Personal Loans: The Superior Yet Forgotten Source of Financing

Personal LoanTurns out, credit cards are not the ‘be-all, end-all’ of alternative payment methods. At least not the ‘end-all’ part.

Plastic Prominence

Paying for things, from homes to cars to all sorts of bits and baubles, with money you do not own yet has been a standard, acceptable form of financing since the credit card’s introduction in the 1950s. It exists in the market regardless of one’s financial or social standing — so long as the banks permit a person to receive a credit card in the first place.

In the past 10 years, credit card balances have risen by 46%. Personal loans, on the other hand, have grown by just 17%. Nothing may seem amiss about these figures, except when one considers the numerous benefits personal loans offer that credit cards do not.

Leading Loans

For one, personal loans are the more sensible choice when it comes to large purchases. Professionals from Rapid Loans advise customers to take out a personal loan instead of using a credit card when it comes to paying for something major, like a car or a home project. This way, users will have an easier time making repayments, given that their credit score is high enough to qualify for larger loans.

If personal loans are the superior choice for large expenses, why do people remain heavily dependent on their credit cards? Financial advisor Bessie Hassan believes that the credit card owes its prominence not just to convenience, laziness or cluelessness, but rather a combination of the three. Some novelty does not hurt either.

‘[Personal loans’] popularity is waning compared to plastic, which is quick and easy to use’, Hassan puts bluntly. ‘Some borrowers even have their debt spread out over multiple credit cards which can be risky if you can’t make payments in full and on time’, she adds.

Lending institutions are making a push for more convenient transactions, as online loans slowly take over the industry as the digital standard. But, as long as people can take out money they have yet to own in the form of a plastic card, repayments will remain as urgent as they are difficult to make.

Basics of Car Loan: A Guide to Using Your Car Title as Guarantee

Car LoanIf you found yourself in dire need of cash for an emergency expense, then your best option would be to borrow cash. You don’t even have to worry about your bad credit when loaning since your auto title serves as collateral. Here is a basic guide to help you if you want to consider this type of loan for the first time.

How does a car title loan work exactly?

Car title loans are typically like collateral loans. This time, you are utilizing the title of your vehicle as warranty. Your lender will depend on how much they can lend you on the value of your vehicle. As soon as you have settled the loan, then they will return the car title to you. However, if you don’t pay it off on time, they will be able to take ownership of your vehicle.

When you are using your car title as the guarantee, you can still drive and use it during the loan term. The lender will just hold the title until you have cleared your debt. Moreover, car title loans allow other vehicles like motor homes, motorcycles and SUVs as a guarantee.

Are you still qualified if your car is not fully paid or if you already loaned it to another company?

If your car has enough equity, lenders will be able to help you out even if you already used it as a guarantee to another financial institution. Lending companies have encountered different situations and they will be more flexible in accommodating you. Learn to open up to them to identify what is appropriate for you.

What are the upsides and downsides of using your car as collateral?

A loan that is guaranteed by the title of your car is convenient, stress-free and fast. This kind of loan is for people who need cash instantly. It will be easier for you since they don’t really go through credit checks. The most obvious risk you will get from this kind of loan is that you might lose your car.

Ensure that you will be able to pay off your dues as you are putting your beloved vehicle on the line.

3 Times You Should Go for Mortgages without LMI

Home LoansAs you borrow funds to buy a house, it only makes financial sense to avoid unnecessary fees that make your home loan bigger. Generally, you want to have a low rate and keep your loan amount as small as possible to avoid paying more interest in the end.

However, in today’s economic climate, saving a deposit worth 20% of the purchase price might only happen when you’re ready to retire. More often than not, you can’t escape the mandatory Lenders Mortgage Insurance.

Why should you avoid this at all costs? Here are a couple of reasons:

Worthless Charge

This one-off fee isn’t for you; it’s for the security of your lender. If you need more than 80% of your mortgage amount for the property, then you’re automatically categorised as a high-risk borrower. Most Lenders want to minimise the lending risk by all means, so they impose this obligatory charge to finance your purchase.

