Construction Loans Can Be a Constructive Wealth Building Tool

Construction loans are a different creature than many other sorts of real estate or small business loans. Basically, they’re short-term arrangements you use to finance the construction (or major restoration) of a home, business, or other physical property.

Unlike a traditional home loan, the property which would otherwise naturally operate as collateral for the loan hasn’t been built yet, making the loan more of a risk for lenders. Approval often requires submission of detailed plans for the project. And some evidence of the qualifications of those involved – along with in-depth credit checks on the borrower or borrowers.

Once the property is completed, or a specific point on the timeline has been reached, any balance is paid off through the sale of the property. Or it’s refinanced as part of a longer-term mortgage or a more traditional, longer-term loan, often referred to as the “end loan.” We’ll come back to this and a few other terms you’ll want to know before you loan shop for this or similar types of loans.

Types of Construction Loans

Because construction loans are higher-risk than traditional mortgages, they are more difficult to secure. And interest rates tend to be higher. Terms vary widely, depending on the lender and the needs of the builder. Some construction loans are required to be paid in full by the projected completion date of the project. Others may be set up as “interest-only” loans. So that buyers pay only a minimal amount until the project is ready for sale.

Some builders prefer to set up construction loans as a “line of credit”. They’ll secure approval on the total they’ve calculated they’ll need , but only draw funds as required. The advantage to this approach is that they’re only making payments on money they’re actually using at the time, almost like a credit card. Interest only accrues on the amount actually withdrawn as well, saving the borrower substantially over the long-term.

Borrowers new to construction loans may find it strange that substantial down payments – often as much as 20% or 25% to pay down – are often required. Such down payments are intended to establish that the borrower is fully invested in both the short and long-term success of the project. And to “spread out” the risk a bit. In any case, they’re a standard feature of most construction loans.

Why Take Out A Construction Loan for Building Wealth?

There are really only two basic reasons for any construction. You want to use the property or sell/lease the property for profit. Maybe there are a few people out there with artistic souls who simply wish to create large, expensive buildings. Then paint them pink or label them with the names of victims of war crimes. Or simply go all Andy Warhol and pack them with multi-chromatic images of some pop culture figure or another, then walk away. But there can’t be many, surely. Most artists simply don’t make enough for that sort of thing.

Let’s assume, then, that the primary goal of most construction loans is personal use or profit.

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Construction Loans for Personal Use

Not everyone can afford to supervise the building of their own home (or serious remodeling). And even fewer of us have the know-how to really do it well. That doesn’t mean it’s impossible, however. Especially with the right vision and a willingness to do one’s homework ahead of time. You don’t have to know how to do everything yourself. But you do need to understand what needs to be done. More importantly, you have to be able to find the right people to make it happen. People you can more or less trust to be the experts at their little slice of the whole.

Personal use means the borrower will be covering the final cost of the project themselves, making the process somewhat similar to what you see at the larger end of personal cash loans. Lenders will look at your personal credit history, current income, and other indicators of your ability and reliability to pay. It can be tricky, and you may have to provide more documentation than with some other types of loans. But there’s no reason to assume it’s not doable if you’re serious. Of course, thinking about the cost of a loan is a must. Loanry can help you find a good lender, a lender who will be open and honest about everything from the beginning.

Whether you’re building from scratch or restoring something which had up until now seen far better days, keep in mind that strategic choices about what you build, how you build, and where you build can mean serious tangible value in the results. To put it another way, make good choices and you’ll have a home that’s worth more than you spent to build it. And which may only continue to increase in value as you live in it, love it, and take care of it.

Even if our intention is to retain ownership and never sell the property, increased value improves your ability to secure future home equity loans. And it strengthens your overall financial situation. It’s impossible to predict the future or issue any absolute guarantees. But homeownership has traditionally weathered all sorts of ups and downs in terms of providing personal security. It’s arguably the most important wealth-building tool in modern American life for the majority of citizens like you.

As a bonus, there’s really no substitute for owning a house you love.

Construction Loans for Business Use

Building for sale or lease is a slightly different game in which the reputation of the builder as a businessman (or businesswoman) comes into play. Obviously, lenders are more comfortable approving construction loans for borrowers with an existing track record of successful repayment, refinancing, or other favorable loan resolution. Even in this dynamic, however, there are multiple variations which may be in play.

If you’re a small business owner looking to establish yourself or expand from your current location, it may be that existing sites prove poorly suited to your needs. It may be that construction targeting your specific needs is the way to go. In that situation, you’re utilizing your construction loan for business use, but not to sell. You’re moving in!

If your expertise is in construction or some part of construction, or if you’re knowledgeable about real estate in your area or otherwise plugged into local business or residential dynamics, then you’re confronted with the same basic dilemma as any other entrepreneur. Do I work for others, or step out on my own? Am I more concerned with security, or do I want to be my own boss, take my own risks, and possibly win (or lose) big?

Unlike many other sorts of entrepreneurs, however, if taking that sort of leap involves construction loans, there’s no working your way up from your home office or garage with minimal risk. They are an “all in” proposition. That part where you might win big or lose big is far more significant in this line of work. But that by itself shouldn’t stop you. Only you know if you’re just as smart, just as skilled, just as determined as the next person.

If you do take that leap, you’ll quickly learn there are things you can’t always control. Choosing the right construction loan shouldn’t be one of them. You have options, whatever your credit history and whatever your professional background. This is the 21st century, and while there’s no reason you can’t sit down with your local bank or credit union and find out what they’re willing to do, that’s no longer your only option.

We maintain a carefully moderated database of reputable online lenders who’ve established themselves as both reliable and willing to work with a wide range of borrowers. Our goal is a bit more comprehensive than helping you borrow; we want to offer you a centralized source of financial sanity, assistance, and assurance. Still, we’re really quite good at the “hook you up with just the right lender” thing. We can also offer you education and insight on a wide variety of loans and related concerns.

It’s something of a point of pride around here, actually.

Construction Business Loans to Help Build Your Company

“Take-Out Commitments”

Wanna order Chinese tonight? Come on, you promised!

Sorry – “take-out commitments” are a bit more involved than that. And you don’t get spring rolls.

Remember above when we said that short-term construction loans often convert into longer-term, more traditional loans after the completion of a project or reaching a certain point on the timeline? Generally (although not always – there simply aren’t that many “always” moments when it comes to construction loans), different lenders provide those long-term mortgages or other loans than the short-term construction loan you are replacing. These short-term lenders often specialize in “bridge loans” and the special circumstances involved. And they prefer to hand off the lower-profit (but less risky) stuff to more traditional institutions.

A “take-out commitment” is an agreement ahead of time between that more traditional, long-term lender and the initial short-term lender that this is, in fact, what will happen.

As you might imagine, this changes the dynamics substantially. On the one hand, it means much greater security for the initial lender. Depending on the specifics of the agreement, they now have a more-or-less guaranteed safety net for what is otherwise a relatively high-risk loan. If the builder for some reason fails to follow through, or supplies don’t show up on time, or it turns out global warming really does flood the earth, they still have a buyer for whatever’s left of the loan and the terms have long-ago been settled.

