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First Investors Financial Services Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Finding the right auto loan can be a time-consuming process. To find the best option for you, researching multiple companies is a must. Luckily, we’ve done the research on First Investors Financial Services for you. Whether you are looking for an auto loan or want to refinance an existing one, First Investors Financial Services might be an option — especially if you have bad credit or a history of bankruptcies that are limiting your lender choices.

About First Investors Financial Services

First Investors Financial Services has been around since 1988. Based in Atlanta, Georgia, the company can service accounts in all 50 states, plus Washington, D.C., though it may not issue loans in every state.

The company works with both auto dealers and consumers to provide lending opportunities. As a borrower, you can finance a new or used car with First Investors Financial Services through a participating dealer. You also have the option to refinance your current auto loan directly through First Investors if it is not already financed through First Investors Financial Services or any of its related companies.

Although First Investors Financial Services offers a range of financing options, the company targets consumers with credit scores of 510 and higher. In particular, the lender focuses on consumers that have undergone a bankruptcy process in the past.

You can check out other auto loan options for buying a used car to ensure you find the best deal possible.

First Investors Financial Services: At a glance

When you are considering an auto loan of any kind, you need to consider multiple lenders. You should take the time to shop around and compare available rates. Finding the best offer could save you hundreds, or even thousands, of dollars over the lifetime of your loan. Make it a priority to explore the different offers that lenders provide.

New car loan APRs and loan terms are not readily available on the First Investors Financial Services website. However, some clues may be gleaned from S&P Global Ratings, which reports an average weighted APR of 13.49% for First Investors loans made through dealers and refinance loans customers make directly through the company; it’s the latter that makes up the bulk of First Investors’ business. Here is an overview of what First Investors Financial Services’ refinance loans are like:

  • Loan terms range from 30 to 72 months
  • Minimum loan amount is $8,000 (can be $10,000 in some states)
  • Maximum loan amount is $40,000
  • Minimum credit score required is 510
  • APR range from 7% to 19.9%

You will be able to work with First Investors Financial Services for your car, truck or SUV refinancing needs if your current loan if not through this company or any of its subsidiaries. In fact, you may be able to refinance the balance of two personal vehicles in some cases. However, you cannot refinance commercial vehicles, motorcycles, RVs, or heavy equipment.

How to apply for refinancing

While you have to go through an authorized dealer to apply for financing on a new or used car, you can apply for refinancing online. Head over to the First Investors Financial Services website to get started, and click on the “Apply Now” button on the homepage to be taken to the online application form. The application process is free, so you can get a quote for your refinancing situation without handing over any cash.

After you distinguish whether this will be an individual or joint application, you will be asked to provide a wide range of information. You’ll need to input your name, vehicle information, Social Security number, date of birth, address, income information and more.

It is a good idea to have some documents ready for this process. Gather your proof of identity and residence and your method of payment as a start. You can find a full list of documents that you should have ready here. As a part of the application process, you will also be required to grant permission for the company to obtain your credit reports through a hard inquiry.

The process of filling out your information should only take about 20 minutes. Usually, you’ll be informed of the initial loan decision within 24 to 48 hours. However, this initial decision will need to be supported by additional loan verification documents that you will be asked to provide later in the process.

The entire process, from application to funding, should take between seven to 10 business days if everything goes perfectly. However, in some cases, it may take more time due to paperwork problems. With that, the average length of the process is 16 days. Throughout the process, you’ll be able to check your application’s status by calling customer service or checking on the website.

The fine print

  • No prepayment penalty but you may have to pay an origination fee and notary fees.
  • Income requirements for borrowers.
  • Vehicle requirements for refinancing.

First Investors Financial Services seems to be transparent about its lending practices over the phone. However, its website left out details, such as APR ranges and loan terms for refinancing, that are critical to know when you are shopping around for an auto loan. Many lenders provide important details through their website so that the borrower has all pertinent information before considering the application process for refinancing.

First Investors Financial Services received an A+ rating from the Better Business Bureau, though the company has also received only 1.5 out of 5 stars from customers, based on 15 reviews.

First Investors Financial Services will not charge you a prepayment penalty if you choose to repay your refinance loan early. However, the company does charge an origination fee and notary fees on some refinance loans. Plus, the company charges transfer fees on all refinance loans.

If you are applying to refinance your vehicle, your car cannot be older than eight years, and it must have less than 95,000 miles. It is sometimes possible to refinance a second vehicle, but that will ultimately depend on your specific situation.

