Author - Alison Beard

What is a Lien and Other Words Used When Obtaining a Loan?

Acquiring different types of loans for a variety of purposes can sometimes lead to confusion in the language that is used. Sometimes, words are used that an individual has never heard of before. One of the words that many people have not heard before and do not fully understand is a lien. Below will explain common words used when securing a loan, such as liens, term, and interest. What is a Lien? Liens are often used when securing a loan with an asset and are almost always used with any loan relating to a vehicle. Vehicle loans include loans to finance a vehicle, lease a vehicle, or title loans. In these cases, a lien will be placed on the vehicle for the duration of the loan and will immediately be removed upon repayment. A lien secures the lender's interest in the asset, such as a vehicle, and lets other lenders know that there is money owing on the asset. The lien allows the asset to be pledged as collateral while the individual borrowing the money can still use the asset. The benefit of liens on vehicles is that you can continue to keep and drive the car as usual, even though it is being used as collateral for a loan. The lien will not impact the borrower in any aspect. They can still use the car, and the insurance will not be affected. This is why many individuals choose to finance vehicles or use their car to borrow money through a title loan.   What is a Loan Term and How Does it Affect Interest? A loan term is the amount of time for the loan to be repaid. For example, if the loan term is one year, then equal payments will be made throughout the year until it is repaid. Within the loan term, there can be a variety of options for the timing of payments. Often, individuals will make monthly or bi-weekly payments throughout the term of the loan. The timing of payments all depends on the borrower's needs and preferences and lenders typically allow the borrower to decide if they would like to make bi-weekly or monthly payments. Additionally, the term of the loan depends on the borrower's needs. Longer loan terms are desirable in order to keep the payment smaller as the loan is spread out for a longer period of time. The disadvantage of a longer loan term is that more interest can accumulate over time. Although the interest rate would stay the same regardless of the loan term, interest is based on an annual rate so the longer the loan, the more interest that is paid. However, many individuals often opt for the longer loan term then make extra or larger payments if they are able to. This will ensure that the payments are lower than a shorter loan term, but extra payments can be made to pay it off quicker in order to avoid paying more interest. The length of the loan term is¬†often the borrower's decision. It all depends on how large or small they want the payments to be. Ask your lender what the payments would be under a variety of loan terms to decide which best suits your needs.   What is Interest? Interest is the price paid for borrowing money. When repaying a loan, you will pay off both the principal amount loaned out and the interest. The interest rate is often a set rate and you are told upfront what this rate is. The rate depends on the market, banks, the Bank of Canada, and how risky the loan is. More risky loans often come¬†with higher interest rates, however, these loans are more easily attainable. An interest rate is the per cent of interest that is paid annually. For example, if you are borrowing $1,000 at a 10% interest rate, then you are paying $100 in interest annually or approximately $8 monthly. It can be helpful to be educated in the language that is often used by financial institutions. This will ensure that you can fully understand contracts and the representatives you are speaking with. However, do not be afraid to ask questions if you are unsure of anything.

Need Car Repairs and Short on Cash?