This doesn’t mean the builder is completely off the hook of course. Ideally, they’re part of the process the entire way. And they don’t flake out, the supplies do show up, and the glaciers melt slowly enough that we can move to higher ground. And both the long-term lender and the initial short-term (or “bridge loan”) lender usually have very specific terms woven i. Which makes sure the onus is on the guy running the project to make things work out – not the lenders’.

Much like the bank doesn’t really want your car, your house, or your firstborn, such terms are all about accountability and security. Not about taking over your business park or remodeled vacation home. They just want those payments to be made and for you to be happy with whatever it is you’ve just built.

Still, I doubt they’d say no to a spring roll. And I love that weird pink sauce…

FHA 203(k) Loans

You’re probably familiar with FHA loans, at least in general. These are loans that Federal Housing Administration guarantees. And they aim at helping first-time homebuyers acquire housing on reasonable terms and at a good interest rate. The FHA doesn’t actually loan the money. But they do act as “back-up” on the loan. Allowing lenders to extend credit on favorable terms to those who might not otherwise qualify.

An FHA 203(k) is similar, but designed to help borrowers secure a loan to purchase a home in need of serious renovation. Especially if located in older communities or areas otherwise identified by federal officials as likely to benefit from a few upgrades. The terms cover not only the cost of the property, but the essential work and supplies necessary to make it move-in ready.

The FHA 203(k) is not available for purposes of “flipping” or other forms of real estate investment. The idea is to put families in nicer, newer homes. Down payments are usually modest and interest rates favorable. Although they will still vary to some extent based on the credit history of the borrower. There are unique fees and paperwork requirements, so prepare yourself to spend some time on small print. It’s a great program, but it’s still the government after all.

Common Risks of Construction Loans

Most professionals already know the ins and outs of construction loans. If you’re an individual looking to start a business or use a construction loan to build or renovate your home, however, there are common potential pitfalls of which you should be aware. Here are three rather important facets of any building project which are harder than you think.

#1: Overseeing Construction

There’s a reason people hire professionals to run a construction site. Watching a few HGTV shows and knowing how plumbing works is a great start and all. But don’t think that just because you know your way around a two-by-four that you have the expertise to handle the project yourself. Not to mention that you probably have a full-time job already.

#2: Hiring a Contractor

It’s essential to find the right contractor for the job, but it doesn’t stop there. Accepting a bid or even signing an agreement isn’t the same as a successfully complete a project. Firing a contractor which does not do a good job is possible. But it causes as many complications for you as it does them. Construction is a job best managed from a big picture, unified process approach. Interruptions and changes are almost always bad – even if they’re otherwise necessary .

While most contractors are no doubt honest, capable people, it’s not unheard of for contractors to walk away from projects. It might be the money, it might be the personalities. Or it might just be that a better offer has come up. This doesn’t only leave you in a tough logistical position. It can cost you substantially as you scramble to find someone to pick up wherever things the contractor did not finish. A job suddenly harder than hiring someone in the first place.

#3: Managing Your Construction Budget

Construction involves a substantial investment of time and resources utilized methodically and efficiently over time. It’s in many ways a constantly shifting puzzle with big, heavy pieces. Failure to manage available resources has been the downfall of more building projects than perhaps any other single factor.

Even if your plans are well-laid, you’ll be dealing with a range of both workers and suppliers at different stages along the way. Neither of which are ever entirely predictable. Then, of course, there’s the weather, which none of us can fully predict, let alone control. Throw in that random county inspector, animal infestation, or late-night vandalism, and you simply never know what might complicate your plans and derail your budget.

Experienced builders plan for the unforeseen and learn to balance flexibility and focus on the endgame.

Conclusion

Construction loans are a very specific, and at times risky, financial arrangement. They also make most of the building and progress you see in any thriving community possible by providing builders the credit and flexibility necessary to make things happen.

If, after learning more about construction loans, you think this might be the right solution for your plans, let us know. We’ll gladly point you to the right people to help you move forward with your project.

When it’s done, we’ll celebrate. Do you like spring rolls?

Smart Shopping: How to Save on a Major Purchase

If you are like me, big purchases are stressful for you. It does not matter if I have the money saved for the purchase, I still find it stressful. Spending a large sum of money is not easy for me. I would imagine that it is not easy for most people. You either see your bank account balance drop, or you see your credit card balance increase dramatically. I do not like either of those options. However, I realize big purchases have to happen. We need to buy items such as cars, houses, appliances, just to name a few. Before you start to think the worst, you should know that it is possible to save on a major purchase.

But, if you are interested in getting a personal loan for any sort of purchase, you can use Loanry! Our partner Fiona can send you offers in minutes based on the information you provide us with in the form below. Don’t waste your time on doing all the research yourself when you can use our free services. It costs you nothing!

You can continue reading to find out how to save money on some important life events. You may even be surprised at some of the ways you can save money.

What Is Considered a Major Purchase?

We all make purchases throughout our lives. Some of us love to shop and do it often. Others of us hate it and do as little shopping as possible. There is online shopping, which has made shopping much more convenient. There are also the people who coupon shop. Some use a coupon here and there while others have made it into an art form. Personally, I do not understand how to coupon but I have not take the time to learn. I know people who save a ton of money couponing, but it seems to me, they are buying a ton of items they do not need. However, it does not negate the fact that there is a huge savings and it is possible to save on a major purchase.

This may still leave you asking, “what is a major purchase?” A major purchase is considered something that is a big ticket item, such as a house, car, appliances, furnishing for the home, and electronics. Some even consider sports equipments and trips to be large purchases. According to Forbes magazine, almost 45 percent of people who answered their survey have a difficult time completing a sale for a big purchase item.

Weddings Can Suck The Money Out Of You

I do not want you to think that I am against weddings. I am not, at all. However, I do think there is a ton of money wasted on weddings for the wrong reasons. Getting married is a big deal and an emotional time. Many play on those emotions and entice people to spend large sums of money on items that are not really that important. That being said, I would like to talk about ways to save on a major purchase, like a wedding. One easy way for saving money when it comes to a wedding, is to plan ahead.

When you plan ahead and begin to save the money you need, it helps guide your decisions. You should create a list of the items you must have at your wedding. These items are non-negotiable. Then you can determine how much they cost and begin to save for them. You can create another list of items you would like to have. Same thing here, you find out how much they cost and determine which ones mean more to you and save for those.

When you create these lists, it gives you a good idea of what you really want at your wedding. This makes it easier when you feel the emotional pull to purchase something. You can look at your lists and determine if it is on either one of them. Perhaps it is something you did not consider and you are willing to remove an item from your must have list and replace it with something different. Budgeting is incredibly important when it comes to a wedding. If you can, try to save money for at least a year to pay for the wedding. This puts you in a better position as you begin to start your life as a married couple. And you don’t have to think about how to get out of debt later.

Some More Ways To Save On That Special Day

There are some other ways you can save on a major purchase, such as your wedding. There may be some things you did not consider when it comes to wedding day savings. Before you have your heart set on one particular item or way to do something, consider these tips. Believe it or not, there are ways to save money on just about every aspect of your wedding.

Date – If you do not have a specific date in mind, be flexible. If you plan your wedding for an off time that is not typically considered wedding season, you can spend less money. Typically, June is prime time wedding season, so choosing a different month can save you a ton of money. Also, choose a Friday night or Sunday afternoon to get married and you can save up to 50 percent of the cost. Saturday is the day most people choose to get married and they pay for it.

