Home and car acquisitions almost invariably require some form of financing.
Sub prime auto loans.
As the title implies, sub prime auto loans are extended to finance car purchases by credit-impaired consumers. Most mainstream lenders reject these applicants as unacceptably high risks. This has become increasingly common in today’s automated lending era whereby credit decisions are based solely upon credit scores. A prior history of slow payments, repossessions, bankruptcies, wage garnishments, or judgments causes dramatic drops in consumer credit scores. Falling below a pre-set credit score means automatic loan denial.
Such unfortunate circumstances exacerbate the financial entrapment of credit-impaired buyers. Without a car, they often cannot get or maintain subsistence-level employment. Ultimately, society loses through increased public assistance demands that drain taxpayers.
Likewise, lenders also lose. Most credit-impaired borrowers are basically good people who have merely encountered economic misfortune. Illness, job loss, layoffs, and pay cuts are common underlying causes of credit impairment. Financiers forego untold sums in interest and loan fees by excluding this growing segment of prospective borrowers from consideration.
Why invest in sub prime auto loans?
Like mortgages, sub prime auto loans generate income streams of many times the amount initially advanced. Sub prime lending is especially lucrative due to higher interest rates and loan fees. These increased costs are justified by the collectively higher risk presented by sub prime loan applicants.
Demand for sub prime auto loans has increased dramatically during recent years. Layoffs, pay cuts, and downsizing have become common in contemporary times. In turn, these events cause widespread consumers debt delinquencies. More people with formerly prompt payment histories are now candidates for sub prime auto financing.
New Age Financial fills this growing consumer finance void by enabling drivers with damaged credit to obtain quality vehicles. As our name suggests, we recognize that a new day has dawned in consumer finance. Our organizational structure provides prime market positioning to reap the rich rewards of sub prime auto lending.
At New Age Financual, our first priority is protecting the revenue pools that overall profits flow from. Thus, we consistently adhere to rigorous risk management – whether it means occasional applicant rejection or prompt repossession.
Our next concern is the auto dealer. Continued retail outlet existence is requisite for maintaining investor income flow. Finally, we help our customers overcome past credit difficulties. This creates much brighter financial horizons. Having re-established a positive payment history with a sub prime auto loan, they will be much better positioned for future credit-based transactions.
Lending is a time-tested investment method of wealth generation.
The time value of money makes sub prime auto lending a good bet for long-term financial security. Consider the following details of a typical transaction:
Vehicle Retail Out of the Door price: $8,000
Buyer down payment: $3,000
Loan Term: 30 months
Monthly loan payments: $303.67
Annual Percentage Rate: 24.990
Total Finance Charge: $2,385.48
Return on Investment (%): 47.7
Simple Annualized ROI (%): 19.1
Imagine the power of ten, twenty, or fifty such investments working for you simultaneously.