Accounts – Island Crisis http://islandcrisis.net/ Mon, 16 May 2022 11:22:22 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://islandcrisis.net/wp-content/uploads/2021/04/default1-150x150.png Accounts – Island Crisis http://islandcrisis.net/ 32 32 What credit score is required for a student loan? – Forbes Advisor https://islandcrisis.net/what-credit-score-is-required-for-a-student-loan-forbes-advisor/ Mon, 16 May 2022 11:22:22 +0000 https://islandcrisis.net/what-credit-score-is-required-for-a-student-loan-forbes-advisor/ Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors. When you apply for a loan, lenders will review your credit to determine your risk as a borrower. This also applies to certain types of student loans, including federal PLUS loans and […]]]>

Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

When you apply for a loan, lenders will review your credit to determine your risk as a borrower. This also applies to certain types of student loans, including federal PLUS loans and private student loans.

If you’re wondering what credit rating you’ll need to qualify for these credit-based loans, here’s what you need to know.

What credit score is required for a student loan?

The exact credit score you’ll need to get approved for a student loan depends on the type of loan you choose as well as the individual lender (for private student loans).

Federal student loans

Minimum credit score required: No minimum for most federal loans (must not have an adverse credit history for PLUS loans)

Most federal student loans do not require a credit check, including subsidized and unsubsidized direct loans. To be eligible for these loans, you must:

  • Be enrolled at least half-time in a degree or certificate awarding program
  • Attend a school that participates in the federal financial aid program
  • Have a demonstrable financial need (for subsidized loans)

However, you must submit to a credit check if you wish to take out a PLUS direct loan. There are two types of PLUS loans: Grad PLUS loans for graduate and professional students and Parent PLUS loans for parents who want to cover their child’s education costs.

Unlike private student loans, you do not need to meet a minimum credit score requirement to qualify for a federal PLUS loan. Instead, you must not have an adverse credit history. If any of the following are included in your credit report, your credit will be considered adverse:

  • An overdue balance greater than $2,085 that has been past due for 90 days or more, has been placed in collection, or has been written off within the last two years
  • A default, discharge from bankruptcy, repossession, foreclosure, wage garnishment, tax lien, or federal student aid debt write-off within the past five years

Keep in mind that if you have a bad credit history, there are two ways to get a PLUS loan. You must either reapply with an endorser who does not have an adverse credit history (similar to a co-signer) or provide documentation illustrating any extenuating circumstances related to your adverse credit history.

Private student loans

Minimum credit score required: Typically 670 or more (depending on the lender)

You will generally need good to excellent credit to qualify for a private student loan. This usually means having a credit score of 670 or higher, although the exact credit score you’ll need to be approved depends on the lender. For example, Education Loan Finance (ELFI) requires a score of at least 680 while Earnest accepts scores of at least 650.

If you have a score lower than this or haven’t yet established a sufficient credit history, applying with a co-signer who has good to excellent credit could increase your chances of approval. Even if you don’t need a co-signer to qualify, having one could get you a lower interest rate than you would get yourself. Just keep in mind that your co-signer will share responsibility for the loan, which means they will be liable if you don’t make your payments.

Also note that some lenders offer student loans for bad credit, but these loans usually come with higher interest rates than good credit loans.

How to improve your credit score to get a student loan

If you can wait to take out a private student loan, consider spending time improving your credit to qualify more easily in the future. It can also help you get approved for more optimal interest rates. In general, the higher your credit score, the lower your rate will be.

There are several potential strategies for building your credit, such as:

  • Make payments on time. Your payment history is one of the main factors that determine your credit score. Be sure to pay all your bills on time to build a positive payment history and potentially improve your score over time.
  • Repayment of credit card balances. Another major component of your credit score is your use of credit. This is the amount you owe on revolving lines of credit (such as credit cards and lines of credit) out of your total credit limits. Consider paying down your credit card balances and keeping your credit utilization rate below 30% to potentially boost your credit score.
  • Become an authorized user on a credit card. If you know someone with good credit (like a parent or another adult), consider asking if you can become an authorized user on their credit card account. As an authorized user, your credit can benefit from the good financial habits of the primary cardholder without you even having to use the card itself.
  • Avoid new loans when possible. When you apply for a new loan, the lender will perform a thorough credit check to determine your eligibility. This could cause your credit score to drop slightly. Although your score will likely rebound in a few months, it’s a good idea to avoid applying for new credit unless absolutely necessary to avoid damaging your credit score.

Can you get a student loan with no credit history?

Yes, you might still be able to get a student loan with no credit history. Most federal student loans don’t require a credit check, and you may qualify for a private student loan with the help of a creditworthy co-signer.

There are also private lenders who work with poor or no credit borrowers. For example, Ascent offers loans to juniors and seniors with no credit history, and AM Money considers your GPA instead of your credit to determine eligibility. These two loan options also do not require a co-signer. However, they also generally charge higher interest rates than good credit loans.

You can also consider applying for a private student loan with a cosigner who has good to excellent credit, which could help you get approved. Remember that if you don’t make your payments, your co-signer will be responsible.

Compare student loan rates in minutes

Compare rates from participating lenders via Credible.com

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Reviews | Student debt is crushing. Canceling it for everyone is always a bad idea. https://islandcrisis.net/reviews-student-debt-is-crushing-canceling-it-for-everyone-is-always-a-bad-idea/ Sat, 14 May 2022 15:00:08 +0000 https://islandcrisis.net/reviews-student-debt-is-crushing-canceling-it-for-everyone-is-always-a-bad-idea/ Federal repayment plans adjust monthly payments based on income and family size and extend repayment periods. Debts are eligible for forgiveness after 10, 20 or 25 years of payments. Approximately 30% of all borrowers with federal loans are in such a program, and more borrowers could benefit from participating in one. But reimbursement programs have […]]]>

Federal repayment plans adjust monthly payments based on income and family size and extend repayment periods. Debts are eligible for forgiveness after 10, 20 or 25 years of payments. Approximately 30% of all borrowers with federal loans are in such a program, and more borrowers could benefit from participating in one.

