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American students to collectively owe $2 trillion by 2021 – What is Trump planning?

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As per a recent analysis, it has been seen that the student loan debt in the US is gradually moving towards a new milestone and it will witness a 30% rise in the approaching 36 months. The Federal Reserve Bank of New York says that as the debt climbs higher in order to reach a record high level, up from $1.55 trillion, the ROI for fresh college graduates is shrinking pretty fast. As the student loan debt costs is growing by $30 billion in every quarter and hence it is soon racing towards $2 trillion by 2021. As there were hosts of protests regarding the crossing of $1 trillion in 2012 and now it is even going to cross that level too.

What are the experts saying?

As the overall population of the nation grows and as college tuition costs keep rising, the US student loan debts will also continue to soar like never before. The CEO of an online lending platform has seen a noteworthy rise in the total number of student loans being taken out from community banks and credit unions.

Since the year 2010, there has been an increase in the number of federal loans that are being made available to the students. Students are also taking up second jobs in order to pursue passive income so that they could pay off the $20,000 in the form of student loans. Whenever you make free flow of credit with access to credit, this inflates the asset class. If you take a glance at the Great Recession, mortgages were made available and then you remember what had happened.

The constant rise in student loan debt

It was just in the last decade that student loan debt had surged by around 60% and if you take a look at the recent forecast, this will only speak about the financial pain. Millions are joining the latest cadre of 45 million American education loan borrowers and it is seen that an average undergrad in 2017 has owed $40,200. There are couple of people who owe $200,000 and this is a rather scary amount.

How is Donald Trump planning to solve this debt dilemma?

Donald Trump is also alarmed at the burgeoning student loan debt level. Here are few things to watch out for.

  • PSLF can be stopped for new borrowers

As the Congress passed a measure to boost the amount of funds available for PSF by $350 million, Donald Trump has chosen to stop this program. PSF is a federal program which forgives federal loans of the borrower who work in the public or non-profit sector.

  • Federal loan repayment options can be changed

Presently there are 8 different categories of loan repayment programs under the federal government loans. The Trump administration simplifies the choices of the borrowers by creating a repayment plan which is income-driven. Under the repayment plan, monthly payments will be capped at 12.5% of the discretionary income of the borrower.

  • Changes in discharging debt during bankruptcy

The Department of Education issued a request for comment on evaluating undue hardship claims, which is the standard used to check if a debt is discharged through bankruptcy.

Therefore, with the current state of student loan debt that is grasping the entire nation, it is vital to repay your student loan debt as soon as possible in order to avoid a bad impact on your credit score.


Women hold a major share of student loan debt in the US – Any reasons behind this?

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As per a recent report, women are carrying around 2/3rds of the outstanding student loan debt of the nation. This alarming statistic has been given by a new report offered by the American Association of University Women which is an education advocacy group. In order to be sure about the statistics, 58% of the college students are women and hence it can be easily concluded why so many women are carrying student loan debt. Student loans are gradually becoming a burden as too many of them are pursuing their higher education.

At present, 7 among 10 students take resort to loans so that they could obtain their degree. The average student leaves school with $30,000 in debt and nearly 25% of them owe more than $100,000. Majority of the Americans are extremely burdened with educational loans and these loan amounts are way more than what they owe on car loans and credit cards.

Implications of student loan debt on the economy of the nation

As long as the conversation on student loan debt is concerned, this starts with definite demographics which are harder and tougher than others. Even though you might compare apples to apples, still women are carrying more debt individually. As per recent statistics, in the year 2016, the average woman left undergraduate education owed $22,620 as against $18,650 for men. Hence there is a huge difference between the two amounts. In fact, black women are taking on disproportionate debt amount and they’ve racked up $25,000 in the form of student loans to obtain bachelor’s degree.

Besides, women are more likely than men to have household responsibilities to balance their coursework and hence they might take too long to graduate. As they spent more time in school, this can lead to more and more loans.
Is there a wide wage gap too?



The fact that as compared to men, more women are borrowing in bigger amounts is troubling the women. It is also true that women earn 28% less as compared against their male counterparts outside school. This clearly implies that women will take longer than men to pay back their student loans and hence they can dig deeper into debt.

