Are you dissatisfied with your current car loan? Perhaps it is time to talk with lending experts and start refinancing your car. The concept behind auto loan refinancing is straightforward: you take out a new loan to pay down the balance on your old one.
If you have trouble paying your bills because of an extremely high interest rate or monthly payment, refinancing may be the answer. Continue reading to decide if now is the right time to refinance your auto or recreational vehicle loan with 1st Community Credit Union.
If You Can Find a Better Interest Rate and Lower Monthly Payment
You should consider refinancing your car loan if you can find a deal that will reduce your interest rate. If you had no credit or low credit before, it is worth looking into refinancing your auto loan after a few years to see if you can get a better deal. Your credit score may have improved to the point where you are now eligible for a lower interest rate.
With a lower interest rate, you will be able to pay off your loan faster or lower your monthly payment while keeping the same repayment schedule. In either case, you’ll pay less over the loan’s life.
When Your Credit Score Has Improved
Like other loans in the markets, your credit score is also crucial when applying for a car loan. That is because auto lenders sort applicants by credit categories. If your credit ratings have improved since you purchased your last vehicle and you have made on-time monthly payments, you may qualify for a lower interest rate. Hence, a lower interest rate will save you money over the life of your loan.
Better credit scores can help lenders determine if you could pay off your loan. If so, they may offer you a lower rate. Having an improved credit score would be the perfect time to refinance your car loan.
When You Want To Extend the Auto Loan Term
An expensive event, such as having a baby, unanticipated medical bills, or a natural disaster, can force you to cut your regular expenses. For these reasons, you may choose to refinance your car and prolong the term of your loan.
Extending your loan term also means having a cheaper payment. Take note that your monthly payment is reduced when extending the length of your auto loan, but it also raises the amount of interest you’ll pay over time. It also works the other way around. So, if you shorten the period, your monthly payment will increase while your overall interest payment will decrease.
Contact Us for More Information About Car Refinancing
If you have more questions about refinancing your car loan, our local lending experts at 1st Community Credit Union in Wisconsin will be happy to assist you. We loan options that fit your budget. Apply now to get started!
Although everyone deserves a good education, most people don’t have the means to pay for it. That’s why they usually get a student loan to afford to enroll in a good college and pursue their studies. However, it could be a challenge to pay off student loans while managing your living expenses and saving for the future.
If you’re feeling overwhelmed by your expenses, here are a few tips you can follow to pay off your student loans faster and ease some burden off your shoulders:
Make Extra Payments the Right Way
One of the best ways to cut your total payoff time is to make larger payments. This will reduce the principal balance, shorten your loan period, and minimize the interest you have to pay. You can also make additional payments at any point in a month or every two weeks rather than waiting for the due date.
Just don’t forget to advise your service provider to apply the overpayments to your principal balance. Otherwise, you’re just advancing the due date and not paying off your loan faster.
Refinance if You Have Good Credit
If paying off student loans quickly seems impossible, you might be paying too much interest. To avoid this, consider refinancing multiple loans and replacing them with a single private loan with a lower interest rate. You can speed up the repayment by choosing a loan period that’s less than the remaining time of your current loans.
Opting for a shorter term will help you pay the debt quicker and save money on interest. However, it can increase your monthly payment.
Get a Part-Time Job While Attending College
One way to make sure you can get a head start on paying your loan is to have income. While attending college, try applying for a part-time job, so you can use your earnings to reduce your balance. However, you have to consider if you can properly manage your studies while working.
Follow a Budget
Being disciplined with your finances can help you pay off your student loan faster. If you understand your monthly cash flow and plan your expenses accordingly, you can prevent delays in reducing your principal balance. Make sure you’re diligent about sticking to a budget throughout your entire repayment period.
Stick to the Standard Repayment Plan
Although making additional payments is one of the best ways to shorten your loan period, some people cannot do it because of their financial situation. If you’re in a similar predicament, the fastest way to pay off your student loan is to follow the standard repayment plan.
Check for Interest Discounts
You’ll find that many people are struggling to pay off their student loans because of high-interest rates. Fortunately, some lenders can offer 0.25% to 0.5% discounts if you sign up for automatic payments on your loan. Other service providers may also offer discounts if you meet a certain number of on-time payments or if you apply for another loan with their company.
A mortgage is a way to purchase a home without having to pay cash up-front. You are also given a set amount of time to pay back the loan with interest. Until then, you don’t fully own your home. Meanwhile, refinancing a mortgage is a whole different thing. It is the act of rolling over your current mortgage into a new home loan.