But reimbursement programs have a poor track record. Not so long ago, 98% of people who requested cancellation of their debts had their request rejected. A report from the Government Accountability Office in March revealed that millions of dollars in student debt could already have been forgiven if the programs had been administered correctly. Richard Cordray, chief operating officer of Federal Student Aid, an agency of the Department of Education, called the failure “truly inexcusable.”

The education department works to repair these programs retroactively giving qualified borrowers more credit for time served in public service and working through a backlog of paperwork, but it could do more. Additional changes to income-tested repayment programs — such as reducing interest payments, lowering eligibility requirements, and making canceled student loan debt tax-free — could have significant implications down the road. weather, according to a report from Pew. Congress and the Department of Education should consider such changes as part of a more lasting solution to the debt problem.

Lawmakers should also consider making it easier to forgive student loans through bankruptcy, a relief measure available for credit card and mortgage debt. Changes to bankruptcy law in 2005 also made these protections less accessible.

The Department of Education has launched a long-awaited crackdown on predatory schools, another major source of student loan defaults. The Obama administration tightened rules on for-profit schools, but the Trump administration’s Education Department, under Betsy DeVos, relaxed those rules and let reimbursement and forgiveness programs atrophy. Last month, the department discharged $238 million indebted by 28,000 people who attended Marinello Beauty Schools, which closed in 2016. The school engaged in “widespread and widespread misconduct”, a department investigation found.

Since 2021, the Biden administration has approved more than $18.5 billion in loan discharges for more than 750,000 borrowers, including $6.8 billion for 113,000 people under the Bank’s loan forgiveness program. public service and $8.5 billion for more than 400,000 borrowers with total and permanent disabilities. The administration is also pushing to double the maximum Pell Grant and restore a rule that holds schools accountable for the paid employment of their graduates — a measure aimed at for-profit colleges.

These measures are all positive, tackling the student debt crisis with policies that are both compassionate and just.

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Springdale tornado victims sleep in SUV while waiting for financial aid https://islandcrisis.net/springdale-tornado-victims-sleep-in-suv-while-waiting-for-financial-aid/ Tue, 10 May 2022 23:50:00 +0000 https://islandcrisis.net/springdale-tornado-victims-sleep-in-suv-while-waiting-for-financial-aid/ “Right now our living situation is that we’re hoping to stay overnight,” said Springdale tornado victim Amanda Chaffin. Chaffin and her husband were in their bedroom when the Springdale tornado destroyed their mobile home on March 30. They had been sleeping in their SUV for the past three weeks. Their six children stayed with local […]]]>

“Right now our living situation is that we’re hoping to stay overnight,” said Springdale tornado victim Amanda Chaffin. Chaffin and her husband were in their bedroom when the Springdale tornado destroyed their mobile home on March 30. They had been sleeping in their SUV for the past three weeks. Their six children stayed with local family members. “Sometimes I have to wait to borrow money to pay for a hotel room,” Chaffin said. “I showered at the neighbors for $10.” Chaffin and her husband had no insurance. They applied for a loan from the Small Business Administration for property damage. They were declined due to bad credit. “When working with disaster survivors, we look for a range of things,” said SBA’s Rick Tillery. “From their credit history to their assets, what they own, their income and it all comes into play to make sure they can repay the loan they take out to rebuild the property.” Chaffin is now awaiting a response from the Arkansas Department of Emergency Management in hopes of securing a grant. But that doesn’t make his life any easier today. “We go to work, we pay our bills, we do what we’re supposed to do and I think there should be some kind of housing for people like us,” Chaffin said. An ADEM manager said that this could take 10 to 21 days to get a response to their application. But so far no one has been denied. Until Chaffin answered, she said it would be another night in their makeshift room.

“Right now our living situation is that we’re hoping to stay overnight,” said Springdale tornado victim Amanda Chaffin.

Chaffin and her husband were in their bedroom when the Springdale tornado destroyed their mobile home on March 30. They have been sleeping in their SUV for three weeks. Their six children stayed with local family members.

“Sometimes I have to wait to borrow money to pay for a hotel room,” Chaffin said. “I showered the neighbors for $10.”

Chaffin and her husband had no insurance. They applied for a loan from the Small Business Administration for property damage. They were declined due to bad credit.

“When working with disaster survivors, we look for a range of things,” said SBA’s Rick Tillery. “From their credit history to their assets, what they own, their income and it all comes into play to make sure they can repay the loan they take out to rebuild the property.”

Chaffin is now awaiting a response from the Arkansas Department of Emergency Management in hopes of securing a grant. But that doesn’t make his life any easier today.

“We go to work, we pay our bills, we do what we’re supposed to do, and I think there should be some kind of housing for people like us,” Chaffin said.

An ADEM official said it could take 10 to 21 days to get a response to their application. But so far no one has been denied. Until Chaffin answered, she said it would be another night in their makeshift room.

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8 Credit Score Myths That Could Hurt Your Chances of Getting a Loan https://islandcrisis.net/8-credit-score-myths-that-could-hurt-your-chances-of-getting-a-loan/ Sat, 07 May 2022 13:53:00 +0000 https://islandcrisis.net/8-credit-score-myths-that-could-hurt-your-chances-of-getting-a-loan/ Are you planning to apply for a loan soon? You are in good company. In 2020, there were 22.7 million home loan applications, according to the Consumer Financial Protection Bureau. Meanwhile, Experian says auto loans hit a record high of $1.37 trillion. So there are a lot of loans. Your credit score and credit history […]]]>

Are you planning to apply for a loan soon? You are in good company. In 2020, there were 22.7 million home loan applications, according to the Consumer Financial Protection Bureau. Meanwhile, Experian says auto loans hit a record high of $1.37 trillion. So there are a lot of loans.

