Taking a Personal Loan While Unemployed

So, bad financial times have fallen upon your life. Your company decided to make cuts and you were in the mix of the people being let go. You are finding yourself out of a job and the bills still keep coming in. Is it wise to take a personal loan to help you through this rough spell?

If you have to ability to secure a personal loan while you have a lowered or non-existent household income then you may want to jump on the chance to obtain that money while you have the opportunity. It is very hard to acquire a personal loan if you have diminished your income. If you qualify now, consider taking the loan to have some extra money as a cushion while looking for a new job, if you wait, you may not be able to get that loan down the road.

Whether or not to take on more debt while unemployed is a tricky question to answer. If you do not have any significant savings in the bank, you will probably need some extra cash. Counting on unemployment is not going to fully pull you through these hard times. Unemployment will help, but it will only be a fraction of your previous income.

The most important thing to do during this time is changing your spending habits. You must cut way back on everything during this crisis. Many people make a huge mistake and think they are going to be re-employed right away, if that’s the case then great, in reality it will take longer for most people. Cutting all of the luxuries out of your lifestyle is imperative when you are experiencing a financial crunch. No more satellite TV, going out to dinner, even going to the movies; you must cut back on all of your extras and focus on paying the bills.

If you have some savings in the bank that can pull you through then this is good thing. Why would you need to take a loan? One of the most common answers is that “I don’t want to touch my savings”. Well if you think about it, you are actually hurting your overall financial profile by taking on more debt with the personal loan. If your situation lasts longer than you planned, you will be tapping into your savings at some point, but now you will have to use some of it to pay off that loan.

If you know your time off work is going to be temporary, by all means, secure a personal loan to help you through. If you are uncertain about your next job then it is time for major lifestyle changes and time to go into a major spending freeze. Pinching every penny can be a big difference in the long run. Adding on another monthly payment of a personal loan may not be the wisest decision.

Using a Personal Loan for a Used Car

It’s time for a new car. This can be a very exciting time and also a very stressful time in someone’s life. Buying a new car is a milestone in most everyone’s life and the first new car a person buys is a huge step in one’s life. However, it can be a mistake.

Buying brand new is one of the biggest financial losses that a person can make. The second you drive that brand new vehicle off the lot it loses twenty to thirty percent of its original value. If you spend twenty thousand dollars on a brand new car you are losing four thousand dollars the second you start it up to take it home.

Everybody wants to have a brand new car, but by buying a slightly used model you can save thousands of dollars. There is no doubt the feeling that you get from being the first owner of the car of your dreams, but is it worth that money that you are losing through depreciation? That new car smell and the idea of being the first owner is a very intoxicating feeling, but none the less, a mistake in the long run.

Now, if nobody bought new cars then there wouldn’t be new cars to buy. The smart buyer is the one who buys a used late model car and gets the same vehicle for a fraction of the price than that of the new car buyer.

Is this day of age the car market is more competitive than ever. The quality of the cars on the market is at the best that it has ever been. The slightly used car is going to be just as reliable as the brand new purchase of the same model. You actually can get a much better automobile for the same price that someone is paying for a new car. Instead of spending twenty five thousand dollars on a brand new Toyota, your twenty five thousand dollars will get you into a four or five year old Lexus. Your dollar goes a lot further. The manufacture’s warrantee follows the car, plus you can usually purchase additional protection from the dealer for your vehicle.

Taking a personal loan for the purpose of buying a used car give you much more negotiating power when it comes to dealing with the dealership. By having the cash on hand, the dealership haggles with you on the price, rather than having to wait for approval from a bank for a loan on the car.

One cannot argue that buying a brand new car is a great feeling, but so is saving thousands of dollars. Just make sure you get a CarFax report and have a mechanic check out your used car before you buy it. Make sure that all of the maintenance records are available and that the vehicle is in very good shape.

Children and Financial Responsibilities

Teaching your children about financial responsibility before they head off to college is every parent’s duty.

Starting at an early age can really help children learn how important it is to take care of their finances once they get on their own.

Usually through the grammar school years children learn what money is and how it is used. They understand that having money can allow them to purchase things that they want.

By this time an allowance is usually in place and the child should start realizing the importance of saving their money.

