Loans

Installment loan options for small businesses – How can you pitch into the market?

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No matter how big or small your business is, starting a business or growing it will require lots and lots of money. This is why the biggest challenge faced by the startup organizations is lack of funds and financing options. As compared to the grown-up organizations, such financial dilemmas are common among the startups as they usually lack enough money to initiate a business. Although it is true that taking out installment loans is difficult but at the same time there are resources that you can turn to.

Now that you have to pay back the monthly payments in regular monthly installments of principal and interest rate, installment loans can really work well for the startups. You just have to know where to look for the best loans for funding your startup business. Here are few options that you may take into account.

Creating a business plan before approaching the lenders

Before you start off with an active search for the startup installment loans, the foremost thing that you need to keep in mind is to create a solid business plan. When you introduce your business to the commercial lenders, they often ask you to show your business plan so that they may get to know about your products and possibility of achieving success with your product. Henceforth, it is critical enough for you to write a business plan and impress the lender to believe that you’ll be able to make timely repayments on your loan.

Approach the SBA

The Small Business Administration, since the 1940s, has been assisting the startup business firms to operate in a successful manner. Besides offering them expert advice and other resources, their loan programs also insure most of their installment loans that are issues within America. Usually the SBA favors long term installment loans because they offer you the opportunity to take cash and the repay the loan over a longer time period, when your business grows.

Credit unions and banks are also a viable option

While credit unions and banks are interesting sources of commercial loans, it is also a fact that they will have strict lending policies. Banks are more concerned with the risks that follow while starting a new business rather than considering the rewards. If bank loans don’t have an SBA guarantee, this can be challenging for the startup business firm. You should become habituated with rejection and try to grasp the fact that this is not something personal.
Seek help of friends and family

Though this is the most overlooked option but your friends and family members can be the most wonderful sources of startup installment loans. Any near and dear one you approach may have the capability to finance you new venture and offer you financial help. Still they are willing and able and the best thing about them is that they offer low terms and rates which are reasonable for the business owner who is already drowning in several other financial challenges.



Therefore, whichever option you may choose to obtain loans for your business, you should try your best to repay your loans on time so that this doesn’t affect your credit score and keep you from getting future lines of credit at a reasonable rate.


3 Ways College Students Can Live Like Kings on a Fixed Income

If you’re like most college students, you’re living on a fixed income from student loans – a very small fixed income.

The good news is that this doesn’t have to mean you spend these years just barely getting by. In fact, you can actually live quite comfortably if you know what you’re doing.

3 Ways to Make the Most of a Fixed Income in College

Even though your student loans do cover living expenses, the following will show you how to spend your college years living like in a king.

1. Live with Your Best Friends and Split the Costs of Your Essentials

After college, you’ll find it becomes harder and harder to see your close friends on a regular basis. So, spend as much time as you can with them during right now.

One way of doing this is by rooming together. The more of your close friends you can get under one roof, the less it’s going to cost you.If you get four or more people together, you can even rent your own home instead of just an apartment.

Your savings don’t have to stop there, though.

Split the price for a Costco or Sam’s Club membership and then buy the things you all need in bulk for even more savings. Get everyone to agree on staying in three or four nights a week and making dinner together and you’ll enjoy a great meal fit for a king without breaking your budget.

2. Never Buy Your Books at the Bookstore

It’s no secret that college textbooks cost a fortune.However, you don’t actually have to buy them at your school’s bookstore, where they are sold at full price.

Instead, once you find out what classes you’re going to take next semester, offer to buy a current student’s textbook for more than the tiny amount they’ll get for selling it back to the bookstore. Then you can put the money you save toward living expenses.

Of course, there are a number ofsites that sell college textbooks, too. If you can’t find a fellow student who’s willing to offer you a bargain, someone online probably will.

 

3. Consider a Side-Income

You may not have enough time in your schedule to add more hours at your job or to even take on a part-time job to begin with.

Fortunately, that doesn’t mean you have to spend your college years living like a pauper. These days, there are countless ways to make money on the side when it fits your schedule best.

