Do You Need a Co-signer for Your Auto Loan?

If you don’t have enough income or good enough credit, you may need a co-signer

As with any type of loan, your income and credit history will be major determinants of whether you are approved for an auto loan application. If you’ve been denied for an auto loan, you may want to consider using a co-signer.

Understanding how a lender determines loan approval
According to a January 2016 article in The Balance by author of “The Everything Improve Your Credit Book” Justin Pritchard, the lending company or financial institution must have reason to believe you will pay back the loan in order for you to be deemed worthy to receive the auto loan. A financial institution looks at two factors to determine whether you are credible: your credit score and your income.

Your credit history is a true indicator of how well you repay your loans; if you’ve borrowed money through loans previously and have successfully paid them off, or are making on-time payments, the lender will be more likely to believe you are a safe bet and will approve your loan application. On the other hand, if you have a poor credit score from defaulting on loan repayments, or don’t have any borrowing history, the financial institution may not want to approve you for a loan, explains Pritchard. To the financial institution, such a person is a bad investment, as the likelihood of the financial institution being repaid decreases.

Lenders also consider the income of the individual in deciding on a loan application, says Pritchard. In fact, the financial institution often calculates a debt to income ratio to determine if you make enough income to cover the expense of the loan payment each month.

Larger vehicles are generally more expensive than smaller ones, but smaller cars can also be more costly depending on the make and the engine build. The price of the vehicle and its calculated monthly payments under a loan in comparison to your monthly income will determine whether you have a low enough debt to income ratio to afford the monthly payments.

When to bring in a co-signer on your auto loan
If you have poor or no credit history, or your debt to income ratio is deemed too high by the lender, you will likely not be approved for a loan. In essence, the financial institution has determined you are too risky and will likely struggle to repay the loan, so it is unwilling to work with you.

A co-signer can help you meet the income and credit score requirements of the financial institution, as the financial institution considers the added income and credit history of the co-signer to the loan terms, explains Pritchard.

“Co-signing happens when somebody promises to pay a loan for somebody else. This happens when a [financial institution] won’t approve a loan (or it won’t approve the original application, but it’s willing to lend if a co-signer is involved),” says Pritchard in an October 2016 article in The Balance.

To the financial institution, the co-signer acts as a backup plan to collect payment if you default on the loan repayment. And if the co-signer has good credit history, the financial institution knows that at least one person on the loan has experience borrowing and repaying loans on time, adds Pritchard.

“The co-signer (who presumably has strong credit and income) promises to ensure that the loan gets repaid by signing the loan agreement with you. In other words, the cosigner takes full responsibility for the debt — if you don’t pay off the loan, your co-signer will have to do it.

“As a borrower,” Pritchard explains, “you need to have sufficient income and good credit to qualify for a loan. Using a co-signer therefore boosts your appeal as a borrower to the financial institution if you can’t meet the loan application requirements on your own.”

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Could You Get In-State Tuition at an Out-of-State School?

Ways you can save money on tuition and fees
According to the College Board, in-state tuition at a public four-year university for the 2016-17 academic year runs an average of $9,650; if you’re an out-of-state resident at the same school, tuition runs $24,930. But it is possible for an out-of-state resident to pay closer to that in-state tuition rate.

“A number of regional, state and college-specific programs allow some students to qualify for in-state or heavily discounted tuition at out-of-state public schools,” writes Kaitlin Pitsker of Kiplinger Personal Finance.

Regional level
There are four regional compacts that exist in which certain out-of-state residents can apply for in-state tuition. The Southern Regional Education Board’s Academic Common Market (Alabama, Arkansas, Delaware, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Virginia and West Virginia) and New England’s Regional Student Program (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) allow for this as long as the student pursues a major that isn’t offered in his or her home state.

Meanwhile, the Midwest Student Exchange (Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota and Wisconsin) and Western Undergraduate Exchange (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming) also offer steep discounts to a number of students across the country.