Your credit score and credit history are among the most important factors lenders look at when you apply for a loan or mortgage. If you’ve struggled with your finances in the past, learning more about your credit score can be daunting. But understanding your score and what’s in it is key to getting the loan you need.

There are many myths surrounding your credit score and what does or does not affect it. Let’s look at some of the most common myths and the truth behind them.

Discover 6 clever ways to crush your debts.

Having a credit card balance increases my credit score

This is a persistent myth around building credit. Carrying over a credit card balance from month to month can hurt your credit score and will likely cost you money in the long run, since you’re paying interest to the credit card company. credit on any balance not paid in full.

In general, people with the highest credit scores have a credit utilization rate — the total amount of credit you use compared to the amount of credit you have — by 10% or less. When your utilization rate exceeds 30%, your credit score may be negatively affected, as lenders may worry about the amount of credit you are using.

Paying off a debt quickly removes it from your credit report

Paying off revolving debt, like a credit card, can be a good plan because it improves your credit utilization rate. A history of on-time payments and responsible use of credit is generally helpful in loan applications because it shows lenders that you are using credit responsibly.

Some people think that a closed account or paid off debt quickly disappears from your credit report. In fact, if you’ve paid your debt in full and made all payments on time, credit reporting agencies could keep the account on your credit report for up to a decade.

Additionally, a history of late payments can stay on your credit report for up to seven years, and certain types of bankruptcies can stay on your report for up to 10 years. When paying off a credit card, be sure to do so responsibly. Consider setting up automatic payments so you don’t accidentally miss a payment.

You have to be rich to have a good credit score

Your bank balance and income have nothing to do with your credit score. It’s possible to have a high income and a bad credit score because you have a large balance on your credit card, made late payments, or mismanaged your finances.

Likewise, you can have an average salary and still have a high credit score. Many lenders use the FICO score, created by Fair Isaac Corp. The highest FICO score you can get is 850. Anything above 800 is generally considered excellent and can help you qualify for the best loan rates and terms.

All debts have an equal impact on your credit score

Paying off a credit card or other revolving debt can improve your credit score because it increases your credit utilization rate. Paying off installment loans, such as a car loan or mortgage, can also affect your score, but the impact is unlikely to be as great as paying off revolving debt.

So develop a strategy to help you pay off your revolving debt if you want to increase your score. Methods to achieve this include snowball or debt avalanche approaches. With the debt snowball, you first pay off your smaller debts and progress to larger ones. With the debt avalanche, you attack your debts starting with the bonds that have the highest interest rates.

Student loans don’t affect your credit score

All loans, including student loans, mortgages, car loans, medical debt, and even your utilities, are included in your credit score. Even one late payment can cause your credit score to drop, so paying your bills on time is essential.

Payment history is one of the most important factors in calculating your credit score. For example, it makes up about 35% of the composition of your FICO score. So, making payments on time is one of the most important things you can do to potentially boost your score. Develop a budget and call your lenders before you miss a payment so they can help you develop a strategy that could prevent a negative impact on your score.

Checking Your Report Hurts Your Credit Score

Checking your credit report regularly can be a great way to keep tabs on your credit profile. Checking your own report does not affect your score.

When you’re pre-approved for a loan or mortgage, it’s traditionally considered a “soft pull” since you haven’t applied for credit yet. Soft pull-ups have no impact on your score.

On the other hand, when you take the next step and submit a formal credit application, the lender will do a “hard bang” to check your credit report, which can drop your credit score by a few points. The same applies when applying for a credit card or other credit inquiries.

Be careful how many credit cards or loans you apply for, especially if you plan to buy a house or car soon. Multiple credit applications and multiple difficult applications can lower your score and set off red flags for lenders.

How much I earn affects my credit rating

Your income and job title do not affect your credit score and are not reported to credit bureaus. Lenders usually get your salary range and job title directly from you because they aren’t on your credit report and therefore don’t factor into your credit score.

Instead, your FICO credit score is made up of the following factors, from most impacting to least:

Regardless of your income, be sure to develop a budget that takes into account your needs like your mortgage or rent, food, utilities, debt repayment, and retirement savings. And try to leave room for the fun things in life, like hobbies or travel.

Using a debit card helps me build my credit rating

Debit cards are tied to a checking account and are not a form of credit, so they generally don’t impact your credit score. The money is withdrawn directly from your checking account and does not affect your available credit.

If you don’t have a credit card, applying for one and using it responsibly can be a great way to improve your credit score. Paying off the balance in full each month and making payments on time will help boost your score. If you are looking for a credit card, see the best credit cards to find the one that suits your needs.

At the end of the line

It is important to note that your credit score is just an overview of your financial life at any given time. By focusing on repay the debtincreasing your credit utilization rate and making your payments on time can help improve your credit score.

If you’re applying for a mortgage or car loan soon, check your credit score and credit report to find out what lenders will find. Then make a plan to improve your score as much as possible.

More from FinanceBuzz:

This article 8 Credit Score Myths That Could Hurt Your Chances of Getting a Loan originally appeared on FinanceBuzz.

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Dave Ramsey has no credit score. Here’s why it might not work for you https://islandcrisis.net/dave-ramsey-has-no-credit-score-heres-why-it-might-not-work-for-you/ Sat, 30 Apr 2022 10:00:41 +0000 https://islandcrisis.net/dave-ramsey-has-no-credit-score-heres-why-it-might-not-work-for-you/ Image source: Getty Images There is a danger in having no credit score at all. Key points Financial expert Dave Ramsey prides himself on having no credit score. While he might get away with not having one, it may not work for the average consumer. Your credit score is not just a random number. Rather, […]]]>

Image source: Getty Images

There is a danger in having no credit score at all.


Key points

  • Financial expert Dave Ramsey prides himself on having no credit score.
  • While he might get away with not having one, it may not work for the average consumer.