You will need to be at least 18 years of age and have an annual income of at least $18,000 to qualify. When you get your loan offer, make sure to read through all of the details.

After you get your offer from First Investors Financial Services, you will have 45 days to decide whether to accept it. However, based on your changing financial situation, your offer details may be altered every 10 days. Keep that in mind as you go through the process, especially if you are applying for offers with multiple lenders.

Once you have your offer in hand, compare it to several other lenders to make sure that you accept the best loan offer possible for your situation.

Pros and cons of financing through First Investors Financial Services

As you consider First Investors Financial Services for your auto financing and refinancing needs, make sure to consider other options. It is critically important to shop around and compare rates from multiple lenders. Even if you have bad credit, there are other companies that are willing to work with you on car loans. Without shopping around, you could be leaving an option that will save you money on the table.

Before you apply for refinancing, you may want to take a look at an auto refinance calculator to get an idea of your potential savings.

Every lender has its strengths and weaknesses: here, we’ve picked out the ones that stand out for First Investors Financial Services auto loans. You can then compare these with the pros and cons of other lenders that you come across in your search.

Highlights of First Investors Financial Services auto loans

  • No prepayment penalty. If you take the opportunity to pay off your loan early, you won’t be penalized. Although this may seem like an unlikely reality, you never know what the future will hold.
  • Options for borrowers with bad credit. First Investors Financial Services is willing to work with you even if you have a low credit score — the company is willing to provide loans for people with credit scores as low as 510. If you have bad credit and are struggling to find a lender, then this could be a good option. And even if you’ve declared bankruptcy in the past, First Investors Financial Services is able and willing to work with you for your auto loan needs.
  • Payment date flexibility. If you need to align your monthly payment with your paycheck, then First Investors Financial Services is a good option. You will be able to move your payment date by up to 20 days from your original due date. It can be helpful if you need to carefully plan your stretched budget around big bills.
  • Willing to work with non-citizens. It can sometimes be difficult to secure an auto loan or refinancing offer if you do not have citizenship in the U.S. First Investors Financial Services is able to work with non-residents with permits to provide financing options. If that applies to you, then this could be a good option for you.

Lowlights of First Investors Financial Services auto loans

  • No credit card payment options. Although you can pay with a debit card in most states for a fee, credit cards are not accepted in any state.
  • Dealer restrictions. If you are financing a car from a dealer, then you will only be able to use First Investors Financial Services if the dealer is authorized to work with them.
  • Lack of transparency. While other lenders clearly list rates and terms for its refinance loans, First Investors Financial Services’ website lacked that information.
  • No motorcycle or RV loans. First Investors only refinances auto loans, no motorcycle or RV loans of this writing.

Who is a First Investors Financial Services auto loan best for?

First Investors Financial Services is best for someone with a low credit score or a previous bankruptcy. The company is willing to look past those issues and work with you anyways. Of course, you should be prepared to pay more in interest as a borrower with low credit.

However, First Investors Financial Services is not your only option. Before you make a final decision about your auto financing and refinancing needs, make sure to shop around. Comparing rates between multiple lenders is critical to securing a favorable loan.

If you are having difficulty finding a lender that will work with you, check out these tips to secure a car loan with bad credit. The car, and payment, of your dreams, could be right around the corner.

The rates and fees mentioned in this article are accurate as of the date of publishing.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Sarah Sharkey |

Sarah Sharkey is a writer at MagnifyMoney. You can email Sarah here

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Investing

5 of the Best Ways to Invest $5,000

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Saving money can be difficult for everyone. Between student loans, buying a home, or starting a family, it’s an accomplishment to save a sizable amount of money at all. Once you have some cash saved up, you may wonder what the next step is. Many financial professionals would recommend investing your spare money to help you reach your goals.

If you’re not sure where to get started investing your $5,000, take a look at some of your options below. Although we’re not presenting every single investment option on the market, many of these are a good place for investors to get started.

Best ways to invest $5,000

When you decide to start investing, remember that there are many options. The best option for you will vary based on your particular financial situation. If you’re not sure which investment path is right for you, then consider talking to a financial advisor before taking the first step.