Some popular examples include:

  • Drive for Uber
  • Take Up Freelance Work
  • Tutor Other Students

The best part about those last two options is that they will most likely look great on your resume after graduation.

You Don’t Have to “Live Like a College Student”

There are plenty of reasons people miss their college years, but the miniscule budgets definitely isn’t one of them. Fortunately, you now know that just getting by isn’t some mandatory credit you have to complete.


Why You Might Want To Turn To An Installment Loan

Why you may get an installment loan may vary drastically from why someone else would seek out this type of loan. Even if you’ve been worried about adding a loan to your mix of bills, you might find that it can be a sound financial decision given the right circumstances. All you’ll have to do is to think about your current situation and how you’ll be helped by borrowing a small amount of money.

Some Of The Ways It Can Help

One common reason many people will seek out affordable installment loans is that they have suddenly found themselves face to face with an unexpected expense. They might not have another way to cover the expense, especially if there isn’t a savings account to access.

Also, even if you have a little bit of money in the bank, you might not want to deplete all your cash funds, as you never know when another unexpected expense can pop up. You’ll always want to exhaust all other options before you drain your savings. It is important to keep as much money in savings as possible.

You might also have some interest in paying off overly expensive debt, such as credit cards with an extremely high interest rate. If the interest rate and the payment terms for the installment loan is better than what you’re dealing with on your current debt, you might want to pay off that old debt and then work on paying off the installment loan using a much better payment arrangement.

Opting for installment loans for student debt is a great way to make sure that you are able to continue with your education, without backing yourself into a burden of debt that you will have a hard time paying off. You won’t even have to worry about delaying the start of your next semester because you can’t find the money for the new books or money for the classes that you’ll need.

What To Expect For The Eligibility Requirements

Once you’re ready to start applying for an installment loan, you’ll want to first make sure that you have a clear understanding of what you can expect and how you can better your odds of receiving an approval.

First, look for a lender that has installment loan options that will fit your need for quick cash, instead of having to go through a payday loan company. As an alternative to payday loans, you’ll be able to borrow money with the security of knowing that you will be paying a fair interest rate and you’ll have easy-to-manage payment terms.

As for what you need to apply, you’ll need to have your social security number handy, as well as proof of an active checking account, and verifiable proof of steady income. With that information in hand, you shouldn’t have much of a problem getting access to the fast-funding cash that you need to satisfy your current financial obligation elsewhere or the emergency that you’re facing.

All you must do now is to make sure that you are gathering up all the information you’ll need for the application process. Then, contact your local lender to see how and when you can apply for the short-term installment loan that you’d need to help pull yourself out of this financial slump.

Once you have completed the repayment of your installment loan, you’ll be very familiar with the process. This is helpful should you ever find yourself in the position of having to borrow money again. Right away, you’ll know which installment loan lender to go through and how to get the cash you need right away.


Keep budgeting while you struggle through your student loan payments

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Over the past 2 decades, the annual cost of college education is rising steadily and the level of student loan debt has accelerated to a jaw-dropping $1.35trillion in America, which is spread among 45 million people, as per recent statistics from the New York Federal Reserve. The study ranks student loans are the second largest debt, the largest being mortgage debt. This shows that student loan debt is even higher than credit card debt and auto loan debt.

It is surprising to note that there are considerably large numbers of borrowers who go through a tough time in repaying their student loans and it is also noticed that 15% f debt is more than 90 days delinquent. If you want to reverse this worrying trend, you have to imply a clear financial strategy. Here are few budgeting tips to follow if you’re struggling with your student loan debt.

#1: Be angry about your debt

You have to be angry with the debt that you accumulated while studying. You shouldn’t feel comfortable with the debt that you accumulated in college as this will make you delay about taking action against it. Once you reach the ultimate level of infuriation, you will be hell-bent to pay it down and become debt free as soon as you can. If required, opt for second jobs or federal programs or debt forgiveness programs through which you can chuck off a portion of the debt.

