3 Risks of No-Credit Check Loans

no credit check loans

When you apply for a loan, lenders will check your credit score and credit report to determine how trustworthy you are at paying back your loan. The lower your credit score, the more interest you will pay for the loan. If your score is too low, you may not qualify for the loan at all. In fact, there are different loan approvals at each credit score.

However, a no-credit check loan is a type of loan where a lender does not check your credit score before giving you the loan. 

If this seems too good to be true, it’s probably because it is. Read on to learn about all the risks involved with taking a no-credit check loan!

Be Aware of These No-Credit Check Loans Risks

1. No-Credit Check Loans are Notorious for Predators

Lenders who don’t check your credit score before giving out a loan are probably using predatory practices. Nine times out of ten, you’ll be scammed. 

Think about it: if a lender doesn’t check your score, it means they don’t care if you pay back the loan. So how does the lender make money if you don’t pay back the loan?

Exorbent interest fees, hidden charges, and late fees. 

2. A Cycle of Debt

No-credit check loans are common among payday lenders. These lenders give loans to people they know are unlikely to make payments on time. Payday lenders will then make extra cash because they charge you additional interest and late fees. When this happens, you owe more money, making it harder to make the next payment on time.

In addition to the high fees and interest rates, they force you to make payments on time. The lender may ask you to write post-dated checks that they will cash once the payment is due, or they may force you to give them access to your bank account so they can take out auto-withdrawals when payments are due. If you can’t make payments, they may even make you take out another loan!

It thus turns into a cycle of debt in which the lender continues to make money off of you, and you continue to fall short of paying off the loan. It can be a scary cycle that’s difficult to crawl out of. 

3. There are Consequences of Not Making Payments

As mentioned, no-credit check lenders will often force you to make payments on time. If you can’t make those payments, there could be more consequences than just more debt.

For example, say you take out a car title loan, which is sometimes offered as a no-credit check loan. The lender may require you to put your car up for collateral. Therefore, if you can’t make the payments, your vehicle could be repossessed

Get Credit Help To Get a Trustworthy Loan

In the end, taking out no-credit check loans can be extremely risky. However, that doesn’t fix the fact that you need a loan and don’t have the credit score to get a good one. 

So what do you do?

The best way to qualify for a loan is to repair your credit. The best way to repair your credit is with a qualified credit repair company. 

The thing is, you could have a bad credit score because there are errors on your report, late payments, derogatories, unpaid debt, or something else. Credit repair companies work to remove those negative items on your report so you can improve your score fast!

Go Clean Credit is one of the top credit score companies in Arizona. They help with all of the issues listed above and so much more! In the end, Go Clean Credit wants your financial dreams to come true, and they want to work with you to help you achieve your goals. Their mission is your success.

So contact Go Clean Credit today for a free consultation and learn how they can help you qualify for trustworthy, risk-free loans!

Good Credit Vs Bad Credit: Loan Approvals at Each Credit Score

good credit vs bad credit

It’s important to build credit so you can qualify for loans and aren’t tied to a loan with bad rates. Perhaps you’ve wondered what loans you qualify for and how to compare good credit vs bad credit. Whether or not you qualify for particular loans usually depends on the lender, but your credit score will determine how high your interest rates will be, as well as the down-payment amount. Keep reading to learn more about how good credit vs bad credit effects loan approvals!

Loan Approvals With Bad Credit

Score of 520-529

A credit score in this range will make it extremely hard to get approved for loans, but it’s not impossible. For example, if you want to buy a house, most lenders will outright reject you. Even if you do qualify for a home loan, you will have extremely high-interest rates, even at rates half the principal loan. 

With car loans, you still have the possibility of being outright rejected but are otherwise easier to find. However, you will still have exuberant interest rates that could cost you upwards of $10,000 over the term of the loan!

With personal loans, if lenders don’t reject you, they might ask for collateral. This could be a title lien or a home deed. However, this can be extremely risky. Otherwise, your interest rate could be upwards of 20%!

Score of 530-549

As with the previous scores, your down payment and interest rates for a car or house will be extremely high. Lenders may even require you to have a co-signer for added security. However, it’s still not impossible to get approved for some loans.