The benefits of a mortgage refinance vary from borrower to borrower, but it usually serves the purpose of shortening the mortgage’s term or lowering the payment. After assessing factors such as credit, tax, and return history, the mortgage lender presents you with several options to lower your monthly dues. That alone should already convince you to refinance your mortgage. Here are more key reasons:
To Secure a Lower Interest Rate
Technically, refinancing is a good idea because it can reduce your interest rate. While lenders would often say 2% is ideal, 1% can also make a big difference. This serves a dual purpose: it helps you save money and lessen the size of your monthly payment.
To Shorten the Loan’s Term
Once interest rates fall, homeowners have the opportunity to refinance an existing loan with another one. While the change in the monthly payment isn’t evident, you can have a significantly shorter term, which means you can settle your payments earlier.
To Prevent Monthly Payments From Increasing
If you currently have an adjustable-rate mortgage (ARM), it’s possible to refinance to a fixed rate loan to lock in your rate for the rest of the mortgage. This means you don’t have to worry about sudden spikes in monthly payments during your term.
To Borrow Money in a Cost-Efficient Way
Mortgage interest rates tend to be lesser in scale compared to other types of loans. They’re also tax deductible, which makes them one of the practical options for borrowing money. For example, cash-out refinance allows you to borrow against your home equity to obtain funds for any purpose. You’ll get a check at closing with the amount added to the mortgage principal you owe.
To Get a Better Mortgage Rate
This is perhaps the most common reason why people consider refinancing. One thing to remember is that mortgage rates are never the same between borrowers. It depends on the lender and can either be fixed or fluctuating with a benchmark interest rate. Mortgage rates also depend on the credit profile of borrowers.
Mortgage rates have the tendency to rise and fall and can affect the homebuyer’s market. If the rates have fallen significantly since taking the loan, it’s possible to save money by refinancing your mortgage into a new home loan at the current rates.
Get Credit at a Fair and Reasonable Rate From Experts Who Care
If you’re looking for friendly and personalized credit services, then consider applying for a 1st CCU mortgage loan. It could be the best financial decision you’ll ever make. Contact 1st Community Credit Union for more information.
Planning to buy a new car or a used car is a big decision as it affects your monthly budget and financial situation. Purchasing a car might be one of your major financial commitments, needing you to figure out how it fits within your budget and whether it is affordable. Your budget dictates the price tag to the vehicle you can afford and not necessarily the car you want.
To illustrate, you want to buy a vehicle that costs $40,000/- but your income can only afford a car worth $25,000. Therefore, the car you want is not within your reach, thus, forcing you to reconsider your planned purchase. Non-payment of auto loan leads to your financier repossessing your vehicle. How can you calculate the amount you can afford to purchase your car?
1. Calculate Your Monthly Net Income
Financial advisers typically advise you to spend less than 10% to 15% of your monthly take-home income on your car loan payment. That means that your first step is to calculate your monthly net income against your monthly expenses. Doing so will help you determine how much extra income you can dedicate towards auto loan repayments and transport costs. Transport costs include fuel expenses, car service maintenance and repairs, and car insurance.
So, if your monthly net income is $4,000, plan to spend $400 on your car payment.
2. Check Your Credit Score
Your credit score contributes to determining your annual percentage rate (APR) payment on the auto loan. The higher your score, the less you pay for loan interests. Keep in mind that the interest rates for pre-owned vehicles are higher than interest rates for new cars. Be realistic about the length of time you wish to pay off your auto loan.
According to CNET, buyers in America negotiated to repay their car loans over long periods to make cheaper monthly payments. In March 2020, auto loan repayment periods were approximately 72 to 80 months of financing for new vehicles.
Negotiating for a longer-term repayment schedule reduces your monthly payments. However, the final amount of interest paid for your car increases.
3. Establish your Target Price
Once you have determined the amount of auto loan you can afford, set your target price for purchasing a vehicle. It is essential to factor in 10% for the sales taxes and fees. For example, your target price for buying a car is $ 25,000. At the dealer's, you see a car with the advertised price tag of $25,000. Calculate the cost of the vehicle to include an additional 10% to the advertised price to get the total purchasing price of $27,500, which stands above the price you can afford. Therefore, target a car whose price is approximately $22,500.
4. Make a Down Payment from Your Surplus Income
Make a down payment on your auto loan as it reduces the length of time to pay off the loan. You can use a trade-in as a down payment if you paid off your old car or you have equity.
For more financial advice for auto loans, contact 1st Community Credit Union or give us a call at 888-706-1228.
Eliminating your debt gives you more choices and allows you to take back control of your finances. However, getting out of debt is usually much easier said than done. It takes discipline and attention to detail, but it can be done if you create and follow a plan. Below are just a few ways you can start your journey to becoming debt free.