#2: The 20-30-50 method is a successful one

If you think that the budget is not a worthy option, the 20-30-50 plan can be one of the most flexible ways of accounting for your expenses. Initially, make sure you keep aside 20% of the take-home pay towards your financial future. Here you could use that money to direct it towards paying off the loans. Next, allot 30% towards wants/fun like eating out or going for parties with friends. Ultimately, spend 50% of your income on the essential expenses like rent.

#3: You should save money for yourself

Irrespective of the debt that you’re carrying, if you don’t pay yourself, you’re committing a huge blunder. In case you earn a decent amount of money, make sure you stack aside 10% of your month towards your debt payments and another 10% towards savings. Keep track of it and whenever you get extra funds, increase the payments.

#4: Keep tracing everything that you spend

When you aren’t tracking your finances carefully, it’s easy for you to spend more money. You should ideally track all expenses, even those that you have paid in cash. The best way is to automate your savings and checking account so that a portion of your funds get deduced from your account. This way you can continue with saving even though you may forget.
Even after you follow the above mentioned steps to follow a budget when you’re struggling with the student loan payments, you should still avoid taking on additional debt. Owing too much of debt at a very young age can bar you from taking out new lines of credit in the near future.

 


How Good it is to Achieve an Unsecured Loan for Your Business Find it Out

 

Achieving an unsecured loan is a great option for developing or expanding your business as it yields considerable support towards capital funding. A sound source of acquiring capital is of great importance to those who are running their own businesses. Few of the loan providers will even ensure a fund transfer within 24 hours of processing your application. You must also understand the difference between natures of personal loans with that of business loans. Business loans are only meant for the growth and expansion of your business.

Advantages of Unsecured Loans are mentioned below:

Easier to Obtain Than Secured Business Loans

In comparison to a secured loan, achieving an unsecured loan for your business tends to be a lot easier. In this case, you won’t need to show any collateral up front for your business.

Unsecured Loans Come Without Collateral

The collateral will be seized by your lenders if you’re not able to repay the amount borrowed under a secured loan. Your business property can’t be claimed by your lender if you’re not able to repay any unsecured loan. They can only claim it after obtaining a court order.

Unsecured Loans Can Be Discharged By the Court While Filing Bankruptcy

Unsecured loans have often been discharged by courts when the owner of any business needs to file for bankruptcy due to an odd reason. However, discharging any secured loan only takes place under rare circumstances.

Quick Turnaround Time

Once your loan application is accepted, funds can be transferred to your checking account within a couple days by a majority of lenders. On the contrary, you’ll need to wait for a much longer period of time if you apply for loans with a bank.

Credit Scores Are of No Use

Your credit scores are of no use if you’re attempting to achieve any unsecured loan for running your business. The nature and command of your business will help you qualify. The lenders shouldn’t have any problem in meeting your demand if your business reflects a sound financial situation.

Scope of Adjusting Payments

The profits earned by your business will help determine your loan repayment amount. The amount repaid can well be adjusted depending on whether your business experiences profits or losses through the different phases. The idea is to make repayments more simplified without going bankrupt during trying times.

Unrestricted Potential for Funding

You’ll always have the option to apply for a loan for as long as you have funds and your business is acquiring sales steadily. Your business can certainly survive against all odds when you’re in good standings. Applying for an unsecured loan yields an added advantage. You may qualify for this type of loan and it doesn’t take much time to determine your eligibility.

You may come across lenders that are able to provide you loans and transfer the funds within a single day, but you need to read through their loan terms prior to sign up. All you need to do is to send in your tax return document and your bank statements for the last 6 months to achieve your loan. You may acquire these loans worth up to 1 million, as the amount is based on the gross turnover of your business.

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What to look for when you pick a logbook loans lender

Today’s loan market is a crowded place and borrowers are spoilt for choice. But when you’ve decided that logbook loans are your preferred line of credit, we’ll give you a few things to think about to help you pick a good, responsible lender.