Every child should have a savings account set up in their name by the time they are entering middle school, the earlier the better.

By allowing them to see the banking process, they can start to understand how important it can be to handle their money wisely. Let them calculate the interest that they are earning and keep track of deposits and withdrawals. This will give them a sense of how to manage money.

Setting up a prepaid debit card in their name can also be a powerful teaching tool. Give them a line of credit on the card that they can use and then give them a monthly bill just a credit card company would. Include interest on their statement and even add the outrageous fees that we as adults can encounter on our real bills.

By doing this it gives you, the parent, the opportunity to teach your children the pitfalls of the credit card industry without putting anyone’s credit rating and a big sum of money on the line.

Now a days the act of writing checks is becoming a thing of the past. However, keeping track of your checking account is still an important part of financial responsibility.

When your child reaches high school, think about setting up a joint checking account and let your child keep track of all the transactions that occur on the account.

This will, with addition of the debit card, give them experience of maintaining a few different accounts that are open at one time.

Let your child make spending mistakes and give them the penalties for their actions. This will reinforce the learning curve of financial responsibility.

By the time your child is in their first semester at college they will be bombarded by credit card offers and preapproved loans.

With the teachings they received as they grew up, hopefully they will understand the workings of our credit industry and they will realize the importance of responsible spending. This can go a long way in protecting your child’s future.

Comparing Personal Loans to Home Equity Loans

When it comes to making improvements to your home, is it wiser to take a home equity loan, or to take out a personal loan?

There are many different arguments for both transactions.

In either case, the interest rate is an important factor as well as the amount and time of the loan. Obviously, you want to get the best deal on your loan and make the most of the money borrowed. Let’s take a look at the pros and cons of each type of loan and what would fit your needs best.

When it comes to home improvements the rule of thumb is that you want to get more money back than what you spent on the upgrades when it comes time to sell your house. You want to profit on your enhancements. This has a few stipulations. If you are going to be in your home for quite some time then the home improvements will probably be outdated by the time it comes to sell your home.

Major structural changes will add value, but tastes change over the years and what is popular now will not be in ten to fifteen years. So, cosmetic changes will probably not give you a major return on your investment. If you are planning on being there for a long period of time, make the changes you want and enjoy your house. If you are planning on selling in the short term, then you must spend your money wisely and try to make upgrades that are neutral and will appeal to a larger amount of people’s tastes.

In general a home equity loan can usually afford the borrower a larger amount of money than a personal loan. If you are making major changes to your house, this can be the right way to go. You mortgage holder will be more willing to lend you a larger sum, because they know that the value of your home will increase. This is a good way to go if you are making major structural changes such as additions to your dwelling. The problem with this is that you have to use the money for home improvements only.

If you are just remodeling, a personal loan is probably the better bet. Remodeling the kitchen is usually within the limits of a personal loan. Once you have completed paying off the loan for the kitchen, it is time to take out another loan to redo the bedroom and bathrooms.

This gives you the option to progress your embellishments over a longer period of time and enables you to keep up with the latest trends in home remodeling. A true benefit to taking out a personal loan is the positive affect on your credit rating. Paying of smaller loans in a quicker amount of time will increase your borrowing power in the future.

When it does become time to sell your house, the home equity loan will provide you with a more accurate summary of whether your investment was profitable or not. When you try to keep track of the personal loans over the period of time you have spent upgrading your house, you can lose track of what you actually spent. You may have used some of the personal loan money to pay for braces or to fix the car and over time this can be hard to track unless you are very good at keeping track of your finances. Just make sure that you enjoy your improvements without losing money on your upgrades.

Is it really a good idea to borrow from your 401(k)?

Is it wise to borrow against your 401K?

This depends on the situation that has come up; however, taking a personal loan can be more beneficial to your credit rating in the long run. There are many circumstances in life that come up where we need some extra cash to help through a financial situation and using your 401k is a good option for obtaining this money, but this option does not affect your credit score.

In most cases, you can only use your borrowed 401k funds for medical bills, education, or the purchase of a home. If you are taking out a loan in the first place, then it may be a wiser decision to borrow the funds from a lending institution and use this advance in your favor to increase your credit a score. There are many advantages in using your 401k; however you are borrowing from yourself and are missing out on an opportunity to improve your credit rating and borrowing capabilities for future loans.

