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.

Common Myths about Applying for Loans

You have been working very hard to make sure that you cover all of your bills each month and keep your credit score in check. Then one day you come across a financial crisis. Perhaps your car has broken down and is in desperate need of repair, or maybe you have to move suddenly. No matter what the problem is, there is a moment of panic that everyone will experience. Now is not the time to panic; step back for a moment and regain your composure before you begin looking for financial solutions. This will help you avoid a lot of common mistakes and also help the odds that you will not be taken advantage of by some of the hundreds of loan companies in your area.

While in a state of panic, a lot of people tend to use the fishing myth for applying for a personal loan. The fishing myth is often what people call it when someone applies for dozens of personal loans, to try and get a feel for what they can be approved for, how quickly they can get it and how much the interest will be. While they are all important things to consider, it is wise for applicants to figure out if these applications will affect their credit scores. Most loan companies run a credit check to see what your payment history is like as well as your debt to income ratios. Depending on how this is done, it can count as a hit on your credit rather than just an inquiry.

Another myth that a lot of people don’t give enough credence to, is applying for more than they need. They feel that if they apply for more than they need, they can use the extra funds to make the first loan payment or buy something that they have been trying to save money for. They think that by applying for a larger loan that it will extend the amount of time they have to repay the loan. This is not the case. The term of the loan is pre-determined by the company that is issuing the loan. These payments are broken into even installments and if you take out a larger loan than you would need, you run the risk of not being able to repay your loan on time. This can quickly cost you hundreds of dollars. This can also rapidly reduce your credit score. When you default on a loan it is an instant black mark on your credit report and it is one of the hardest marks for anyone to remove.

Taking the time to look for the right loan before you apply is one of the ways you can avoid being victim to some of these myths. You can also look for a lending company that works with you to find loans from several different institutes. This way you are only placing one application that is able to be reviews by multiple lenders. This increases the chances of finding a loan with a single application, which can help prevent any more dings to your credit score.

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.


Should you accept a pre-approved personal loan?

So you receive information that you are pre-approved for a personal loan. There are many questions to answer before you decide to accept the loan. Normally you will have a decent credit score for a financial institution to offer you a loan, or your credit score has just recently been upgraded. Everybody needs extra cash in their lives, but should you take the loan? Let’s ask a few questions to see if taking the loan is right for you.

Why are they offering you a pre-approved loan?

Generally speaking, you have probably recently paid off the balance of one or more credit cards and financial institutions are assuming that you have freed up your monthly budget and you can afford to take on more debt. This situation is probably true; however you may not want to immediately put yourself back in that situation. The financial institutions want you to use the money that they are offering you and are hoping that you find it beneficial to accept their loan. They have looked at your credit history and feel secure in offering you a loan.

Do you need extra cash for some expenses?

If you are in need of some extra money for a new car or some household repairs, then it may be wise to accept the loan. Just be wary not to jump on the loan for some luxuries that you would like to purchase. Many times the interest rates are higher than if you were to go to your bank and apply for a loan. In these troubled economic times it may be best not to add more debt to your financial portfolio. If you really need the cash then you probably should accept the loan, but make sure that you understand all of the terms offered and know that you can afford to add the extra monthly debt to your expenses.

How much money are they offering you?

Normally pre-approved personal loans that are not tied to a house purchase will not be an extremely substantial amount of money. Make sure you check the interest rate that is tied to the loan and if you actually require extra money, see if you can only accept a portion of the loan offered. You may be better off using your credit cards to help out with the necessities of life.

Just remember to ask yourself if you truly need the loan offered. It can be very tempting to accept a pre-approved loan, but it can be a burden.

Ways to Use a Personal Loan to Help with Moving Expenses

Ok, you have to move. This is going to be a very stressful time in your life. Taking a personal loan to help out on this situation will help you out in many ways. If you are not being moved by the company that you work for, than the cost is totally on you.

There are many different reasons that people make a major move, family, business opportunities, or even the fact that you need to get to a new place. Keep in mind that a major move costs a lot of money and you want to have the ability to pay back any loans that you incur before you make that move.

Taking a personal loan to just move “somewhere else” is not a good idea. You need to know what you are doing before you decide to borrow that money; your credit is on the line and you have to have the means to pay off your debt. A personal loan can help in a lot of ways when it comes to the actual moving process.

The cost of a moving company or truck rental (don’t forget fuel) can range in the thousands of dollars. Add on the cost of a deposit on a new rental place can put you out of the possibility of moving. Taking a personal loan that can cover these costs will definitely be a benefit as long as you have the means for making the payments.

Moving is never fun, I have never met someone that “likes” to move. Having that extra cash on hand can make a big difference. You can hire local help to assist you with the actual move in to your new place. The personal loan can give you peace of mind as you are entering a new location, it would be cheaper than using your credit cards, and the rate should be lower.

By having the cash on hand, you can feel more comfortable in your “new town”. I highly recommend that you use a personal loan for a major move, just make sure that you have the means to pay it off once you get there.

The benefit of having the cash on hand in a new environment is priceless. Be smart when you take out a personal loan, you need to use the money wisely and efficiently. Just trust in your instincts and know that cash in your pocket is a good thing when moving.