Logbook loans are one of the most widely used methods to get a fast cash injection. The format is simple, with all logbook loan lenders using your car as the security for your loan. So while it’s easy to get this type of loan if you’re a car owner, just like other loan types, some deals are better than others.

There’s been a rise over the last few years, in a number of people having day to day financial difficulties. At the same time, there’s been an increase in the number of small, opportunist and often unethical logbook loan companies. This minority of companies will offer a quick loan, but will often use sky-high interest rates, big fees and sly tactics for dealing with any late repayments.

So let’s look at how some logbook loan lenders like to operate and give you some pointers on what to look out for and what to avoid. We’ll then look at all these things to see how Car Cash Point would be a better option for you.

Check the interest rate

Interest rates can vary wildly depending on the lender. This is true for all types of loan, whether they’re secured or unsecured and from a bank, building society or any other source. Even logbook loan rates can differ greatly.

Some lenders can charge as much as 450% APR for their logbook loans. And although that seems particularly high, it’s not unusual to see. This kind of figure makes paying back your loan far more difficult, more expensive and longer to do. You should always check the lender’s APR interest rate first, then compare it against the rates of other lenders. It’s surprising just how much you could save, just by doing this simple check.

How’s your credit?

For every loan applied for, it’s usual for the lender to undertake credit checks each time. This background check tells the lender whether or not you’re creditworthy and have a high probability of full loan repayment. It’s standard practice for the majority of lenders to do these checks, but that might not be good news for you.

If you’ve had credit problems in the past, such as a CCJ or bankruptcy, this will be enough for the lender to deny your application outright. This hardline approach is used by all money lenders, including some logbook loan companies. If you know you have bad credit now or have had problems in the past, there is another alternative, so make sure you find a lender that does not use credit checks.

Hidden fees & charges

Often the cause of financial problems getting out of control, lenders hidden fees and charges can be a borrower’s downfall. As with any agreement that requires a signature to get started, it’s advisable to read the small print before doing so. But it’s not so much the fact that details are buried in tiny terms and conditions, but that many lenders do not tell you about them up front in the first place.

Hidden fees can be anything from more obvious things like a charge for a late payment to charging you for text messages, phone calls and letters. All of these can make your repayments get bigger and carry on for longer. A responsible lender will always be upfront with you about fees and charges, but if nothing gets mentioned, ask them during the application process.

Paying your loan off early

If you find yourself in a position to be able to repay your loan in full before the end of your loan term, it makes sense to be able to do so. However, not all lenders see it that way. The majority of lenders like to impose a minimum period, usually three months, before you can pay your loan off. So even if you’re able to, you won’t be allowed to, meaning you’ll have to incur further interest charges for no reason.

Some lenders will even add an amount of interest to your current outstanding balance when you request early settlement. This is plainly just a penalty for wanting to settle early as it will prevent some lenders from making maximum profit from you. Again, always ask about this before you agree to your logbook loan and choose a lender that won’t penalise you for wanting to settle your loan early.

Making overpayments

Similar to paying your loan off early, some people may find a change in their financial circumstances allows them to pay more off their loan once in a while, beyond their agreed repayment amount. If you find you’re able to do this, it makes sense to have your future interest lowered accordingly. It might only be a slight change, but every penny can help.

Every logbook loan lender should allow capital overpayments against the original loan amount. However, not every lender will adjust their level of interest accordingly, instead keeping it at the original rate, even though you’re able to pay more off. Some lenders will also have a limit as to how many times you can make overpayments as well. Both these things should be made clear at the loan application stage, but if you make overpayments, you shouldn’t be charged the same rate of interest.

Payments to suit you

When you take out any loan, it marks the start of a fairly long repayment schedule that you need to maintain. Everyone’s finances and budgets are different, so it’s helpful to know exactly how much you’re paying and when you’re paying it. When you know this, it makes things a lot easier to manage, so choose a lender that will allow weekly or monthly payments that fit with your own finances.

