May
30
Sara Dowling asked:
A Brief Look At Loans
“Innovative financial packaging” is how it is sometime known. Essentially what this means is that financial institutions look for more and more ways to lend to their customers - after all, charging interest on a debt is the main way that they make their money. But, with more and more loans now available, it can sometimes be difficult to know exactly which loan to apply for. The following explanations try to clear this issue up a little for you:
Personal Loan
Probably the mainstay of financial institutions is the personal loan. As the name suggests, personal loans are money borrowed from a financial institution for personal use. In nearly all cases, a personal loan is going to be unsecured, which means you’ll likely be paying a premium on interest. Once the personal loan is given, you repay it by making monthly repayments to the lender. In effect, this is the multi-purpose loan.
Auto Loans
Auto loans are where you borrow money from a financial institution in order to buy a car or vehicle. In most cases auto loans are done by the car dealer, but there is no reason why you cannot make arrangements with your bank before buying the car to borrow the money from them. As with a personal loan, most auto loans need to be repaid by monthly installments. Sometimes, although not always, the financial institution will secure your loan with the vehicle, which means if you cannot repay the loan they’ll repossess your car. One additional expense with an auto loan is that most lenders insist that you take out fully comprehensive insurance during the period that the auto loan is outstanding.
Home Improvement Loans
As the name suggests, home improvement loans are where you ask a lender to lend you money so you can improve your home. In most cases a home improvement loan is granted on the condition that you give the lender a second rank mortgage on your home. As such, the loan amount can rarely exceed the valuation price of your home - including the increased value after the improvements have been made. Again, home improvement loans usually need to be paid by monthly installments; however, balloon (or bullet as they’re also know), one-off, payments are also sometimes accepted.
Education Loans
Education loans are where you borrow money to further your studies. One big difference between an education loan and any other type of loan is that most education loans, although given by a financial institution, are underwritten by the government. Consequently, the interest rate on education loans (also known as “student loans”) is usually very low.
Holiday Loans
These days it is even possible to go to your bank and ask them to borrow money so that you can go away on holiday! As you’ll be using the money to go on holiday, this type of loan is unsecured. Consequently, interest rates are high. Not really a recommended way of paying for your holiday, but nice to know it’s out there if you need it!
Debt Consolidation Loans
Unfortunately debt consolidation loans are becoming more and more popular these days. A debt consolidation loan is where you have too much debt on store cards and credit cards and you need to borrow money to pay these all off and consolidate them into one big debt. The advantages of doing this are two-fold: (i) hopefully you’ll lower the borrowing interest rate; and (ii) you only have to deal with one creditor.
Having decided upon the type of loan you want, all you need to do now is to ask your financial institution to approve the loan - Good Luck!
Jack
A Brief Look At Loans
“Innovative financial packaging” is how it is sometime known. Essentially what this means is that financial institutions look for more and more ways to lend to their customers - after all, charging interest on a debt is the main way that they make their money. But, with more and more loans now available, it can sometimes be difficult to know exactly which loan to apply for. The following explanations try to clear this issue up a little for you:
Personal Loan
Probably the mainstay of financial institutions is the personal loan. As the name suggests, personal loans are money borrowed from a financial institution for personal use. In nearly all cases, a personal loan is going to be unsecured, which means you’ll likely be paying a premium on interest. Once the personal loan is given, you repay it by making monthly repayments to the lender. In effect, this is the multi-purpose loan.
Auto Loans
Auto loans are where you borrow money from a financial institution in order to buy a car or vehicle. In most cases auto loans are done by the car dealer, but there is no reason why you cannot make arrangements with your bank before buying the car to borrow the money from them. As with a personal loan, most auto loans need to be repaid by monthly installments. Sometimes, although not always, the financial institution will secure your loan with the vehicle, which means if you cannot repay the loan they’ll repossess your car. One additional expense with an auto loan is that most lenders insist that you take out fully comprehensive insurance during the period that the auto loan is outstanding.