Your credit score is not just a random number. Rather, it is an indication of your level of confidence as a borrower. A higher credit score sends the message that you can be counted on to repay a loan on time and in full, while a lower score sends a warning that a lender may want to think twice about you. lend money.

But what if you don’t have bad credit, but rather no credit? It’s not such a rare scenario. If you are a recent college graduate, for example, who has never paid your bills directly, there may not be enough financial data on you to establish a credit score.

But it’s not just young adults who don’t have credit. Some people actively choose not to build a credit history.

Financial expert Dave Ramsey is one of them. As a strong advocate of debt avoidance, Ramsey insists that going through life without credit is more than possible. But while having no credit score may work for Ramsey, it may be more difficult for you.

Why You Might Need a Credit Score

There are ways to get by in life without borrowing money. You could save a huge amount of money to buy a house instead of having to take out a mortgage. You could save to buy a car outright and avoid having to take out a car loan. And you could forgo credit cards and just pay for all your purchases in cash.

But whether you can do these things – and want to do them – is another story. It’s easy for someone like Dave Ramsey to get by without a credit score. The reason? Its borrowing needs are probably limited to non-existent.

Investopedia reports that as of 2021, Ramsey had a net worth of around $200 million. Most of us have a net worth that is nowhere near that.

Now, if you had $200 million in assets and wanted to buy a $500,000 house, you probably wouldn’t need a mortgage either. And so in this case, having no credit score would not be a problem.

But what if your net worth is closer to $20,000 than $200 million? If so, you are in good company. And that means you may need to borrow money to finance major purchases, like a house or a car. There’s nothing to feel bad about. And it also justifies establishing enough credit history to get your own score.

Good advice, but only up to a point

Ramsey thinks debt is generally bad news and he doesn’t like to see consumers get sucked into it. In that regard, he’s onto something.

If you charge a major credit card tab, you could find yourself stuck losing hundreds or thousands of dollars in interest charges. It is not a good thing.

But not all debt is created equal. Mortgage debt, for example, is a healthier type, even if it also means spending money on interest.

Should you do everything possible to minimize your debt – and your interest payments? Absolutely. But avoiding debt altogether isn’t feasible for the typical consumer, and it’s something Ramsey tends to overlook. While you may want to follow his advice and minimize your debt, you don’t necessarily want to find yourself in a position where you have no credit rating. This could limit your options and make your life more difficult than necessary.

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1 Warren Buffett Growth Stock Down 90% to Buy Now https://islandcrisis.net/1-warren-buffett-growth-stock-down-90-to-buy-now/ Fri, 29 Apr 2022 10:15:00 +0000 https://islandcrisis.net/1-warren-buffett-growth-stock-down-90-to-buy-now/ Warren Buffett is one of the most successful investors in history, and he’s dispensed a lot of wisdom over his decades of guiding Berkshire Hathaway with incredible yields. Perhaps his most quoted investment advice is that it pays to “be scared when others are greedy and greedy when others are scared.” With the uncertainty that […]]]>

Warren Buffett is one of the most successful investors in history, and he’s dispensed a lot of wisdom over his decades of guiding Berkshire Hathaway with incredible yields. Perhaps his most quoted investment advice is that it pays to “be scared when others are greedy and greedy when others are scared.”

With the uncertainty that has rocked the market recently, there is no shortage of companies that have seen their valuations fall precipitously from previous highs. However, one company in Berkshire Hathaway’s portfolio stands out for its particularly terrible performance lately. Read on to see why Warren Buffett’s worst performing stock since the start of 2021 actually looks like a smart buy right now.

Image source: The Motley Fool.

This battered fintech was Berkshire’s biggest loser

StoneCo (STNE 2.10%) is a Brazil-based fintech that provides payment processing and credit services, primarily to merchants. While the stock has enjoyed a string of successes following its IPO in 2018, conditions have changed dramatically since the start of last year. Shares were crushed due to a combination of inflation, other macroeconomic headwinds and regulatory changes implemented by the Brazilian government, essentially cracking the company’s credit business.

StoneCo’s stock price is down about 90% from its peak, and the company faces big challenges. The graph below tracks StoneCo’s former credit portfolio and its estimated fair value in Brazilian reals from the first quarter of 2021 to the first month of its current fiscal year.

A chart plotting the outstanding portfolio and the estimated fair value of StoneCo's former loan portfolio.

Image source: StoneCo.pg. 10 PowerPoint presentation (stone.co)

StoneCo managed to sell off some troubled parts of its credit portfolio, but management still believes more than half of its legacy portfolio is bad. Due to new regulatory standards, the company has suspended lending to small and medium-sized businesses and ultimately could be required to pay somewhere in the range of 450 million Brazilian reals (about $90 million) in loans. that end up not being reimbursed.

Down, but not out

StoneCo’s credit segment is in bad shape. On the other hand, its payment processing business continued to onboard new merchant partners and grow total payment volume (TPV) at an encouraging pace. The charts below track StoneCo’s merchant payment customers, POS on its platform, and revenue over the past two years.

Graphs tracking the number of StoneCo merchant customers, total payment volume and revenue.

Image source: Stone Co.

While StoneCo is still benefiting from a small increase in payment volume thanks to the coronavirus stimulus program in Brazil, overall POS has grown at an impressive rate over the past year, and the growth looks even more impressive if the program contribution is cancelled. Even better, the total number of active customers for its payment processing ecosystem more than tripled year-over-year (YOY) in the fourth quarter of last year.

The company has also entered the business management and human resources software sector with its acquisition of Linx. Linx’s revenue grew 17.7% year-over-year in the fourth quarter, and non-unit software services revenue increased approximately 82% to push total software segment revenue up 26, 4% YoY. Through a combination of synergies with the Stone Financial Platform, the integration of other software services with Linx, and increased discipline in managing spend, the company is seeing margins in the software segment increase significantly this year.

StoneCo’s credit business is clearly not in great shape, and the company is on track to significantly reduce bad debts. On the other hand, its payment processing and enterprise software segments still have strong growth potential, and the stock currently appears to be priced conservatively.