To get a better idea of how this score can make life difficult, consider you are purchasing a house of $300,000 and you have a credit score of 535 to 540. Your interest rate is 5.9%, which is a jump from someone with excellent credit, 4.31%. It may not seem like much difference, but over the course of the loan, you will pay about $105,000 more than you would with excellent credit! 

Next, consider the price difference of an auto loan. Say your car costs $27,000 and your score is 535. With a 36-month payment agreement, you will pay roughly $500 more than with a score of 615. With a 48-month payment plan, you will pay roughly $700 more than with a score of 615. Last but not least, a 60-month plan will have you paying about $900 more than if you had a score of 615. That’s right! An 80-point difference in your score could cost you $900!

A score of 540 isn’t looking much better. Your interest rates are still too high. With a $27,000 car loan, for example, a credit score of 640 will put interest rates a little over 9%, while a score of 540 will be a little over 14%. That means with a 36-month auto loan, you will pay about $2,500 more, with a 48-month loan, $3,500 more, and with a 60-month loan, $4,500 more. 

Score of 550-579

With a score of 550 to 560, a $300,000 house can cost you over $68,000 more than if you had excellent credit over the course of the loan. While this isn’t as bad as a score of 540, it is still an enormous expense that will carry with you for years. 

If your credit score is anywhere between 540 to 570, car loans will have a similar expense. With a $27,000 car loan, for example, a credit score of 640 will put interest rates a little over 9%, while a score of 540 will be a little over 14%. That means with a 36-month auto loan, you will pay about $2,500 more, with a 48-month loan, $3,500 more, and with a 60-month loan, $4,500 more.

Score of 580-619

A credit score of 580 is a magical number where The Federal Housing Administration (FHA) will offer a home loan with only a 3.5% down payment. Anything lower than this, and your downpayment for an FHA home loan is 10%! For example, if you wanted to buy a house that costs $140,000, your downpayment would be almost $5,000 cheaper than if you had a credit score of 530! 

Keep in mind that even though you qualify for better FHA loans, most other home loan providers will charge high-interest rates and down payments. You could still be paying upwards of almost $70,000 more than someone with excellent credit, even if your credit score is 600.

With a credit score of 580, your car loan is still about 14% on a loan of about $27,000. Let’s compare it to a score of 680. With a 36-month auto loan payment method, you will pay about $3,700 more than if you had a score just 100 points higher. With a 48-month loan, you pay about $5,000 more. Lastly, with a 60-month loan, you pay about $6,500 more. In comparison, with a score of 590-600, your auto loan interest rate goes down to about 13%.

Loan Approvals With Fair Credit

Score of 620-659

So you’ve reached a credit range where things get a little easier! Yay! 

With fair credit, it suddenly becomes much easier to get loans. Most loan providers will lend you the money you need at fairly reasonable rates. While the interest rates will still be much higher than of someone who has good or excellent credit, you’re not in the bad credit red zone, which makes it much easier to qualify for loans. Additionally, you won’t have to have a co-signer, give up collateral, or pay astronomical interest rates.

Loan Approvals With Good Credit

Score of 660-749

Good credit makes it even easier to get a loan. If you are turned down for a loan and you have good credit, it may be because your income is too low, your debt-to-income ratio is too high, you’re self-employed, have irregular income, or there’s an error in your credit report. Otherwise, you should qualify for any loan you want. Though you may not qualify for the lowest interest rates possible, your interest will still be exceptionally low. 

Loan Approvals With Excellent Credit

Score of 750+

Congratulations! The world is your oyster. You are a free bird. Your tethers have been untied. You qualify for the best loan contracts out there, meaning you get the best interest rate with the lowest downpayment. 

Improve Your Credit Score Today!

Now you understand the effects of good credit vs bad credit! If you have bad credit, it’s best to improve your credit score before you get out those moving boxes, take that nice car for a test drive, or make another large purchase. 

Go Clean Credit is a company that helps individuals understand the difference between good credit vs bad credit and improve their poor credit scores. Contact them today for more information about how you can improve your score before you commit to a loan with bad rates!

What Credit Score is Needed for a Home Loan?

credit score needed for a home loan

Your home is more than where you hang your hat. It’s where memories are made—they are buildings that give you feelings of safety and security. 