Home Improvement Loans
As the name suggests, home improvement loans are where you ask a lender to lend you money so you can improve your home. In most cases a home improvement loan is granted on the condition that you give the lender a second rank mortgage on your home. As such, the loan amount can rarely exceed the valuation price of your home - including the increased value after the improvements have been made. Again, home improvement loans usually need to be paid by monthly installments; however, balloon (or bullet as they’re also know), one-off, payments are also sometimes accepted.
Education Loans
Education loans are where you borrow money to further your studies. One big difference between an education loan and any other type of loan is that most education loans, although given by a financial institution, are underwritten by the government. Consequently, the interest rate on education loans (also known as “student loans”) is usually very low.
Holiday Loans
These days it is even possible to go to your bank and ask them to borrow money so that you can go away on holiday! As you’ll be using the money to go on holiday, this type of loan is unsecured. Consequently, interest rates are high. Not really a recommended way of paying for your holiday, but nice to know it’s out there if you need it!
Debt Consolidation Loans
Unfortunately debt consolidation loans are becoming more and more popular these days. A debt consolidation loan is where you have too much debt on store cards and credit cards and you need to borrow money to pay these all off and consolidate them into one big debt. The advantages of doing this are two-fold: (i) hopefully you’ll lower the borrowing interest rate; and (ii) you only have to deal with one creditor.
Having decided upon the type of loan you want, all you need to do now is to ask your financial institution to approve the loan - Good Luck!
Jack
May
28
Question: Consumer Credit Assistance or Snow Ball it to get out of debt?
Filed Under Other - Business & Finance | 3 Comments
Dominika asked:
First off, Settlement is out of the question b/c it is not good for people who may want a Government Clearance for a job….so scratch that. Also we already have a second mortgage so scratch that too……My issue is we are in serious debt and we want to get out before we get in serious trouble. My husband works for the Gov. so it is very important he stay current and no bankruptsy ect. Our plan is to sell a vehicle that we are having trouble paying for each month ($518 a month payments) Once we sell that we are going to apply that money toward our debts as such……Credit loan #1 (which is currently $90 mth and bal of $600) Apply $518 mth and $90 until paid off. When paid off apply the $518 a month + $90 mth + Credit loan #2 monthly payment amt. until paid off. We keep doing this with all our debts until they are all paid off. This is called the Snow Ball effect. because the payments get bigger as you go along. Anyhow, the problem its taking forever to sell the Van. Ideas?
Darren
First off, Settlement is out of the question b/c it is not good for people who may want a Government Clearance for a job….so scratch that. Also we already have a second mortgage so scratch that too……My issue is we are in serious debt and we want to get out before we get in serious trouble. My husband works for the Gov. so it is very important he stay current and no bankruptsy ect. Our plan is to sell a vehicle that we are having trouble paying for each month ($518 a month payments) Once we sell that we are going to apply that money toward our debts as such……Credit loan #1 (which is currently $90 mth and bal of $600) Apply $518 mth and $90 until paid off. When paid off apply the $518 a month + $90 mth + Credit loan #2 monthly payment amt. until paid off. We keep doing this with all our debts until they are all paid off. This is called the Snow Ball effect. because the payments get bigger as you go along. Anyhow, the problem its taking forever to sell the Van. Ideas?
Darren
May
27
Is it time for the US to reduce the number of “legal immigrants” entering our country?
Filed Under Immigration | 15 Comments
noils asked:
Everyone proudly states that we are a “nation of immigrants” which is certainly true. There’s no doubt that we need immigrants in specialized fields like medicine as long as the AMA restricts the number of US students entering our medical schools. However, how many more legals do we need to open restaurants, convenience and liquor stores while overcrowding our infrastructure plus education and healthcare systems?