StoneCo is cheap and could benefit from big trends

With approximately 215 million inhabitants, Brazil is the most populous country and the largest economy in Latin America. While Brazil has seen a rapid increase in the adoption of e-commerce and card and mobile payments in recent years, the overall adoption of these services remains at an early stage compared to the United States, Europe and the United States. Asia.

After a rush sale, StoneCo now has a market capitalization of around $3 billion and is valued at around 1.6 times this year’s expected sales and 26.5 times this year’s expected earnings. With the shift to card and app payments and the rise of e-commerce continuing to heat up in Brazil and Latin America as a whole, this downed fintech stock could have a big advantage at current prices.

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America’s Car-Mart, Inc. announces pricing for its first https://islandcrisis.net/americas-car-mart-inc-announces-pricing-for-its-first/ Mon, 25 Apr 2022 20:29:15 +0000 https://islandcrisis.net/americas-car-mart-inc-announces-pricing-for-its-first/ ROGERS, Ark., April 25, 2022 (GLOBE NEWSWIRE) — America’s Car-Mart, Inc. (NASDAQ: CRMT) (the “Company”) announced today that it has priced $400 million principal amount of asset-backed notes (the “Notes”), a securitization transaction backed by subprime auto loans. The Notes will be issued in four classes, secured by loans directly issued by the Company’s operating […]]]>

ROGERS, Ark., April 25, 2022 (GLOBE NEWSWIRE) — America’s Car-Mart, Inc. (NASDAQ: CRMT) (the “Company”) announced today that it has priced $400 million principal amount of asset-backed notes (the “Notes”), a securitization transaction backed by subprime auto loans. The Notes will be issued in four classes, secured by loans directly issued by the Company’s operating subsidiaries, America’s Car Mart, Inc. and Texas Car-Mart, Inc. (collectively “Car Mart”), with expected ratings of AA – to BB. – by Kroll Bond Rating Agency (“KBRA”), and have a final maturity date of 20 April 2029. The credit enhancement for the Notes will consist of an overcollateralisation, a reserve account funded with an initial amount of at minus 2.00% of the Pool Balance at the Cut-Off Date, excess interest on claims and, in the case of Class A Notes, Class B Notes and Class C Notes, the subordination of certain payments to noteholders of Notes less senior categories. Additional ticket details are as follows:

Initial capital amount Initial credit enhancement Fixed coupon rate (per year) Preliminary KBRA Ranking(1)
Class A tickets $ 236,000,000 60.70% 3.23% YY- (fs)
Class B tickets 52,000,000 51.60% 4.47% A- (fs)
Class C tickets 74,570,000 38.55% 5.48% BBB- (fs)
Class D tickets 37,430,000 32.00% 8.58% BB- (fs)
Total $ 400,000,000
(1) The KBRA adds an indicator (sf) to the ratings assigned to structured finance bonds.

The notes were priced with a weighted average fixed coupon rate of 5.14% per annum until the scheduled clean-up call. The Notes will be issued by ACM Auto Trust 2022-1 (the “Issuer”), an indirect subsidiary of the Company. The Issuer will be the sole debtor of the Notes; the Notes will not be obligated or guaranteed by the Company or any of its other affiliates or subsidiaries. Car Mart will act as the auto loan receivables manager securing the Notes. The net proceeds of the Notes will be used to pay outstanding debt, make the initial deposit into a reserve account and for other general purposes. The expected settlement date for the transaction is April 27, 2022.

“We are delighted to diversify our funding sources by entering the securitization market. This transaction represents an important step as we prepare for continued growth,” said Jeff Williams, President and Chief Executive Officer of the Company. “Looking to the future, this market will give us better access to credit with a more efficient capital structure.”

The Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities law, and may not be offered or sold in the United States absent registration or an applicable exemption or a transaction not subject to the registration requirements of the Securities Act and applicable state securities laws. The Notes are being offered only to qualified institutional purchasers pursuant to a Rule 144A private offering under the securities law.

This press release is not an offer to sell, or a solicitation of an offer to buy, securities, and there will be no sale of such securities in any state or jurisdiction in which the offer, the solicitation or sale would be unlawful prior to registration. or qualification under the securities laws of such state or jurisdiction. Any offer of securities will be made only by means of a complete offering memorandum.

In connection with the Asset Backed Securitization Transaction, the Company has entered into Addendum No. 4 to the Company’s Third Amended and Restated Loan and Guarantee Agreement (the “Agreement”) with BMO Harris Bank , NA, as an agent for a group of lenders. Amendment No. 4 to the Agreement (the “Amendment”) modifies the Agreement to permit the sale, contribution or transfer of vehicle contracts to, and certain redemptions of such contracts from, an indirect subsidiary purpose of the Company in the context of a securitization transaction, in each case subject to specific conditions. The amendment also replaces LIBOR as the applicable benchmark interest rate for borrowings under the agreement with the simple daily guaranteed overnight funding rate (“SOFR”) and increases the unused line charge rate by 0.25% to 0.375% if the average daily amount unpaid during the previous month is less than 50% of revolver commitments.