What do the personal finance experts have to say?

While the men are seen to pay back 14% of their debt annually, women can just pay off 10% of their debt, as per a recent study. 3 years post graduation, women have been seen to pay back less than a third of their debt and during the same time period, men has successfully paid back 40% of the entire amount. These numbers can clearly indicate the irony of education and the system that prevails in the country.

Education certainly plays the role of an equalizer within the nation and in case the rising tuition costs are setting an impact on few people, few more than others, this is now demotivating them to take any step. Hence, as long as you wish to pay off your student loan debts, make sure you are proactive about them.


Factors that Leave an Impact on the Borrowing Capacity

A few key factors tend to influence your borrowing capacity under all circumstances. It’s actually a single important factor that helps in determining whether you can own a home or not. Gaining a fair idea of how much you can borrow is of great help when you’re considering multiple properties simultaneously.

Once you gain a fair idea of your actually borrowing capacity, you’ll be able to adjust your property search accordingly. You may even achieve a few options that fall within your budget once you do your research. Many of you may simply be wondering about the factors that can prevent you from achieving the desired loan amount and the maximum amount that you can borrow.

Find out ways to enhance your chance of borrowing more:

Financial Commitments:

Prior to issuing a home loan, a lender has to determine the extent of mortgage repayment that you can afford. Apart from your income, the lender is bound to check out the commitments you have towards other outstanding debts.

A greater repayment capacity will enhance your power to borrow, more so, when you co-own a property with a relative. Your financial commitments may include vehicle financing, credit card repayment, repaying loans and other debts.

Loan Repayments:

The amount that you can borrow may be easily determined by the interest rate and the loan term that you sign up for. As the rate of interest falls, your repayment amount also gets lower. By opting for a short-term loan, you’ll end up saving much of the loan interest. You must accept a loan repayment term that matches your financial situation.

Living Costs:

Your loan application only gets approved when your lender does through your living costs. School fees and cost of child care are among charges that increase your living cost. Once the lender is able to identify your borrowing capacity, it becomes much easier for you to sort out these expenses. Even after maintaining a certain living standard, you’ll need to work towards repaying the mortgage.

Credit Rating:

Your credit rating is certainly an important factor that determines your borrowing capacity. By proving your worth as a reliable borrower, you’ll be able to convince the lender for a much higher loan amount. However, you’ll also need to repay the loan amount within the specified time-frame. Your loan application may be rejected after you’ve defaulted on repaying your utility bills and credit card bills in the recent past. Before even visiting a lender, you must check out free copies of your credit report for free from each of the 3 credit reporting agencies. All of the red flags appearing in your credit reports need to be compared and the discrepancies need to be resolved in any.



Asset Evaluation:

In an attempt to identify your actual loan requirement, a lender can run a credit check on the assets owned by you. All of the vehicles that you own as well as your investment options might affect a lender’s decision. These factors hold considerable ground in determining your loan requirement.

Keeping these factors in mind, you’ll need to work on all areas of opportunity just to enhance your borrowing capacity. This way, you’ll have more options of comparing loan and fresh job offers that come your way.


Lending Options When You Have Bad Credit

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If you have bad credit, then you may think that a loan is out of your reach. However, it is possible to get a loan without having a good credit score. There are many lending options that you have.

Home Equity Line of Credit

If you are a homeowner and the home has built equity, then you can get a home equity line of credit. This is a risky type of loan because you are using your home as collateral. However, it is one of the best options if you have bad credit.

You will be able to use your funds in whatever way that you want. A home equity line of credit typically has a lower interest rate than credit cards.

Secured Loans

Lenders feel more comfortable lending to people with bad credit if they have something that they can use as collateral. The item that you use as collateral can be repossessed if you do not pay the loan back. There are several things that you can use as collateral.

You can use your vehicle as collateral. A loan that is secured by a car is also known as a vehicle title loan. You can also use investments that you have as collateral. Additionally, some lenders will allow you to use your future paychecks as collateral.

