Category Archives: Personal Finance

Online Loan Risks Worth Taking – Take a look

Low credit or more popularly referred to as bad credit is often the most undesirable state to be in when you are faced with an emergency and are looking for loans. Had it been some 20 years back, getting a loan was almost impossible with a bad credit score. However, in the current time there are a lot of lenders who have come up to cover the gap which was created with none of the banks operating in the space. However, this leads to another question- How to select the ones which are reputed and best suited to our requirements and the financial situation.

Working out the terms of the loan

It goes without saying that if you have bad credit, taking a loan which calls for the lower monthly installment will be the best situation to be in. However, at times one has to compromise with the loan terms offered by the lenders. Loans with bad credit are generally the high risk loans where the pressure on the borrowers is of paying a higher amount in the form of interests while the lenders are skeptical about the fact whether the borrowers will be able to pay the amount or not.

So with the bad credit short term loans like the payday loans it always, makes a lot of sense to accept their terms and conditions only when you can make the repayment on time and understand the merits and demerits of the loan.

  • Immediate access to money

One of the biggest factors associated with these loans is the approval rates on them. There are hardly any lenders who deny the loan request for the payday loans. With no collateral and a bad credit getting a sure shot approval always attracts customers towards this loan. However, all is not that great. There are considerations which need to be taken.

The amount of money one can get under these loans is extremely low and can extend for up to $2000. These loans can be granted within hours of submitting the application and are best suited in case of emergencies where one needs small amounts of money from

However, the real game begins when it comes to the repayment of these loans. Based on the paycheck, these loans carry an interest rate as high as 30% for the period of 14-30days. For an amount of $1500 an individual will need to pay a sum of $1950 with the interest and the fees. This means that they will be left with little money to deal with their monthly expenses. This in the grip of payday loans is often seen taking multiple of these loans.

  • Person 2 Person (P2P) Loans

There are loan sites which connect the borrowers to the lenders directly. Borrowers put their loan taking criteria which if the lenders agree; the two parties contact each other and go ahead with the loan proceedings. These loans are extremely high risk for the lenders as there is less chance of them getting any respite if the borrowers default.


  • Cosigner Loans

A third option is a cosigner loan, which is arguably the most affordable option when seeking a personal loan with bad credit. The interest rate is kept low by a cosigner, who guarantees the monthly repayments will be made without fail. This means the degree of risk a lender faces is effectively removed, and because of this a low interest rate is charged.

In case of the bad credit loans with a co-signer, the risk of the lenders is reduced to the minimum. The lenders usually agree for a lower interest rate and this means a lower monthly repayment for the borrowers much to their satisfaction. In case of defaults, lenders have all the right to put the cosigners into a tight spot by forcing them into the repayment of the loans which the actual borrowers failed to do.

Home improvement loan makes your home lovable place to live in!

The home improving process is quite expensive and this makes it necessary to avail loans for the purpose as this expense cannot be deferred. Financial aid in the form of grants and loans are extended to those who need to renovate their homes, beach houses and farms or any real estate. To implement the idea of renovation, most of the people depend on the home improvement loans or home improvement grants. The offer could be availed for the purpose of renovating residential buildings only and the loan is not offered to the renovation of real estate with a commercial purpose.

Home improvement grants options

Similar to educational grants and medical grants, the home improvement grants are offered by the federal government for the economic enhancement of the society. The agencies authorized by the federal government offer grants to the consumers belonging to around thousands of various categories. The purpose of the offer is to renovate the homes and the amount should be used exclusively for that. There are offers solely for supporting senior citizens and there are offers of grants to support the low income people. Besides home improvement grants, home improvement loans are much sought after by the people for renovation of their homes.

How does the home improvement loan functions?

Home improvement loan is a secured loan with some collateral as assurance. Mostly, the house that needs renovation is set as collateral for the loan. In some of the offers, the interest rates are subsidized by the federal government. The process of home improvement loan is quite a lengthy one. The loan application is approved on the basis of the credit history. The location, the present condition of the property and the expected life of the property are also some of the important factors that the lenders consider while approving the loan application at sbwire. Above all, the market value of the property is taken into account.

The offer is highly advantageous to the home owners. With the improvement on the property, the life of the property is extended. Since the home becomes more comfortable to live in, the market value of the property gets increased. As the property is set as collateral, there is no hesitation or fear of losing the money for the lenders. Most of the borrowers buy the property that is affordable and once the home mortgage is cleared, go for a home improvement loan to renovate the house to make it a lovable place to live in.

When you decide to apply for home improvement loan, it should be ensured that the repayments are affordable so that you do not feel the burden of repayments. Analyzing your renovation requirements and the expenses due to that and your resources to repay will help to make a wise decision. The purpose of renovation is to live comfortably in your home. With the financial stress haunting you, you cannot enjoy the comfort of your dear home. Borrow only what is required and not more than your needs. You can consult your financial advisor regarding the offer and get the suggestions so that the offer of home improvement loan or home improvement grant is used to maximum benefits.

Reverse mortgages- more disadvantageous than beneficial!

Reverse mortgages seem to impress people as there is a consistent source of income at one’s old age. However, the disadvantages in the offer should be studied well before deciding whether to access this offer or not. Let us first understand how the reverse mortgage functions to know whether it can be beneficial or not. Reverse mortgage is also termed as conversion mortgage. The mortgage is opposite to conventional mortgage and hence the term reverse mortgage. In this offer, the mortgage is paid by the lender at prlog to the homeowner, instead of the homebuyer repaying towards the mortgage for the home purchased.

How does the reverse mortgage function?

To put it simply, the homeowner obtains loan on the home and the lender gets the loan amount along with the interest once the property is disposed at the demise of the homeowner. The homeowners who lack sufficient funds for regular financial commitments can solve their financial problem with the support of reverse mortgages. The borrower of reverse mortgages is expected to be aged 62 years at least and must have settled a major portion of the home mortgage. Neither the income nor the medical history of the applicants is required for this mortgage.

In certain cases, the borrower needs to undergo counseling before taking the offer. The age of the applicant, the equity of the applicant on the home, and the market value of the property are the factors that determine the loan amount. The reverse mortgages are offered by both the private financial institutions and the government agencies. The loan amount is paid either fully or in regular monthly installments or through line of credit. The homeowner who applies for reverse mortgage can choose either one of the options of payment or can avail a combination of the options.

Though the offer gives financial freedom to the homeowners, the disadvantages in the offer should be considered as well before committing to it as there is the risk for your property. Since there are various options in the offer of reverse mortgages, counseling will be helpful in the decision. The process of reverse mortgages involves high cost. The application cost, the closing cost, the cost due to appraisal, credit report charges and expenses due to insurance and service charges are involved in the offer. Though the homeowner can enjoy the comfort of residing in own house, property taxes, the insurance and the repair charges are to be undertaken by the homeowner.

In case the homeowner is not regular in his payments towards these costs, there are chances that the loan might be revoked and the homeowner might become responsible for the entire loan amount. However, the homeowner can apply for rolling the expenses due to the above mentioned factors into the loan amount. The financial support that is availed through reverse mortgage is exempted from taxation. You are denied the benefits from SSI and so on due to this. The interest amount on reverse mortgages is not exempted from tax until the loan is settled completely. Analyzing the advantages and disadvantages, you should consider the option only if you are utterly in need of financial support for survival.

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