Dress – Wedding dresses are expensive and you only wear them one time. You can get a second hand dress and save a lot of money. You may be surprised at how well people take care of their wedding dresses. Do not think just because it has been worn, that it is second rate. At least take the time to look at some resale dress shops to see what is available to you.

Food – The food and drinks at a wedding are incredibly expensive. You can make the bar a cash bar so that your guests have to pay for whatever they drink. Many people do not like to do that, so there are other ways to decrease the cost of alcohol. Some venues allow you to provide your own alcohol, so you buy it and bring it and they will serve it. This cuts the cost tremendously. You can also choose to have only beer and wine. These are cheaper options than liquor.

You can also forego a wedding cake and have various desserts instead. A wedding cake can cost close to a thousand dollars and most of them do not taste great anyway. You can have several other types of desserts that your guests may like better.

Moving Without Breaking The Bank

Moving is a stressful time before you even think about the cost of it. It can be incredibly expensive for you to move. If you have to move, or you have determined that moving is the best thing for you right now, then you should arm yourself with some tips to help you save on a major purchase associated with moving. One of the best ways to save money on a move is to do everything yourself. If you can enlist your friends to help with the promise of pizza and beer, you really can see a lot of savings.

There are many different moving services that you can use, but they all come at a cost. There are some items associated with a move that you cannot change the cost. For example, you might need a deposit and first months rent for a new place. You may buy a house and need the closing costs. These costs typically cannot be changed and you have to accept them.

There are other ways to save money on a move. You can do all of your own packing. You can get some friends you trust and ask them to help. Make sure that you label all of your boxes with the room name and the box contents. This is helpful when you are unpacking. You can rent a U haul and literally haul your stuff yourself. You and your friends can load up all your items into the truck and drive them to the new location. Once there, you and your friends can move the items from the truck. This is really only an option if you are moving locally. If you are moving someone that requires a plane trip, you may have to have your items shipped and that causes a huge expense.

No matter where you are moving, you should take this opportunity to down size. Now is the time to get rid of all those items that you no longer use or need. I am sure you have items that are sitting in a corner of your house collecting dust. If so, it is time to get rid of them. If you have items that you have not used in the past year, donate or trash them.

Will A Moving Company Save Me Money?

What if you really need a moving company? What do you do then? If you have decided that for various reasons, you need to use the services of a moving company, there are ways to save on a major purchase. The first thing you should do is compare moving companies. While you might want to pay attention to the final number the company gives you, do not be so quick to do that. Make sure you understand how the determined the total. You should also verify if that total is an estimate, or an actual figure. Some companies will quote you an hourly rate and you are subject to paying for how long they take to pack and unpack your items. While the figure may seem like it is a lower cost initially, it may cost you more money in the long run.

Make sure whichever company you use, they perform background checks on their employees and insure all of their moves. First, remove all the clutter from your home and make sure that the items you are packing are items you really want. The worst thing for you to do is pack and pay to move items that you are going to throw away in your new home. Make sure that you really want all the items you are taking with you.

Travel On A Budget

We all want to take time away from the stress of everyday life. Many of us cannot travel because it is too expensive. While traveling can be an investment, there are ways to save on a major purchase such as traveling. The most important way to travel without blowing your budget out of the water is to plan. You should determine where you want to travel and when. When you have an idea of the location, you can begin to look for deals. Perhaps, you do not have a specific place in mind, then you can look for deals online.

I would caution you when looking online, many of these deals must be purchased and used quickly. There is not often a lot of time before the deal expires. You should be prepared to spend the money and travel soon. And you should also read all the fine print and make sure that you know all the details associated with the deal.

Consider traveling during off peak times. Depending on the location, off peak may be different times for different locations. For example, August is usually considered off peak for a hot location. You can save a significant amount of money just by changing your travel plans by a few weeks.

Can I Really Travel Without Spending A Fortune?

Yes, it really is possible to save on a major purchase, such as traveling. You may, however, have to be willing to make some compromises. So, you can choose to stay at a hotel that is one less star and may cost less money per night. You should do a lot of research about the area in which you want to travel. The more information you know about a location, then the more money you can save. While you are there, eat at local places instead of fancy restaurants. Many times, these places have better food and cost way less money. Find out where the locals eat and go there. You will probably get a better meal. Walk to all the places that you can instead of spending money on a car, taxi, or Uber. This can be a significant savings for you.

When you are deciding on the excursions in which you want to participate, find as many free ones as you can. You can do many things for free, you just have to look for them. Instead of paying for a tour, take in the sights on your own. Often times you can get a book or an audio version of a tour for free or a nominal cost and move through the tour at your own pace. Do not spend a lot of money on souvenirs. Many of these items are priced higher than normal and you forget about them or throw them away after a year.

Medical Bills

Medical bills are often something that many of us have to pay. The cost of medical care is increasing and insurance (if you have it) never pays enough. Medical bills add up quickly and before you know it, you have a bill that is thousands of dollars. While this may seem overwhelming and daunting, take a breath and know that there are ways to save on a major purchase, such as medical bills. Yes, I am putting medical bills in the major purchase category because they are. Typically, the medical treatment is something you need to have and you have no choice but to pay the bill.

One of the key points to remember when it comes to medical bills is that most medical providers understand. They understand that health care is expensive and insurance does not cover much. They know the cost of prescriptions is outrageous and they are usually willing to work with you.

Tops Ways To Decrease Medical Bills

I know you probably do not like that I am referring to medical procedures and health care as a major purchase, but it truly is. So, I am going to continue to refer to it as such. There are some ways to save on a major purchase like medical bills.

The first thing to remember is to be honest with the provider. Call them and talk to them about what you can and cannot afford to pay. Many times they will work with you on a payment plan. They may even be willing to take a partial payment. Some providers are willing to cut as much as half of the bill if you can pay that amount right away. They know it is better to take a partial payment up front instead of getting small payments for months, or years.

Another point to consider is talking to the medical provider prior to the treatment. If you are honest with the doctor or provider, they may be able to modify the treatment so that it fits into your budget. The provider may be able to find a study or trial in which you can participate that allows you to receive free treatment. Medical providers deals with insurance companies all the time and often the insurance company wants a request worded in a specific way to approve the treatment or care plan. If your provider is aware of your situation from the start then he or she may be able to work with your insurance company to ensure approval.

Can A Personal Loan Help Me?

If you need money quickly for a large purchase, you might immediately think of a personal loan, or personal cash loans. Does it make sense to get a personal loan to save on a major purchase? One way a personal loan may benefit you is it gets you money fast when you need to make a large purchase. If you need car repairs, or even a new car, or if a major appliance needs to be replaced, a personal loan is a great way to get money. If you have good credit, you may be able to obtain a personal loan with a low interest rate.

Paying the interest rate may be better than not having a car that you need, or having medical treatment that you need. When you obtain a personal loan, it may reduce the stress you feel about needing the money. Trying to find the money for a large purchase may cause a difficult situation to be even more stressful. When you know that you will have the money you need due to a personal loan, it can help decrease your stress. This may make the interest you pay worth it to you.