Payday Loans

Payday loans are a popular option for people who have bad credit. It is relatively simple to get a payday loan. If you have proof of income and a bank account, then you will likely be able to get approved for a payday loan. However, there are downsides that come along with getting a payday loan.

Payday loans typically have high interest rates. Even though no credit check is required, your credit score will be affected if you do not pay back the loan.

Unsecured Loan

Contrary to popular belief, it is still possible for you to get an unsecured loan with bad credit. However, your lender will likely require that you apply with a co-signer. The co–signer must have good credit and a stable employment history. If you cannot pay back the loan, then the co-signer will be responsible.

You and your co-signer’s credit will take a hit if the loan is not paid back. However, there are benefits that you can reap from applying with a co-signer. You may be able to get a loan with a lower interest rate. A cosigner also allows you to get a loan without having to risk your possessions by using them as collateral.



Credit Union Loans

If you trouble getting a loan from a bank, then you should consider going to a credit union. It is easier to get approved for a credit union loan because the standards are more relaxed. They also offer loans for a lower interest rate because they work on a non-profit basis. Additionally, there are fewer fees and penalties.

Keep in mind that your credit score will still determine how much you will be able to borrow.

 


Paperless Borrowing Is Good For Your Business and the Society

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Instant loans or quick cash loans are a great means of matching your urgent cash requirements. Certain mismatches pertaining to your cash flow may arise out of exigency. You must know the benefits of availing the personal loans online and how simple it is for you to acquire them. Alongside a few other benefits, these loans prove to be cost-effective and yield considerable flexibility in repayment.

Small Businesses Are Opting For Green Options

Going Green is actually about going paperless and making the most of other resources. Instead of using hoardings, a majority of businesses are utilizing the power of social media for promoting their brands. This is a great move towards consuming less of paper and saving more trees.

Small businesses are even opting for paperless credit options like quick loans in their attempt to reduce operational costs and accumulate working capital. Paperless loans can help save much of the processing time besides saving the processing costs.

Benefits of Paperless Loans Have Been Stated Below:

Simple and Fast

Cash loans are much simpler and faster to achieve than the secured loans that are of traditional nature and taken for a longer term. Quick loans can be processed and the funds transferred instantly due to a back-end support technology that’s based on consumer data. Much of this ease and comfort has been driven by the advent of technology.

No Paperwork

Online loans don’t involve paperwork. They don’t require you to spend time in visiting a physical lending organization. They even help save much of your invaluable time as the processing time is much faster than traditional loans. The KYC information of an application is processed by the engine for determining the creditworthiness of the applicant. The funds are transferred within 24 hours. These loans are your perfect option to go green.

Apt Borrowing

The utility bills that you pay and your monthly income help in determining the amount that you actually need to borrow. It helps to keep a borrower away from the debt burden besides helping him borrow within the eligible limit. The creditworthiness of a borrower is even enhanced as recovery of cash loans involves a simple and timely procedure.

Data Security

All individuals aren’t comfortable about sharing his income and other personal details. The lending organization is bound to store all personal information pertaining to customers in an encrypted server. Such personal data shouldn’t be shared with any third party business. Both the borrower and the lender gains more ground to develop their relationship based on mutual trust and transparency.

Emergency Avenue

Regardless of how efficiently you plan, life often shows you through some unpredictable circumstances. Quick loans can be availed within a span of 24 hours. There are instances wherein these loans got disbursed within an hour or just a couple of hours. Certain financial factors might lead you through exigencies; quick loans help you resolve all of these issues.

Convenient Methods

Lenders providing quick loans provide their services through applications that are run on the web or mobile. These applications can be run 24×7. The minimal requirement of manual applicability and computations that are backed by data make things more convenient for the borrower. It even enables a borrower to avail it with just a few clicks.

Flexible Usage

Under circumstances when a mismatch in cash flow arises, you may utilize quick cash loans. For instance, you may consider buying a gift, buying a cell phone or experience shortfall while repaying your utility bills. You won’t feel any restriction while utilizing these loans; you may utilize them for all activities.

