Category Archives: Personal Finance

Credit Card Arbitrage: Look before You Leap

Many enthusiastic ad shrewd investors seem to have made good profits by utilizing the attractive offers of the credit card companies. However, credit card arbitrage may offer easy money; it must be used only when you are sure of the pros and cons.

All of us like to make some quick bucks or save some extra money and hence get drawn to methods that seem like an easy way to accumulate wealth. However, as is often said, nothing comes free in this world and it is unlikely that you will be able to make a lot of money without any efforts. This includes things like credit card arbitrage that promises fund at almost a zero cost, but before you jump at the extremely tempting offer, it’s important to understand what it means and how it works. Failing to do this will not only erode your profits, but in fact cost you much more than you can imagine affording.

Well, there are many people who make profit using credit card arbitrage and hence feel that this is a good way to get funds at low or no cost at all and make good profits. But is it really so? For a lot of people this may just mean a road to accumulate more debt and that too at a pretty expensive rate. You may not just end up paying through your nose, but also hurt your credit score badly. Therefore, make sure you understand carefully what you are getting into when you opt for this route to earn some quick profit.

How does it work?

The credit card arbitrage process is aimed at getting profits by using the low cost cash advance or balance transfer funds for investments in an option that gives good returns over and above any costs that you may incur. As arbitrage involves making a profit from the price differential of buying and selling an investment, to achieve a successful credit card arbitrage you will have to invest the money in an option that gives a return at substantially higher rates of interest that what you will be paying for. Therefore, you must find out some option that pays a considerable high interest rate so that you can invest the money into it during your initial offer period and when that expires, you can withdraw the money and repay the credit card debt and keep the rest balance as your profit.

Sounds great, doesn’t it? Well, yes, but the situation is quite hypothetical, especially in today’s economic world. Though people favoring this method feel that this provides capital at very nominal costs, finding reliable investment options that are likely to offer returns higher than credit card charges are not so common these days. Well, if the borrower does get a chance to pay back on time and make a profit, then it will be beneficial as he can boost his credit score also.  However, this can be a big gamble and can prove very risky. Let us take a look at some of the dangers associated with this method.

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.

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