Tag: personal loan

  • Apply For a Personal Loan – Step by Step Guide

    Apply For a Personal Loan – Step by Step Guide

    Apply For a Personal Loan - Step by Step Guide
    Before you apply for a personal loan it’s important to consider why you need the money. Depending on that, you will choose the loan that’s most suitable for your financial circumstances.

    By Guy Avtalyon

    A personal loan is a convenient vehicle to cover a large expense if you have them but many people are confused with it and don’t understand how to apply for a personal loan. The problem is that many of them have not so good credit scores but there are some possibilities to increase their chances of approval during the process. 

    Before you apply for a personal loan you’ll have to define what type of loan you want to take out. There are several types and you have to know each of them before you start the process. 

    Personal loans can be an unsecured, secured, variable-rate or fixed-rate loan, debt consolidation, co-sign, a personal line of credit, and many other types but these are the main. A personal loan is frequently unsecured. That means it uses your credit as a gauge. To take out this type of personal loan the lender will not ask you for assurance in some other asset, for example, house.

    The second checkpoint in your deciding process before you apply for a personal loan is how much money you need.

    That amount should be suitable to cover your expenses but also, your income has to be suitable to cover the monthly charge you’ll be obliged to pay over the life of the loan. Your personal loan should be less than your maximum monthly expense but also not too small. 

    If you take out a too big loan that surpasses your income per month, you’ll jump into big financial problems. So, when deciding to apply for a personal loan you have to plan based on current income, not upon the expected. Also, applying for a personal loan that is too small will not be sufficient to cover your financial needs. So, you should carefully measure the debt you can handle, and before you apply for a personal loan.

    Select the right type of lender

    Think about what is most important for you: support or speed. You might choose banks or credit unions that are both experienced and if you are already a customer of some you might have some benefits, for example, discounted rates. The problem with these traditional lenders is that the application process may take too much time. They always require a lot of papers and that may eat your time. If you are in a rush maybe online lenders are better for your needs.

    If you choose some online lender it is probably because you need cash fast. We hope you compared various lenders before you apply for a personal loan. It is extremely important, you could find some with the lowest rate. Anyway, if you pick an online lender, you’ll have a lower rate, much lower than it is the case with banks and credit unions. Moreover, they’ll give you an opportunity to see the rate before you apply for a personal loan. In many senses online loans are unique. 

    You can compare rates by pre-qualifying, there is no need to go anywhere instead you can apply for a personal loan on a website, and what is most important for those who are in a rush, you’ll get approval in a few minutes and after a day or two, your loan will be funded.

    By selecting the right type of lender can save you money.

    Check your credit score before you apply for a personal loan

    Your credit score determines how much you qualify to borrow or you are not at all. Your chances of getting a loan will increase with a better credit score. Also, your credit score will determine the rate.

    Where to check credit score?

    Find some credit scoring service. For example, we suggest you use FICO. FICO score is a measure of consumer credit risk. It is a standard of lending in the US.

    A FICO score is expressed as a number, and it will determine your creditworthiness. That is your credit score. FICO scores are in the range from 300 to 850, where the higher the number represents a better credit score. 

    The credit score of 740 and over is excellent. Between 670 and 739 is considered as good, between 580 and 699 is rated as fair, and everything below 579 is ranked as poor credit score.

    The lenders will expect good credit and you’ll need one year of credit before they approve you an unsecured personal loan. It is smart to check your credit score before you apply for a personal loan. 

    Check the lender’s demands  

    This sounds logical but many people unveil the lender’s eligibility requirements after they apply for the loan. Don’t waste your time. If you don’t meet its requirements you’ll be rejected promptly. Apply only if you are eligible for.

    Typical demands include a good credit score where the lowest average is 640, also your annual income is one of the lenders’ requirements and you’ll need to have above $25.000. They will also ask you for your credit history of at least 3 years to qualify. The lenders will estimate your debt-to-income ratio or DTI. Lower than 43% is better.

    Before you apply for a personal loan you’ll need to have a good DTI because it has a great influence on your interest rate or loan terms.

