Debt Problems

5 Tips for Completing a Personal Loan Application

5 Tips for Completing a Personal Loan Application

Each year millions of people apply to get a personal loan for different financial reasons. It may be needed for a medical emergency or may be needed to purchase a big ticket item such as a boat, motorcycle, or car. Whatever the case may be for you, it is important that you complete the application correctly in order to improve your chance of getting your application approved. Here are some tips for completing a personal loan application.

Review Your Credit Report

Many personal loan lenders use your credit report and score to determine several factors about your personal loan approval and terms. Before you complete a personal loan application, it would be wise to first review your credit report to make sure it is correct. You should check for inaccurate information or anything that could damage your credit score. If you find inaccurate information, you should file a credit report dispute with the reporting credit bureau.

Provide Accurate Information

Many personal loan applications request personal and financial information about you and your co-applicant if applicable. When you fill out your application, you should make sure that you are providing the most accurate information as possible in order not to delay the processing of your application. Before you submit it, you should double-check all important information such as social security numbers, employment history, and income.

Submit Only One Application

Although you may be in hurry to obtain a personal loan, you should try to only submit one application instead of several applications to different lenders. If you have several lenders pulling your credit report at the same time, it can cause your credit score to go down. Also lenders are often leery of giving money to someone who may be trying to obtain loans from several lenders at the same time.

Apply with a Lender You Have Used Before

If you have a good banking history with a local bank or credit union in your area, you should apply with them to obtain your personal loan. Many banks often feel more comfortable approving loans for customers who have used them for other financial needs such as checking and saving accounts. Also they may be willing to work with you if your credit score is not so good.

Read the Fine Print

Before you signed the dotted line on the application, you should make sure you have done your research and read the fine print. The fine print often tells you about terms of the loan and about any fees you may have to pay as part of the loan. If you don’t understand something, be sure to ask questions.

About the Author: Tanya is a writer and blogger with a passion for personal finance. She’s also a regular health contributor, creating content for those interested in a career path as a registered ultrasound technician.


Debt Consolidation: Pros and Cons

Debt Consolidation: Pros and Cons

Are you considering consolidating all your loans? For sure, you are intending to do so to effectively overcome your debt problems soon. However, as we all know, such loan products are not only full of advantages. There are also disadvantages that come with those. In the case of debt consolidation loans, you may be surprised at how there are more possible disadvantages than advantages.

In the end, your decision whether to apply for and obtain debt consolidation loans or not would depend on how you could possibly gain from getting one. The cons could surely be outweighed by the pros. You would need to fully reassess your personal and financial condition to properly evaluate debt consolidation loans and determine if it would be best if you get one.

The pros

First, debt consolidation loans could help you significantly lower the amount you need to shoulder paying off your monthly dues for loans. This could be because high interest rates of your original loans could be replaced by a single but lower interest payment required. The term of the loan could be longer, which logically makes lower interest charges possible. Thus, such products are ideal if your main goal is to reduce loan payments you are required to make every month.

How about the convenience of combining all of your existing debts into a single loan? That is facilitated by a debt consolidation loan. Such products are usually huge enough so you could repay all your current loans. In exchange, you would make a new significant debt that has consolidated all other debts. That means you would only have to deal with only one creditor, which would make paying off debt less confusing and convenient on your part.

You may say goodbye to all your other creditors that have been pestering and harassing you. On top of that, you may take a bargaining power to waive annual fees, lower service charges, or get much lower interest rates. You could further make more convenient and advantageous provisions and terms for your new loan.
The cons

First, debt consolidation loans are mostly secured loans. The interest rates could be much lower but that could be in exchange for longer terms. Such loans may take up to 20 years or longer to mature. Monthly payments required could truly be more attractive but if you could compute the overall costs of such loans, you may end up paying more. And because you have put a property as collateral, you are not exempted from the possibility or risk of losing it if you would default on the loan.

