LARRY: How can you get a good deal on a car loan? And is there a service that will let you know when a credit card or loan is opened in your name?
MICAH: WGN’s money and real estate expert Ilyce Glink is here with the answers to your questions… GOOD MORNING!
LARRY: Adonna from Chicago wants to know if there is a service that will notify you when a credit card or loan is opened up in her name or social security number.
ILYCE: The best service is one that’s relatively new: It’s called Credit Watch, and it’s a service from Equifax, one of the nation’s three major credit reporting bureau. For about $50 per year, Credit Watch will notify you any time there is a change to your credit history, whether a creditor changes names, or if an account is opened or closed. If you have already been the victim of identity theft, Equifax, Experian, and Trans-Union will put a special hold on your credit history, which requires creditors to contact you personally before issuing credit in your name. You can sign up for Credit watch at myFICO.com.
MICAH: Ilyce, I wanted to ask your opinion on paying the points on a mortgage to get a lower rate. Is this a good idea or should I get a “no points” mortgage. That letter is from Michael, in Schaumburg.
ILYCE: Whether or not you pay points depends on whether you have the cash on hand, and if you need the write-off on your taxes, since points paid in the year you close on a home are tax deductible. It’s very difficult to compare a loan in which you pay points with one you don’t. You could look at the APR, which is the annual percentage rate, of the loan. But the way I like to compare loans is to look at only “no-cost” loans. That way, you can easily see how much the loan costs and whether there are any hidden fees. By the way, use the “No Cost” term when talking to lenders. If you say "No Points," there could still be hidden fees.
LARRY: Glynda, from Cicero, writes, Dear Ilyce: We’re planning to buy a new car. The deals for e-banks are great – 5 percent for a loan on a 3-year old car. But I’m worried. Who monitors these companies? Is it safe to do business with them? And, why are their rates so much lower than everyone else?
ILYCE: Sometimes e-banks like e-loan.com have great rates because interest rates are low and their costs are low, and they pass on the savings to you. Typically, I don’t find e-banks to have the lowest rates for car loans. I usually find a better deal at thrifts or credit unions. You can go online to www.BankRate.com to find out which companies are offering the best deals right now. And then check out your credit union for a competitive bid.
As for who is monitoring these companies? You can check out the Better Business Bureau website to see if anyone has filed a complaint against any of these lenders.
Other than that, I don’t know of any company that’s following up on internet lenders. But you should do your homework, and remember the golden rule: If it sounds too good to be true, it probably is.
MICAH: YOU’LL BE ANSWERING MORE LISTENER QUESTIONS TODAY ON WGN-RADIO . . . AND AS ALWAYS.. YOU CAN CHECK OUT ILYCE’S WEBSITE AT THINKGLINK.COM.