In addition to the stipulation regarding majors for the first two programs, there may be school-specific restrictions as well.

State level
Individual states may also have reciprocity programs. For example, the in-state flexibility could extend to an entire neighboring state or perhaps a few select bordering counties in a neighboring state. Again, the benefits of such programs vary, but in many instances the state-level programs are more advantageous than the regional compacts.

College level
Many colleges also offer discounts in order to attract students from out of state. These often are based on GPA and test scores.

Special circumstances
Children of parents who are in the military or work in public service are often eligible for tuition flexibility. Other times, nonresident fees are waived for children of alumni or those with strong academic credentials.

The bottom line is that you should never take that glaring “out-of-state tuition” figure at face value. Research thoroughly and talk with a guidance counselor, school registrars or financial advisers in order to get the best education for the best value.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Common Items You Didn’t Know You Could Recycle

Reduce your carbon footprint in 2016 by recycling more than ever before
As the New Year begins, RecycleItems_Featured you may find among your list of resolutions the pledge to create less waste and recycle more. According to the EPA, American consumers created 250 million tons of waste in 2010 alone; astonishingly, more than one-third of that waste was material that could have been recycled or composted. The following five items are commonly considered trash destined for landfills, but they are absolutely recyclable.

Cell phones
At the rate that technology is moving, Americans are swapping out their cellphones for newer and smarter models at a quicker turnaround than ever. If you have old Nokias and flip-phones from years past lying around, you can put them to good use by donating them to any number of organizations. For example, Cell Phones for Soldiers provides active-duty military members and veterans with a cost-free means of communication. The organization has provided 216 million minutes and recycled nearly 12 million cell phones since 2004. Verizon Wireless’ HopeLine program collects phones and equipment for recycling and uses the money raised from selling refurbished phones to contribute to victims of domestic violence.

Used oil
If you change the oil in your lawnmower or motorcycle with regularity, or if you own a deep fryer that requires new cooking oil every so often, then you know well that you have to go out of your way to dispose of it properly. The American Petroleum Institute suggests visiting http://Earth911.org to see if there are any motor oil or cooking oil recycling facilities in your area. Two gallons of used oil alone is said to provide electricity enough to power an average household for nearly 24 hours. The website can also provide information on facilities that specialize in recycling batteries and electronics.

Sneakers
There is a lot that can be done with even the smelliest pair of old sneakers. For example, Nike operates a Reuse-A-Shoe program that repurposes old shoes for the creation of Nike Grind, a material which is used in the creation of tracks and gym floors. Another recycling program, One World Running, collects shoes that are still serviceable and provides them to runners in third-world countries. Old shoes can also find new purpose through donations to The Salvation Army, Goodwill or your nearest homeless shelter.

Brita water filters
Brita’s product line ensures the cleanest drinking water imaginable, and the company has taken steps to see that the filters used in its pitchers and faucets are not contributing to landfills. Brita’s partnership with Preserve allows for the former’s filters to be used in the creation of the latter’s razors, toothbrushes and cutting boards. Once a filter is exhausted, simply give it three days to dry out, wrap it in a plastic grocery bag and drop it off at the nearest Gimme 5 location to your home. In 2014, Gimme 5 collected a total of 254 pounds of #5 plastic, or the equivalent of 1.3 million used Brita filters.

Bras
It is not terribly uncommon to donate bras to Goodwill with other clothing items, but the Bosom Buddies Bra Recycling program offers an alternative means to putting old bras to good use. The Bra Recyclers is a textile recycling company that focuses specifically on repurposing bras by either donating them to women in need around the world or harvesting them for their materials. This serves the purpose of both reducing energy usage and providing affordable clothing to those less fortunate.

To make 2016 a greener year, be sure to research what you can and cannot recycle before you take out the garbage. You might just be surprised to see all the things that have greater utility than simply going to a landfill.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.