Whether you will be a first-time buyer or a seasoned mover, buying a new house is a big step in life. While there are many aspects that go into purchasing a house, one of the most important is your home loan. Without it, you won’t be able to pay for the house at all. However, your credit score actually determines what kind of home loan you qualify for -and even if you qualify for a home loan at all. Luckily for you, in this article, we will explain the credit score needed for a home loan.

What Credit Score Will Qualify You for a Home Loan?

How To Read Your Credit Score

You can request your score from a number of places, such as a credit reporting agency. Here’s how to understand your score:

  • Excellent Credit: a score of 750 or higher
  • Good Credit: a score between 660 and 749
  • Fair Credit: a score between 620 and 659
  • Bad Credit: anything below 619

What Credit Score Will Lenders Accept?

Basically, the answer depends on the lender. If your score drops below 660, however, lenders will start to see you as a potential risk. Some lenders might not give you a loan even if you have fair credit. On the other hand, other lenders might say that a score of 640 or 620 is where the line is drawn where they won’t approve you for a loan. If you have a bad credit score, you can expect to be turned down by most lenders. The credit score needed for a home loan doesn’t have to be excellent, but it needs to meet a lender’s requirements.

On the other hand, you could qualify for a subprime loan or receive a loan from the Federal Housing Administration (FHA), which is one of the only lenders who provide home loans for people with bad or fair credit. However, they have a minimum score of 580 to qualify for a low down payment advantage, which is only 3.5%. If your score is below 580, you are required to pay a 10% down payment to qualify for loans. If you have a fair or bad credit score, an FHA loan might be your only choice.

Does Your Credit Score Affect Interest Rates On Home Loans?

Yes! The difference between excellent credit and fair or bad credit can cost you tens of thousands of dollars over time. The lower your score, the higher the interest rates. 

For example, according to “Home Loans with Bad Credit: What Credit Does For Your Payment”, if you have a home loan amount of $300,000 and an excellent credit score of 740, you qualify for the lowest interest rates possible. Let’s say your interest rate is 4.31% and your monthly payment is $1,487. One late payment can drop your credit score up to 100 points, so say one late payment drops your credit score to 690. 

Lenders might see you as a risk and raise your interest rate to 4.71%, which adds about $70 to your monthly bill. It may not seem like much, but over the course of your mortgage, you will ultimately pay $25,560 more than if you made the payment on time! Likewise, if your score was just 20 points lower at 670, the added cost would come to $39,600! 

In the end, your credit score has a huge impact on the terms and conditions of the loans you receive. The difference of a few points on your score could cost you tens of thousands of dollars. 

Should You Improve Your Score Before Taking Out a Home Loan?

Even if you have a credit score needed for a home loan, it is always a good idea to improve your score before taking out a loan. The lower your score, the more money you will pay and the harder it will be to get out of debt. However, if you can prove to lenders that you are trustworthy by upping your score, you will qualify for better terms and conditions and lower interest rates. Try improving your score before taking out a home loan and save yourself thousands of dollars over the course of your mortgage repayment!

Easily Improve Your Credit Score Today!

Though it might seem daunting to improve your score, it really isn’t too hard. For one, read about the ways you can improve your credit score in as little as thirty days. If you happen to have bad credit, you can also contact a company like Go Clean Credit, who helps people restore their scores. By taking action now, you can start improving your credit score today, ensuring that you receive the best deal possible when taking out a home loan!

How Many Points Does a Mortgage Inquiry Affect Your Credit Score

How Many Points Does A Mortgage Inquiry Affect Your Credit Score You’re looking into a mortgage so that you can buy a home. Congratulations! You’ve worked up until this point making sure that your credit is what it needs to be to get a loan, but now you’re worried that shopping around may decrease your score and you’re wondering how many points a mortgage inquiry will affect your score. It is true that hard inquiries will decrease your score, but you can rest easy knowing the impact will largely be marginal. In today’s post, you’ll learn everything you need to know about mortgage inquiries. Spoiler alert: There’s not much to worry about.

1. Time Frame

Contrary to popular belief, the credit system is not trying to work against you. They understand that shopping around for the best rate is in your best interest, and they aren’t looking to punish you for that. For that reason, inquiries into loans like mortgages and automobiles made within a certain time frame (anywhere from 2 to 6 weeks) will actually count as one inquiry. So, applying for many loan quotes will not hurt your credit as long as you do it fast. And that will save you time and money in the long run!