    A debt-to-income ratio shows the debt payments you have every month divided by your total income per month. Lenders estimate your DTI to be sure that you can afford to pay a new loan. Usually, the lenders will calculate your DTI themselves but it is much better if you know your DTI before applying. For example, if you find out your DTI is high, think about paying off your other debts. Otherwise, the lender will offer you too high rates or reject your application.

    Examine lenders

    Examine everything, interest rates, fees, terms, payment options, fine print, literally everything before you sign papers, and fill out your application. Why is this important? First of all, you have to be sure how safe you are. For example, you can find in the lender’s fine print a note about prepayment penalties or late fees. That could be a great problem if there are any and you didn’t know before you signed the documents. Check your lender, ask, examine. 

    When it comes to online lenders you should be especially cautious. Choose the lender who is registered and has all information available. If some info is missing, check the lender’s credibility, it could easily be a scam and you’ll end up giving your personal and banking details to a scammer.

    Collect your documents before you apply for a personal loan

    It is always better to have all documents on hand. In that way, your applying will go faster and you’ll receive approval sooner.

    The lender in the US will tell you which documents it demands, but it will frequently be some ID, passport, driver license, or similar. Also, the lender will ask for your proof of employment. You can show your pay stubs for the last three months or a W-2 form. You have to have a bank statement also to provide to the lender information about your total income. To be able to check your credit score, the lender will ask your social security number. 

    Some lenders or online applications will require your current company’s contact info but some will ask you about previous employers.

    So, prepare all these documents to get your loan as soon as possible.

    Consider rate and fees

    The main considerations when looking for a loan should be its rate, fees, and terms. Will you choose an online lender or a bank branch is less important.  Always apply for pre-approval. Online lenders, banks, or credit unions will give you this opportunity. Based on the data you submit, you’ll know some important things such as the rate (maybe not precise but very close) or loan duration and other conditions.

    Some of the best-known national banks don’t have unsecured personal loans in offers. They have some other credit products, for example, mortgages, credit cards, etc. Credit unions are good for borrowers with a bad credit score. But to apply for a personal loan, you need to be their member first.

  • Getting a Personal Loan

    Getting a Personal Loan

    Getting a Personal Loan
    How is possible to get a personal loan even with a bad credit score

    By Guy Avtalyon

    A personal loan is a good choice if you need funds for a particular purpose. But you have to consider many factors when deciding the variety of loan that suits you. You can use a personal loan to decrease debt, repay unpredictable payments, make home repairs, and more.

    How to get a personal loan?

    Personal loans allow low-interest rates for people with good credit. They are usually smaller loan products than other kinds of loans. We have to say, they aren’t undoubtedly the best choice for everyone.

    Before getting a personal loan, you have to consider several important things.

    The first thing you are asking yourself is: How much money can you get?

    Well, loan sum varies from lender to lender.  Usually, you can expect between $1,500 and $100,000.  That depends on your creditworthiness. This means that the lender will estimate your ability to pay them back before they decide to lend you money.

    How does a personal loan work?

    You will get a fixed sum and have to pay it back with interest in monthly parts until you pay back the whole amount.

    That can be after 12 to 84 months. After you pay back all, your account will be closed and you, if there is a need, can apply for the new one.

    Nevertheless, before you apply for any loan it’s crucial to consider why you require the money. Depending on that, you may choose the variety of loan that’s most suitable for your financial situation.

    What are the types of personal loans?

    You see, there are two types of personal loans: secured and unsecured.

    Unsecured loans are not backed by collateral which means that the bank determines are you qualified to get the loan. The lender will estimate your financial history. If you don’t pass for some unsecured loan maybe you’ll find the lenders who want to offer secured options.

    Secured loans are backed by collateral. Collateral is a savings account or CD. Why this is called a secured loan? Because if you are not able to pay on time, the lender can require your asset as payment for the loan. Your asset, a savings account or CD is the guarantee that the lender will get its payment.