Everyone proudly states that we are a “nation of immigrants” which is certainly true. There’s no doubt that we need immigrants in specialized fields like medicine as long as the AMA restricts the number of US students entering our medical schools. However, how many more legals do we need to open restaurants, convenience and liquor stores while overcrowding our infrastructure plus education and healthcare systems?
I don’t care what your politics is. Our immigration policy is being governed by large corporations. US citizens aren’t producing enough consumers(babies) so they tell our politicians to import them.
The US has one of the loosest immigration policies in the world. A couple from India in their 50s from India can immigrate, get a bank loan, open a liquor store, make some money and then get Social Security and Medicare for the rest of their lives.
Francis
May
27
T asked:
(*`*`WARNING*`*`: PLEASE DO NOT USE THIS QUESTION FOR SOLICITING OR GIVING E-MAIL ADDRESSES TO LOAN SHARKS. YOU !!WILL!! BE REPORTED TO YAHOO)
(*`*`WARNING*`*`: PLEASE DO NOT USE THIS QUESTION FOR SOLICITING OR GIVING E-MAIL ADDRESSES TO LOAN SHARKS. YOU !!WILL!! BE REPORTED TO YAHOO)
Here are the details to my situation: I have a credit score of about 706, but I only have about $1100 worth of credit (from credit cards) and about $21,000 worth from an auto loan. All have been paid on time for about 9 months now. After applying for a personal loan with a company that works with bankruptcy consumers, they denied me stating that I do not have enough credit AFTER bankruptcy (which was discharged 8 1/2 years ago). How much more credit do I need to get approved????
Again- -DIRECT answers to my question (above) only please! Otherwise it will be reported as abuse and can result in deletion of your yahoo account.
The Chapter type I filed for bankruptcy comes off after 10 years only.
Rodney
May
27
Matthew D asked:
Conservatives blame the housing bubble and sub prime lending on racial minorities, claiming it all happened because lending institutions were *made* to give sub prime loans to low income minorities thus causing this massive recession. However for this theory to be true only minorities would have received sub prime loans based on what they say were the lending institutions motivation. This is absurd and patently false so where does the blame for the housing bubble and recession rightfully belong? Surely it must go to those who encouraged sub prime lending via deregulation, high rates of home ownership and heavy consumer spending to keep the economy ‘afloat’. Who were those people, anyway?
Gene
Conservatives blame the housing bubble and sub prime lending on racial minorities, claiming it all happened because lending institutions were *made* to give sub prime loans to low income minorities thus causing this massive recession. However for this theory to be true only minorities would have received sub prime loans based on what they say were the lending institutions motivation. This is absurd and patently false so where does the blame for the housing bubble and recession rightfully belong? Surely it must go to those who encouraged sub prime lending via deregulation, high rates of home ownership and heavy consumer spending to keep the economy ‘afloat’. Who were those people, anyway?
Gene
May
26
Apurva Shree asked:
Payday loans are unsecured loans. The lender is usually at a higher risk but that is offset by the huge interest rates usually as high as triple-digit annual interest rate. Due to this, payday loans have received a lot of negative press as it involves legally lending small amounts of money at interest rates as huge as 1000% per year. A less well-publicized pay day loan is the car title loans which are marketed as small emergency loans.
Car title loans use a paid-off automobile as collateral. The auto loan lender trusts the borrower to pay back within a month. This rate is often for an amount that is far less than the value of the vehicle. If he or she fails to repay the lender, the car is sold to repay the amount. In some states, the lender may keep all the proceeds of the sale even if it exceeds the loan amount.
Credit advocates argue that these auto loan lenders target the low income group who cannot afford the terms. National legislation to protect consumers against these lenders seems unlikely.
If you are in need of emergency cash, there are smarter options to an auto title loan. These include small consumer loans, cash advances on credit cards and advances from employers. If you have exhausted all these options and still are in need of that emergency cash, you may think of borrowing money from auto title loans. There are certain things to keep in mind while taking this type of loan:
Choose a company that provides low car title loan interest rates. Be sure to pay the loan back as soon as possible.