About American Car-Mart

America’s Car-Mart operates automotive dealerships in twelve states and is one of the largest public automotive retailers in the United States, focused exclusively on the “Integrated Automotive Sales and Finance” segment of the used car market. The company specializes in the sale of quality used vehicles and offers flexible used car financing options for customers with bad credit, no credit, repossessions or even past bankruptcy and puts the emphasis on superior customer service and building strong personal relationships with its customers. . The Company operates its dealerships primarily in small towns in the south central United States, selling quality used vehicles and providing financing to substantially all of its customers. For more information about the US Car-Mart, including investor presentations, please visit our website at www.car-mart.com.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address the future objectives, plans and goals of the Company, as well as the intention, beliefs and expectations Company information regarding future events and operating performance, including statements regarding the proposed private offering of the Notes, and can generally be identified by words such as “may”, “will”, “should”, “could ‘, ‘believes’, ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘expects’ and other similar words or expressions. These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties. Accordingly, you are cautioned that these forward-looking statements are not guarantees of future events or performance, and that actual results could differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially from the Company’s projections include, but are not limited to:

  • the failure of KBRA to rate the Notes at the expected rating levels, which is a condition of closing the Offer, or at all;
  • changes in financial markets, including changes in credit markets, interest rates, securitization markets generally and more specifically, the securitization offered by the Company;
  • the willingness of investors to purchase the Notes;
  • general economic conditions in the markets in which the Company operates, including, but not limited to, fluctuations in gasoline prices, grocery store prices and employment levels;
  • the availability of credit facilities and access to capital on terms acceptable to us to support the business of the Company;
  • the Company’s ability to effectively underwrite and collect its contracts;
  • competition;
  • reliance on existing management; ability to attract, develop and retain qualified general managers;
  • the availability of quality vehicles at affordable prices for customers;
  • changes in consumer credit laws or regulations, including, but not limited to, rules and regulations that have recently been enacted or may be enacted by federal and state governments;
  • ability to keep pace with technological advances and changes in consumer behavior affecting the Company’s business;
  • security breaches, cyberattacks or fraudulent activities; and
  • the ability to successfully identify, complete and integrate new acquisitions.

In addition, risks and uncertainties that could affect future results and events include those described from time to time in the Company’s filings with the SEC. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

contacts: Jeff Williams, CEO at (479) 464-9944 or Vickie Judy, CFO at (479) 464-9944

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Dave Ramsey hates debt. Is it really possible to live without debt? https://islandcrisis.net/dave-ramsey-hates-debt-is-it-really-possible-to-live-without-debt/ Wed, 20 Apr 2022 13:00:34 +0000 https://islandcrisis.net/dave-ramsey-hates-debt-is-it-really-possible-to-live-without-debt/ Image source: Getty Images Many consumers are regularly in debt. But can we break this cycle? Key points Financial expert Dave Ramsey has made it clear that he is not a fan of debt. Although he has many tips to help consumers stay out of debt, they may not be right for everyone. American consumers […]]]>

Image source: Getty Images

Many consumers are regularly in debt. But can we break this cycle?


Key points

  • Financial expert Dave Ramsey has made it clear that he is not a fan of debt.
  • Although he has many tips to help consumers stay out of debt, they may not be right for everyone.

American consumers are no strangers to debt. In February alone, debt levels rose by nearly $42 billion to a total of nearly $4.5 trillion in different borrowing categories, from credit cards to auto loans.

This news is unlikely to please financial guru Dave Ramsey. Ramsey’s views on debt are pretty clear – he thinks all debt is bad and something consumers should aim to avoid at all costs.

Dave Ramsey is so against debt that he thinks consumers should avoid credit card use altogether. And he even went so far as to suggest that home buyers buy properties with cash if they can afford to do so – even though mortgages are generally considered a healthy type of debt.

Of course, Ramsey’s advice is well-meaning. Every time you rack up debt, you sign up to pay interest, and in Ramsey’s mind, that’s the same as throwing money away. But is it really possible to live a completely debt-free life? It’s more debatable.

Choose your debts carefully

Going through life debt-free is something many consumers fail to do. But that doesn’t mean we shouldn’t aim to avoid certain types of debt.

Credit card debt is considered unhealthy because it does nothing but cost you money. Credit cards are notorious for charging exorbitant interest, so much so that a $100 purchase paid off over time could easily cost double, depending on the amount of accrued interest.

Plus, credit card debt can hurt your credit score, making it harder to borrow money affordably, or buy or rent a home. And in that sense, Ramsey is right when he says credit card debt should be avoided at all costs.

But mortgage debt is another story. Having a mortgage – even a large one – won’t hurt your credit provided you can meet your monthly payments. Additionally, a mortgage can help you own an asset that can increase in value over time.

Also, buying a house with cash makes little sense financially, even for people who have this option. Houses are quite illiquid, which means turning a house into cash is not easy. And so, shelling out $400,000 to buy a house is risking a scenario where you need a financial lifeline and have to wait months for your property to sell.

In addition, mortgages are a fairly affordable means of borrowing. Even with mortgage rates rising these days compared to the past few years, you could easily generate higher returns in the stock market than the interest you pay on a mortgage. And so keeping your money out of a house and investing it might make better financial sense.

Good advice, but only up to a point

Dave Ramsey’s tips for avoiding debt are designed to help consumers avoid wasting money on interest and getting in over their heads. But do you need to commit to a totally debt-free lifestyle? Not necessarily.

There’s nothing wrong with financing a major purchase, like a house or even a car, that probably won’t increase in value over time but will keep you going. And as long as you commit to doing your best to avoid credit card debt, you’ll make Dave Ramsey proud, at least to some degree.

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Best business credit cards for new businesses in 2022 https://islandcrisis.net/best-business-credit-cards-for-new-businesses-in-2022/ Fri, 15 Apr 2022 02:36:43 +0000 https://islandcrisis.net/best-business-credit-cards-for-new-businesses-in-2022/ There will be a lot of items on your to-do list when you start a new business, including getting a business bank account and a business credit card. Finding a card available for startups and qualifying can be confusing. Here, we’ll explain how new entrepreneurs can get and take advantage of small business credit cards. […]]]>

There will be a lot of items on your to-do list when you start a new business, including getting a business bank account and a business credit card. Finding a card available for startups and qualifying can be confusing.

Here, we’ll explain how new entrepreneurs can get and take advantage of small business credit cards.

Benefits of Business Credit Cards for New Businesses

Business credit cards have many advantages. They can provide:

  • Access to a line of credit that can be used for start-up financing
  • Excellent record keeping for business expenses
  • Separation of professional and personal finances
  • Benefits such as cash back or travel rewards
  • Superior protection against fraudulent use

How to choose the best credit card for your new business

When choosing a credit card for your business, you should consider two key factors:

How should I plan to use the card?