One thing to keep in mind is pay attention to the interest rate tied to your loan increases your monthly payment. You may want to do some rate shopping to find the best rate for your loan. The ultimate goal should always be to keep yourself out of debt. In some cases, a personal loan may be in your best interest.

Get Yourself On A Budget

This is one of my favorite topics. I know it probably is not one of your favorites, though. Yes, a budget is important. Yes, a budget is necessary. And finally, yes, you need a budget. If you do not currently have a budget, you should create one. If you feel like it is some form of forced control that prevents you from doing and buying the items you want, stop now. Stop thinking that way. Change the way you think about a budget and understand all the benefits. A budget helps put you in control of your money and your spending.

There are many apps and websites available to help you create a budget. These websites make it simple by providing you a form to list your expenses on one side and income on the other side. Once you see in writing how much you are spending and what you have left each month, that gives you an idea of what you can save on a major purchase. This list shows you where you are spending money each month. I bet you are spending money that you do not even realize. You probably spend more money in ways that you do not even think about each month. For example, how much money are you spending on coffee shops or convenience stores? Those are places that suck up a lot of money quickly and you probably do not even consider it spending money.

Save More, Spend Less

The best way to save on a major purchase is to save the money you need. Once you created a budget as defined above, it gives you a clear picture of who you spend your money. Once you know that, you can determine where you can make spending cuts. First, you should determine your goals. What do you want to do with your budget? Do you want to become debt free? And do you want to save on a major purchase? Do you want to secure savings for your retirement? It is helpful if you have a goal in mind to help you reach that goal. When you set a reasonable goal for yourself that is true to what you really want, it helps you reach those goals.

You should cut out unnecessary spending on items such as that gym membership that you do not use. If you have not been to the gym in months, cancel it now. You are wasting this money. You should also look at other subscriptions that you may have. Make sure that you really want and need those subscriptions services. If you do not, cancel them right now. If you do, change the rate as which you are receiving the items, or change it so that you request the items when you need them. This way you control when the items come and how much you are paying.

Conclusion

I have provided a lot of information on how to save on a major purchase. We all have to make major purchases at some point in our lives. Even if we have the money to pay for them, it is still nice to be able to save on a major purchase. As with any purchase, It is important that you ensure that you need the item and not make an impulsive purchase. Once you are sure of the purchase you want to make, you can begin to save for it. There are many ways you can save money on these items. You can also do research and find the item at the best price. Many large purchases are events, such as a wedding or a new home.

7 Best Personal Finance Books for Experts: Between the Lines

No matter what point you are at in your life, you can and should take control of your own financing. You need to know how to build a budget, how to calculate and understand personal income tax basics, and what personal loans are and how they can benefit you. But don’t worry, it isn’t as overwhelming as it may seem at first. You just have to take it a step at a time. One of the great things about taking control of your financing is that, when you understand how budgeting and other financing aspects work, you can use personal financing techniques to choose the path to get to where you want to be according to your personal finance goals.

Personal Finance Books for Experts

You don’t have to figure everything out on your own. There are many great places to find help learning about personal finance, including apps, websites, professionals, or finance agencies. But nothing compares to good, old-fashioned books. Since you’re a personal finance expert by now, you have probably already read all of the best personal finance books for beginners. Now you’re ready for something more challenging. And below we have compiled a list of the best personal finance books for experts just for you.

You can get the following books on Amazon, at your local library, or possibly on Audible. No matter what your financial situation is, these books are available for you.

7 Best Personal Finance Books for Beginners: Read On

1. The Total Money Makeover: A Proven Plan for Financial Fitness

Dave Ramsey, one of America’s most trusted voices on money, wrote The Total Money Makeover to help people gain financial fitness. With Ramsey’s proven plan for financial fitness, even the average person can create a good budget and get their expenses under control. His straight-forward plan can turn your unhealthy money habits into healthy money habits. The beginning is always the hardest part. So Ramsey gives you a step-by-step guide that will show you exactly how you can pay off your debts and build your wealth. You can even purchase The Total Money Makeover Workbook or The Total Money Makeover Journal so that you can complete prompts and develop your own financial plan based on Ramsey’s proven plan. Say goodbye to overspending and massive amounts of debt, and say hello to The Total Money Makeover!

What You Need to Know about Dave Ramsey

Dave Ramsey learned his financial principles the hard way. He was worth a little over a million dollars by the time he was 26. But he lost it because of bad decisions. Dave learned from his own mistakes and was determined not to go through that again. He asked others what they did to control their finances and went back to working in real estate to earn his money again. Also, he formed Ramsey Solutions in 1992 so that he could help others who were suffering from financial problems, giving them advice so they wouldn’t have to make the same mistakes he did. And he started a local radio show where people could call in with questions. This radio show, The Money Game, is now a nationally syndicated show. The goal at Ramsey Solutions is to help as many people and change as many lives as possible.

2. The Millionaire Next Door: The Surprising Secrets of America’s Wealthy

The Millionaire Next Door is what they call an oldie but a goodie. It may have been first published back in 1998 (and then first republished in 2010), but many people still regard this as one of the best personal finance books. Dr. Thomas J. Stanley and Dr. William D. Danko interviewed real millionaires to find out what it is that they do that led to them to become millionaires. According to these interviews, most of America’s wealthy people aren’t what you might picture: someone living in Beverly Hills or on Park Avenue.

They may actually be living right next door to you. Dr. Stanley and Dr. Danko used these interviews to determine 7 common traits that seem to be common in these people who have accumulated extreme wealth. For insight on “what it takes to become the millionaire next door today”, pick up a copy of The Next Millionaire Next Door: Enduring Strategies for Building Wealth, a new book by Dr. Thomas J. Stanley, with Dr. Sarah Stanley Fallaw, published in 2018.

Why You Need to Read It

The book is based on decades of research and also includes many interesting facts and anecdotes to make the material relatable. The premise is that people can be divided into Underaccumulators of Wealth (UAWs) and Prodigious Accumulators of Wealth (PAWs). PAWS can become wealthy even without earning a lot by living well within their means. On the other hand, people who earn a lot may have high amounts of debt and no savings if they feel the need to live a too lavish lifestyle.

There is also useful information in the book about first-time millionaires, lessons to teach your children about buying a vehicle and other practical matters, and some food for thought about choosing a career. This is one of the personal finance books that can help in every area of your life, and lets you know that it is never too late to change your path.

3. Broke Millennial Takes On Investing: A Beginner’s Guide to Leveling Up Your Money

For some reason, millennials seem to be avoiding investing. But it isn’t just millennials who are avoiding investing. Many people think that they are not ready to get into the market, while others may think that they are just not rich enough for investing. Another common reason people may avoid investing is that they don’t know where to even start. This book can help you, no matter what your reason is for resisting the urge to invest.

Here you will find the answers to all of your investing questions, from how to invest in a socially responsible way to where to look online for additional investment advice. You will even learn common investing terminology and how to handle your retirement savings. Whether you are a millennial or just someone who is interested in learning how to start investing, then this is the book for you.

