Tuesday, 9 April 2013

Tax Season Can Be an Easier Time for Consumers Looking for Auto Financing

Tax season is approaching fast. Whether you are employed part time or full time with any business organizations in the USA, you may be getting ready to pay taxes with paycheck you receive every month, and expecting a tax refund – and, what can be an easier time for people seeking for auto financing. If your tax refund is a large one, you may already have a plan to replace your existing car with a new one. After paying the government a part your every paycheck, for a whole year, you may be taking time to reconsider your decision of purchasing a car. But relax as tax season can be a boon for people who need an auto loan. Many tax preparers are working with car dealers to bring you anticipated tax refund loans. This option is really an effective one for bad credit auto loan seekers like you. And you can get easy approval also. So, don’t forget to take full advantage of this tax season.

You know it very well that bad credit prevents you from getting easy approval for auto loans, and makes you to pay high interest. Though bad credit auto financing is now offered to more consumers than earlier, the payment rates that are charged for a bad credit auto loan can make your dream car purchase a difficult thing. By paying a significant down payment with your paycheck you can easily avoid high loan interests and enjoy purchasing a car with bad credit. The more money you are ready to pay as down payment, the more you are able to save on bad credit auto financing payments. 

Tax season gives you a chance to utilize your refund as a way to repair your credit score through better auto financing options. Although your credit score might fall a bit, fulfilling the terms and conditions of the bad credit auto financing agency will help improve it later. But, in expectation of your tax refund, some tax service providers are already offering an auto financing with different conditions so that you can have quick cash. Feel free to try on smart options like RAL (Refund Anticipation Loan) on offer by these tax preparers.

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But, getting that refund check may take several weeks after April 15th and you may need that money now. Most tax preparers offer an anticipated refund loan to put cash in your hands without the wait. In some cases, tax preparation services will have partnerships with car dealerships to sell anticipated refund loans while, in other cases, some car dealerships sell these loans directly. Though sold as tax refund auto loans, they are actually two separate sorts of financing; one is a loan in anticipation of the refund and the other is your basic auto loan – two very different things.

The anticipated refund loan is not subject to interest rate limits that are normally imposed on auto loans. As a result, these can some with annual percentage rates that go into triple digits since the loan term will only last, at most, a few months. This is to generate profit on the loan making it worth the while of the tax preparer, or dealership, to sell the loan to you. In the event you choose to get an anticipated refund loan, you must budget for the amount of money you will lose on your refund because of interest.

If you study the loan documents carefully, the interest rates that come with an anticipated refund loan will be quite shocking to you. Though these rates are not regulated in the same way as auto loans, however, you still have other credit protections when you sign on for one of these financing deals. Even a loan through a tax preparer is subject to the Truth in Lending Act. TILA requires that a lender inform of all conditions of the loan before you sign on the dotted line. These conditions must be disclosed in writing and list APR, total finance charges, monthly payments, payment due dates, the total amount of the loan, length of the loan agreement (term), and late payment penalties.

If you're in need of a replacement car around tax time, it's in your best interest to simply make a down payment out of pocket. This puts your auto loan under the legal limitations on interest rates, which will save you hundreds, possibly thousands, of dollars on the loan depending on the amount of your tax refund. Since your tax refund is your money, why shell out cash to someone else just to use it a bit sooner? If your down payment on an auto loan hinges on you getting a refund check, you may want to put that purchase off until you receive that check directly from the Treasury Department.

With an auto loan, you're about to enter into a credit agreement that will last for several years and cost hundreds of dollars in interest alone. Why compound that burden with a short term loan that will take a huge chunk out of money that already belongs to you. Exercise a little patience and put off that car purchase for the few weeks it will take to get paid in full from the government. Loans always cost a certain amount of money and tax refund auto loans cost that much more. Keep what you've earned and wait to use that tax refund for that down payment with no strings attached.

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