No lender should give you an unrealistic repayment schedule that will put you in financial difficulties. If they try to, do not accept it. If you’re not able to specify terms that suit you when you apply, find another lender who will let you choose.

An easier alternative

At Car Cash Point, we like to do things differently. We’re the cheapest and best value providers of logbook loans in the UK. We’re also authorised and regulated by the Financial Conduct Authority for the conduct of consumer credit as well as a member of the Consumer Credit Trade Association and therefore is fully compliant with its ‘Code of Practice’. All that simply means that we’re an ethical and responsible lender.

Looking at our list of what to look out for when choosing a logbook loan lender, Car Cash Point can offer you a refreshing alternative to those unscrupulous lenders we talked about earlier. How are we different? Well, let’s take a look:

Low interest rates: Being the best value logbook loan lender, our APR interest rate is capped at a maximum of 230%. This can be almost half of other lender’s rates and because of our lower rates, we will never be beaten on price.

No to credit checks: Unlike other lenders, Car Cash Point do NOT carry out any formal credit checks. Your application will have no effect on your credit score whatsoever. And if you have credit problems or have been refused credit in the past, don’t worry – we should still be able to help you.

No to hidden fees: Car Cash Point never have any hidden fees or charges. Any fees are made clear to you upfront, so you don’t get any nasty surprises. Plus, we are the only lender in the UK to offer a price guarantee – if you find a cheaper quote from any other UK logbook loan lender, we’ll beat it by 10%!

Yes to early settlements: We don’t believe in penalising you for paying your loan off early. Car Cash Point is the only UK logbook loan lender that lets customers settle their loan at any time – 100% penalty free, even after just one day.

Yes to overpayments: Car Cash Point is the only UK logbook loan lender that allows capital overpayments and then charge reduced future interest on the lower balance. We also have no restriction on the number of times you can make overpayments.

Repayments that suit YOU: To make things easier for you, Car Cash Point is the only UK lender that offers you a choice of either weekly, fortnightly, four-weekly or monthly repayments. Giving you this choice lets you manage your budget according to your finances.

Remember, it’s not how much you can borrow, but how much you have to pay back in total that’s key.

So if you’re looking for a flexible, great value logbook loan, visit Carcashpoint.co.uk or call 0333 220 4419 and speak to one of our expert advisors today. We’ll never be beaten on price or service!


Fearful of Borrowing? Here’s How to do it Cautiously & Safely

Are you the kind of person that worried about borrowing and the effect it will have? Sure, debts can be disastrous; that’s why you should always be careful and cautious when borrowing. That’s not always easy to do, though. However, it’s worth learning more about borrowing and how to do it safely if you want to take out a loan with confidence. That way, you won’t have to worry about it too much. Your mind will be clear, and you’ll be able to take the steps that need to be taken.

Making sure that you borrow in a way that is cautious and careful will help you to avoid all of the common mistakes people make. That can only be a good thing for you and your own financial future, so it’s something you should definitely do. Below, you will find some tips and guidance that will help you to borrow in the right way. Take the time to read it all and make sure that you understand what you’re getting into before you take out the loan.

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Look for Alternatives to Borrowing First of All

First of all, you should question whether or not borrowing is the right move for you at all. It could be the case that you’d be better off doing something else instead. It’s a simple case of looking to avoid debts that could cause you trouble later on. If there is an alternative out there that’s better than borrowing money, then it definitely makes sense to take it. For example, you could get an advance from your boss. Or you could borrow money from a family member on a more casual basis. Or you could cut your expenses and use the money you save to spend on whatever you want. However, if none of those options are possible, you’ll need to borrow.

Be Aware of the Risks Attached to Each Type of Loan

There are so many types of loan out there, and you really do need to understand them before you borrow. When you know more about the possibilities on offer, you can be sure that you will make the right financial choice for you. In particular, you should be aware of the various risks that are attached to each type of loan out there. If you can build up your knowledge, you won’t ever need to miss a trick. You won’t want to take out the wrong kind of loan if it means that you end up in a worse financial situation than you need to be in. Talk to a financial advisor if you want to be 100% that you know what you’re getting into.