Sometimes, unexpected and unpleasant events occur. This can¬†range from a variety of issues such as health problems or requiring vehicle repairs. Many people require their vehicle to get to work or their kids to school, so not having a vehicle in good working condition can be very unpleasant. These situations can be worsened if one does not have the funds in order to finance these unexpected events. Although it is recommended to have savings for these emergencies, this is not always possible. One could be short on cash due to other obligations, such as car payments and utility bills, or other emergencies that have previously occurred.¬†Luckily, there are solutions available.   What is a Vehicle Repair Loan? A vehicle repair loan is a viable option for individuals that need car repairs but do not have the cash to finance it. A money lender will finance the repairs and the individual acquiring the loan will make monthly or biweekly payments in order to settle the debt. This is very beneficial for individuals that do not have an abundance of readily available cash. This is because the debt is paid off over time instead of having to make one large payment. Another advantage with vehicle repair loans is that many lenders have good relations with mechanics or auto body workers, and can set you up with cost-effective and quality vehicle repairs.   How Does a Vehicle Repair Loan Work? A vehicle repair loan is quite similar to other loans, such as personal loans or title loans. The main difference is that the money will be sent directly to the individual completing the repairs, such as the mechanic or auto body worker. Once the repairs¬†have been completed, an invoice will be sent. This invoice will then be paid in full by the money lender. In order to secure the loan, a lien will be placed on your vehicle. However, the lien does not affect how you use your vehicle, as you can still keep and drive it as usual. All the lien does is secure the loan. Once the loan has been repaid, the lien will immediately be removed.   Requirements for Vehicle Repair Loan The only requirement for a vehicle repair loan is to have a vehicle that requires repairs. The repairs must be necessary, such as repairs to the engine or to repair damage from a collision. Things that merely enhance the appearance of the vehicle, such as new rims or unnecessary paint jobs, are not covered under vehicle repair loans. The repairs must also be completed by a licensed repair shop. Unlike other vehicle loans, such as title loans, the vehicle can be financed or leased. It does not matter if there are any previous liens on the vehicle, you can still be eligible for a repair loan as long as necessary repairs are needed. Additionally, credit scores are not considered by money lenders for repair loans. It does not matter if you have bad credit or no credit, you can still be eligible for a repair loan. Employment history is also not a factor for repair loans. Whether you are unemployed, on disability income, or self-employed, you can still be eligible for a repair loan. This is because the lien secures the loan, so credit scores and employment history is irrelevant when applying for the loan. How to Apply Many lenders, such as Fast Action Finance, make the whole loan process very simple and straight-forward. This includes applying for the loan, receiving the loan, and making payments. Often, there are online applications to fill out and a loan representative will contact you in a timely fashion. Alternatively, you can call the lender directly and give basic information over the phone. This information includes the make and model of the car, and what repairs are needed. After you have been approved, you can discuss your situation with the money lender and come up with a payment plan that is feasible.

How To Use Your Motorcycle To Secure A Loan

For some people, there comes a time when they find themselves in a tight financial situation but are unable to borrow from traditional lenders, such as the bank. This may be for a variety of reasons such as a poor credit rating or unemployment. Many individuals would then turn to secured loans, such as title loans, where credit and employment status is not considered. However, not everyone has a debt-free vehicle. One needs to have a debt-free vehicle with full-coverage insurance in order to qualify for a title loan. Another reason why title loans may not be a viable option is because of the value of the vehicle. There simply may not be enough value in the vehicle in order to receive a substantial amount of funds from the loan. How does one go about receiving well-needed funds with these factors at play? Motorcycle Storage Loan A lesser known way of securing a loan is with a motorcycle storage loan. This type of loan involves the lender holding onto the motorcycle for the duration of the loan. The lender will have a secure facility that the collateral will be held in, that is locked and alarmed at all times. In addition to this, many lenders will also allow an individual to check-up on their motorcycle for peace of mind and to ensure that it is safe. Once the loan has been paid-off, one can pick up their motorcycle at any time they please. One of the positive aspects of motorcycle storage loans is that many individuals do not use their motorcycle year-round anyways. That means that it can be used to secure a loan during the cold winter months, then the loan can be paid-off as the weather warms up and you will be free to use your motorcycle as you wish. How Much Money Will I Receive? The amount of funds received from the loan depends on how much equity is in the motorcycle. The higher the equity, the more funds one will be eligible to receive as a result of the motorcycle storage loan. For example, a motorcycle worth $6,000 will be eligible to receive more funds than a motorcycle worth$4,000. Since the motorcycle will be held onto for the duration of the loan, almost the full value of the motorcycle can be loaned out. This is because there is less risk if the motorcycle is in the lender's possession as opposed to on the road. Other Options If you find yourself still needing more funds after considering both motorcycle storage loans and title loans, then you may have other collateral that can be utilized to receive additional funds. Collateral such as watercraft, snowmobiles, machinery, and equipment can be pledged as collateral for a loan. However, this collateral will need to be stored by the lender for the duration of the loan. Snowmobiles can be a perfect asset to pledge as collateral for a loan. This is because they can only be used for a few months each year. One can take out a secured loan with their snowmobile as collateral in April, and pay the loan off by November. This way, you still have from November until March to enjoy your snowmobile. Additionally, some professions find themselves needing certain equipment during certain seasons, but have no use for them in other seasons. Examples of this include snowblowers and tractors. Why have equipment sitting idle when you can use it as collateral to receive funds? These funds can then be reinvested in order to make additional revenue in the future. You Always Have Options All in all, motorcycle storage loans can be a viable option for those who are lacking other forms of collateral to obtain a loan, but do not meet the strict requirements of the bank. However, motorcycle storage loans are also useful to receive additional funds on top of another loan, such as a title loan or a unsecured loan. If you do not have a motorcyle then take a hard look at the assets that you do own. Are any of them of a substantial value? Can you go without them for a few months, until the loan is paid-off? If the answer is yes, then you may want to think about pledging these assets as a security for a loan.