Are Car Title Loans Legal?
High-priced car title loans are illegal in about half of the states. As the industry has grown tremendously, they have failed to take adequate steps towards protection.
What Can One Do If There Is An Auto Title Loan Problem?
Some suggestions are listed below:
You can file a complaint if you are living in a state where these car loans are considered illegal. Even if you live in a state which permits this lending, you can file a complaint for two reasons: First, the state agencies can investigate the lender to see if they are violating the state law. Second, you can let your state agency know that you don’t like these loans because they are too expensive and that you want the law changed. Contact your state legislator Contact your federal legislator Find a lawyer
Bonnie
Payday loans are unsecured loans. The lender is usually at a higher risk but that is offset by the huge interest rates usually as high as triple-digit annual interest rate. Due to this, payday loans have received a lot of negative press as it involves legally lending small amounts of money at interest rates as huge as 1000% per year. A less well-publicized pay day loan is the car title loans which are marketed as small emergency loans.
Car title loans use a paid-off automobile as collateral. The auto loan lender trusts the borrower to pay back within a month. This rate is often for an amount that is far less than the value of the vehicle. If he or she fails to repay the lender, the car is sold to repay the amount. In some states, the lender may keep all the proceeds of the sale even if it exceeds the loan amount.
Credit advocates argue that these auto loan lenders target the low income group who cannot afford the terms. National legislation to protect consumers against these lenders seems unlikely.
If you are in need of emergency cash, there are smarter options to an auto title loan. These include small consumer loans, cash advances on credit cards and advances from employers. If you have exhausted all these options and still are in need of that emergency cash, you may think of borrowing money from auto title loans. There are certain things to keep in mind while taking this type of loan:
Choose a company that provides low car title loan interest rates. Be sure to pay the loan back as soon as possible.
Are Car Title Loans Legal?
High-priced car title loans are illegal in about half of the states. As the industry has grown tremendously, they have failed to take adequate steps towards protection.
What Can One Do If There Is An Auto Title Loan Problem?
Some suggestions are listed below:
You can file a complaint if you are living in a state where these car loans are considered illegal. Even if you live in a state which permits this lending, you can file a complaint for two reasons: First, the state agencies can investigate the lender to see if they are violating the state law. Second, you can let your state agency know that you don’t like these loans because they are too expensive and that you want the law changed. Contact your state legislator Contact your federal legislator Find a lawyer
Bonnie
May
16
Has anyone ever used a debt management service? How did it affect your credit rating? Would you reccommend it?
Filed Under Personal Finance | 6 Comments
mom24athome asked:
I want to eliminate the rest of my credit card debt. I see the ads for debt management services where they work with your creditors to reduce your interest rates, then combine all of your debt together, where you pay them one payment per month. My husband thinks this will reflect negativly on our credit report. Has anyone ever done this, and were you succesful in eliminating debt? Did it affect your credit rating in a nigative manner? I think that most people in America today, have alot of consumer debt, but I see many poeple who aren’t worried about it, and only pay the monthly minimums each month. I have been there before, but I am ready to pay it all off. What do you think? I would love to hear from anyone who has used these services before, or any other great idea to pay it all off, without taking out any more loans. Thanks!
Karen
I want to eliminate the rest of my credit card debt. I see the ads for debt management services where they work with your creditors to reduce your interest rates, then combine all of your debt together, where you pay them one payment per month. My husband thinks this will reflect negativly on our credit report. Has anyone ever done this, and were you succesful in eliminating debt? Did it affect your credit rating in a nigative manner? I think that most people in America today, have alot of consumer debt, but I see many poeple who aren’t worried about it, and only pay the monthly minimums each month. I have been there before, but I am ready to pay it all off. What do you think? I would love to hear from anyone who has used these services before, or any other great idea to pay it all off, without taking out any more loans. Thanks!