Be Careful Not to Borrow Money to Pay Off Other Debts

If your main motivation for borrowing money is to pay off existing debts, you should be very careful. This is not always something that is advisable. When you do this, you’re liable to get even further into a debt spiral that could become disastrous for you. To put it simply, piling debts on top of debts doesn’t often turn out well for you. There are some circumstances in which borrowing can be used to alleviate existing debts, but it requires a particular kind of loan. They are known as consolidation loans, and they are used to pay off numerous small debts. They replace them with one large one, which should be easier to manage.

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Know the Difference Between Secured and Unsecured Loans

The main distinction between loans that you should be aware of is the difference between secured and unsecured loan. When a loan is secured, it means that it is secured against something you own. This could be your house or another expensive asset of yours. So, what does this mean in reality? Well, it means that the lender could take possession of the house or the other asset if you fail to make the repayments. So, you need to be aware of this before you go ahead. That’s why unsecured loans are generally considered to be much less risky for borrowers. Assess your circumstances and decide which option will be best for you.

Only Borrow from Recognised Lenders

There is a real risk of borrowing from loan sharks when you are not careful about who you borrow from. Loans sharks don’t always look like dark and shady characters. In fact, they often look the same as your ordinary bank manager. They put on a suit, look professional and manage to win more people over this way. But make no mistake, these people are criminals, and they will stop at nothing to get their money back. So, you should only ever borrow money from a recognised lender. They should be recognised by the relevant industry bodies and be known to the public. If you’re not sure, ask questions. Never borrow unless you’re sure they are a legitimate company.

Always Shop Around and Compare Deals

You should always make sure that you shop around when you’re about to take out a loan. If you fail to shop around and look at all the options, you could miss the deal that’s the best one for you. Everyone knows that shopping around pays off. But that doesn’t just apply when you are buying a car or a home. It’s just as important, maybe more so, when you are looking for a loan to take out. There is no way to find out whether or not you are getting value unless you compare offers and deals. There should be no difference between the way you would shop around when purchasing any other item, so don’t neglect this. If an installment loan is what you’re looking for, there are plenty of online lenders to consider too.

Think Carefully About Loan Insurance

Loan insurance is one option that will be available to you when you take out a loan. You should think very carefully about whether this is something that will be good for you or not. For some people, loan insurance can help them out when something goes wrong. But for most people, loan insurance represents a waste of money that is probably not worth paying for. It’s all about deciding whether going without loan insurance is a risk you want to take or not. That’s for you to think about, but don’t make a decision without considering all the ramifications first.

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Don’t Lie to Secure a Loan

There is always a temptation to lie when you are applying for a loan. People think that if they present themselves and their financial situation more positively, it will make them more likely to be approved. Even if this is true, and it often isn’t, it’s still not a good thing for you to do. Banks have rules in place for a reason. If they don’t want to give you a particular loan, there will be a reason for it. It might be the case they don’t want to put that level of financial burden on you because they don’t think that you will be able to cope with it and pay the money back.

Check Your Credit Score and How it Will Impact Things

Check your credit score before, during and after taking out a loan. You need to be aware of it before you apply because it could affect whether or not your application gets approved. Make an effort to improve it in the months leading up to your application. And when you have the loan, be sure to meet the repayments on time, every time. If you fail to do that, your credit score will take a battering, and you will have to deal with the consequences of this later on, which is never much fun. So, keep an eye on your credit score and think about how you can keep it in good shape.

Plan Your Repayments In Advance

Before you even take out the loan, you should be sure to have a repayment plan in place. When you do, you can be sure that the debt will be manageable for you. If you feel like you will be spending too much on the repayments and your margins will be tight, it might be better to borrow less. Either way, planning out how you will pay the money pack in advance of taking out the loan is very important. Not doing this would be a big mistake, but it’s one that many people make.

