Should You Pay in Cash or Get Car Loans?

If you’re looking for extremely low rates to finance a new car, you have to make sure that it is not the only thing you are looking at. Remember that a car dealer gets a better deal when financing your car, than getting paid for it in cash; unless the lender pays for it and you have to pay the financing company on your own. So, it wise to consider the following things when planning to tie up your finances with car loans.

Financing a new car may or may not be a good deal depending on the following circumstances:

  1. Credit report. It’s easy to get favorable loans when your credit is good. But, what about if you have a bad credit? You can still get a car loan by doing the following things:
  • Know your credit score to know where you financially stand.
  • Check your credit report and correct erroneous entries. If there are problem areas in your report, lenders may be hesitant to lend you money.
  • Find a reputable lending company by checking their business in the business bureau, and reading reviews about the company. Good lenders can tell you not only the monthly payment, but the interest rate, loan terms and other hidden fees. It is advisable to work with companies that lend to people with bad credit.
  1. Employment record. When you are hopping from job to job, lenders may not give you the best deals. But, if you have a stable employment, and you have extensive list of assets, the lenders may look at your application favorably.
  2. Outstanding debts. If you have big debt loads and you have financial capacity to cut it down, pay the high-interest loans first and pay off your smaller debts to give some allowance for your payments. This way, you will not only improve your credit score, but your monthly finances as well. Close unused charge accounts and credit cards, except for your oldest credit card.
  3. Budget. If you have earned adequate amount of money and it is sitting there for you to use, why not pay in cash?

If you don’t want to spend more than you earn each month, then getting car loans may not be your best choice. Paying in cash can help you handle your budgets well because you don’t have to pay for the interests. But, if you don’t have large amounts of cash and you really want to buy a car today, then a car loan can help you get it.

Final thoughts

Avoid getting car loans unwisely. Remember the cost of debt. It can leave you in a financial mess if you don’t know what you are getting into.  Don’t succumb to the temptation to apply for car loans which are beyond your means to pay off.

When you apply for car loans always do the math. Figure out if the interest rates, associated fees and loan terms are worth the cost.

For more information, contact us and we will help you find a loan solution that works for you.

Debt Consolidation Financial Planning News

How to Manage Your Money like a Millionaire

How do millionaires make their money, especially when they’re so young? And just as important, how on earth do they manage it? What are their secrets, and can we learn from the methods that they apply?

Well, Capgemini Consulting made it a little easier for us with the report in which they reveal young millionaire money management methods. Do you want to know how to manage your money like an under-40 millionaire? Then keep reading for some valuable tips.

Manage Your Money like a Millionaire

Socially responsible investing

Do you think millionaires invest all willy-nilly? They do not, and they don’t just support the causes dear to their hearts through donations, they also invest in them. That way, they make a hefty return, but they also have a clear conscience, knowing that the cause is a good one.

They usually benefit from the help of a financial advisor, who can tell them what to invest in. And the method is not limited to just millionaires. More and more millennials (two thirds) and about a third of generation x-ers were found to be involved in such socially responsible investments.

Dubbed as a “feel good return”, this allows people to invest without guilt, but they should still retain a balance and not invest everything in just one place, which is a good tip if you want to manage your money like these millionaires.

The case for cash

Studies have found that people who spend cash spend around 12%-18% less than their counterparts who use credit cards. But that’s not why millionaires like cash. In fact, the reasons given were diverse:

  • They want to have money ready for investments
  • They want to have easily-accessible disposable income to spend in order to live the way they desire, including shopping, vacations, eating out, etc.
  • They want to have a means to protect themselves financially, in case of a market crash or a changing market

If you’re looking to manage your money like a young millionaire, going with cash cannot steer you wrong, especially if you have a safety cushion to land on in case times get rough.

Real estate investments

Real estate remains the tried and true of investment, because it offers multiple income sources that are more or less steady. While investing in stocks of a major company can pay out really big, it can also be incredibly risky, so maybe that’s not something to emulate when it comes to how you manage your money. Rental income, by comparison, is safe.

Interesting is that these young millionaires seek their friends’ and their families’ help, but also the Internet’s advice, when it comes to financial matters. Baby Boomers, by contrast, were much more likely to trust a professional with their money and their investments in their future.

This is just one of the signs that money management in traditional ways doesn’t fly anymore. A growing number of millionaires (not only the young set) claimed that they would like to receive automatic advice from a robot, per the same report from Capgemini.