VIDEO: Thank You for Helping Us Grow 628% in 3 Years

rateGenius was recently named in the 2014 top 15 percent of the Inc. 5000 fastest growing private companies in America. We grew 628 percent in the last three years, and we want to thank all our customers for helping us get there. We have the best customers!

 

About rateGenius
The rateGenius group of companies includes rateGenius Loan Services, Inc., a nationwide, Web-based automobile refinance loan broker, which hosts a virtual marketplace to bring together qualified borrowers and its network of more than 200 competitive lenders to save consumers money by refinancing their auto loans at more favorable terms. rateGenius Insurance Agency, Inc. is a quickly growing independent agency, which brokers policies for multiple national providers.  rateGenius also provides loan origination software and mobile loan application products in a SAAS model through financeGenius, Inc.

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4 Reasons to Refinance Your Auto Loan

Did you know you can refinance your car, truck, RV or motorcycle for a lower interest rate? Many consumers think of refinancing their home, but refinancing your auto loan is a great way to slash your auto payments  and enjoy savings each month!

See our blog entry on how your interest rate is costing you thousands.

Questions? Leave us a comment here, FB or Twitter.

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What You Need to Know About The Two Types of Debt

debt

Typically, lenders become more wary about your debt when 45% or more of your debt payments each month take up your pre-taxed income. This is referred to as your debt-to-income ratio. Once you reach a point where 45% or more of your income each month is for debt payments, it’s time to start pumping the brakes.

 

There are two different types of debt: Revolving debt and installment debt.

Revolving debt: Something without fixed payments, like credit cards. Your amount due at the end of each billing cycle varies. When consumers don’t pay their credit card, the credit card debt is sent to a debt collector. The debt collector will try to collect the unpaid funds from the consumer.

Defaulting on a credit card will result in a debt collector coming after your payments, since there is nothing is repossess. Because there is nothing to reposes, this type of debt is considered more risky for the lender.

When you default, this will show as a collection on your credit score. The collection hurts your score and makes it hard for lenders to loan to you. A collection will continue to show as long as the debt is unpaid. Even after you pay the debt off, the fact you had a collection will remain on your credit file for seven years.

Installment debt: Something with fixed payments, like an auto loan or mortgage payment. The amount due at the end of each billing cycle for your auto loan or mortgage payment is the same.

This type of debt is considered less risky for lenders because there is less exposure for the lender. A lender will repossess your car or home when you stop paying your monthly bill. As with revolving debt, the default/collection will show on your credit report, harming your score and credibility with lenders.

See our latest blog entries about the reality of improving your credit score and how your interest rate really works.

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The Reality of Improving Your Credit Score

If you’re someone with a less than stellar credit score, you’ve probably felt the effects of it. Less than stellar credit means facing higher interest rates and maybe more problems obtaining a loan. American consumers feel overwhelmed when it comes to credit education. I believe this stems from basic credit conversations consumers have with one another, but neither is properly informed about the straightforwardness of credit improvement. Where do you start?

Improving your credit history needs to take priority. Why?

Lenders check credit history to determine the risk level of the borrower. After determining a risk level, the interest rate is determined. Interest rates are what the lender charges for letting you borrow money from them. Therefore, the less risky the borrower, the lower the interest rate and more likely the borrower will obtain a loan from that particular lender.

Improving your credit score—tied directly to your credit history— is the only way to improve your interest rates, which improves your savings. Financial security is something to strive for. Facing high interest rates makes it hard to be financially secure when you have a 500 or 600 dollar car payment, and nearly half of it doesn’t go towards your principal amount. (See our previous blog touching on understanding how your principal amount and interest rates work.)

When you think about it, does it seem okay to pay half your car payment directly to the lender for loaning you the money for the car?

FICO Scale Graphic

What are the best ways to improve your credit score?

There are a couple things: First: You will always face an improved credit score when you pay off a loan or credit card balance on time. If you’re struggling with your credit score, the number one way to increase your score and better your history is to pay your bills on time, every time. Second: The second biggest way to increase your credit score is to keep your amounts owed lower. A lot of different types of debt can impact your score. Different types of debt being a lot of money owed on credit cards, while also have a lot of money owed on your auto and home loan, etc.

How long does it take to see a drastic improvement of your credit score?

Everyone is different. Some people have an outstanding loan balance, pay off the few thousand dollars and their score dramatically raises. Some people do the same thing and there’s not as much improvement. (Hey, some improvement is better than none or negative.)Why? Because your credit score is made up of five things.

credit-score-make-up (2)

I stress paying all your loans on time and don’t rack up your debt—aka amounts owed—for optimal results.