- Track your spending. If you don't know where your money is going, it's difficult, if not impossible, to eliminate excess spending and put that money towards paying off your debt. Take a good look at your spending by logging every dollar you spend for a couple of weeks. Then, take a good look at your log and see where you can make some positive changes. When you've identified those areas, make a monthly budget and vow to stick to it.
- Stop spending on credit. It may seem obvious, but you'll have a difficult time getting out of debt if you don't keep adding to the total. If you have little self control, you may want to cut up your cards or hide them in the freezer (where you can't use them until they thaw). It's not a good idea, however, to close your accounts as that can have a negative effect on your credit score.
- Eliminate excess spending. Most households spend money on things they don't really use. This could be subscriptions to online publications or streaming services that you rarely, if ever, use. According to a recent study by Waterstone Management Group, the average American household spends $237.33 a month on subscription services, including things like Netflix, Amazon Prime, a New York Time digital subscription or weekly food or beauty box. While these services can be convenient, they are usually charged automatically to your debit or credit account and can become a big draw on your finances over time if you aren't using all the services you pay for.
- Use the snowball method. Another popular method of paying off your debt is to use the "snowball" method. To do this, you pay the minimum payment on all of your debts except one, usually the one with the lowest balance. On that one, you pay at least double the minimum payment required. When you've paid off that bill, you move on to the next lowest, etc.
- Renegotiate your credit terms. Armed with your new budget and debt reduction plan, you may be able to renegotiate the terms of your existing debt. Banks and other lenders are generally willing to work with debtors to help them be able to pay back what they owe. This may lead to a lower interest rate, a reduction in the total debt or a longer period of time in which to pay the loan off.
1st Community Credit Union wants to help you manage your money more responsibly. We've been helping Wisconsin residents with their financial needs since 1961.
For years, banking was the same. Deposit checks at your nearest financial institution’s branch. Withdraw cash from an ATM. Receive bills in the mail and send them a check for the amount you owe. But the Internet has changed all that. Managing your finances has become so much easier, now that you can do it online or on a mobile device.
- Online Bill Paying - Rather than receiving a bill in the mail, sending a check back, and hoping it gets there on time, an online bill paying portal through your credit union lets you pay each of your bills instantly, at the touch of a button. Enter in the amount you owe, and hit, “Pay,” and the money is automatically sent from your account to the institution you owe. For certain bills that are the same every month, you can even set it to deduct the money automatically.
- Money Transfers - Maybe you have two accounts, and need to move money from one to the other. Maybe you have a client who needs to pay you, or a vendor you need to pay. Maybe you just want to send money to a friend. With regular banking, you had to write a check and wait for it to clear. Now, you can do an online transfer, either directly through your financial institution, or through a secure third-party service connected to your account, such as PayPal or Venmo.
- Deposits - Most employers now offer direct deposit, where your money is sent to your account automatically each pay period. But even when you do get a paper check, you don’t have to go to the credit union and wait in line to deposit it. Just take a photo of the front and the back through your mobile banking app, and the money goes in your account automatically.
- Freedom and Flexibility - Most credit unions today offer both an online option as well as physical branches you can visit. This provides the freedom of managing your accounts any time, from anywhere, with the option to choose whether or not you want face-to-face assistance at a branch location. Want to add a secondary savings account to put money aside for something special? Open a secondary account online from home on the financial institution’s website. Sunday is the only day you have time to apply for a loan? Apply online from the comfort of your home.
- Going Paperless - How much mail do you get from your bank? Monthly statements, notices of important goings on, special offers, etc. All that paper just clutters your home, or gets thrown away. With online banking, you can choose to receive all of these communications through email, or through an online portal on the bank’s website, rather than receiving paper mail. Not only does this make everything a lot easier to organize and keep track of, you can lower your carbon footprint significantly by reducing the amount of paper produced, printed, and sent to you. The energy used to access your email is much less than it is to send mail by post—an important consideration as we continue the fight against climate change.
These are just a few of the benefits that online banking and mobile banking can provide you. It’s easier, it’s more convenient, it saves you money, and it’s better for both you and the environment. What more could you ask for? Find out more about 1st CCU's Online and Mobile Banking, we think you'll love it. Or contact the team at 1st Community Credit Union today to learn more about how online banking can benefit you.
Identity theft is a persistent problem and, unfortunately, cybercriminals show no signs of letting up. Statistically speaking, identity theft affects approximately 1 in 20 Americans every year. In 2019, 13 million U.S. consumers suffered identity fraud.