If you want to use your credit card as a line of credit and pay for your purchases over time, you’ll need to look for a low-interest card. An introductory offer of 0% APR for a year or more can be helpful in providing start-up capital. Low-rate balance transfers can also be useful if you need access to a line of credit for short-term cash flow financing.

On the other hand, if you want a card for business expenses, you can look for a card with a rewards program like cash back, travel points, or other perks. Many of these cards also offer sign-up bonuses that can be especially valuable for new businesses trying to make every dollar count.

What am I eligible for?

Unlike small business loans, most credit card issuers don’t require a lot of business time. Many cards will allow you to get a card just days after starting your business. But in this case, they will check your personal credit and probably require you to have a good to excellent personal credit score.

They’ll also want to make sure you can afford to pay off the balance by asking about your income. For most cards, revenue can come from a variety of sources, not just the company. Your income can affect your credit limit.

What credit score is needed to get a business credit card?

Most business credit cards check personal credit. Although many don’t specifically reveal their minimum credit score requirements, you can expect most cards to require good credit (650-680+) or excellent credit (700+).

There are a few business credit cards that don’t check personal credit, but they often require the business to generate fairly significant revenue. These can be called company cards.

8 Best Credit Cards for New Businesses

Every business is different, so there’s no one credit card that meets all needs. The cards shown here are available to new businesses that qualify.

Capital on Tap Corporate Credit Card

This is a popular first business credit card for small businesses. it offers 1.5% unlimited cashback with no annual fee. and the annual fee is $0.

Bank of America® Business Advantage Unlimited Cash Rewards Mastercard® Credit Card

For cardholders who want to pay for startup purchases over time, this card offers a 0% Introductory APR on purchases for the first 9 billing cycles as well as a solid welcome offer: Earn $300 online credit after making at least $3,000 in net purchases within the first 90 days of opening your account.

Ink Business Preferred® Credit Card

If you want a card with a generous welcome bonus, you can’t go wrong with this card: Earn 100,000 bonus points after spending $15,000 on purchases within the first 3 months of account opening.. And if your business takes you outside of the US (or you have overseas suppliers), you’ll save money with a $0 foreign transaction fees.

Amazon Business American Express Card

If you’re planning on making business purchases on Amazon, you might want to check out this map. Enjoy 3% Money Back or 60 Days on US Purchases on Amazon.com, Amazon Business, AWS and Whole Foods Market. You’ll earn 3% back on the first $120,000 in purchases each calendar year, 1% back thereafter.

American Express® Gold Business Card

If you want a card to pay for start-up expenses, you might consider this card. Welcome Offer: Earn 70,000 Membership Rewards® points after spending $10,000 on qualifying purchases with the Business Gold Card within the first 3 months of card membership. Earn 4X the Membership Rewards® points on the 2 selected categories where your business spent the most each month. 1X is earned for further purchases.

Divvy chip credit card for business

Divvy is an expense management platform accessible with a business credit card. It’s a great way to manage business expenses. Get free employee cards with expense controls. All charges made on this payment card are due and payable when you receive your periodic statement

American Express Blue Business Cash™ Card

This Amex card is a popular cash back card and with a simple rewards structure, it does not require you to follow bonus cash back spending categories. Earn 2% cash back on all eligible purchases up to $50,000 per calendar year, then 1% cash back earned is automatically credited to your statement.

Ink Business Preferred® Credit Card

This card offers a healthy welcome offer: Earn 100,000 bonus points after spending $15,000 on purchases within the first 3 months of account opening. Earn 3 points per $1 on the first $150,000 spent on combined travel purchases, shipping purchases, internet, cable and phone services, ad purchases made on social media sites and engines search each account anniversary year. Earn 1 point per $1 on all other purchases, with no limit to the amount you can earn.

FAQs

How do new businesses get credit?

Most business credit cards report to commercial credit bureaus, making them a good choice for establishing business credit. If you maintain a good payment history, the card can help you establish good credit scores for your business.

However, the decision of whether or not you will qualify will likely depend on your personal credit scores. As long as you have a good personal credit history (and meet other requirements such as income), you should be eligible for a business credit card. There are only a few business credit cards for bad credit.

Can you use an Ein to get a credit card?

You may be asked for an Employer Identification Number (EIN) when you apply. An EIN is your business identification number used for tax purposes. (This is not required for all businesses.)

Again, however, most card issuers require a Social Security Number (SSN) to verify your personal credit history. Some cards don’t require a personal credit check, but these cards are generally not available to new businesses with no income.

Similarly, only a few cards do not require a personal guarantee.

How do I get a business credit card with a new LLC?

Many of these cards are available to new LLCs, as well as sole proprietors, provided you meet other criteria such as income and the issuer’s credit requirement.

Can I get a business credit card without business income?

Yes, many of these cards are available to small business owners as long as you meet minimum income requirements, which don’t always have to come from the business. Unless the application specifies business income, you may include personal income and/or other income.

This article was originally written on April 14, 2022.

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What are secured loans and where can you get one? https://islandcrisis.net/what-are-secured-loans-and-where-can-you-get-one/ Tue, 12 Apr 2022 19:45:57 +0000 https://islandcrisis.net/what-are-secured-loans-and-where-can-you-get-one/ Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own. Unlike unsecured loans, secured loans are backed […]]]>

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

Unlike unsecured loans, secured loans are backed by collateral or a valuable asset that you own. (Shutterstock)

If you don’t have the best credit and want to lock in a low interest rate or borrow a large sum of money, a secured loan might be on your radar. Contrary to unsecured personal loansSecured loans require you to pledge an asset like a savings account or a car, which the lender can take if you don’t repay the loan.

Let’s take a closer look at what secured loans are, where you can get them, and some pros and cons to consider.