Transparency

The Federal Trade Commission regulates the quick loan operations within the US. A certain degree of transparency is maintained throughout the process and it even rules out breaching of the policies governing the issuance of loans. While borrowing a certain amount, the applicant achieves much comfort once he obtains the regulator’s license.

Limiting Fees and Interest Rate

Online loans aren’t believed to be secured and hence the regulator enforces some limitations on their interest rates. It actually depends on the lender’s organization channels. This is one way of protecting the borrower from unjustifiable charges and pricing.

Flexible Tenure

Regardless of the loan tenure opted by the borrower while submitting his application, he can opt for an extension of the loan tenure or may even choose to decrease it. Lenders may choose to offer it on certain cases wherein more flexibility is provided to the borrower against a higher fee. These online loans are usually offered on a short-term basis that enables the borrower to repay the entire amount when he receives another paycheck.



Quick loans come with a lot of simplicity, processing speed, and repayment flexibility. These days, the loan application model based on Android apps makes it easier for the user to enter all necessary information even while he’s on the move. The computation seems to be perfect with the assistance of a back-end engine and paperless application helps support the Go Green movement!


How short-term loans help your business to grow

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A short-term loan often seems to be the best option for a small-business owner. However, you won’t find any opportunity to escape debt once you’re stuck in a seemingly never-ending cycle of persistent lenders. It often happens – and it’s hard on a business owner. You may accept certain terms that seem agreeable without knowing how it will affect the credit or cash flow of your business. Before you even realize, you might be dragged into this unsustainable and uniform debt burden.

But this doesn’t necessarily mean that you’ll turn insolvent due to your short-term loans. You may actually help push your business in a positive direction if you follow the loan repayment terms diligently or if you utilize the money more cautiously. Prior to applying for a short-term loan, you must consider your spending habits and other associated things. Analyze your cost-benefit and take every step cautiously.

Here are a few important points to consider:

• Generating revenue: Are you eyeing at an opportunity for generating revenue? A short-term loan often helps you catch a good deal or fulfill a great order. Then your interest payments are likely to be matched by the ROI (return on investment). On the contrary, your financial situation isn’t nice when you’re attempting to make a payroll by applying for a short-term loan. In case you aren’t earning an extra amount, you’re bound to be hit hard by the expensive rate of interest.

• Cash flow: Your cash flow tends to get reduced due to the daily loan repayments. You won’t land up in trouble if you can manage the debt schedule for your business. A short-term loan doesn’t seem to be a good option for you when paying it early doesn’t suit your model or if it restricts your options. You may check out for more borrowing options when you have several daily expenses, generate infrequent revenue, or just have a small number of clients.



• Emergencies: Your equipment is broken down by a storm. You lose inventory during transit. Any of your employees turn sick. Assuming such emergencies, sometimes you’re only left with the option of a short-term loan. You’ll need to be absolutely sure of your loan repayment plan if you really want to live life hassle-free. Don’t let your business turn bankrupt by leaving it to risks.

• Paying back in-advance: The risk tends to be lesser when you’ve applied for a short-term loan and you even have the potential to pay it off early on. It often seems complicated when you’re trying to pay off your loan earlier, but then you won’t need to apply for another short-term loan to pay it off. But while repaying it early, you must bear the initial interest and you are also not supposed to utilize another short-term loan for refinancing.

You must brace yourself for unforeseen events and allocate a certain line of credit for running your business. You can pull out of every debt as you repay the amounts that you borrow on time.


5 Things to Consider When Applying For Loans That Are Meant for the Unemployed

A number of opportunities and avenues are created by a job. Achieving a loan doesn’t prove to be a crucial issue when you have a job. However, things turn out to be different when you’re unemployed and required an extra bit of financial assistance. In the absence of an immediate respite, things tend to feel more complicated. You may check out a few variable options if you wish to source loans. Managing your cash flow often becomes tough when you aren’t employed. Likewise, it doesn’t take much time to source funds once you’re able to spot the ideal offers.

Few key factors that have to be taken into account while signing up with a lender:

1. Evaluate All Needs

Loans can be achieved from a number of online lenders. Prior to signing up with an online lender, you must read through the fine print and do some extensive search. Pick deals that match your needs to perfection after evaluating them carefully. Your financial strength determines your ability to secure a loan. A loan application is accepted and the funds released only after your entire financial situation gets checked by a lender.

