Tag Archives: Loans
A loan is a lump sum of money that you borrow with the expectation of paying it back at once or over a period of time with interest. Loan amount and interest may vary depending on your income, debt, credit history, and other factors.
The reasons why you would want a loan may differ. Some needs it to buy a new home, while others will use it for a new car. Whatever your reasons may be, you need to be familiar with the different loan options available to you to make an informed decision.
Secured loans require a collateral so you would need to leverage a personal property or asset in order to acquire one. And since there is a collateral, interest rates are also often lower for secured loans. But, it’s not that easy as your assets are often appraised to confirm its value and you are only allowed to borrow the amount it was assessed for. Getting title loans from reputable lenders, such as Easytitleloansutah.com, for houses and vehicles are a good example of a secured loan. Defaulting on a secured loan will result in the confiscation of your property or asset.
It is more difficult to qualify for unsecured loans and interest rate may be higher as these kinds of loan do not need an asset for collateral. Qualifying for unsecured loans will require that you have a good income and exceptional credit history. A solid payback plan is also an advantage. If you default on this, be ready for a lawsuit.
Conventional loans can be classified as mortgage loans from mortgage lending institutions not insured by a government agency, such as the Federal Housing Administration (FHA), Rural Housing Service (RHS), or the Veterans Administration (VA). These loans may be conforming or non-conforming. Conforming loans follow the guidelines set by Fannie Mae and Freddie Mac while non-conforming loans do not.
You can avail of these loans repeatedly, however, there is a fixed credit line limit. Once you’ve reached the credit limit in question, you need to pay the amount first before you can borrow again. Credit cards are a good example of these loans.
Close-ended loans, unlike open-ended loans, can only be borrowed one time. Your loan balance decreases for each payment you make but your credit line does not replenish. The only way to borrow again is to go through the whole loan process again.
Before applying for any type of loan, make sure that you arm yourself with the right information to avoid costly problems later on.
Title lending has always been bashed by pro-consumer groups in Utah, which repeatedly assert the very nature of this type of financing is predatory. There’s no denying that title loans charge relatively steep rates, but that should be expected, considering the high level of risk lenders take in these transactions.
Not to say that all lenders are clean, but sometimes the borrower might be the one responsible when a title loan doesn’t work out. Why? Here are some of the blunders debtors do that make this secured financing even riskier:
Being Overoptimistic to Repay the Loan on Time
If you plan getting a car title loan in Taylorsville, West Jordan, or Spanish Folk, make sure to keep your confidence in check before signing on the dotted line. You may be sure of yourself that you’d have the money come payment day, but disregarding the possibility of things not turning out as planned is a cardinal sin.
According to a Vanderbilt University study, most borrowers are so positive they could repay the loan on time, only to find themselves facing a larger debt to shoulder after being unable to cover the balance.
Failing to Be Fully Informed
Title loan lenders usually disclose all the information a borrower needs to know about the transaction, but it doesn’t mean the message gets across successfully. Unless you’re 100% sure you understand what exactly are the consequences should you default, and what options you have to avoid repossession, shying away to ask your pressing questions is the worst you could ever do.
Disregarding the Lender’s Incentives
Rewards may just be a bonus, but not using them to your advantage renders them worthless. You should be aware if your lender is running any form of incentive scheme to help save you in interest and finish your loan early. This could serve as an additional motivation for you pay off your borrowed sum and prevent losing your vehicle.
All financial products involve some kind of risk, but lending money always become unnecessarily dicier without doing your due diligence. Do your part, leave no stone unturned to be a smart borrower, and obtain the debt you need.
It is very easy to acquire a personal loan since it involves little paperwork. When in urgent need of money, quick loans are your best option. Since it does not require any security, guarantor, or collateral, it is relatively hassle-free.
However, you need to address the three challenges highlighted in the following text need to ensure that your application is successful.
High Interest Rates
Most borrowers realise that their interest rates are way higher than they would wish or expect. A good rate can save you a lot of money.
First, be sure that your credit score has been improved before borrowing a loan and ensure that the report is free from any errors. Next, only apply for the amount you need. Those who ask for maximum loan amounts end up paying very high loan payments. However tempting it can be to borrow larger amounts than necessary, avoid that trap. Finally, if you are yet to apply for a loan, avoid multiple applications for credit. Note that every time you apply for any credit the scores go down.
In a personal loan for quick cash, you are not guaranteed of getting the full amount requested. If your company or personal profile makes the lender doubt your capacity to repay the amounts requested, you may get only half of what you applied for or experience disbursement delays. If there are accounts that are hurting your report, fix them first.
Credit Score Influence
One of the struggles you are likely to get on your personal loan is getting a loan approval. Bad credit scores discourage lenders from approving personal loan requests. However, if your score does not meet the mark, you still can get the funds you need since there exist lenders that are very flexible with their policies. Here, you have a guarantee of getting a full personal loan.
It is necessary to bear in mind that interest rates for bad credit scores can be dramatically high even when dealing with flexible lenders, which makes it necessary to carry out extensive online and other enquiries before making an application.
A personal loan will get you the cash you need to sort out your short-term cash requirements. You can, however, make it a seamless process if you find ways to circumvent the challenges highlighted above.