This is why you should always take advantage of your strong credentials. Apart from having a pristine credit rating, plenty of genuine savings or a stable source of income, your very profession can make you eligible for a mortgage with no LMI. Many providers of lawyers, engineers and accountants home loans are more lenient to waiving this fee for low-risk professionals.

Substantial Savings

Of course, whatever you don’t have to pay would stay in your pocket. Although you wouldn’t have to pay for it upfront, the LMI would be added into your overall loan amount, increasing the debt you’d incur.

Among many factors, the percentage of the LMI depends on the amount you need to borrow and your loan-to-value ratio. If you’re going to compute for it today based on a $600,000 property with a 90% LTV, your LMI would be more or less $12,042 — a considerable amount you could have used for something else.

Unpleasant Pressure

Getting approved for a no LMI–home loan eases the pressure to provide a large deposit. Sure, it’s a requirement, but you don’t have to try hard and save a huge amount just to avoid a fee meant to protect your lender.

No borrower likes LMI, but its existence makes sense from the lender’s perspective. Nevertheless, there are financial products with waived LMI. Aim for those home loans and spare yourself from spending thousands of dollars for someone else’s sake.

Essential Time-Based Advice To Improving Your Finances

Time-Based Financial Pointers

Time-Based Financial PointersTime is a priceless commodity. With the right attitude towards time, you can become financially successful. Successful individuals and prosperous businessmen know this, so they make the most of the time they have. Here are three other time-conscious financial pointers.

Make Financial Decisions Early in the Day

Most people suffer from brain fatigue due to their high-stress careers and pressure-filled businesses. It’s easy to fall prey to mental tiredness, physical exhaustion and emotional fatigue if you aren’t careful. Rapidloans.com.au agrees, major decisions such as taking small loans, no matter how much it is, need to be thought over carefully.

Gather all necessary info, study them carefully, then sleep on it. A refreshed and relaxed individual is capable of doing great things.

Be Strict With Your Payment Schedules

For every delay and cancellation of payments, additional penalties and interests can stack-up. Paying only the monthly interest rates in case of emergencies will just add up to a larger total in the end. Save up whatever amount you can, until you’re completely paid up. Consider your loan payment as important as your utility and grocery bills; otherwise, prepare to pay the consequences, in the literal sense.

Put Target Dates On Your Goals

It doesn’t have to be specific dates. Create an overall timeline, including goals for the year and for the next five years. Go with a weekly or monthly financial aspirations list, if you have to be ultra-specific with details. Check it frequently, so you can be encouraged with the objectives you’ve already completed.

Time management is an integral part of success in every aspect of your life. You’ll have time for everything, as long as you can manage your schedule. If you can make time, you can also make money. It’s as simple as that.

 

Payday Loans: Alternative Financial Solution

Payday

PaydayBanks pose stringent rules that prohibit immediate loan approval. They will insist you to comply with the Reserve Bank rules. In contrary, payday loans are easily made available. It requires only a few hours of waiting, and these can even be availed online.

Such is true for payday loans, because, unlike banks, it does not make checking of required documents compulsory. Cash lenders do understand their consumers by not wanting to bother them with unnecessary papers. This means no last-minute faxing, lots of paper requirement and bank visits. Above all, these businesses operate in mutual trust and consent like any other legitimate cash lenders.

As such, online lenders do get in direct contact with customers and prospective borrowers. Credit agents or counsellors are present to talk to customers. They will not only eagerly listen, but also provide alternative solutions if necessary. They may suggest the amount as well, depending on what they infer from the customer’s current money requirement.

Here are the interesting features of short term loans:

  • Borrowers can receive the loan in less than an hour.
  • They can apply for loans anytime.
  • Cash is deposited into the borrower’s account.
  • The length of payment is short term.
  • The transaction process is easy.
  • There is no checking of credit score.