How do lenders determine your credit worthiness?

It’s important to know lenders each have their own set of criteria for how to determine which risk tier each borrower will fall into. For example, some lenders won’t loan money to borrowers below a certain credit score. Each lender has their own criteria to determine who they will and will not loan to. One thing remains constant though: Borrowers with better credit history and credit scores receive the better interest rates and savings.

It pays to pay your bills.

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Your Interest Rate Is Costing You Thousands of Dollars

The interest rate the lender charges is a percent of the total amount loaned. Your total amount loaned is called the principal loan amount.

principal loan amount definition

It’s important to remember every car payment you’re making isn’t all going towards your principal amount, but to pay the lender for letting you borrow that money.

Example:

Mr. Borrower owes $20,000 on his auto loan with a 10% interest rate. Mr. Borrower’s monthly car payment is $424.94. After five months, Mr. Borrower’s paid $2,124.70 towards his auto loan. But a staggering $811.63 of the $2,124.70 has gone towards paying the lender, bringing Mr. Borrower’s total auto loan amount (principal loan amount) down to only $18,686.93.

If Mr. Borrower has a 60 month loan term, he will pay the lender almost an extra $5,500 on top of the $20,000 he owes. Over the course of one year, Mr. Borrower has paid $1,853.93 in interest costs.

See this breakdown of what every individual auto loan payment costs Mr. Borrower here on this amortization table. This tool is also helpful to see what your auto loan costs you.

Mr. Borrow refinanced his car and dropped his interest rate by 3%. This makes it a 7% interest rate. He saves almost $30 a month on his car payment. He will pay $1290.33 (savings of $563.60) in interest charges over the course of one year and $3761.44 over the entire 60-month loan term.

The interest rate is applied to the total unpaid portion of your loan or bill. It’s important to know what your interest rate is, and how much it adds to your outstanding debt. If your interest rate adds more to your debt than the amount you are paying, your debt could actually increase even though you are making payments.

What are ways to save when you have a high interest rate like Mr. Borrower’s?

Refinance for a lower rate. Services like rateGenius don’t charge you to refinance your auto loan. Also, overpaying on your car payment each month will save you money, because the interest charged each month is only on the principal loan amount.

Have questions about your interest rate? Comment below or call us. 1 866 728 3436.

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INFOGRAPHIC: 5 Signs of Tire Wear

Do you know what signals tire wear? Have you noticed bulges on the sides of your tire, low PSI or tread wear? These are all signs it may be time for a new tire. Don’t get caught in rush hour (like me) with a flat tire.

InfoGraphic-TireWear-big

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VIDEO: Is a Bank or Credit Union Better for You?

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Financial & Auto Trends in Texas: Travis & Williamson County

Your credit history and  score mean the difference between a bad, good and a great interest rate. FICO credit scores are the most widely used scores for lenders. Because we are in the line of business of saving people money on loans and interest, the FICO score is a big part of that. Did you know your payment history and amounts owed on credit make up 65% of your credit score?

We’ve looked at multiple factors including interest rates, credit scores and age relating to autos to discover trends relating to Texas and Austinites.

We recently took a look at the FICO scores for our home state of Texas and compared them to our home counties of Travis and Williamson county. Some highlights include:

  • Travis Country residents see an average 4.35% rate drop when refinancing their vehicle.
  • The Chevy Silverado is the most refinanced vehicle.
  • The older generations have better credit scores in Williamson County than the rest of the state.

How do you compare? Do you have a part of the country you would like to see specific numbers on? Tell us in the comments!

Auto Refinance Texas Travis Williamson

Use this infographic!

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INFOGRAPHIC: How Much Does Your Car REALLY Cost?

So, you bought a car? Are you happy with your car payments? Did you consider everything you have to pay for with a vehicle besides the final sales price? Gas, maintenance (oil changes, car washes, etc), insurance payments, interest rates. Did you know interest is accrued on a daily basis for your vehicle loan amount? Did you even know your vehicle insurance premium is partly influenced by your credit score?

Check out this infographic breaking down the cost of your vehicle.

InfoGraphic-ActualCostOfAVechicle

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First Quarter National Auto Trends

Q1 2013 vs Q1 2014. Last week, Experian–a major credit reporting agency–released financially-related auto data from the first quarter of 2013 compared to the first quarter of 2014. Take a look at the infographic we created with some national auto trend data.

InfoGraphic-Auto Trends

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