    Where you can get a personal loan

    In the first place, it is a bank. But you must know they are not the only place where you can get a personal loan. There are other lenders too. For example, online lenders, consumer finance companies, or credit unions are places where you can acquire a loan.

    The one thing is important, you have to be qualified applicants.

    Also, you can take a risk and contact some online lenders. There are plenty of them. But you must be careful. It’s true you can get a personal loan very quickly from them. But some of them are not legit and often they are scammers. Check them first. 

    As we said previously, personal loans can give the money you need, but they are not, at the same time, the best choice for everyone. Sometimes, a credit card could be a better alternative.

    But be careful with this too. If you take a balance transfer card and you are not able to pay off your balance, you may catch an enormous amount in interest charges.

    For homeowners, there is a home equity loan. This kind of loan will give the aid you need. Usually,  it is a larger loan sum at low rates. You should be aware, you are giving your house as collateral for these kinds of loans. If you fail to pay, your lender has the right to use your house as payment for debt for the loan.

    How personal loan may impact the credit score?

    When you demand a loan, the lender will count your credit as an element of the application process. This is recognized as a hard inquiry. It will regularly reduce your credit scores by a few points.

    On the other hand, the lenders that you previously had an account with will just review your credit. This is identified as a soft inquiry and will not affect your credit score.

    It is obvious where to ask as first.

    Interest rates and fees

    Interest rates and fees can create a big distinction in how much you will pay to the end. Here are several circumstances to consider.

    Interest rates typically vary from around 5% to 36%. That depends on the lender and your credit. Meaning, if you have good credit, the interest rate will be lower. But, you will pay more interest if your loan is long-term

    Some lenders will charge you a fee to cover the expense of processing the loan. That is origination fees. It can be from 1% to 6% of the loan sum depending on lenders’ rules.

    Some lenders will charge you a fee if you pay off your loan early. What? Yes, if you pay off early the lenders will lose the full interest that they would have earned in established agreement.

    You have to know all of this or you must be informed by your lender about all the circumstances before signing anything.

    A personal loan may be a good solution when you need extra money for a particular intent. But there are many circumstances to consider. You have to decide what sort of credit is best for your condition.

    You must feel comfortable.  Also, you must find the payments like the one you can afford and not feel captured. Measure twice, cut once.

     

  • Money Management

    Money Management

    Money Management
    Hans Stam

    by Hans Stam

    A little off topic but well received within my group how I manage money.

    So I decided to put this in writing to your benefit. 

    Many don’t know where all the money went at the end of their month. 

    Usually, they have a bit of month left at the end of their money. 

    Others make a lot of money but always seem to have a shortage anyway. 

    Some are doing just fine but don’t seem to get ahead in their finances. 

    The process of Money Management

    Here is the process I went through personally.

    I had one account at my bank as most people have. 

    All my money came in on that account and all payments were made from that account. 

    I started to write down all my expenses.

    Then I noticed I was overpaying for some services like my phone, so I contacted the phone company for a better deal and instantly got more than 50% discount. That was my first step in money management. 

    Same with other bills, I noticed some things I spent but didn’t really need or that could be done differently. 

    When I had a complete picture of all my expenses per month, I divided it into daily portions. 

    2nd Account in the process of Money Management?

    I opened a second bank account at another bank, and whatever income I had I placed at that central account. 

    Not only the usual income but also whatever money I got like tax returns or bonuses, etc.

    Then I set up automated daily payments from that central bank account to the initial bank account where most bills were deducted automatically. 

    The way it was set up plus perhaps a few bucks a day was taking care of the bills and it grew a bit every day. 

    Why another bank? 

    Anything can happen, and when it hits the fan, you better keep control yourself instead of letting the bank decide for you!

    3rd Account?! 

    Then I set up a third Bank account. I decided on a number I needed to do groceries on a daily bases.

    So from my central account, I got daily payments to use for shopping.

    Now I knew what was there every day to use and not overspend.

    4rth Account!!

    I also got Gas money from jobs I do.

    So I opened a Fourth Bank account.