Most loan providers that offer and provide debt consolidation loans also impose financial penalties if you would attempt to alter terms of the contract in the future. Those are called early exit fees. Your current loans may also impose such charges, which may make it less practical to opt for debt consolidation. Applying for and getting approval for debt consolidation loans could also get more difficult and there are many disreputable lenders out there that may take advantage of you.


When Cash Advances Can Pay Off for Borrowers

You’ve no doubt heard about the pitfalls of “ no fax payday loans ” or paycheque cash advances . The interest rate, when compounded over a full year’s time, stretches into three and four figures.

That would not make sense because it would mean the payback would be bigger than the loan itself. Fortunately, not many people take out a cash advance payday loan for a full year. In fact, most people know the nature of the loan defies that. It’s a short-term, low dollar amount loan that you should pay back in one or two paycheques.

No one uses payday cash advances loans for long-term purchases. It might be good for a used car down payment, but it’s not the kind of money you use to buy a house. You can use a payday cash advance to pay an emergency bill, but it doesn’t make sense to use the moolah for unnecessary purchases. Your no fax payday loans can help you pay bills – which is what millions of Ozzies use them for. But these “bad credit loans” are not something you would use for superficial items.

In fact, there are several ways in which payday loans might actually help you save money. Here are a few:

Avoid a loan shark – Unregulated and illegal, a loan shark might easily charge 50-100% interest on a loan.

Pay bills on time – You know that penalties and higher interest charges can add up. Then there is the damage you do to your credit score if you pay bills late.

Make a timely purchase – We don’t recommend buying anything just because it’s on sale. But if you know you will need to buy something soon, and you see it advertised at a discount, say 30% or 40% off the retail price, a cash advance can enable you to buy it when it’s on sale.

If you don’t trust your instincts for finding the cash advance loan yourself, you could try an aggregator to search for you. AnydayPayday (http://www.anydaypayday.com.au) will take your information and match you up with a lender that best fits your needs.


How To Be Debt Free


The credit boom and subsequent credit crunch of the last decade has left many Americans with an overwhelming level of debt that they have no real means of ever paying back. And this will no doubt have been a contributory factor in the 20 per cent rise in personal bankruptcy filings witnessed during 2010.

And if you are one of the millions of Americans with a seemingly insurmountable level of debt then there are a number of options open to you that could help to improve your financial situation.

Live the frugal life

This may seem obvious but if you curb your spending habits then you may see a rapid improvement in your financial circumstances. For example, if you have a $2.00 coffee on your way to work every day and then spend a further $5.00 on lunch each day then that amounts to over $150 every month and almost $2,000 per year. And you can save a large portion of that $2,000 by simply cutting back on the morning coffee and preparing your lunch at home and then taking it to work with you. And if you apply this principal to other areas of your life then you can save even more money and may even keep enough money back to put into savings.

However, this will only make a difference if you have a manageable level of debt as it may help you pay it off quicker than expected as you have more money to pay down each month. If you have a larger amount of debt you may have to consider some of the following options.

Debt consolidation

Debt consolidation works by gathering up all of your outstanding debts, such as loans and credit cards, and then offsetting them with another, larger loan that is usually taken out and secured against any property you may own. This could be in the form of a remortgage of your home or a tailored debt consolidation loan that some lenders will offer.

This is a good solution for many as they do not have to worry about various credit lines, which can be confusing and difficult to manage, and it can also offer a lower rate of interest and so you will not pay as much money back in the long term. The downside to this is that you have to be in a position whereby lenders are still willing to offer you more credit and, should you fail to keep up with the repayments, you could lose your home.

Debt management and settlement

If the first two steps do not suit your circumstances then you could enroll in a debt management plan whereby a third party company will contact your creditors in a bid to reduce or freeze interest rates and put a stop to costly default fees and phone calls demanding payment.

This works well as an interim measure for those heavily in debt and may also lead to a settlement plan whereby your debt management planners agree on a compromise figure with your creditors which may lead to you only paying back 50 per cent of what you owe to have the debt settled and written off.