If you have the choice between your 401k and a lending institution, leave your 401k alone. There are some factors that can hurt your retirement fund if you do not pay back the 401k loan, or move on to a different employer before you have paid off your 401k loan.  If you do not pay off your 401k then you are subject to extra taxes and early withdrawal penalties. If you move on to a different job then you must pay back your 401k loan or face the same consequences.

By borrowing from a lending institution, you are leaving your retirement savings alone and not risking paying fees and taxes. In both cases you will have to pay interest on the loan, but a personal loan from an institution avoids the fees and taxes as long as you are making your payments on time.

One idea that you may want to consider is using a loan against your 401k to pay off existing loans or future loans. Use the opportunity to borrow from a bank and then if you have the option to pay off the loan early, use your 401k to pay off the balance. This improves your credit score and will you the benefit of a cheaper interest rate from your 401k loan.

Be aware that in most cases if you borrow against your 401k, the payment will be directly withdrawn from your paycheck. If you have a lot of automatic online payments from your paycheck, be sure to account the lack of that money in your account on a monthly basis.

All In all, use your ability to obtain a loan from a financial institution to increase your credit score and leave your 401k alone.

Why people choose to apply for Personal Loans

There are so many different types of loans available, most of which are design for a specific purpose. The personal loan is one of the most attractive loans available to date. A personal loan can be used in a number of ways and with the easy repayment terms of these loans they are more effective than most loans. You can find a vast number of online vendors as well as banks that offer personal loans but it is still important to shop around for the best interest rate.

Personal loans are often use for home improvements or remodeling. They have a lower interest rate on them when compare to construction financing options and credit cards. When homeowners decide to use their credit cards or apply for lines of credit from home improvement stores, they run the risk of running out of money to complete their projects. With a personal loan, you know exactly how much money you have to work with and the size of a personal loan will likely be three to four times greater than the limit on a line of credit or credit card.

Personal loans are also commonly used for debt consolidation. They have better interest rates than most debt consolidation loans and have an easier payment plan established. You typically will not find any penalties when it comes to paying off your personal loan, whereas you may encounter this type of a problem with a debt consolidation loan. The personal loan has quickly become the most sought after style of loan.

When using a personal loan to consolidate your credit card debt, keep in mind why you took out the loan to begin with. A lot of people who use personal loans to consolidate their credit cards, they quickly begin using the credit cards again and find themselves back in the same situation. Sitting down and figuring out a method to help control your financial spending or meeting with a financial advisor may be something to consider as well.

The Flexibility of a Personal Loan

You never know when you are going to need the support of that 720 credit score you have been working so hard to maintain. One day you find yourself in a bit of a financial pinch and need a little bit of help to get through a tough spot. Perhaps you are planning on getting married and the interest rates on wedding loans are too much for you budget or maybe you did not get approved for the amount you wanted or needed. It does not matter what you need the loan for; it could be a new car or taking that big vacation you have been putting off, a personal loan could be just what the doctor ordered!

With the emergence of wedding loans and medical loans, more and more people have turned to these types of loans to help cover the cost of their expenses but are they better than a traditional personal loan? It depends on what you are going to use the loan for and how much you are looking for borrow. Personal loans have been around far longer than a lot of these newer loan models and were designed to give you more freedom. You can use your personal loan for just about anything you can think of, making it the ideal choice for whatever you need. The interest rates on personal loans usually end up being about the same as other types of loans and in some cases; they can have lower interest rates.

When considering the type of loan you want to apply for, consider the following. What is the length of the loan? If you are applying for a $15,000 wedding loan and you are given six months to pay it back, you may be better off looking into a personal loan for a longer term loan to ease your burden. You will also find that you have a lot more flexibility with a personal loan than you will any other type of loan. They were created specifically to be vague so they could be tailored to meet the needs of the applicant. Do not be afraid to shop around and learn more about the different type of loan options that you can apply for. It is better for you to do your research and save yourself the hassle of potentially having to default on a loan.

