden on your finances or negative impact on your score.
∙ Ensure to Keep all the Required Documents Handy
Each financial institution may be a bank or NBFC, must follow a mandatory KYC procedure or know your customer process before permitting a potential seeker to use their services. The KYC is a procedure that aims at curbing fraud and verifying the customer’s identity. Being an applicant, one of the crucial things you would want is to keep all your documents handy when applying for a personal loan. Such documents are extremely common KYC documents. And the major categories of KYC documents include age proof, address proof, photo ID proof, and salary proof.
One of the common reasons that personal loan applications usually get rejected is because the applicant failed to submit the right documents or because the required documents were uploaded in the incorrect places of the online application form. You can simply avoid this by carefully going through your application form and ensuring to do a final check before sending out your application to the concerned lender.
Note that it is very common for financial institutions like banks or NBFCs to request a huge number of documents for evaluating your personal loan application, which can certainly come across to be a burden. However, the required documents for a personal loan from digital avenues like MoneyTap, upwards etc., are minimal wherein you just require submitting your PAN card, salary slips, Aadhaar card and bank statements. Such digital avenues offer a paperless process where you just need to fill-up the form and then upload your documents through their website or application.
Applying for a personal loan may seem confusing, but it is all about having knowledge of how a personal loan application is evaluated and if there is any area you require improving when or before applying. Ensure to thoroughly check your lender’s eligibility criteria to view if you qualify for the loan. Also, knowing on what basis the lenders evaluate your loan application makes it extremely helpful as you tend to understand what you may need to ameliorate. Remember to keep the above-listed tips in mind, and you will have a far higher chance of availing of loan approval.
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Best Strategies to Get Out of Debt in 2021
Debt can be useful when used properly as it gives your financial life a boost. There are times when unforeseen circumstances would prevent you from fulfilling your debt obligations or find it hard to pay back. In this guide, we will be discussing some of the tips you can use to get out of debt this year. Debt can be a heavy burden to bear as it can weigh on your finances and prevent you from achieving financial fulfillment. Without further ado, here are some of the helpful tips that would help you get out of debt today:
Draft a Budget
Drafting a budget is a good first step to getting out of debt. It helps you to plan your finances and properly allocate capital as needed. Your budget gives you a clear view of where your money is coming from, how much it is, and where your money is going. To create a compact budget, the first thing you should do is outline all your sources of income and your corresponding fixed recurring expenditure on a monthly basis. The difference between your total income and your expenses is your disposable income which you can use to repay your debt. Determine how much of your disposable income you would set aside to use in repaying your debt.
Haggle Lower Interest Rates
Where possible, you should always call your creditors and negotiate a lower interest rate. Most debtors are unaware that creditors are willing to review your interest rates based on your payment history and your account information. If you have a good relationship with your creditor, leverage that relationship to get better rates especially if it is one you have been building for years. Renegotiating your interest rates would save you money and help you to get free of debt faster. You never know if you qualify for lower interest rates so make that call today.
Increase Your Debt Repayment Percentage
Setting aside a reasonable percentage of your disposable income towards paying off your debts would help you clear your debts faster. For example, credit card companies require debtors to pay at least 2% of their debt monthly. If you set aside 15% of your income for debt settlements every month, you will be on track to clear your debts faster. When you pay smaller amounts (minimum payments), your debt balance keeps accruing interest and it takes a longer time for you to pay off. On the other hand, large chunks of paid debts would drastically reduce the amount and time you would spend paying off the debt.
Pay Off Small Debts
Create a list of all the debts you owe from the littlest to the largest to get a clearer picture of your total debt profile. Paying off your smaller debts first has a number of advantages which put you on track to clearing your total debt. Firstly, you get to be free of those smaller debts which may then accrue to become larger debt obligations. Secondly, it helps you build momentum as the small payment milestones will create a snowball effect and put you in a positive frame of mind.
The debt snowball method is a very common method used to help debtors get out of debt and it can help you too. Using this snowball method would ensure you have the momentum to weather your larger debts. Classifying your debts in order of size will help you to delegate your money to your smaller debts and improve your capital allocation.
Tackle Large Debts
Large debts can be scary because they may weigh on you both mentally and financially. Once you have paid off your smaller debts (see tip above), you can employ different methods to tackle your larger debts. One popular method used is called the debt avalanche method. This method requires you to pay the minimum payments for all your outstanding debts and then use the remainder of the money earmarked for paying debts to pay off the debt with the highest interest rate.
Interest rates accrue and can make your debt larger with time, this method ensures that you truncate the interest rate on your worst debt and keep more money and make larger payments. This method has been proven to be effective when used to tackle large debts as it ensures that you have fewer amounts to pay each passing month and you get one step closer to freedom with each payment.
Use Debt Consolidation And Debt Relief
Debt consolidation and relief are viable methods of getting out of debt. Your credit score also affects your interest rates during repayment as individuals with higher scores pay lower interest rates than debtors with lower scores. When you pay higher interest rates, most of your repayments go towards servicing the interest rather than paying the principal and it is important that you avoid such a scenario. Having higher interest rates on your repayments will put a strain on your finances and keep you in debt longer than necessary.
Debt consolidation can help you if you have debt with high percentage interests by allowing you to combine your multiple debts into one single debt with better and more flexible repayments terms. This way, you are only obligated to pay one monthly payment with low interest rates as opposed to multiple monthly payments with high interest rates.
Debt relief also makes it easier for you to make your payments as it helps you by giving you a lower principal, reduced interest rates, or partially forgiven debt. This reduces the burden on your finances and ensures that you are able to pay off your debt in an easier manner. Both these options are available to you and the one you choose is up to your preference. If you want more help with this line of action you should consult a debt expert for a more detailed breakdown.
Use Tax Refunds
Tax refunds can be a good source of extra income and it can be quite tempting to want to use this money for fun activities but if you have any outstanding debt it is not advisable to do so. Tax refunds give you a much needed cash injection which can allow you to pay off some of your debt thereby reducing your monthly payments. The resulting lighter debt load will take off the strain from your finances and give you a better long term outlook over spending the tax refund on other activities.
Credit Card Balance Transfer
Credit card balance transfers allow you to transfer a high interest rate debt to a zero percent deal that lasts for around 9 months. We know most people ignore or tear up credit card balance transfers as soon as they appear in their mailbox but you may want to rethink this action. Eliminating your credit card interest can free up cash which you can use to pay off other debts.
Debt repayments can be daunting especially if they are not planned properly. If you currently have some debt you are working through then we hope this article has been able to provide enough insight on how you can solve your debt problem. As always, contact a debt professional if you need hands-on help to solve your debt repayment.
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