Other Broke Millennial Books to Look Into

This book is actually part of a series of personal finance books offering financial advice, the first one being Broke Millennials: Stop Scraping By and Get Your Financial Life Together. Erin Lowry runs a Broke Millennial platform that features her books, her blog, her YouTube show, and her writings and speaking engagements. Lowry’s advice covers everything from saving for retirement to paying down debt to getting a better interest rate for a savings account.

She also offers workshops so she can help individuals who are making a commitment to changing their financial lives and futures. Unlike most people, Erin Lowry learned about money from a young age. And her parents were open with her about finances. Her dad gave her her first economics lesson when she was seven. And her early experience was what motivated her to want to earn money from a young age. She practices her principles in her life, being open with her partner about their finances, and works as a financial advisor and writer.

4. Financial Freedom: A Proven Path to All the Money You Will Ever Need

Are you interested in FIRE? I don’t mean the hot flame, I mean the acronym FIRE, which stands for Financial Independence and Retiring Early. If you are interested in FIRE but don’t know how to realize this goal, then Financial Freedom: A Proven Path to All the Money You Will Ever Need can help you. In addition to the simple math needed to reach FIRE, this book can actually give you the necessary psychological components and get you into the right mindset to accomplish FIRE.

In addition to his advice on how to achieve FIRE, this book will also teach you how to save money. Without giving up what makes you happy, travel the world for less, and think creatively in order to see all the ways there are to make money. Grant Sabatier is especially qualified to help you reach this stage of financial freedom in life. Especially since he went from $2.26 in his bank account one day to having a net worth of $1.25 million just five years later. If you want to have all the money you will ever need, then Grant Sabatier can tell you what to do to make your dream a reality.

What Special about This Book

Sabatier has more of a sense of urgency than many of the other authors, and he points out that while money is unlimited, time is not. He hopes that people will use his advice to become financially independent as soon as possible. While the other advisors speak more of a day-to-day approach where you don’t have to worry, Sabatier himself woke up when he was 24 and realized he had only $2.26 in the bank, but five years later he had amassed over $1 million.

CNBC dubbed him “The Millennial Millionaire,” and Sabatier started to evaluate the methods he used to turn his life around. After realizing that most common advice was impractical or outdated, Sabatier created his own program offering counterintuitive advice. While most financial advisors talk about living within your means, Sabatier emphasized that you should spend time doing what you love and that you shouldn’t sacrifice enjoyment of life to become more financially independent.

5. The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

First published in 1949, this classic handbook has been updated several times over the last 65 years. The original author, Benjamin Graham, died in 1976, and financial writer Jason Zweig wrote the latest update. This book provides information on how to make long-term investments. And it presents the topics with the help of Graham’s philosophy of “value investing.” Graham has been called the greatest investment advisor of the twentieth century. And his strategies helped shield investors from mistakes they might make while developing their strategies for making long-term investments. Market developments over the years have only emphasized the accuracy of Graham’s observations. His wisdom in coming up with his basic investment principles.

The Main Idea

One of the most important ideas in The Intelligent Investor is that it is more important to focus on minimizing loss than on maximizing profit. Warren E. Buffet said that you would either get the idea right away or not at all, and while you don’t need to read the entire book, doing so will help you learn a completely different way of looking at the world.

Graham espouses an important philosophy. But the examples in the book are relevant to modern investing. There is information on how to find bargain issues, when to make certain kinds of investments, dealing with companies that don’t pay dividends, and other important matters. The original theory can still be applied to modern situations, even after so much time.  It certainly explains why Warren E. Buffet called this “the best book on investing ever written.”

6. Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

Rich Dad Poor Dad is another oldie but goodie. This book has been one of the top-ranked personal finance books for over 20 years. Instead of being just one of the best personal finance books, it has recently been ranked as the #1 personal finance book of all time. And has been translated into dozens of languages and sold all around the world. In Rich Dad Poor Dad, Robert T. Kiyosaki compares and contrasts the financial lessons he was taught during his childhood by two different men: the rich father of his best friend (Rich Dad) and his own biological father (Poor Dad).

There has been some controversy over part of his current project. As well as controversy over how factual this book is. But Robert T. Kiyosaki is still known for his great tips and insights in this book. Kioyosaki retired at the age of 47 but worked with a consultant to bring his ideas into a meaningful form to share with others and help them achieve their dreams too.

Make Your Money Work for You

The biggest difference between the successful dad and the unsuccessful dad was this: one of them worked for his money, and the other one made his money work for him. Some of the ideas in the book challenge what most people would consider common sense; Kiyosaki pushes forth the belief that you don’t have to be a high earner to become rich. And he challenges the idea that your house is really an asset.

Some of his most useful tips are how to teach your children about finances. Especially because public schools do not provide adequate education in that area. Regardless of how factual the book is, it is still true that it has great financial advice. This new version of the book even offers sidebars with updated advice. So that he can emphasize how successful certain tips are and how it is still relevant today. Grab a copy of Rich Dad Poor Dad if you want to know what the rich teach their kids about money that the poor and middle class don’t!

7. The White Coat Investor: A Doctor’s Guide To Personal Finance And Investing

According to The Millionaire Next Door [one of the personal finance books mentioned above], doctors oftentimes will not end up becoming millionaires; they have high incomes, but they will not accumulate enough wealth because of their lifestyles and spending habits. James M. Dahle, MD, noticed that unscrupulous financial professionals tried to take advantage of other professionals like himself who weren’t familiar with the complicated financial issues.

Because of this, James M. Dahle, MD, decided to write The White Coat Investigator in order to teach doctors, medical students, dentists, and similar high-income professionals how to better manage their money. Even if you are not in the medical field, then you — as a high-income professional — can still get a lot out of this book. You can still benefit from the advice on graduating from university with as little debt as possible, choosing the right types and amounts of insurance, buying your first house, and minimizing your tax burden. There are not many personal finance books that focus on the issues that high-income professionals have. So The White Coat Investigator is a must for any high-income professional who doesn’t know how to manage their money as well as they would like to.

About Dr. Dahle

When he is not out enjoying nature with his family or practicing medicine, Dr. Dahle does other work with his brand The White Coat Investor. He has a financing blog that gets over 200,000 views every month. And he also writes columns for journals like Practice Link Magazine and Medical Economics. Besides his main book, Dr. Dahle helped write The White Coat Investor’s Financial Boot Camp: A 12-Step High-Yield Guide to Bring Your Finances up to Speed.

This book is excellent, with concise instructions on how to get the best results from the outlined principles. This book is different from the first book, too, because it applies to more professionals generally instead of focusing so much on doctors. By applying the principles he teaches, Dr. Dahle became a millionaire by the time he turned 38, only 10 years after he graduated from medical school. While he says his principles are not complicated or risky, they do take hard work.

What You Need to Know About Personal Loans

Unexpected expenses can occur at any time in life. You could be the most risk averse person in the world. And you could still be negatively affected by an accident. Whether you had one second of distraction or someone else was being reckless, you could be involved in an accident that causes you to get high medical bills that you just cannot afford.

Besides emergency medical bills that require you to find financing quick, you may find yourself in a situation where you need to get a personal loan to relocate. Maybe you are about to have your dream wedding and don’t have the funds to pay out of pocket, so you need to get a personal loan to fund your dream wedding. No matter what your personal situation is, it is important to make sure you understand the basics about personal loans before taking on such a responsibility.