Karen
May
7
Another Consumer Math Question?
Filed Under Homework Help | 1 Comment
P.RicanMami asked:
Josh Paltrow and his wife Susan are buying their first home for $125,000. They’ve been granted a mortgage loan at an annual interest rate of 8.5 percent for 20 years with a $25,000 down payment. Closing costs are 2 percent of the amount of the mortgage loan and will be financed as part of the mortgage. What is the actual amount financed with the mortgage?
A) $102,000
B) $120,000
C) $100,000
D) $125,000
Donald
Josh Paltrow and his wife Susan are buying their first home for $125,000. They’ve been granted a mortgage loan at an annual interest rate of 8.5 percent for 20 years with a $25,000 down payment. Closing costs are 2 percent of the amount of the mortgage loan and will be financed as part of the mortgage. What is the actual amount financed with the mortgage?
A) $102,000
B) $120,000
C) $100,000
D) $125,000
Donald
May
4
Should I file for bankruptcy?
Filed Under Personal Finance | 6 Comments
Jeremy G asked:
I just lost both of my cars that I was paying a total of $841/mo. on. My wife is going to be quitting her job because of childcare issues, tension levels in the family, and all the stress that’s been building up from playing “tagteam” with watching the kids over the past 2 months. I get at least 15 calls a day from credit card companies asking where their money is. I incorrectly filed my taxes in 2005 (filed a Schedule K-1 online with Liberty Tax, and apparently I was missing a Schedule E form), so now I have a tax debt of almost $10,000. I will be making just enough money to pay my mortgage, utilities, food, and gas for commuting to and from work (70 miles a day). I am behind on every credit card I have, a Home Depot Consumer Loan, student loans, medical bills, everything. I also live in a suburb of Austin, TX in case anyone was wondering. I don’t know the bankruptcy laws well enough in Texas, and I need major help. Should we file for bakruptcy, and if should which kind of bankruptcy?
I believe most people are thinking that I’m a big spender, but I’m actually more of a tightwad. I don’t buy latte’s at all or have any weekly or daily habits with spending money on food, my wife cannot work due to the fact that everything she makes goes towards paying for childcare, and even still we’re short. I am a general manager of a restaurant, on salary, and I cannot get another job because I have to have open availability. I lived on credit cards and did things like paying my water and electric bills with them, not going out and buying a big screen tv or anything of that sort. Like I said,I am relatively frugal, it’s just childcare mostly that screwed me and now I’m up to my ears in debt because of the decision for my wife to stay at work.
Edgar
I just lost both of my cars that I was paying a total of $841/mo. on. My wife is going to be quitting her job because of childcare issues, tension levels in the family, and all the stress that’s been building up from playing “tagteam” with watching the kids over the past 2 months. I get at least 15 calls a day from credit card companies asking where their money is. I incorrectly filed my taxes in 2005 (filed a Schedule K-1 online with Liberty Tax, and apparently I was missing a Schedule E form), so now I have a tax debt of almost $10,000. I will be making just enough money to pay my mortgage, utilities, food, and gas for commuting to and from work (70 miles a day). I am behind on every credit card I have, a Home Depot Consumer Loan, student loans, medical bills, everything. I also live in a suburb of Austin, TX in case anyone was wondering. I don’t know the bankruptcy laws well enough in Texas, and I need major help. Should we file for bakruptcy, and if should which kind of bankruptcy?
I believe most people are thinking that I’m a big spender, but I’m actually more of a tightwad. I don’t buy latte’s at all or have any weekly or daily habits with spending money on food, my wife cannot work due to the fact that everything she makes goes towards paying for childcare, and even still we’re short. I am a general manager of a restaurant, on salary, and I cannot get another job because I have to have open availability. I lived on credit cards and did things like paying my water and electric bills with them, not going out and buying a big screen tv or anything of that sort. Like I said,I am relatively frugal, it’s just childcare mostly that screwed me and now I’m up to my ears in debt because of the decision for my wife to stay at work.