2. 30-Day Delay

Chances are, if you’re actually putting in hard inquiries, you are ready to buy soon. Great news… There is a 30-day delay between when the mortgage loan is quoted and when it actually hits your credit report. So, those home loans you are applying for aren’t even visible to lenders. This means that they aren’t seeing the multiple applications you sent in. No reason to worry about lenders subjectively declining you either. They won’t even be able to see it until 30 days after it’s all said and done.

3. How Much Does An Inquiry Affect a Score Anyway?

As with most things credit, it depends. There are many factors and the more storied your credit history, the less any single change will affect it at all. Generally though, even with newer or more sparse histories, a single inquiry wouldn’t be much at all, maybe five to ten points. Since credit card inquiries do not get lumped together into one, applying for multiple credit cards in any time period would continue to affect your score and the amount of damage it does would compound with each new inquiry. But with mortgage inquiries, you won’t have this problem. And you should see very minimal damage to your perfectly polished credit score.

Conclusion

You’ve worked hard to get yourself into the position you’re in. Buying a house is an exciting step and you don’t need that feeling to be weighed down by additional worry about every factor of applying for your loan or a few credit points. Shop around if you’d like and find that loan that works best for your individual needs. In fact, this is likely to increase your score in the long run, because you won’t find yourself in a loan that you cannot repay because you took the first one offered to you. Let the experts at Go Clean Credit help you increase your score by more than 200 points! Our credit repair programs put you back on the path to financial success.  Contact Go Clean Credit today!

Credit Score of 524: Loans, Improvement Tips & More

Having a credit score of 524 means that you have some work to do. Ranked squarely in the lowest tier of scores, you are facing elevated interest rates on any loans and credit you are able to obtain—or rejection from them all together.

There is confusion on how credit scores actually affect car and home loans and credit cards. Will the interest rates be too high for me? Will I just be rejected? Luckily, it’s all answered below.

1. Home Loans

For a first time home buyer with a credit score of 524, you will most definitely be fighting an uphill battle. The majority of loans will reject you outright as your score is lower than their usual threshold of 620 by almost 100 points.

If you do find a loan that is willing to take you, the lower your score, the more that your interest rate skyrockets. With a score that low, the amount of interest you pay on the house could be upwards of half the principal loan, a lofty price to pay for poor credit.

Increasing your score is going to be your best bet to getting a decent home loan. It may take a couple years to fix and it will be frustrating, but even 100 more points on your credit score can improve your chances drastically and knock an interest percentage upwards of 2%!

2. Auto Loans

Car loans are similar in terms of interest rates and possible rejection through conventional means, but a car loan will be at least easier to find. The rates may once again be too high for you to consider this a viable choice, though.

Using the average $27,000 dollars for a car loan and a 60-month loan, a score of 524 could land you an average APR of upwards of nearly 16% and an interest over the life of loan of nearly $12,000 extra dollars!

Once again, it is in your best interest to improve your score or you may fall victim to predatory lending.

3. Credit Cards

Credit cards are not going to be easy to come by, either. This is the unfortunate fact of having a low score. Honestly, obtaining an unsecured credit card will probably be impossible. However, unsecured credit cards, or ones where you must make a deposit to obtain, will be beneficial to improving your score.

Your score may even jump by opening the card. And if you pay off your debt on time every month, the number will continue to climb.

So What To Do?

You will need to improve your score to be put into a more comfortable position. You may be able to get loans, but the interest rates will be high and could nearly double your loan… Start with a secured credit card and work your way up and pay on time every month. You’ll be glad you did.

Let the experts at Go Clean Credit help you increase your score by more than 200 points! Our credit repair programs put you back on the path to financial success.  Contact Go Clean Credit today!

Veteran Credit Repair | How It Works

veteran credit repair

Credit Repair, Credit Scores, and Loans

Whether you’re a civilian or military member, most lenders require a minimum credit score of 620 to 640 to receive approval on a loan. In this article, you’ll learn more about how credit works for veterans, potential loan options, and how to repair a credit score to meet your financial goals.

First, Research All of Your Options.