However, this will have a damaging effect on your credit rating, if it not already irreparably  damaged, that could mean that you will struggle to gain credit for up to six years.

Bankruptcy

This is usually the last resort for many as the Federal courts are involved in liquidating your assets to eliminate your debts and a Chapter 7 bankruptcy order takes into account personal income regulations to determine whether you are eligible. If you have any saleable assets then these will be seized as part of the bankruptcy and the implications for your credit score are severe and could last for up to seven years.

Although you could be discharged from any unsecured debts within a matter of months bankruptcy should never be seen as an easy option as the sanctions and future limitations placed on you are severe. For more information on bankruptcy visit the United States Courts website.

If you are in debt then they are just some of the options available to you and you should always seek professional financial advice before deciding which debt solution is best for you.

Many may be wishing they had a finance degree online, or the equivalent after the credit mistakes that have been made.

Article written by Les Roberts, debt specialist at Moneysupermarket.com


Fastest way to become debt free

Fastest way to become debt free

Eleanor Simpson is a debt counselor for Franklin Debt Relief, the leading company in debt settlement programs for consumers.

Are you looking for the fastest way to become debt free? Bankruptcy is no longer the best option, since the 2005 overhaul significantly reduced the number of consumers who qualify for financial relief. Balance transfers or ten-year consolidation loans are not quick fixes either. You could always work another job or sell your possessions, but the extra effort and stress is often not worth the payoff. Fortunately you have access to experienced debt relief  professionals who will work with your creditors and can slash the amount you owe by up to 60%. Debt settlement services can help you become debt free in as little as 12 to 36 months. If you are behind on your credit cards, store cards, personal loans, etc. by 90 days or more, your creditors want money and they will settle to obtain it. Depending on your situation, you have two plans from which to choose: lump sum settlement or periodic payment settlement.

In a lump sum settlement, the debt relief service negotiates with individual creditors and collection agencies to find a
single, final payment that will end their harassment. This payment is typically 40 – 60% of your balance and completely satisfies the debt. A lump sum settlement typically takes four to twelve months and then the debts are marked as settled on your credit report.

The second option is a periodic payment settlement. In this scenario, your debt relief service still negotiates with your
creditors, but you will continue to make payments until the settlement threshold is met. This option is convenient for
people who cannot afford to make a lump sum settlement payment, but it does take two to five years to complete. A
periodic payment settlement is still a better option that attempting to make minimum payments on high-interest credit
cards to become debt free.

Working with debt relief services is the fastest way to become debt free. Use the experience of these financial professionals to navigate complex legal requirements and convince your creditors to work with you. By negotiating a simple settlement agreement, you can gain a fresh start to your financial future.


Escaping the Bad Credit Loan Jungle

The “Bad Credit” Loan Blues … Is this your song?

  • Frequent calls from bill collectors
  • Cash advances from one credit card to pay off another
  • Not making your loan payments on time or missing them
  • Paying just the interest or less than agreed upon
  • Continually falling behind on monthly bills
  • Inventing new excuses of why you cant pay your debts

Feeling lost in the Bad Credit Loan jungle? Trying to find your way but don’t know where to look? Your escape route starts here with a roadmap to debt consolidation that will help you gain lost financial control and could even help save you money.

Sub Prime Debt Consolidation

Debt consolidation can best be described as the combination of a number of small debts and regular monthly payments into one debt and one monthly payment. Usually one monthly payment can be less than the total of all your current bills. You don’t have to pay out the same amount of cash as you did before and repayment of your loan once a month is more convenient. An additional upside to this form of financial management is that it can help you re-establish your credit providing you make all your payments on time, every time. Reducing your debt faster by making a larger payment than negotiated helps even more. It demonstrates to lenders that you are serious about your responsibility to reduce your debt load and reestablish your credit.
Lenders like that a lot.

You are not alone

It has been estimated that 25% of the population in the U.S.A. falls into this category of bad credit/impaired credit classification. The price a borrower pays for this label is- the lower the credit rating the higher the cost of borrowing. Because of the potential risk involved, there is also reduced access to lenders willing to take a chance and lend you money. Not a pretty picture to say the least. But just as there are always borrowers, there are always lenders to do business, at a price.