    Every time I’m getting gas money, I deposit it in that account. 

    Most times I’m getting more than needed so all other car bills like taxes and maintenance are being paid from that account. 

    Central Account for Better Money Management

    When I did set it up that way, all I needed to focus on was the central bank account and I knew exactly what I needed a day, week, month. 

    I noticed at first it wasn’t easy but I was determined to get it right.

    So then I realized I needed a buffer of 3-6 months based on my daily payments. 

    I knew what I needed to survive 3-6 months without any income in case something happens. 

    This has saved me several times as I do not have a steady income. 

    Interest

    I noticed I was paying interest on open balances.

    So how did that happen? 

    I was in need of a car, and that’s a huge sum for most people. 

    So that had to be paid from the Gas account, but there wasn’t enough. 

    So I had to loan from a bank, but I paid more due to interest. 

    I decided to calculate the interest and paid the same interest amount into my central account as well. 

    Basically, I was paying back the bank, and now also myself. 

    Over time I needed more money on bigger spendings.

    So I loaned from the central account and paid it back from the account I needed it for with interest!

    How does that work?

    When I saw something in the shops I really wanted to have, I just paid it from the central account to my Groceries account. 

    Same goes for Gas-account when in need of more cash instantly like buying another car.

    Then by the daily income, I was getting on those accounts, I paid it back to the central account with interest.  

    It also made me aware that at times I did not really have to buy whatever it was I wanted, so it kept me from buying the item. 

    All I need to watch for is the buffer on the Central bank account to keep my internal economy going. 

    But before there was a buffer, I took care of small bills that were past due and made them disappear quickly. 

    Doing that gave me more and more control to work towards my buffer.

    Investments as the best way for Money Management

    When I wanted to start investing, I didn’t really have much money to do it with. 

    So I loaned money from my central account, and whatever money went out, I paid back with interest from my income. 

    So even if that investment was not working out, it was covered by future manageable income, bit by bit. 

    Whatever the investment did produce was placed back into the central account which also helped to pay off the initial loan. 

    If the investment made more, I was free to either let it grow or to fund the central account after the internal loan was settled. 

    When I invested more I considered it to be a separate loan which re-entered the process. 

    No logic

    It doesn’t seem logical to work with your money like that, it seems too complicated.

    But what it did do for me was that it gave me control over my bills which all happens automatically and it made me think twice before spending outside the balance on the cards. 

    So in a way, it made me focus and I know what I have to do next. 

    If my investments are not providing enough for my buffer, I know I need to get another job and quickly maintain my Central Account.

    Anything can happen in life, and I never really valued stability really going day by day without much thought until the day came I got stuck financially.

    So through desperation and a whole lot of debt, I decided to set it up to the way I have it now. 

    And although it did not help me overnight, the action alone to contact another bank and set up the accounts gave me a feeling of control.

    It also made me go look for other ways to make an income like another job to maintain the central account. 

    This got me moving with a plan in action and it has given me many benefits in my financial life.

    Back on control

    I took back control, and I crawled back from a deep hole which made me an investor and Trader. 

    Hopefully, you are not facing that mountain of debt in your life and you might not give this a second thought as long as you always have enough, but even millionaires can go bankrupt if they don’t pay attention. 

    Be wise, don’t let money become a problem where it doesn’t have to be. 

    I surely hope this off-topic article will benefit you, as money is not everything and it should not control your life. 

    Yes, we need it, so let’s deal with it and go on with other important things in life. 

    If you can support my work as a Mentor, please click here for a donation

    I really appreciate your encouragement. 

    Also, any support you like to show through PayPal is very much appreciated!

    to your success,

    Hans Stam

  • Bad credit loan – How to improve the financial health

    Bad credit loan – How to improve the financial health

    Bad credit loan - How to improve the financial healthIf you have no other option you’ll take a bad credit loan. But it isn’t the end of the world.

    By Guy Avtalyon

    Bad credit loan isn’t the end of the world. Here are several ways how to overcome them. I’m gonna introduce some of them.