Before we dive into credit scores and how it works. Let’s talk about the potential uses of a credit score, acquiring a loan. Understanding all of your options when seeking a loan is key to getting the best deal possible. Even veterans with fantastic credit and a 20% down payment may benefit from comparison shopping between conventional and VA loans.

Federal Benefits — Personal or Business?

Interested in buying a home? Veterans are eligible for VA home loans, which often require no down payment, no mortgage insurance, and have flexible underwriting requirements. An excellent resource to look into is the Veterans Benefits Administration website.

Ready to start a business? SBA 504 loans are designed to help small businesses owners purchase commercial real estate and equipment. There are also grants, loans, and business development programs backed by the U.S. Small Business Administration. Prospective entrepreneurs look into financing by searching the Small Business Administration’s Office of Veterans Business Development website.

Assess Your Finances.

Consider all factors beyond your status as a veteran when making money decisions. The right choice for you will align with your current financial situation and goals. What are your financial plans for the next 6 months to a year? What financial habits are you looking to strengthen or stop? Make sure you’re financial goals and habits are leading you in the right direction.

Understanding Your Credit Score.

Part of assessing your financial plan includes reviewing your current credit score. The Fair, Isaacs Corporation, also known as FICO, created an algorithm for all three major credit agencies to use when calculating credit scores. This method creates your credit score by reviewing five different categories, with each category weighted.  See below for details:

veteran credit repair credit score

Credit Score Categories — Let’s Talk About Payment History.

Your payment history affects your credit score the most out of all other areas. The scoring algorithm determines if the borrower’s payments were on time and if they weren’t, how late they were. Late payments are categorized by more than 30 days late, more than 60 and more than 90. For each category, the algorithm drops the score more.

Where Does Available Credit Come In?

Your available credit is determined based on the number of outstanding credit accounts you have compared to the credit limit assigned to each account. The ideal amount of credit to use is around 30 percent of any credit limit. Scores typically improve when having a balance around this percentage. However, if an account has a zero balance, it will have little impact on your score.

Keep in mind, having a balance of more than 30 percent will result in your credit score falling.

Quick Credit Repair Options

The quickest way to repair credit scores is to focus on available credit and payment history. Make sure credit payments are consistently on time or paid no later than 30 days past due. Paying outstanding credit balances down to 30 percent of the available credit will help, too.

 


No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a one size fits all model and we tailor your needs to the right program. Help is just a free phone call away or you can fill out an appointment request. 

Contact Go Clean Credit to schedule a free consultation today.

The Pros and Cons of Subprime Loans

The Pros and Cons of Subprime Loans

Making a big financial step often depends heavily on whether you can get a loan. If your credit score isn’t as good as it could be, that can be tough to accomplish. Thanks to subprime loans, though, it could be possible to get that much needed loan.

The Pros and Cons of Subprime Loans

Pros

Easy Approval

Usually a person is turned down for a loan because they have defaulted on a loan before or they have outstanding debt. Banks and lenders aren’t willing to take a risk on someone if they believe there is even just a small chance the borrower won’t make their payments.

Fortunately, in the subprime market, your credit score doesn’t have to be perfect. Subprime lenders will still approve you for a loan.

Usefulness

Subprime loans are a great way for people to pay off other debts. Having outstanding debt hurts your credit score, but a lower score isn’t a problem with subprime loans. Borrowers can get a loan, use it to pay off their debt, then make payments on the subprime loan on time. With the debt gone, they can now work toward improving their credit score.

In a way, subprime loans can potentially be a gateway toward better credit.

Still struggling with fixing your score? Here are some other tips on how to improve your credit.

Cons

Higher Costs

Subprime loans are a higher risk than prime loans, as lenders are taking a chance on someone who has a history of bad credit. This means that borrowers in this market are seen as more likely to default on their loan and therefore pose a higher risk. Because of that higher risk, interest rates are also higher so the lender has some cushion in case of a default.

Processing and other fees will also be higher with a subprime loan. Lenders want to collect more money upfront in case of default.

Income Demands

While subprime lenders will be more understanding of a borrower’s credit score, they will be tougher on their income and cashflow. A borrower must be able to prove they have sufficient income or cashflow that will allow them to make their monthly payments. If they can’t provide proof, they will likely be turned down.

