Posted on June 1, 2012 in:
Blog|Comments Off on 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Be aware that in most cases if you borrow against your 401k, the payment will be directly withdrawn from your paycheck.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.
Posted on May 21, 2012 in:
Blog|Comments Off on 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.
Posted on May 7, 2012 in:
Blog|Comments Off on 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.
Posted on April 16, 2012 in:
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Pesonal Loans|Comments Off on 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.
Posted on April 9, 2012 in:
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Pesonal Loans|Comments Off on 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.
Posted on March 20, 2012 in:
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Pesonal Loans|Comments Off on 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.
Posted on February 27, 2012 in:
Blog,
Pesonal Loans|Comments Off on 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.
Posted on February 20, 2012 in:
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Pesonal Loans|Comments Off on 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.
Posted on February 13, 2012 in:
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Pesonal Loans|Comments Off on 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.
Posted on January 17, 2012 in:
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Pesonal Loans|Comments Off on The 7 most popular uses for a personal loan
I am going to give you a few popular uses for a personal loan. Please be advised that this is not necessarily for everyone.
- The Home Improvement Loan
We can all use a little bit of work on our dwellings; this is a very popular reason that people take out personal loans. Be advised that you should check with a professional before any work is done with regards of a personal loan. You are more likely to get your money back from taking an equity loan against your property than actually using your personal credit for this action. Your house has its own identity with value, use your home for its own good and upgrading.
- The Auto Loan
You will more than likely lose money on this loan due to the depreciation of the vehicle, however, you end up with a true asset in regards that you have a vehicle. By securing funds through a personal loan before you begin shopping for a vehicle gives you leverage in negotiating the price of the vehicle. Having cash on hand is always a way to get a lower price for the vehicle and you do not have to deal with the hassles of financing your purchase.
- The Student Loan
This is a popular use for personal loans; however you are probably better of taking out a student loan to further the education of yourself or your children. The terms of paying back the student loan are much easier as you usually do not begin to pay back the loan until you are finished getting the education. Interest rates are usually lower on a student loan than a personal loan.
- The Debt Payoff Loan
This can be a very beneficial use of a personal loan. If you are finding yourself with a lot of credit card debt at high interest rates and fees, then obtaining a lower rate personal loan to pay off the credit cards is very cost effective and a financially sound decision. One very important aspect is to not use your credit cards after you have paid them off with the personal loan. You will end up deeper in debt and find it hard to overcome the debt. Wait until you have paid off the personal loan before you start using the credit cards again.
- The Loan to Another Family Member
Taking out a personal loan to give to another family member is usually not a good idea. The person you are loaning the money to probably has poor credit or has a lot of debt, hence they are asking to use your credit to help them out. If you do decide to help out a family member by taking out a personal loan, make sure that you have the ability to pay off this loan in case the family member misses payments or ends up defaulting. You do not want to ruin your credit by missing payments.
- The Medical Loan
Obviously no one wants to use a loan for medical reasons, but sometimes it is just plain necessary to obtain medical care. If you find yourself in this situation, just make sure you do not over extend yourself financially; sometimes you just don’t have a choice.
- The Vacation Loan
This is a very popular use for personal loans and is quite worth the incurred debt. People need vacations and by using your credit to obtain a personal loan you end up with a much better vacation. Make sure that you have the means to repay this loan and do not just borrow and spend the money unwisely.