Don’t Settle for Making Minimum Repayments

It’s not always a great idea to only pay back the minimum amount required of you. This might seem like the best option. But if you can, you should definitely try to pay back more. You’ll be making those repayments forever if you are only paying back a small amount each month. And that means you’ll have to deal with more interest as well. Therefore, think carefully about how much and how fast you can afford to pay back the money. The sooner you do it, the better.

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Different Types of Student Loans Explained

Students seeking financial assistance to attend college have many options. Ideally, you have some money set aside and your parents are willing and able to help you pay for a college education, but if you still need money for tuition, books, and living expenses, there are a variety of loan options available to you. Here are a few different types explained.

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Direct Student Loans

The most common type of loan that college students receive is a direct student loan, which is granted by the federal government (through the U.S. Department of Education) when students apply for federal financial aid through FAFSA (the Free Application for Federal Student Aid). Within this category, there are Stafford loans, federal plus loans, and consolidated loans.

Stafford Loans

There are two types of Stafford loans: subsidized and unsubsidized. Subsidized Stafford loans are so named because they are government subsidized, which means the Department of Education pays the interest on the loans while you’re in school (at least half-time), for six months after you graduate, and during a deferral period. In addition, subsidized federal loans are based on financial need, with the amount determined by your school.

Unsubsidized loans do not require you to prove financial need, but your school still determines the amount, factoring in the cost of attendance, as well as any other financial aid you already receive (i.e. grants, scholarships, etc.). Also, you’re responsible for all of the interest accrued on your loans.

Federal Plus Loans

This type of direct loan is intended to cover the gap in expenses not already paid for by other types of financial aid (grants and Stafford loans). These loans are still federal, but they are based on credit score and may have less favorable terms for repayment, although the interest rates are still low.

Consolidated Loans

Students may take out several loans throughout the course of their college career. This type of direct loan consolidates all of these student loans into a single loan so that students paying down debt need to only make one payment.

Perkins Loans

While this loan program falls under the scope of federal loans, it is actually administered by individual schools and granted only to students with extreme financial need. For this reason, Perkins loans are not nearly as common as, say, Stafford loans.

Private Loans

Suppose you’re unable to receive all the funding you need for your school expenses through federal financial aid. If you can’t earn enough at a job or gain other funding through grants and scholarships, you’ll have to look for another source of funding.

Luckily, you can also take out student loans from private lenders to make up the difference and meet all of your financial obligations while you’re in college. Just keep in mind that private loans have very different terms, so make sure you understand the loan agreement.

References:
https://studentaid.ed.gov/types/loans/subsidized-unsubsidized
https://www.nerdwallet.com/blog/loans/debt-consolidation-loans/


US government express concerns about the risky state of car loans

As per recent reports, a top banking regulator warned that the $1 trillion auto loan industry is gradually getting pretty dangerous in 2016. There is unprecedented growth in auto loans, shrinking values of cars and a sharp rise in auto loan delinquencies, as per the Office of the Comptroller of the Currency. The banking watchdog also put emphasis on the cut-throat competition within the banks which finally led them to make the underwriting standards more lenient than before.

Risks in auto lending keeps growing and the OCC stated in its annual report mentioning the details of the key risks that are faced by the US banks. Neither did the OCC call out the names of specific banks which are threatened by auto loan lending issues nor did they mention that this issue might pose to be a great risk to the financial system at large. Nevertheless, the report echoes certain concerns which have been raised by other regarding car loans, particularly the subprime or the low quality ones. Jamie Dimon, JP Morgan Chase boss recently opined in an industry conference that auto lending looks stretched in spite of the banks being careful about issuing them.

Soaring delinquencies on car loans

Earlier in 2016, Fitch Rating pointed out the fact that the rate of delinquent subprime auto loans has reached their highest level since 1996. The volume of auto loans recently exceeded $1 trillion, a figure that is up by more than 45% from the latter half of 2009. What is the reason behind this statistic? Well, Americans are seen to have buying a large number of cars, with sales hitting a record high level since 2015. Since cars have become more expensive, the loan amounts are also bigger and the defaults too. Wells Fargo and Ally Financial are 2 of the largest providers of auto loans in America.