What Is a Personal Loan?

A personal loan is a fixed amount of money a lender gives to an individual, with the agreement that the individual borrowing the money pays the money back. A personal loan has an agreed upon repayment term, as well as a fixed interest rate. Or how much extra you are required to pay over a period of time for having borrowed the money. There are many types of loans, so it is important to do your research on the different types of loans before choosing one.

Credit Score

It is understand to understand what role your credit plays when getting a personal loan. This three-digit number that appears on your credit score reflects your relationship with money. And it reflects how likely you are to pay back your loans and debts. Because of this, it is important to have a good credit score. So that you can build trust with your bank and lending institutions. The first step is to find out what your credit score is, and then you can determine what types of loans and with what kinds of interest rates may be available to you.

Since your credit score can have a big impact on whether or not a lender decides to loan you money, does having a bad credit score automatically disqualify you from getting the loan you need? No! It is possible to get a personal loan with bad credit. You may end up with a higher interest rate. Or may need to find alternative lending institutions — such as credit unions — in order to get the loan you need. But it is possible to get a personal loan with bad credit. In fact, getting a personal loan could even help your credit.

Benefits of Getting a Personal Loan

While a personal loan is generally used to pay off large expenses that you cannot afford out of pocket, it is sometimes overlooked that sometimes getting a personal loan can save you money. Debt consolidation, or the process of putting your debts under one loan to be paid off, can save you money over time. Since you may be able to get a smaller interest rate that will allow you to pay off your debt faster. If you have more than one type of debt, then it may be worth it for you to consider consolidating your debt.

Final Thoughts

It makes sense to use all of the resources available to you when it comes to changing your habits and living the life you really want and deserve. Books are great because they are tangible; you can read them and then mark them so that you can really enforce the lessons. That doesn’t mean that you should ignore other resources, such as apps, blogs, and personal financial advice. Most of the authors here provide extra information and advice in the form of talk shows, blogs, and newsletters. And you can look at their personal finance books as textbooks, which you can read again and again. In this way, you can learn more about finances and change the way you think about money.

When you are considering finances, you have to look at your short term goals and your long term goals. Sometimes you need to get money now because of a current need. And you don’t have another good way to get the cash. There is nothing wrong with checking out personal loans online. As long as you are responsible and make a plan to pay it back. With the principles from the personal finance books here, you will learn about how to protect your credit and stay out of debt.

When you use an online lender, you can often find a reputable business that will loan shop for you while only running your credit once. If you are just starting out in your financial education, you may not have much credit history yet. Personal cash loans can help you build your credit as you prove that you are capable of paying back the money. Personal loan shopping can help you find the best deal for you. So that you can keep from paying unnecessary fines.

These personal finance books offer advice on everything from working to investing to retiring. So you can find guidance for every area of your life. Pick up one of the personal finance books in our list today, and take control of your financing!

What Are Personal Loans for Fertility Treatments?

Only 15 states in the country require insurers to offer some coverage for an infertility diagnosis and treatment. The average cost of a single fertility treatment cycle can be over $10,000. With this information, having children can seem financially out of reach. In order to make dreams of having children a reality, many couples will consider taking out personal cash loans in order to cover the cost. Since a personal loan can be used for just about anything, with little restrictions on how you use the money, you can use one to pay for treatment.

Cost of Fertility Treatment

One of the most common fertility treatments is IVF. The average cost for a single IVF treatment can run between $12,000 and $14,0000. Not everyone gets pregnant through the first treatment cycle or at all. Those who go ahead with IVF treatment should plan to pay for at least two cycles but there is no way to predict how many cycles any one woman may need.

The price of a cycle can range. There are also additional costs that not everyone will think about. If you add in the cost of lab work and medicine, one cycle can also easily add up to $20,000. The medicine cost can give many patients sticker shock. The issue is further exacerbated by the fact that the type of medicine you may need is unpredictable and can be dependent on your age or the treatment option your provider selects. Many patients shop for medications on their own and the price can range from $2,000 to $6,000 per treatment cycle and vary from one pharmacy to the next.

If a patient is lucky enough to have some insurance coverage for fertility costs then the cost of the medicines alone can sometimes meet the policy maximums for treatment. There may also be the cost of genetic testing, which can cost an additional $5,000 to $7,000. Many people want to do genetic testing to see if the embryos are healthy and to give the highest chance of success. When pricing out an IVF cycle, don’t forget to take all the costs into consideration, which include the price of medicines and whether or not you will need genetic testing.

What Is a Personal Loan?

A personal loan is when a lender lends you money that you must pay back monthly for a set period of time. The lender can be any type of lender. There are certain qualifications that you must meet and you will need to provide some documentation. When you take out a fixed-rate personal loan, you will have the same payment throughout the life of the loan. If you take out a loan with a variable interest rate then it has a lower starting interest rate that could increase over time.

Should You Get Personal Loans for Fertility Treatments?

If you aren’t covered for fertility treatments under your insurance then getting a personal loan can seem like a good option. It’s always a good idea for potential borrowers to weigh the costs associated with getting a loan and consider all their financial options. Some loans can carry high interest rates, especially if your credit isn’t that great. You will need to ask yourself if you are able to afford the monthly payments along with the cost of pregnancy, childbirth, and a newborn.

Ideally, you should try to pay for some of your treatment with your own savings but it can be hard to foot the entire bill. If you are going to search for personal loans to pay for fertility treatment, you should search for the lowest rates. It’s also advisable to look for treatment and prescription discounts to help offset the cost of treatment so if you do have to take out a loan, it’s not for as much.

Where to Get Personal Loans for Fertility Treatments

You may be able to get a loan directly through your healthcare provider. If that’s not the case, you can go to banks and online lenders for a traditional personal loan.

At the Medical Provider’s Office

There are some finance companies that will work directly with medial providers to have in-house lending solutions for patients. This lets you apply directly at the doctor’s office for financing. Some of these companies provide loans for a variety of healthcare needs, while others focus solely on fertility treatments. The loans will act the same way as a traditional personal loan and you will have monthly payments over the course of the loan. There can be prepayment penalties associated with the loan so check with the provider.

Personal Loans Online

If your healthcare provider doesn’t work with a financing company, there are plenty of options for personal loans online. You can find fertility loans online but you can also apply for traditional personal loans. If you have excellent credit, it’s possible that you can qualify for a single-digit interest rate. Fertility loans function in the same way as personal loans but can only be used for fertility treatments. Most personal loan providers will allow you to check your rate online without a negative impact to your credit score so you can shop around for the best rate.

Credit Union or Bank

Your credit union or bank will have personal loan options. You may even get a rate discount if you are paying back the loan through a qualified savings or checking account. Some banks offer secured loans, which will use something as collateral. Secured loans can come with longer terms, larger loan amounts, and lower interest rates. Credit unions and banks may have some restrictions on how to use the funds from a loan so you need to see if fertility treatment is eligible. Most will have online applications to help speed up the process.

Other Options to Pay for Fertility Treatments

While personal loans can be a good option for fertility treatment for many couples, there may be other options for medical financing.