1. Use a robo-advisor

A robo-advisor is an automated investment platform that operates online. Instead of choosing where each and every dollar is allocated, you just need to answer a few questions from the robo-advisor. Once you enter your information, the platform will automatically build a portfolio that matches your investment style and goals. For example, if you’re a young person interested in saving for retirement, your portfolio may be more aggressive than an older investor who will need to access their money sooner.

The biggest benefits of using a robo-advisor are that they typically offer lower fees than other brokerage accounts and instant portfolio diversification with even a small amount of investment capital.

Some drawbacks to consider about robo-advisors include a lack of personalized services that a human advisor might offer. In some cases, you may not have any access to a human advisor, which might be a problem when you have specific investing questions.

When you are just starting to invest, a robo-advisor may be a good choice. If you are comfortable with growing your investments slowly over time, then a robo-advisor is capable of handling this for you. As your investment portfolio grows, you may want to look into an investment advisor to help create a more personalized plan to meet your goals.

To get started with a robo-advisor, compare the fees of several options before you choose one. Consider your options carefully and choose a robo-advisor that seems best suited to your investment needs.

2. Consider micro-investing

Micro-investing is a way to start investing without having to save up to a minimum account balance. Some brokerage accounts require several hundred dollars as a minimum investment, but that isn’t realistic for everyone. Instead, you can use micro-investing to get started.

Micro-investing apps such as Acorns allow you to invest your spare change. Typically, you link up your debit and credit cards to the app. Each time you make a purchase, the app will round up your purchase to the next dollar and invest the change.

For instance, if you bought dinner for $20.25, the micro-investing app would round up your purchase to $21 and invest 75 cents. Although that seems like an incredibly small amount, your investments can add up over time. The best part is that your budget will barely feel the squeeze of this investment method.

3. Save for your retirement

Retirement is an expensive part of life that will be here sooner than you think. If you plan to stop working in your later years, then you need to start planning as early as possible in order to capitalize on the benefits of compounding interest.

The first place to start your retirement investment is through your employer’s 401(k) plan. Check to see if your employer offers a plan that’s worth maximizing; some employers even offer matching funds, which is essentially free money for your golden years.

Other types of retirement accounts that you may want to consider are traditional IRAs and Roth IRAs. Both of these accounts have annual contribution limits set by the Internal Revenue Service (IRS). Although each of these accounts have different rules, both are very commonly used retirement accounts that are suitable for new investors.

4. Open a high-interest savings account

Many investment accounts can leave your money inaccessible for a certain period of time. A high-interest savings account could help solve that problem. Your money will grow slowly, but you would have access to the cash at any time.

If you’re concerned about not having quick access to your cash, then this is a good option. The interest rates on these accounts are typically lower than investing your money in the market. However, there is significantly less risk involved as well. You will need to determine what kind of investment risks you are willing to take before choosing this route.

A high-interest savings account is an especially good option for anyone that has not built an emergency fund. Life happens, and you may need quick access to cash. Before opening a high-interest savings account, take a look at all of your available options to ensure you are getting the best rate possible.

5. Put your money into a CD

A certificate of deposit (CD) is a savings account that will allow you to earn interest on the money you deposit into it. Although CDs typically pay more interest than your average bank account, there is a trade-off. You will need to leave your money in the account for a specified amount of time.

For example, if you put your money into a two-year CD, you will be expected to leave that money alone for two years. If you take your money out too soon, then you will have to pay an early withdrawal fee.

Typically, the longer you agree to leave your money in the account, the more interest you earn. Think carefully before locking your money into a CD — it’s a good way to earn interest but it can backfire if you are forced to make an early withdrawal.

To get started with a CD, find the best rate for your money before signing up.

Bottom line

You have many great options when it comes to getting started with investing. It can be difficult to take the first step, but many agree that it is an important component of a better financial future.

One reason why investing can seem difficult to beginners is that they aren’t sure where they want to go with it. Consider your short- and long-term goals and be realistic about the amount of risk you are willing to take with your investments before your portfolio starts to grow.

Want more investment ideas? See some top options for investing $10,000.

This article contains links to DepositAccounts, a subsidiary of LendingTree, our parent company.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Sarah Sharkey |

Sarah Sharkey is a writer at MagnifyMoney. You can email Sarah here

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Investing

When a Roth IRA Loan Makes Sense

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Investing money into your Roth IRA can be a big step in creating a solid financial future. The contributions you make into your Roth IRA come from your after-tax income. Once the money is contributed, you are able to withdraw your contributions with relative ease. However, you may have to pay penalties if you take any of the capital gains out of your account before the age 59 and a half.