Do you have any questions about subprime lending? Let us know! Give us a call today at 1-866-991-4885.


No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.

We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away, or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.

The Navient Lawsuit and Your Student Loans

The Navient Lawsuit and Your Student Loans

In January, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient, the nation’s largest servicer of both federal and private student loans. The company was allegedly “systematically and illegally failing borrowers at every stage of repayment.” What does this mean for your student loans?

The Navient Lawsuit and Your Student Loans

Navient President & CEO Jack Remondi stated on his Medium blog, “At Navient, our priority is to help each of our 12 million customers successfully manage their loans in a way that works for their individual circumstances.” However, in their latest court documents, Navient now states that there is “no expectation that the servicer will ‘act in the interest of the consumer.'” Going further, they said contacting the company with issues didn’t mean it would necessarily act in the customer’s best interest.

The Navient Lawsuit

There’s a pretty good chance that, if you have a student loan, it may be serviced by Navient. In their lawsuit, CFPB alleged that they:

  • provided bad information to create obstacles to repayment
  • incorrectly processed payments
  • failed to resolve borrowers’ complaints through inaction
  • caused many borrowers to overpay for their students loans by illegally cheating them out of their rights to lower payments
  • deceived private student loan borrowers about requirements to release their co-signer from the loan
  • harmed the credit of disabled borrowers, including severely injured veterans

The Bureau also alleges that when borrowers could have qualified for income-driven repayment plans, Navient instead directed them toward forbearance.

To avoid falling victim to any of these situations, check out these tips for tackling student loan debt.

Navient’s Motion To Dismiss

“Borrowers could not reasonably rely on Navient to counsel them into alternative payment plans unless Navient had an affirmative duty to provide such individualized financial counseling. But the law imposes no general duty to provide information without some fiduciary relationship.”

Navient stated in court that it’s not their job to help borrowers. Their main job is to collect loan payments for creditors.

If you have questions about the Navient lawsuit and your student loans, call us today at 1-866-991-4885.


No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.

We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away, or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.

Here’s How Lenders Determine Your Interest Rate

Heres How Lenders Determine Your Interest Rate

Loans are a huge help when it comes to making big payments. And it’s no surprise at this point that they are accompanied by interest. Interest rates are always changing from loan to loan, though. Why is that? It all comes down to different factors that lenders look at, so here’s how lenders determine your interest rate.

How Lenders Determine Your Interest Rate

Credit Score

First and foremost, your credit score and credit history will have the biggest impact on your interest rate. Your history shows how well you’ve paid your bills in the past. If lenders see that you haven’t done the greatest job of making your payments on time, they’re going to set it up so they’re safe. The higher your credit score, the lower your interest rate. The lower your score, the higher your interest rate.

Debt-to-Income Ratio

Debt-to-Income Ratio is a measure of your ability to pay back a lender. If you have a lot of money sitting in outstanding debt, then you don’t look very reliable as a borrower, which results in less attractive terms for you. The more income you have available in comparison to the debt, however, the more confident lenders will be that you will pay them back.

Amount Borrowed and Down Payment

Lenders also determine interest rates based on how much money they have to lend you. If you’re able to pay a large portion up front, that says to the lender that you will be able to pay back the loan with no problem. On the other hand, if you borrow a large amount of money, and don’t pay much up front, that’s a pretty big risk for the lenders. This will cause them to increase your interest rate to balance their exposure.

Length of Term

The shorter the term of the loan, the quicker the lender will get their money back. This will usually result in friendlier terms. While your shorter term may result in lower interest rates, your payments will likely be much higher. If you are hoping for a little more room to breathe with your payments, be prepared for higher interest rates. The lender won’t be getting their money back particularly fast, so they need to make sure they get their money back.

Age of Vehicle (Auto Loan)

If you’re going for an auto loan, the age of the vehicle will play a role in what your interest rate is. You will typically see higher interest rates for older cars than for newer cars. That’s not what you expected, right? You would think the newer cars would have the higher interest rates because they’re new and tend to be more expensive. Actually, that’s precisely why they have the lower rates. Older cars have already depreciated quite a bit, so it’s safer for the lender to increase the interest rate in case of unforeseen circumstances.