Edgar
May
4
Carrie Reeder asked:
If you have a home loan, perhaps you have considered refinancing your
loan. Homeowners may refinance their home loan to cash-out and pay
outstanding credit card balances and consumer loans. In addition,
refinancing a home loan is ideal if you have two mortgages. Combining a first and
second mortgage into a new loan is a great way to consolidate debt.
Why Get a Second Home Mortgage?
Many homeowners obtain a second mortgage. The reasons vary. Some may
get a second mortgage to eliminate credit card debt, whereas others may
borrow money to complete home improvements. If you get a second
mortgage, the funds are secured by your home’s equity. In addition, a second
mortgage is a separate loan amount. Because these loan amounts are
smaller, the monthly payments are lower than first mortgages. However, the
interest rates on second mortgages tend to be higher.
Nevertheless, the interest rates on second mortgages are considerably
less than credit cards. Plus, the loan terms are fixed, which allows you
to pay the balance within a few years. If you are hoping to eliminate
debt, and simplify your finances, consolidating your first and second
mortgage is the perfect solution.
Mortgage Loan Refinancing
Refinancing your first and second mortgage into a single loan is ideal
if you have a higher interest rate on both loans. For example,
homeowners with less than perfect credit may receive an initial home loan with
a higher percentage. Moreover, their second mortgage may also carry a
higher interest rate. If you are in this situation, try and improve your
credit rating, and then apply for a new mortgage. This way, you
increase your chances of being able to consolidate your first and second
mortgage at a lower fixed rate.
In some instances, homeowners obtain a first and second mortgage with
an adjustable rate. This is beneficial in the beginning because the
rates are low. However, as market trends shift, the interest rate on both
loans may increase, which will increase the monthly payments. This is
dangerous. If a homeowner is unable to pay either mortgage, the lender
may foreclose. Thus, it is wise to refinance both mortgages into a single
loan before interest rates increase.
Arthur
If you have a home loan, perhaps you have considered refinancing your
loan. Homeowners may refinance their home loan to cash-out and pay
outstanding credit card balances and consumer loans. In addition,
refinancing a home loan is ideal if you have two mortgages. Combining a first and
second mortgage into a new loan is a great way to consolidate debt.
Why Get a Second Home Mortgage?
Many homeowners obtain a second mortgage. The reasons vary. Some may
get a second mortgage to eliminate credit card debt, whereas others may
borrow money to complete home improvements. If you get a second
mortgage, the funds are secured by your home’s equity. In addition, a second
mortgage is a separate loan amount. Because these loan amounts are
smaller, the monthly payments are lower than first mortgages. However, the
interest rates on second mortgages tend to be higher.
Nevertheless, the interest rates on second mortgages are considerably
less than credit cards. Plus, the loan terms are fixed, which allows you
to pay the balance within a few years. If you are hoping to eliminate
debt, and simplify your finances, consolidating your first and second
mortgage is the perfect solution.
Mortgage Loan Refinancing
Refinancing your first and second mortgage into a single loan is ideal
if you have a higher interest rate on both loans. For example,
homeowners with less than perfect credit may receive an initial home loan with
a higher percentage. Moreover, their second mortgage may also carry a
higher interest rate. If you are in this situation, try and improve your
credit rating, and then apply for a new mortgage. This way, you
increase your chances of being able to consolidate your first and second
mortgage at a lower fixed rate.
In some instances, homeowners obtain a first and second mortgage with
an adjustable rate. This is beneficial in the beginning because the
rates are low. However, as market trends shift, the interest rate on both
loans may increase, which will increase the monthly payments. This is
dangerous. If a homeowner is unable to pay either mortgage, the lender
may foreclose. Thus, it is wise to refinance both mortgages into a single
loan before interest rates increase.
Arthur