The OCC warned that the banks may face bigger losses from sub-prime auto loans and they may require setting aside enough money to cushion themselves against those losses. Some risk management practices of lenders have not kept pace with the increasing risk and growth in portfolios. There is too much of indirect auto lending where banks offer cash to dealers to lend to people who are about to buy cars and this is yet another risky area which can watch out for ‘significant fair lending risk’.

Comptroller of the Currency Thomas Curry had once again raised the red flag previously about auto loan ending warning the lenders that some activity in auto lending reminded him of what took place in mortgage-backed securities in the run-up for the crisis. Auto lending has recently seen a sharp rise than before due to the lower interest rates, strong consumer demand and cheap gasoline prices. During the financial crisis too, the auto loans performed relatively well and market watchers interpreted this as the sign that the car loans are safe enough as cash-strapped people too had to pay for transportation costs. Auto lenders also have simple time collecting collateral on a defaulting auto loan by repossessing the car just as they do foreclosing on a house which is covered by a bad mortgage loan.

So, it is important to remember that auto loans don’t seem to pose the systemic risk which mortgage loans did before they started facing the Wall Street meltdown in 2008. Overall, auto loans make up a smaller universe of lending as compared to mortgages. Banks too are even pretty stronger to deal with any possible losses due to auto loan defaults.


Different Loans for Different Purposes

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Sometimes unexpected events come along that require your immediate attention, such as a car repair or medical bill. When this happens if you don’t have wiggle room in your budget or savings account, it can cause stress.

The good news is that there are a number of loan and cash advance options available that can get you the money you need to pay for these additional expenses. Since there are many different types of loans, it’s a good idea to find out which one best suits your personal needs. Before taking on any loan, make sure that you understand the terms of repayment and that you are able to make the installments on time.

How much do you need to borrow?

Loans vary, and in order to apply for the appropriate loan, it’s important to figure out the exact amount that you need to borrow. If it’s something like a car repair that costs roughly 1,000 dollars, taking on a personal loan for a period of 12 months can get you the money you need quickly. If, however, you prefer not to have continuous payments looming over your head for that length of time, a personal loan offered online through a lender like MaxLend can give you the same advantage of a quick payment with a short-term loan. The payments will be higher but you will only have to secure it for a few months.

Taking a cash advance from a credit card

You can also choose to take a cash advance from your credit card. The interest rates are usually much higher than a personal loan, however, if you are unable to secure a personal loan due to a high-debt-to-income ratio or a lower credit score, this can offer a quick fix. If you choose this as the best option, try to pay the balance off as quickly as possible to avoid paying two or maybe three times more than the actual cost of the repair.

When you need access to a large sum of money

If on the other hand, you’re in need of a major home renovation and you have a mortgage, a HELOC gives you access to a large sum of money that you can borrow from as you need to. You must have a good standing with your mortgage and the interest rate derives from the current market and other variables. You can also borrow funds from your 401K. You can usually borrow up to 50% of your savings and while there is interest attached you are paying the money back to you.

Removing debt and freeing up your money

A consolidated loan or a personal loan is ideal if you have a lot of outstanding debt in the form of credit cards and medical bills. These monthly payments can occupy a large portion of your budget and by consolidating them into one much lower monthly payment you’ll not only free up money but you’ll put an end to the high monthly interest rate.

Payday loans

If your credit score is poor and you need access to money fast for an unavoidable expense a payday loan can get you money in your hands usually within a few days. However, the repayment terms are short term and the interest can amount to two, three and even four times more than the original borrowed amount. In this instance, if you have nowhere else to turn, such as a family member or friend, make sure that you make every effort to pay the loan off quickly.

Even the best-planned budgets can need help from time to time. Just make sure before you put your signature on the dotted for the loan that you understand the repayment terms and that you are able to afford the loan. Learning to be financially responsible will save you from paying higher interest rates or getting denied a car loan down the road.

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