Purpose of Property (Mortgage Loan)

Lenders also take into consideration the type of property you want the home to be. If you plan to have it as a second home or rent it out to other people, your interest rate will be higher. Otherwise, if you plan to occupy the home yourself, your interest rate will likely stay low granted all other factors are satisfactory to the lender.

Do you have any questions regarding how lenders determine your interest rate? Let us know! We’re here to help. Give us a call today at 1-866-991-4885!


No matter what your situation, Go Clean Credit has a solution. We have many credit repair programs that are available to help you overcome your credit situation and place you back on the path to financial success. Real credit restoration is not a once size fits all model and we tailor your needs to the right program, but most people can start for just $99 per month.

We have fixed price programs that get you back on track in as little as 5 months, debt resolution solutions, programs geared toward people who have had recent short sales or foreclosures and many others. Help is just a free phone call away, or you can fill out an appointment request. Contact Go Clean Credit to schedule a free consultation today.

Loan vs Lease: 9 Things to Consider Before Financing

Loan vs Lease

If you’re considering getting a car or other equipment, it’s important to know your options when it comes to financing. Thankfully, you don’t have to buy it outright. You can choose to either get a loan to pay for it, or pay for the item on lease. Here are the differences between a loan vs lease and what you should consider before financing.

Loan vs Lease:

First, let’s establish, what is the difference between a loan and a lease? A loan is when you borrow money from a financial institution to pay for something – for example, a car. You then proceed to pay back that loan to the lender over a set period of time. Once you have completely paid off the loan, you own the car. With a lease, on the other hand, you never own anything. You still make payments over a set period of time, but once that time comes to an end, you give the car back and you start the process over again.

9 Things to Consider Before Financing

Rates

Loan: With a loan, rates are usually floating. This means that as the index fluctuates so does your monthly payment. This can really help you during periods of falling interest rates, but it can also really hurt you when interest rates rise.

Lease: Unless your lease has special arrangements, payments will generally be fixed for the entire term. This can be a plus, as it can be much easier to budget and manage your cash flow.

Amount Financed

Loan: Banks usually only lend a portion of the equipment or vehicle cost. The amount they lend is about 60%-80%. It does not include the costs of shipping, training, installation, or any other soft expenses.

Lease: You can get up to 100%, which includes soft costs and sales tax. Any out-of-pocket costs are usually limited to the first month’s investment or a small security deposit.

Available Terms

Loans: Banks are typically less flexible than leasing companies. This isn’t a bad thing if you’re looking for a standard term. If you need some flexibility, though, it’s not so great.

Lease: In most cases, you will choose the terms, purchase option, and the down payment of your lease. Custom terms can usually be arranged.

Ease of Application

Loans: Most banks won’t begin to review your credit until you have submitted a complete financial package. This is regardless of the amount you are requesting to borrow.

Lease: Most places have a simple application process and don’t require extensive information before they approve the lease.

Extra Costs

Loan: Banks use fees to boost their rates of return on loans. These fees include application fees, origination fees, commitment fees, schedule fees, funding fees, and fees associated with approving and executing the loan application.

Lease: In most small-ticket leases, which are anything up to $75,000, there are no origination, commitment or application fees. Documentation fees depend on the transaction size, and can range from $195 to $295.

Equipment Types

Loan: If the bank does not understand or feels the equipment has limited collateral value, they will not finance it.

Lease: You will find that you’re able to get a lease on most equipment.

Speed

Loan: Banks are slow to make a decision on credit. It can take weeks for them to prepare your request and put it in front of the credit board.

Lease: Decisions on leases are typically quick and can be made within a day.

Collateral

Loan: Banks will usually secure their loans by requiring extra collateral such as real estate, equipment, inventory, receivables, or your house.

Lease: In most cases, the only collateral is the equipment or vehicle being leased.

Restrictive Covenants

Loan: Bank loans often require the borrower to maintain minimum financial ratios, otherwise they will call the loan. The borrower must also report on a regular basis so the bank can ensure they are maintaining the ratio. If the bank does call the loan, they have the power to limit future borrowing from them and any other financial institution.

Lease: There are usually no such restrictive covenants.

Do you have any other questions about the difference between a loan vs lease and what to keep in mind when financing? Let us know! Give us a call today at 1-866-991-4885.


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