    What is a bad credit loan?

    In the first place, let me be clear about what is a bad credit loan.

    A bad credit loan is a relief option for consumers whose low credit scores limit their borrowing options. In other words, a bad credit loan, or just another name for a personal loan, can secure you out of a financial emergency. Even if your credit score is lower than you would like it.

    The good thing is that you can get a loan with bad credit, but it’s harder to get a good deal.

    Yes, I know! Nobody likes to be judged. But when it comes to loans, creditors are going to look deep into your credit history and make a decision about whether or not to lend to you.

    They need to define how risky it would be to lend money to a borrower. And if you’ve got bad credit, you could expect to show you the exit space. But, even if you have bad credit, there may be ways to get a loan. Here’s how.

    You can get a loan from a bank, but if you’re looking for a reasonable interest rate and adjustable qualifying requirements, you better don’t even think to open that door. Even than, you have several options available. But you have to know that loans are typically more expensive.

    With low credit scores is easy to slip into expensive traps. But a bit of homework can help you avoid the problems. After you prove you’re able to repay on time, it shouldn’t be hard to rebuild credit so that it’s easier to borrow next time.

    How credit scores and credit reports can fix bad credit loan

    Keep in mind that bad credit has different meanings to different lenders. Lenders know your credit score, and you should too. So, check out your credit reports. Especially if your credit card issuer reports to the consumer credit bureaus. This is important because some of the information contained in them is necessary to calculate your credit scores.

    You’ll want to make sure there are no incorrect derogatory marks on your reports before applying for a loan. The major consumer credit bureaus aren’t perfect, so it’s important to read your credit reports carefully. If there are false negative marks, you should contact the specific credit reporting company.

    Along with correct information, the provider will remove the error.

    Your credit scores are important, too. Your credit scores, along with other factors, can affect your approval odds for a loan and the terms you qualify for. Don’t be discouraged if your scores are not what you’d like. A little bit of work could help put your scores in better shape.

    How to improve your credit status

    So, it’s time to start improving your credit status. Your scores are calculated using different credit factors and scoring models. Just be focused on the factors with the greatest influence. For example, payment history is one of them, but check out everything to improve your credit overall score.

    You can’t change the past,  but make all of your current payments for at least the minimum amount. And on time. This is key for payment history.

    Speaking about usage, keep the amount of debt you owe low compared to your total credit limit, ideally less than 30%. Maxed-out or over-the-limit lines of credit can be particularly harmful. Also, keeping old accounts open instead of closing accounts after they are paid off can help increase your credit history length.
    Mix. Frankly, you shouldn’t apply for a new type of credit to influence your scores. But it can naturally grow over time as you experience major financial events, such as buying a home, for example.

    But be careful. Applying for several new credit accounts in a short period of time can make you seem risky to lenders.
    The best bet is opening new accounts only when necessary and when you know you can handle them responsibly.

    Shop around to compare options

    Shop around for loans, and include credit unions in your search. Those institutions may work with you even if you have bad credit. Credit unions are often smaller than large banks. Also, they are focused on the community. Usually, they will review your application personally and discuss it with you. If you sit across the desk from a human being, they can understand what you need.

    So, it’s time to start shopping around for the best loan for you. Some people simply choose the first loan they’re approved for.

    But, that could be a major mistake.

    Different lenders may offer different interest rates and loan terms. Lenders have their own methods for evaluating these factors.

    There is a selection of lenders and loan facilitators who can help low-credit applicants obtain affordable financing. But not all loan features are created equally.

    For example, one lender may offer you a loan with a 19.99% annual percentage rate while another can offer you a loan with a 15.99% APR (annual percentage rate). If you don’t shop around and accept the first offer of 19.99% APR, you would be overpaying by 4 percentage points.

    Shopping around for loans is easier than ever. We have the internet. Yes, you should check into your local options, such as banks and credit unions. But you can easily view the estimated loan terms of various online lenders in one place using the internet.