Deciding the Best Way to Spend Personal Loans

Personal loans can be used for many different things, maybe even some you have never thought of before. It doesn’t matter if you are trying to figure out new ways to pay old bills, or if you need a vacation to spoil yourself, there are personal loans out there to help you. You can look up loans by walking into a loan store or a bank, but you will not likely find nearly as much leeway as you would if you looked up your loan needs online. The internet is going to give everyone the anonymity they desire when looking up these loans, as well as many more options than most banks or loan stores can offer.

If you decide that you want to put all of your bills together in one place, then a personal loan can be a perfect solution. Some people choose debt consolidation loans, but these tend to have larger requirements than personal loans have. You could make one easy payment for your loan each month, and finally have the mental freedom of knowing that your bills are all paid and taken care of. Just think about how nice it would be to open your mailbox or answer your phone without worry anymore. That is why personal loans are such a great option for getting that financial freedom back.

If you decide that you have earned a vacation after a long time of hard work, a personal loan is going to be able to help you make that dream come true. If you pick the right season to travel in, you will get even more bang for your buck. You can travel during an off-peak time period and pay as little as half of your normal prices, giving you more options of ways to spend that personal loan. Maybe you can even treat yourself to some special vacation treats as a sideline benefit… maybe a new outfit or two, or a new swimsuit? The only thing limiting your options is your imagination.

Using personal loans to help you get into a better situation in one form or another is just one way of viewing your loan options. Look around, and see what you can find in the range you can realistically pay back. Take the time to decide that the loan you get is really the loan you want or need. If you take too little, you may not be able to get more down the line for a while. If you take too much, you may stretch yourself too thin. Just make sure that the loan is something you can pay back, and then enjoy giving yourself that special treat.

Understanding the Differences in Loans

If you are considering a personal loan, you need to make sure that you understand the difference between a personal loan and a payday style of loan. There are quite a few things that make them different, even if you qualify for the same amount in each style of loan. Knowing what these differences will help you decide on what you need, and make sure you do not get yourself into something you may end up having trouble with later.

Payday styles of loans are loans that have a very short turn around. These loans need to be paid back in weeks, not months or years. They also have a higher interest rate, which makes them a great choice if you only need the money for a very short amount of time. If you are needing the money for a few months, or just need a few months to pay it back, then you should look into a small personal loan. These give more leeway when it comes to time for repayment, and they usually have a lower interest rate overall. They take a bit longer to apply for and receive funds for in most cases, so this is why some people choose payday loans over personal loans. If you need the money today or tomorrow, then a personal loan may not be the best way to approach your situation.

If you are in need of a loan, then consider all of your choices carefully. It is often difficult to decide when it is a pressure situation, so any preparation that you can do ahead of time will help. Take the time to read through all of the small print to make sure that you are getting exactly what you want and that you are going to be able to pay it back. If you take this time ahead of time, then you will not be in the same spot when it comes time to pay it back.

Is It Worth Getting A Personal Loan to Remodel Your House

Now that spring is in the air, you have decided it is time to look into doing some of the remodeling work you have been talking about. You know that the project is going to cost you a pretty-penny but you are not sure about draining your savings account to do it. A lot of people avoid these types of endeavors simply because they are not comfortable with the idea of having next to no money left in their accounts for any emergencies. You do have places you can turn to for help, so you do not have to give up on your desires to do the projects you had in mind.

Most personal loans review your credit, and once approved, the range of your loan amount will be someplace between $2000 and $25,000. You can use this money to tackle those pesky projects around the house that you and your spouse have agreed need to be updated. Most personal loans do not have a penalty for repaying the loan early, so if you end up spending less money than you expected, you can always use some of the remaining amount to help repay the loan.

If you are going to use the loan to hire someone to do your home renovations, I would suggest having the contractor or company who is handling the work provide you with a written estimate. If you have an older style of house, I strongly suggest you add an additional 10% to the amount of the estimate to cover any unexpected issues that may arise. These unexpected issues could be anything from bad wiring to water damage or even heavy wear and tear. It is always better to have a little more than you need, just in case.

The biggest thing to remember when applying for a personal loan, is making sure that you are able to make your payments. A personal loan will directly effect your credit. With as difficult as it can be to repair your credit, it is in everyone’s best interest to try and make their payments a little bit early if they can or at the very least, on time. Remember your credit score is kind of like your reputation and the harder you work to maintain your reputation, the more fruit it will bare for you.