2. Pick the Best Option

You must choose an option that actually suffices your need. Both the secured and unsecured loans are available to you. The provision of showing any of your assets in the form of collateral helps you to achieve the secure loans more easily. That’s one reason why you must consider the unsecured loans only for a short-term requirement. But in doing so, you might need to bear a higher rate of interest with the unsecured loan. Keep an eye on your current requirement while applying for your loan.

3. Seeking the Assistance of a Guarantor

Seek the assistance of a guarantor if you’re experiencing any challenge for securing funds. The rate of loan approvals enhanced when you have any of your loved ones acting as a guarantor. The guarantor must also possess a sound credit standing and a stable source of income.

4. Achieving Unemployed Loans with Poor Credit

Your credit score is bound to be affected when you fail to repay your loan within the payment due date. This is an important reason behind achieving an inferior credit score when you aren’t employed. Borrowers with bad credit may derive considerable financial assistance out of loans that are meant for the unemployed. These loans can be used for various purposes. It becomes much easier for you to repair your credit score when you repay the dues on time.



5. Checking Out Online Opportunities

Applying for loans online yields a few nice offers for you when you’re able to keen to achieve guaranteed loans aimed at the unemployed. You don’t need to go through a lot of documentation and paperwork for achieving the funds as the loans add much to the convenience of online borrowers. Apart from this, you’re needed to fill out your basic information over the internet. The loan amount is transferred to your account immediately after your credentials get verified by the lender.

 


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 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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Secured and Unsecured Loans – How to distinguish between them

A personal loan is always there to improve your financial situation whenever you find yourself amidst financial challenges. Even under circumstances when you need some money for purchasing something, such loans could be of great help. Your loan amount may vary depending on the terms of repayment, rates of interest and principal amounts. Secured and unsecured loans are the two types of personal loans that you come across in the market. You must understand the differences between these two categories in order to avoid trouble in the future.

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What is a secured loan?

A loan that needs collateral is termed as a secured loan. You must put up something worthy of meeting the lender’s losses in the event of your failure to repay the loan amount. It will enable the lender to recoup much of the loan amount by selling the object that you put up as collateral. Besides using jewelry, you may use your land, vehicles and properties for putting your collateral. This type of loan is described as “secured” due to its nature. Loans of this type turn the lenders more flexible and let them provide bigger amounts as principal, longer periods of repayment and better charges and rates for the borrower.

What is an unsecured loan?

A loan that doesn’t need collateral is termed as an unsecured loan. This option proves a lot safer from the perspective of a borrower. It protects the borrower from losing something important or valuable like that of his home. It tends to be riskier from the perspective of a lender. That’s one reason why the lenders run credit checks and issue loans worth smaller amounts. An unsecured loan helps you to reimburse amounts that you spend towards small purchases, home repairs, using cars or going out on vacations. Till you posses a good credit score and earn handsomely, you can’t expect a loan more than $10,000.

Qualifying for an unsecured loan

When it comes to an unsecured loan, you’ll need to qualify as per a few basic criteria. In the event you don’t meet these norms, you won’t qualify for the loan regardless of how many credit cards and loans you possess.

Loans can’t be issued to minors; you must be at least 18 years of age at the time of application. In order to prove your capacity to reimburse under usual circumstances, you must show a regular monthly income worth $750.

In case you’re applying for loan with a big lender or bank, they will run a credit check to determine your financial stability. Your loan application may be rejected, if your credit history shows any black mark or in case you’re a payment defaulter.

With loans, you’ll need to repay the principal and an additional amount as interest. The interest that you pay is calculated as per the APR (Annual Percentage Rate). This is a portion of the principal that’s calculated every year.

The lender’s wish to create a repayment plan for you seems natural when you can’t make your loan repayments. In case this repayment process fails then they may take any civil action against you or start collecting the proceedings. It could be taken in the event any collateral is placed by you, otherwise you might need to pay the interest back over a longer period of time.


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