    How to compare loan terms

    If you have bad credit, the loan could be approved but also will cost you more. The lenders may recognize you as risky. Since personal loans for people with bad credit can be so much more expensive, it’s especially important to compare loan terms to find the best deal. To compare loan offers, there are a few basic terms to pay attention to.

    Loan repayment period: Loan repayment period is the time frame in which you’ll have to repay the loan. Personal loans require fixed monthly payments for an established period. The longer the repayment period, the more interest you’ll pay, and the more the loan are likely to cost you.

    Monthly payments: Monthly payments are determined by the amount you borrow, your interest rate, and your loan term. Make sure the payments are achievable.

    Loan maximum and minimum: Lenders usually establish a minimum amount and maximum amount they’re willing to lend. A lender may not be well suitable for you if it won’t loan you enough money or if it requires you to borrow more than you want.

    Annual Percentage Rate (APR): APR is the total cost you pay each year to borrow the money, including interest and fees. A lower APR means the loan will cost you less. If you want to take out a personal loan with bad credit, you’ll probably have a higher APR.

    Try online lenders to fix bad credit loan

    Peer-to-peer lending services are one option for getting a loan with bad credit. Instead of borrowing from banks, you can do it from individuals. They may be more willing to take the risk, but they’re not looking to lose their money.

    These non-bank lenders have different risk tolerance and use different ways to evaluate your creditworthiness. Online loans evolve. They may approve you with lower credit scores.

    Just be sure to avoid payday loans. They are costly short-term loans and they have heavy promotions online.

    Use collateral

    It isn’t the best choice, but if you have trouble getting approved, you may need to put up collateral. If you pledge something valuable, your lender will know you’re serious. In such a case, lenders will have a better chance of collecting on the loan because they can take your collateral and sell it.

    But be extremely careful when pledging collateral. If you have a property, you can probably borrow against it. But the risks are worthy of your attention. If you can’t make all of your payments, you might be forced out of your home. Think twice to avoid making a bad situation even worse.

    Some con artists take advantage of you when you’re down. They particularly target people who are urgent to borrow. These lenders charge enormous fees, so make it almost impossible to dig yourself out of debt.

    Sometimes, you won’t even deal with a real lender: Scammers advertise loans, but you need to pay steep application fees upfront. In the end, you don’t get approval, and you don’t get your money back. This is well-known as an advance fee scam. Don’t pay upfront fees to get a personal loan. Any processing fees should come out of your loan proceeds.

    Think more than twice about a payday loan

    If you need money right away, need an amount less than what a traditional lender might be willing to give, or have been denied a personal loan because of poor credit, you may be tempted to try a payday loan.

    A payday loan is a short-term loan for a small amount — usually $100 to $500 — that you secure by giving the lender a post-dated check or electronic access to automatically withdraw your bank account. The loan is usually due on your next pay date, along with fees. Depending on the state, payday lenders can charge from $10 to $30 per $100 you borrow.

    According to research by The Pew Charitable Trusts, for example, if a payday lender charges you $15 for every $100 you borrow per two weeks, it amounts to an APR of 391%. The Pew research found that fees from online lenders can be even higher, averaging an APR of 652% as of April 2012.

    Never mind where do you live, a payday lender may not check your credit in order to approve you for a loan. Many only require you to be an adult with an active bank or prepaid card account. Also, they will ask for proof of income and valid identification. It may be easy to get a payday loan when you have bad credit, but the high cost could make it difficult to repay.

    Don’t take out a payday loans

    Some studies found that many payday loan borrowers can’t repay their loans without taking out another payday loan.
    High-cost payday lending is prohibited in some countries. Others set limits on how much payday lenders can loan.
    The regulation varies from country to country.

    If your credit scores are low and you need a loan right away, finding an online lender or some other source offering personal loans for borrowers with bad credit could be your best option.

    Just proceed with caution and be sure to compare the terms of each loan to find the most affordable lender. But, if you can’t find such an option that you can easily repay, it may be better to wait and work on your credit.

    Applying for loans, especially if done the wrong way, can further damage your credit.

     

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