Can a Personal Loan Help with Expensive Car Repairs

You have a big problem, your car needs some major repairs and you do not have enough money to cover the costs. There are several factors that you want to look into before you decide to take out a personal loan to cover the repair costs.

Obviously this car has expired its manufactures’ warrantee and the vehicle will be a little bit older in age. Has the car provided you with sound, reliable service? Are other repairs in the future? If you know your vehicle well and have just had a bit of bad luck, then yes, take a personal loan to fix the problem.

If the car or truck in question can be on its last legs, you are better off cutting your losses and using the money borrowed to buy a newer vehicle. You do not want to get into a situation where you become “Car Poor”; the amount that you have spent on the vehicle exceeds its actual value.

The major factors depend on what the problem with the vehicle is. Major engine problems will tend to lead to a lot of other problems that can cost more money down the road. You may have cooling issues or oil problems that will cripple the car’s usefulness. Suspension problems are an easy fix and I recommend that you take a loan on these issues; it’s just wear and tear.

If you are fixing up an older antique car, then a personal loan to help you with the cost is recommended. You will get your money back if you know what you are doing.

If you have a car that is worth less than $5000.00 by the “Kelly Blue Book” value, then you do not want to spend more than $1000.00 on repairs. If you have the credit for a personal loan, you have used car credit. You are better off taking a loan for another car than fixing a vehicle that will continue to be a costly issue.

Make sure that you feel that the vehicle is worth the investment. If you are in this situation, be sure that you know your vehicles history and have faith that the money spent will be worth it. You do not want to spend a lot of money on a car that will have more problems ahead of it. If the vehicle has been loyal and needs a minor repair to keep it running smoothly, take out the loan.

What to Consider when Chosing a Personal Loan

There are many reasons people take out personal loans. A personal loan can be very helpful for many different reasons, but be sure that you take this financial obligation very seriously. Here are some tips when it comes to deciding on a personal loan.

Interest Rate:
This is the most important factor when it comes to considering taking out a personal loan. The interest rate that you end up agreeing upon can cost a lot of money when you consider the life of the loan. Most personal loans are usual taken out on s short term basis (under five years) and time factor of the interest is not as important as say a home mortgage, but the interest can add up to costing you a lot of money. You always want to make sure that you get the best interest rate possible and you want to do some research to find that interest rate. Just as an example, if you borrow $1000.00 at 10% you will be paying pack the lender $1100.00, that may not seem like a big deal, but that is an extra month’s payment on that loan. When you multiply that loan to a higher amount borrowed you can see how obtaining the lowest possible interest rate can really be important.

Who you Borrow from:
In general you bank is the best bet when it comes to taking out a personal loan. The interest rates tend to be lower and you have already established a business relationship with this institution. By borrowing from your bank, you tighten that relationship and establish credit with them that you can benefit from in the future. Credit unions are also a very good place to obtain personal loans and it is usually fairly easy to obtain credit from these establishments. You do want to avoid the “Quick Cash Now” establishments. These businesses often charge considerably higher interest rates. They can be the solution as they are more lenient when it comes to your past credit history.

Length of the Loan:
As a rule; you want to try and pay of the personal loan as quickly as possible. The drawback to doing this is higher monthly payments. You want to figure out what you can afford to pay and how quickly you can pay back the loan without jeopardizing a healthy monthly cash flow. If necessary, chose a loan that lasts a little longer to make sure you have the money to pay your other monthly living expenses. Most personal loans will have a penalty clause attached to them in the event that you pay it off early. The lender needs to make money on the loan and will charge you fees to make sure it was worth their while to lend you the money.

Using a Personal Loan to Start a Business

When it comes to using a personal loan to start a business, you better have all of your facts right. You want to take a personal loan to start a business very seriously. It is always wise to first establish a LLC or corporation, depending on the state that you are doing business in.

An LLC is a “limited liability corporation” and is common in most states. You are establishing a company that will take all responsibilities of the financial health of your business. This form of company does depend on your personal credit, but does not put your house or other assets on line to run this company. The LLC becomes its own entity and is able to pay or default on any loans that it acquires through the process of doing business.

By taking a personal loan on the LLC that you have established, this leaves your personal assets available for consumption if there is a default on a loan or if your company cannot pay. By taking a personal loan to help your business through tough times or to establish more capital you are taking a risk by putting your personal assets in jeopardy in case something happens to your business and you are unable to pay off your personal loan.

A personal loan can be very helpful towards your business, but just make sure that the money you are borrowing is not to try and save a business that really struggling or is used for an unproven business plan or venture. Starting a business is always a risky thing and you want to make sure that you have done enough research and planning to make the risk worth it. When you use your personal assets as collateral for your start up business, try to have an outside source of income other than the business to make it possible to pay off the loan in case the startup business is not a success.

Always make it a number one priority in your business plan to pay off the personal loan as soon as possible, even if you do incur penalty fees by doing so. Using a personal loan for your business can be very helpful, but you want to remove that liability from your personal profile and use the company once it is established to take the burden of any outstanding debt. Just make sure that you have a valid game plan to pay back any loans taken out with your personal line of credit.