Drowning in debt

The need for debt consolidation is usually a self inflicted wound. If you were able to manage your debt load and pay off what you owe you would not be in difficulty. The fact that you are suggests that you don’t have the “tools” to keep your “head above water”. You need help to get out of debt. You need behavioral modification and a follow up action plan. Consider the following:

  • Reasons for bad credit including bad money management
  • List monthly income and expenses to determine how much you can afford to pay in a bad credit loan
  • Contact your bank or credit union (a lending institution that knows you) to determine what you need to get out of debt.
  • If needed, find a co-signor to guarantee your loan payments
  • Try a Debt Consolidation Service but shop wisely

Debt Consolidation Services

Many companies supply this service while sourcing lenders at competitive rates. They shop around on your behalf. Financial institutions including banks, credit unions, finance companies, insurance companies are all polled to find the best fit at the lowest rate of interest for you and your debt load.

Remember that this is a business and there are things you need to know before committing to any long-term borrowing. How much do they charge for their service? Do you pay “up front” or upon completion of the loan? Maybe they will charge a flat fee or a percentage of the total loan, all important questions to ask.

A list of satisfied customers is a good place to find out how reputable the service provider is when dealing with their clients. Membership in the Better Business Bureau is another indication of professionalism.

Finally, ask for a list of the lenders they deal with. More means better while less generally means they are interested in working with just one or two lenders for their own profit. Do your due diligence!

Returning to good financial health can be a painful process. Once achieved, you will enjoy a greater peace of mind. Well worth the effort!

But just as there are always borrowers, there are always lenders to do business, at a price.


Important Things to Know When Getting a Secured Loan

Important Things to Know When Getting a Secured Loan

Secured loans are typically used for larger amounts over longer periods of repayment. The reason this is done is because they are costly and time consuming to set up, since arranging the necessary searches and registering the property interest (the usual security taken for a secured loan) takes weeks to complete.

So immediately, one drawback can be the time taken to get a loan on secured terms. If you need a loan quickly, you will need to look for one or more unsecured lenders since their procedures are much quicker to complete with some advancing money within hours of receiving an application.

To even apply for a secured loan you will have to have some free equity in your home or some other form of valuable asset to pledge. That means that your home must have a surplus value over the current mortgage loan of at least 125% of the loan being applied for; so if you need a £20,000 secured loan, you must have around £25,000 of equity in your home.

But if you need to borrow more than around £15,000 then the chances are that you will have to consider some form of secured loan. Borrowers with exceptional credit histories and strong monthly incomes may be able to borrow up to £25,000 on an unsecured basis whilst those on low incomes or with poor credit histories may have to consider a secured loan for as little as £3,000.So there is no ‘typical’ when it comes to choosing between a secured or unsecured loan. Your personal circumstances and the requirements of the lender will drive you towards the options available to you. But different lenders have different outlooks so it is worth shopping around to see who will offer what terms. Be wary, though, of making multiple applications for loans since each one will register a search against your credit profile. Multiple searches in a short period of time can harm your credit rating and alert lenders to your enquiries making them all a little more cautious.

Since secured loans are more expensive to set up, you can expect to pay a greater administration fee up front. You may also be expected to pay any property search fees or registration of interest charges. The plus side is that the interest rate charged on the loan should be lower than an unsecured loan due to the additional collateral cover provided.

If you have the choice between a secured or unsecured loan, then you need to so your sums thoroughly to see which is the best for you over the full term. Whilst the rate of interest may be lower on a secured loan, the additional charges and fees may offset the saving in lower monthly payment.

Remember that a secured loan takes an interest in your home or other property. That means that if you fail to make the repayments you may have your home repossessed by the lender for them to sell, in order to pay off the loan balance. With an unsecured loan you can only be sued for the balance – your home will not be at risk.

This guest blog post was written by short term loan provider Wonga.


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