Health Savings Account

An HSA is a savings account with tax advatanges that will allow you to contribute pre-tax dollars to a fund that you can use to pay for out-of-pocket medical expenses. If you have a high-deductible health insurance plan, you should definitely have an HSA. If you have saved up enough funds in your account, you can pay for treatment. There are limits on how much you can contribute each year but it can still be a good option. Flexible spending accounts, or FSAs, can also be used.

Advantages of HSA for fertility treatment

Home Equity Loan

If you have a home and there is some decent equity built up then you can get a home equity loan or a home equity line of credit to pay for treatments. There are some risks involved. If you aren’t able to repay the loan then you are putting your homeownership in danger. You should only take out this loan if you know you are able to repay it without any problems.

Credit Card

Paying for fertility treatments on a credit card may not be the best option due to high interest rates. If you are able to get a 0% interest credit card and pay for the charges before the promotion period ends then using a credit card can be a good choice. You will need to pay off the balance before the promotional period ends in order to make it worth it.

Fertility Grants

Foundations and organizations to help with fertility treatments can offer fertility grants. Some of the grants come in set amounts that you can use toward your treatment, while others cover the full cost of a procedure, such as an IVF cycle. Even if grants don’t cover the full cost of the procedure, they don’t have to be repaid, which can help you supplement your other financing options. In order to do this, you need to fill out an application and likely pay an application fee. The organization reviews the application and may perform a background check to let you know if you get the funds. Each program will have its own guidelines and rules so do your research before applying for any grants.

Payment Plan with a Provider

Instead of taking out a loan to pay for treatment, you can work out a plan with your medical provider. This may be able to help you save on interest costs and you can have some recourse if there are billing or clerical errors for treatment, which can be common. You may also get a discount if you pay with cash. Each medical provider will have different options so be sure to check what is available.

Borrowing from Family

Borrowing from family members can be the best decision or the worst decision. It will depend on your relationship with the family member you are getting the money from and your ability to pay them back on time. If you miss a payment to a family member then you won’t ruin your credit score or lose your house but the tension can lead to bickering and bitterness. It can cost you the relationship. However, if you have a good relationship with the family member and he or she has the cash to lend then it could be an option.

Medical Loans

Medical loans can be personal loans or credit cards, which are specially marketed for health care. You can use some medical credit cards and loans only at certain providers, while others are less restrictive. They can be offered to pay for a variety of different medical needs, including fertility treatments. You cannot use every medical loan for fertility treatment so you shouldn’t waste time applying for one you can’t use. Medical loans may offer a 0% interest rate for a set period. Another advantage of medical loans is you aren’t going to be tempted to use the money for other expenses. You need to read the fine print on these loans. What happens if you are late on a payment? What happens if you take longer to repay the loan than the period you have for zero interest?

Borrowing from a Retirement Fund

Borrowing from a 401k or IRA may be possible with a hardship withdrawal. Whether this is possible will have to do with your particular plan, your ability to pay it off, and your assumed job security. You may also need to prove you have a need, which may require sharing your medical bills with HR and you may not want to disclose you have infertility issues to your employer.

Other disadvantages of borrowing from a retirement fund can include getting hit with penalties, having to pay taxes on the borrowed funds, and the risk of losing your job before you pay back the loan. It can be possible to borrow the money without paying penalties or fees but navigating the rules can be tricky. Your expenses usually need to occur in the same year you borrow the money. If you borrow money in 2019 to pay off credit card debt you got from fertility treatments in 2018, you could end up being penalized.

Advantages and Disadvantages of Different Financing Options for Fertility Treatment

With so many different financing options for fertility treatment, it helps to know the advantages and disadvantages of each one so you can make the right decision.

Personal Loans

Since personal loans come with fixed interest rates and a monthly payment that is predictable many think it is the best option to cover fertility treatment. When you have a personal loan, you will know exactly how much interest you have throughout the life of the loan and when you will pay off the loan. Another advantage is that you may also qualify for a lower interest rate depending on your creditworthiness. However, some loans will charge origination fees and you may need a good or excellent credit score to qualify. You will also have to borrow a fixed amount of money, which means you may borrow more or less than you need. Since the cost of each treatment cycle varies, this can be a big disadvantage.

Home Line of Credit

With a home line of credit, you can borrow exactly what you need to cover the expenses as you go and these come with low APRs since your home is used as collateral. However, you may not know your exactly monthly payment until you are done borrowing money, which can make it harder to budget. You are also putting up your home as collateral so you need to make sure you can repay the loan. Some lines of credit may come with adjustable interest rates, which can mean it’s harder to calculate the monthly payment and the interest cost.

Credit Cards

Credit cards do come with some advantages since you only borrow what you need as you go. They can be convenient to use and some will give you rewards for every dollar you spend. They also don’t charge an origination fee like personal loans, but there can be some that charge annual fees. Credit cards can come with high interest rates that make borrowing more costly than other options. You may not have a predictable monthly payment since the balance will change as you charge more during your treatment. Credit cards can often tempt people to rack up more debt.

How to Borrow Responsibly and Get the Best Rate for Fertility Treatment

Before you borrow money for fertility treatments, you need to prepare your finances and know the ins and outs in order to get the best deal.

Резултат слика за credit score infographics

Check Your Credit Score

Generally speaking, if you want to qualify for personal loans, you will need a good or excellent credit score. Some lenders can give personal loans to those who have a credit score as low as 600 but the lower the credit score, the higher interest rate you will have to pay. The first step should be finding out where your credit score stands and if there are quick ways to improve it.

Set a Treatment Budget

You should speak with your fertility clinic to find out all the different costs you will need to pay. Get an itemized list and add up your total. While you may not be able to get an estimate of everything, try your best to get as close as possible to the final total. You should then figure out how much you can pay yourself and how much you will need to borrow. The best way to save on fertility treatment is to only borrow what you need and not any more.

Apply for Loans Online

The fastest way to find the best deal and to compare different loan options is online. Personal loan shopping online can be quick and easy and you are able to compare several different offers in one place.

Read All the Fine Print

No matter what type of funding you go with, you need to do your due diligence. For example, if you are taking out a personal loan then you need to read all the fine print and understand the terms and conditions before you sign. This can include understanding your payment terms, your interest rate, the fees associated with the loan, and if there is a prepayment penalty.

Set Up a Realistic Payment Plan

Before you sign, you need to make sure you are able to afford the amount without jeopardizing your financial life. If your fertility treatment is successful, you will be juggling these payments along with the cost of having a newborn. The best way to set yourself up for financial success is to only borrow what you need and get the lowest interest rate possible. If you want to have a lower monthly payment then it can be worth it to choose a loan that has a longer repayment timeline. With this option, you will pay more interest in the long run but your monthly payments can be easier to afford.

What to Watch Out for When Getting Personal Loans

As part of doing your research for personal loans to know you are getting the best rate and the best option for you, it helps to know what to look out for. One main thing you should pay attention to is an excessive fee. Many lenders can charge an application fee but the fees can add up. They may also offer you loan insurance, which would cover your personal loan payment if something happens to you or in the event of death. While insurance may help with peace of mind that you aren’t leaving family members in a bind, it can also come at a cost. Always make sure that the lender is legitimate and is a licensed business in your state.

What Do You Do if You Have Bad Credit?