How to Pay for Vehicle Repairs When You Don’t Have Emergency Cash

Although it is highly recommended to put money aside for emergency situations, sometimes this is just not possible. Many things can get in the way of developing an emergency savings fund, such as other expenses that need to be paid, previous emergencies, and various life events. This leaves many people in difficult situations that are very challenging to get out of. Having an emergency is bad enough, but not having money to cover it can make things feel that much worse. Luckily, a vehicle repair loan can help lessen the conflict by financing the repairs. Vehicle Repair Loan One emergency situation that many people find themselves in is needing car repairs without having the funds to do so. A car is very important and necessary in most people‚Äôs lives as it gets them to work, takes their kids to school, takes them to the grocery store, and anywhere else that they wish to go. Without a working car, it can be very difficult to maintain your career, especially if there is not a good transit system in your city. That being said, if your car is in desperate need of repairs then it can be detrimental to delay it until you have to funds to do so. If you are looking for quick funds to finance a car repair then a repair loan could be your best option. An emergency repair loan is processed very quickly. At Fast Action Finance, you will be approved on the phone and receive money within the hour. Requirements Unlike personal loans, you do not need to have good credit to obtain a repair loan. The car itself is used as collateral and a lien is placed on it. Once the loan has been paid-off, the lien will be removed and you will be back to where you began, except with a newly repaired vehicle. And unlike title loans, your car does not have to be paid in full and can even be lease. A requirement of a repair loan is that the repairs must be for the general upkeep of the vehicle and bringing it back to an original condition. As an example, a repair loan can be granted for a paint job where the vehicle‚Äôs paint has been damaged, but it cannot be used to change the colour or put racing stipes on it. In other words, necessary repairs are acceptable, while ‚ÄúPimping it out‚ÄĚ is not allowed. An Unknown Saviour Many people do not know about repair loans. Most think that because their vehicle is financed or leased that they cannot use a repair loan to finance a repair. This is not true, simply call Fast Action Finance and learn how we can get your vehicle repaired and you back on the road quickly. How The Process Works You would contact us and tell us what needs to be done to repair your vehicle. We would tell you if we can help you. You would then go to a reputable repair facility of your choice and get an estimate form them. We would then deal directly with the repair facility and take it from there. We would pay for the repair and you would pay us back, not the repair shop. We have reasonable terms and can spread the payment over one year. In essence you would drive away from the repair shop without paying. What Vehicles Ca be Used For a Repair Loan Cars, truck, vans and SUVs can qualify for Repair Loans. Call us today to find out if we can help you. Fast Action Finance is an industry leading lender and come up with reason to assist when most lenders cannot.