It’s important to be vigilant because the sooner identity theft is detected, the less damage ID thieves can do. The following list includes warning signs you may be a victim of identity theft or financial fraud.
Unusual Withdrawals from Bank Accounts
Anytime you see an unusual withdrawal from any of your bank accounts you or a joint account holder didn’t make, this is a huge red flag. While a bank may make the occasional (very rare) error, chances are better a thief is pilfering your account.
Credit Standing Takes a Plunge
If you’ve maintained good credit and it takes a sudden plunge, consider this to be a warning sign. Once a thief gets a hold of your personal information, they can then open credit accounts in your name and go on a spending spree without paying the bill. If you check your credit report and find unfamiliar accounts or charges, this is a clear sign your identity has been compromised. Gone unchecked, within a few months, you’ll most likely find debt collectors begin to call you about debts you don’t recognize.
Small Charges on Your Credit Card
Any small and unusual credit card charge should be viewed with suspicion. Identity thieves will often test the proverbial waters by making very small charges with your credit card to see if it’s detected. If they sense a green light, they’ll then go for the gusto and start making large purchases, often maxing credit limits out.
Bills and Other Mail Go Missing
If regularly scheduled mail stops arriving, this could mean someone has stolen your identity. What thieves often do is steal their victim’s mail and then change the mailing address to be rerouted to them. Once they do this, they begin to collect other key pieces of your personal information to gain the information necessary to open new accounts in your name. Alternatively, if you start to receive strange bills, this is also a red flag.
Problems with Medical Providers and Health Plans
If you begin to receive bills for medical services you didn’t seek, this is another warning sign. It means there is a possibility someone used your identity information when they sought treatment. Additionally, if your health insurance plan starts to reject your legitimate medical claims this should be addressed ASAP. This is especially true if claims are rejected because your medical records show a condition you don’t have or your benefits have been maxed out, it could signal someone has been using your health insurance for their own purposes.
IRS Says You Already Filed
If you file your annual tax return and the IRS notifies you one has already been filed in your name and SSN, this is a key indicator someone is using your identity information to get a refund. Additionally, if they say you have income from an employer you never worked for, this is another red flag and should be investigated immediately.
Identity theft is an ongoing issue we all face. For financial advice and to learn more about how to protect yourself and your accounts from cybercriminals, give the team at 1st Community Credit Union a call at 888-706-1228.
For a lot of people, buying a house is the ultimate dream that they hope will come true someday. After all, it’s nice to have a whole place for ourselves.
However, the reality of buying a house is the fact that it’s exorbitantly expensive. In fact, the real estate company Zillow has currently reported that the median home listing price this 2021 is $272,446, and that figure is expected to rise by 11.4% in 2022.
As a result, even though 80% of millennials would love to purchase their own houses, only a few of them are actually able to afford the costs, according to the data from Apartment List.
Despite the daunting statistics, your dream of buying real estate is achievable if you are financially savvy. To aid you in this matter, here are some words of financial advice for you.
- Be Realistic When You’re Looking at Houses
When you’re looking through the possible houses you might buy, you need to be realistic before getting attached to a gorgeous house that you can’t afford.
This means that you need to check your income and calculate the possible costs to determine what price range of houses you can handle. You can continue your research on houses once you know your price range. - Continue to Pay Off Debt
As mentioned earlier, owning a house is really expensive, and if you’re not careful enough, you’ll be drowning in a lot of debt. It is important to continue to pay off your debt as you can afford it, while also being able to make your mortgage payments on time. - Save for Down Payment and Closing Costs
After paying off all your debt, the next thing you have to do is to save for down payment. Some home loan options require a down payment of 20% or more so that you don’t have to pay for private mortgage insurance, which is an added expense for your monthly mortgage payment. Luckily there are also options for Zero-Down, 3% Down and 5% Down Payments available to qualified borrowers. Consult a 1st CCU Mortgage Loan Expert to find out which mortgage loan option is best for you and your budget. Aside from the down payment, you should also save some money for closing costs. Usually, it costs about 3–4% of the purchase price to close on a house, and these costs pay for the next crucial steps in the home buying process, such as appraisal, credit report, and home inspection. - Get Pre-Qualified for a Loan
Once you’ve already saved up for the closing costs and the 20% down payment, the next step you have to take is to talk to a mortgage lender and get pre-approved for a loan.
Getting pre-approved for a loan and getting a pre-approval letter will show home sellers that you’re serious, and that can get you ahead in the competitive real estate market.
Buying a house doesn’t come cheap. As a result, you need to be financially prepared first, and the tips above can help you achieve that particular goal. For further advice and information on buying your first home, give the team at 1st Community Credit Union a call at 888-706-1228.