Benefits

Considered as an unsecured loan, applying for a short term loan does not require collateral. Because of this, cash lenders are like rescuers easing the financial burden of individuals in a monetary emergency.

The fact that the loans they provide are small amount payable in a short time helps protect a borrower’s esteem. Their approachable arrangements also boost it, as the entire process is over in less than an hour. They can immediately receive their cash advance, as long as they are successful in providing the right kinds of document.

Timely repayment is important in this type of loan. Otherwise, it will incur a huge penalty. The good news is lenders provide enough time to make repayments, and the next payday just sounds good to settle short-term dues.

The SBA Loan Program: Understanding the Process and Terms

packs of cash

packs of cashThe SBA Express loan program or express line of credit from the U.S. Small Business Administration is best for small businesses wanting to increase their cash flow, fund business improvements, refinance debts, or fund real estate or equipment. It features the most effortless SBA loan application process.

Expect faster approval, smaller down payment, and longer loan terms than conventional loans. Specifically, you can take advantage of the following when you are approved for the loan program:

Venture Bank lists SBA Express as a form of the SBA 7(a) program. It has a smaller loan amount—a maximum of $350,000, instead of the $5 million maximum loan amount for the SBA 7(a) loan. Despite this, you can get a response to your application in only 36 hours.

• The borrowers and lenders may negotiate interest rates. The rates may be variable or fixed, and will depend on LIBOR, the prime rate (according to the Wall Street Journal), or the optional peg rate (according to the Federal Register).

• You can’t exceed the maximum rates set by the SBA. Lenders can charge as much as 6.5% on top of the base rate for $50,000 loans or less, and as much as 4.5% on top of $50,000 loans or higher.

• Revolving lines of credit for as much as seven years are available. Lenders will only offer you maturity extensions upon approval of the loan.

• The SBA doesn’t require lenders to obtain loan collateral for $25,000 loans, but they can use their current collateral guidelines for express loans higher than $25,000, up to a maximum of $350,000.

• Lenders will use their own loan procedures and forms when processing an SBA Express loan.

• SBA doesn’t directly loan money to small businesses. They determine the policies for loans they guarantee through SBA’s partners, the various lending institutions.

The SBA Express loan is an excellent option if your small business requires a loan less than $350,000. The majority of small businesses will appreciate the quicker application process and turnaround times.

Direct vs. Indirect Lenders: Which is Right for You?

Business Employees

Business EmployeesWhen shopping around for a mortgage, one of the biggest decisions is choosing between a direct mortgage lender and a broker. There are pros and cons to both, and understanding what makes them different can save you a lot – both in terms of money and time.

Although direct lenders and brokers perform a number of similar tasks, such as gathering information on your behalf, educating you on the mortgage process, and making legal disclosures easier to understand, there are also certain differences.

Lending Sources

Direct lenders are single lending institutions. Loan professionals from Direct Mortgage Loans say it’s part of a direct lender’s job to help you pre-qualify, apply, and select a suitable mortgage. Mortgage brokers, on the other hand, work with several lending sources. Brokers function more like “middlemen,” brokering deals between you and potential lenders.

While this may come handy when you want to shop around for several lenders through the help of a “liaison,” there are still some drawbacks. It usually takes longer to close a deal when working with a broker.

Areas Covered by License

Most direct lenders have license to fund home buyers in all of the states in the country. A broker’s license is often not as far reaching. This means problems if the property you want to purchase is not covered by the broker’s license.

Fees and Rates

All lenders, whether direct or indirect, charge fees to process loans. However, brokers typically charge more, since this is how they actually make money. On top of the fees you need to pay the loan source, you also have to pay the broker’s “salary,” since they work on your behalf, doing all the work for you. Although they offer convenience, it may cause your overall expenses to spike dramatically.

Based on the above-mentioned differences, you have a clearer idea of which type of lender is best for you. In the end, the choice depends on the time you can devote to finding your mortgage company.