If you are considering an unsecured personal loan, you can visit Credible to learn more and to see your prequalified rates.

What are secured loans and how do they work?

Also known as secured personal loanA secured loan is secured by collateral or something valuable that you own. It could be a house, a car, a savings account, an investment portfolio, or even a piece of jewelry or a musical instrument. If you default on your loan, the lender may seize your collateral. You can use a collateral loan to almost any goalwhether you need to cover an unexpected expense, pay a medical bill or perform an expensive car repair.

You will come across several types of secured loans, including mortgages and car loans. If you take out a mortgage, for example, you will use your house as collateral. For an auto loan, you would use your vehicle as collateral. Other examples of secured loans include home equity loans or home equity lines of credit (HELOCs), which also use your home as collateral.

Secured loans are less risky for lenders because they have the right to sell your asset if you fail to repay your loan. This can make secured loans easier to obtain than unsecured loans, which pose a higher risk to lenders.

Where can you get a secured loan?

You can get secured loans from a number of financial institutions, such as:

  • Banks – If you already have a checking or savings account with a bank, you might want to start there for a secured loan.
  • Credit Unions – In most cases, you will need to be a member to qualify for a secured loan from a credit union.
  • Online lenders — While most online lenders only offer unsecured loans, some also offer secured loans.
  • Car dealerships — If you are looking for a new or used vehicle, you may be able to get a car loan from a car dealership.
  • Pawn shop – Pawnbrokers are secured by a personal item of value, but they usually come with very high costs.

What credit score do you need for a secured loan?

Each lender has their own requirements for secured loans. While some require good or excellent credit scores, others are more lenient and work with borrowers who have fair credit ratings. If you don’t see the credit score requirements listed on a lender’s site, you can contact the lender to find out.

Comparing rates from multiple lenders can help you find the loan that’s right for you. Credible, it’s easy to compare your prequalified personal loan rates from several lenders.

Lenders who offer secured loans

While some personal lenders only offer unsecured loans, others offer loans that you can secure with collateral. These four credible partner lenders offer secured loans:

Before

LightStream

OneMain Financial

  • Loan amounts: $1,500 to $25,000
  • Minimum credit rating: Check with the lender
  • Acceptable collateral: Car, Truck, Motorcycle, Boat, RV, Motorhome

Improve

  • Loan amounts: $1,000 to $50,000 ($3,005 minimum in GA; $6,005 minimum in MA)
  • Minimum credit rating: 560
  • Acceptable collateral: Auto

The following three lenders are not Credible partners, so you won’t be able to easily compare your rates with them on the Credible platform. But they are also worth considering if you are looking for a secured loan:

First Tech Federal Credit Union

Federal Naval Credit Union

  • Loan amounts: Equal to the amount of your savings or certificate of deposit
  • Minimum credit rating: Check with the lender
  • Acceptable collateral: Navy Federal Savings Account, Navy Federal Certificate of Deposit

Wells Fargo

  • Loan amounts: $3,000 to $250,000, depending on coverage
  • Minimum credit rating: Check with the lender
  • Acceptable collateral: Savings account, certificate of deposit, home

How to apply for a secured loan

If you decide to go ahead, you’ll typically follow these steps to apply for a secured loan:

  1. Check your credit score. Since borrowers with the best credit ratings generally qualify for the lowest rates, it’s a good idea to review your credit rating before applying for a collateral loan. This way you will know where you stand and you won’t be surprised.
  2. Pre-qualified. Find a few lenders that allow you to prequalify for a secured loan. Prequalification generally won’t affect your credit score, so you can explore potential offers without affecting your credit.
  3. Compare offers. Compare prequalification offers and review accepted collateral, interest rates, terms and fees for each option.
  4. Take a decision. Determine which offer best suits your budget, needs and preferences. Be sure to choose a lender with collateral requirements that you can meet.
  5. Gather your documents. When you apply for a collateral loan, the lender will ask you for supporting documents to confirm your financial situation. Be prepared to submit pay stubs, tax forms, bank statements, and proof that you have the security you are offering.
  6. Complete an official application. Depending on the lender, you may be able to apply for the loan online. Check your work before submitting your application to avoid delays. Once you’ve made a formal request, the lender will usually do a credit check, which can temporarily lower your credit score by a few points.
  7. Wait for funds. The type of secured loan and the lender you choose will determine how long it will take to receive the money. Funding time can be one business day or seven or more business days.

Credible makes it easy for you compare personal loan rates from various lenders in minutes, without affecting your credit score.

Advantages and disadvantages of secured loans

Like any other financial product, secured loans have advantages and disadvantages to keep in mind.

Advantages

The inconvenients

  • The application process can be more complex. Chances are you will have to provide more documents and share more information when applying for a secured loan than you would with an unsecured loan.
  • You are putting your asset at risk. If you default on your loan, the lender can foreclose on your property. This can be risky, especially if you are hiring your car or your home.
  • You need collateral. To take out a collateral loan, you must have something of value. If you don’t have the type of security a lender is looking for, the loan won’t be an option for you.
  • Not all lenders offer secured loans. Almost all lenders offer unsecured loans. But not everyone provides secured loans, so you may need to do some extra research to find the right secured loan for you.
  • You could hurt your credit. While a secured loan can help your credit, it can also hurt it if you don’t make your payments on time or, even worse, if you let it default. Lenders will report any late or missed payments to major credit bureaus, which can stay on your credit file for up to seven years.

Is the secured loan for you?

Although a secured loan may be a good option in some situations, it may not make sense in others. If you’re having trouble qualifying for an unsecured personal loan or need to borrow a large sum of money and you have something of value that you can afford to risk, a secured loan can be a great option. Good choice. Additionally, if you have poor credit or no credit, a secured loan can help you establish or improve your credit history.

On the other hand, if you are not sure that you can repay your loan, a secured loan is risky because you could lose a valuable asset. If you have good credit and don’t want to put a valuable asset on the line, an unsecured loan is probably a better option.

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