Throughout your life, there will be moments when it’s tempting to tap into those funds, though it may be better for your long-term financial success to avoid tapping into your Roth IRA. Keeping your retirement funding goals on track is critical to successfully retiring on time with sufficient funds. Each time you tap into your Roth IRA, you may be pushing your retirement date further away.

That being said, you may not have a choice. If you truly need access to cash and have no other options, tapping into your Roth IRA may become a necessity. But before you head down this path, understand that choosing to take out a Roth IRA “loan” is not like other traditional loans. When you withdraw the money from your IRA you may have to pay taxes and fees, but you don’t have to repay the amount with interest like a traditional loan.

Maybe you need to fund a medical emergency or need the cash to recover from a natural disaster. Whatever event happens, it’s important to be aware of your Roth IRA withdrawal options.

Can I withdraw from my Roth IRA without a penalty?

Yes, it is possible to take money out of your Roth IRA without a penalty. However, there are rules that need to be followed.

For example, you can take out the contributions you made to your Roth IRA at any time without a penalty. Remember, you already paid taxes on these contributions, which is why you are able to withdraw this portion penalty-free.

After you have withdrawn an amount equal to your original contributions, you will be left with the earnings made by your investments in your account. If you choose to take out the investment gains, then you may have to pay a 10% penalty in order to gain access to the money.

However, in some situations, you may be able to waive the penalty. For instance, first-time homebuyers or those who survive a natural disaster might be able to withdraw penalty-free funds. (More on that below.)

A final way to withdraw money from your Roth IRA is to stay within the confines of the 60-day rollover rule. You have the option to take money out of your Roth IRA without penalty if you deposit the funds into another qualified retirement account within 60 days.

If your financial emergency will be short-lived, then this option might make sense. However, if you don’t redeposit the cash within the 60-day deadline, the withdrawal could be subject to penalties. It’s a risky move if you are unsure if the funds can be replenished within 60 days, so think carefully before using this option.

When does a Roth IRA withdrawal make sense?

Life events and emergencies that require money will pop up from time to time. However, not every emergency is a good reason to take money out of your Roth IRA.

“The Roth IRA should be your last go-to source for emergency funds,” said Adam Beaty, a certified financial planner at Bullogic Wealth Management. “You can take out a loan for an emergency, you cannot take out a loan for retirement.”

But there are some scenarios where tapping into your Roth IRA could be useful. Here are some situations to consider:

    • First-time home buyer. If you’ve decided to make your first home purchase, you are able to take out up to $10,000 of your Roth IRA without paying the 10% penalty. You can withdraw both your contributions and your earnings, though you may be required to pay taxes on your earnings if the account is less than five years old.
    • You have a permanent disability. If you become disabled, you’re able to take any distribution from your account without the 10% penalty. This includes both your contributions and your earnings, though you may be required to pay taxes on your earnings if your account is less than five years old.
    • You’ve experienced a natural disaster. If you encounter a natural disaster and need the funds to rebuild your life, then tapping into your Roth IRA could be an effective solution to your immediate problems. The IRS may allow you to take out a “qualified disaster distribution” without imposing the 10% penalty, but you could be required to pay taxes on the distribution.

Before you decide to withdraw money from your Roth IRA for disaster-related expenses, make sure that the reason is qualified as defined by the Internal Revenue Service (IRS). Typically, the IRS will announce whether or not a particular natural disaster qualifies for this kind of distribution within a few weeks of the event. You can find this information on the IRS tax relief page.

  • You need to fund educational expenses. Investing in yourself through education may be your next step towards the future. However, paying for that education can be expensive. You may be able to take money out of your Roth IRA for qualifying higher education expenses without having to pay the 10% penalty, though you may be required to pay taxes.
  • You are over the age of 59 and a half and the account has been open for more than 5 years. If you fall into this category, then you are able to take your earnings out of a Roth IRA at any time. You will not have to pay taxes or penalties on the withdrawal. Waiting until this age gives you more flexibility in how you use the money.

Bottom line

Using your Roth IRA to fund certain life events could be a good option for some. However, you will be affecting your retirement account in a negative way each time you make a withdrawal. Think carefully about your reasoning before you decide to make a withdrawal or not.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Avatar
Sarah Sharkey |

Sarah Sharkey is a writer at MagnifyMoney. You can email Sarah here