Those who have bad credit may not qualify for personal loans and often will opt for fast loans. However, these loans will usually have very high interest rates. These loans can often be seen as predatory because of the high interest and the terms. If you do take out these types of loans, it’s best to pay them off as soon as possible. If you’re looking for personal loans for fertility treatments but aren’t able to qualify, you may want to spend some time working on your credit before applying in order to get the best rate.

Final Thoughts

Personal loans for fertility treatments can help with the high costs of treatments and IVF. There are plenty of benefits of getting personal loans and you may be able to get these loans from different locations. Whether or not personal loans for fertility treatments work for you will depend on your unique situation and your other options for financing your treatment. There are different ways to finance treatment but they also come with their own advantages and disadvantages. If you do decide to get a personal loan to help with the cost, you need to make sure that you are able to work it into your monthly budget and having a monthly budget before you apply is a must. There are certain things to look out for, including high fees.

What Happens If You Want to Return A Personal Loan?

If you are considering a personal loan, it may be a stressful time for you. I understand that the need for a personal loan comes up at varying times. It could be that you are in a good place financially and can afford to the monthly payments for a personal loan. There is another side to needing a personal loan. You could be in a place where you need money fast because you are in a sticky situation. You may have medical bills that you cannot afford. There may be some type of emergency that requires you to make significant repairs or a replacement.

No matter what your financial position is, when you are considering a personal loan, you should be sure that is the right path for you. You do not want to enter into a loan contract without serious consideration. It may be something that you cannot easily terminate. You may not be able to return a loan, but there are other ways you can handle a personal loan.

What Is A Personal Loan?

You are seriously considering a personal loan and one of your burning questions is what if I want to return it? That is a valid question and you should know the answer to it before making that decision. However, if you are asking that question, you probably have a few more questions. It is important that you fully understand everything as it relates to a personal loan. I am going to start with the most basic information.

A personal loan is when some type of lender allows you to borrow money. You promise the lender to repay the money when you make regular monthly payments for a set period of time. The set period of time can be anywhere from three to five years. A lender can be a bank, online lender, credit union and even a friend or family member. The lender adds interest to the money you borrow. This is a fee for allowing you to borrow money from them. This amount varies based on several factors, including credit score. The amount you pay per month is typically static and does not change from month to month.

A loan is a contract so it is important that you read the entire document, including the fine print. A lender is required to give you all the information about the loan before you sign the document. That does not mean that information is in print that you can easily read. Pay attention to everything before you sign it.

Can I Return a Personal Loan?

Typically when you accept a personal loan and the money has been deposited into your account there are no true givebacks. You can cancel the loan before you sign the paperwork and the fund are in your bank account. The one exception is a mortgage refinance, but that is not considered a personal loan. Depending on the lender, they may offer you a short period of time when you can return the loan. It depends on the lender and they do not have to offer it. You should ask your lender if they offer this period of time. While you may not be able to cancel the loan, you can always pay off the loan. There is a slight catch here.

You were in the amount of $5,000 with 10 percent interest. Most likely there were fees associated with your loan, so only $4,500 was deposited into your account. However, you owe $5,000 back to the lender. You also have to pay interest for the amount of time you had the money. In reality to pay off the loan right away, you have to pay money out of pocket.

Payday loans often have a two-day cooling-off period. You do not have to have a reason for canceling the loan. You have to give back the money. They do not charge you fees or interest. If you are in the UK and receiving money from a lender in the UK, they have a 14 day cooling-off period. You can cancel your loan within 14 days from the date the loan is signed. After that, you have 30 days to pay back the money. You may be charged interest for the days that you have the loan and there may be fees on top of that.

Can I Pay Off A Loan Early?

Yes, you can always pay off your personal loan early. I briefly touched on this above. However, there may be additional fees associated with paying off your loan early. You should make sure you read the fine print of any contract you sign. All lenders must disclose all the information about fees and interest about your loan in the contract. It is up to you to read and understand what is in the contract.

A lender may charge you an early termination fee. This is a charge from the lender when you pay back the money you borrowed earlier than the schedule. The lender makes money from your loan by charging you interest. They lose money when you pay off the loan early. They may charge a fee to offset the money they end up losing. Not all lenders charge this fee, so pay attention to the contract before you sign it.

There may be other fees that the lender charges you. One of those possible fees is an origination fee. It covers administrative costs that come with the loan. This is for the paperwork. This is usually taken off the top of the loan before it is deposited into your bank account. Some lenders charge application fees. This fee is charged by the lender simply for you to fill out the application. You may have to pay this out of pocket before the lender processes the loan. Even they deny your loan, you still have to pay the fee.

Are There Different Types Of Loans?

There are a variety of personal loan options available, so you should be able to find one that fits your needs. One of the major differences between loans is a secured or unsecured loan. Most personal loans are unsecured. That means that they do not have collateral associated with the loan. They are riskier for the lender and typically have a higher interest rate. A secure loan means there is collateral associated with it. Collateral is an expensive item, such as a house, car, or jewelry associated with the loan. If you do not pay back the loan, the lender gets to keep the item used as collateral.

In addition to the two major types of personal loans, there are also different kinds of loans. I mentioned earlier that there are many different types of lenders.  You can borrow from online lenders. In the past online lenders were considered for those with bad credit but that is no longer the case. Even those with excellent credit are getting loans from online lenders because it is faster. You quickly fill out an application and you receive an answer in about a day and the money is in your account just as quickly. Historically, they have had high-interest rates, but that is not the case today. It gives you another avenue to research when looking for a personal loan.

If you are interested to apply for a personal loan, You can check out Loanry and see what we can offer to you. We connect you with reputable lenders whom you can trust to honor the deal between you.

There are other types of loans but I would pursue them cautiously. They have high-interest rates, high fees, and can be dangerous. However, they can get you a small amount of cash quickly. You must pay back the money quickly as well. These are payday loans, fast cash loans, and title loans. Each one has different parameters. If you know that you can pay them back on time without any impact on your finances, then they may be the route for you. Just be aware that you should proceed with caution.

I’m Not Sure A Loan Is For Me

Obtaining a personal loan is something you should seriously consider before you sign the paperwork. It is understandable that you may not be sure if a loan is the right decision for you. You must make the right decision for you at this time. There are some items you should consider when deciding if a loan is right for you. The first thing you should decide is if you can afford to pay back the loan. If you cannot afford the monthly payments, you should not accept the loan. If you cannot afford the loan, you are putting yourself in a terrible financial position. You should also think about why you want the loan. If it is for something you need, you may want to move forward. However, if it is for something that you do not need, or frivolous, you may want to think twice about it.

If you are sure that you can afford the loan payments each month, then it may be a wise decision for you. When you use a personal loan properly, then it can help to improve your financial outlook. The key is to make the decision that does not hurt you financially. You have to be the one to make the decision for you. You cannot let others guide you to thinking if a loan is right or wrong for you.

What Happens If I Default On a Loan?

The last thing that you want to do is the default on a personal loan. When you default on a loan that means you have stopped paying the loan. Each lender has a different idea of what default means. For some lenders, one payment means that you are in default. Some lenders provide you a grace period of up to six months before they say you are in default. No matter what definition the lender uses, you still want to avoid default at all costs. Lenders make sure they get their money no matter what. They may incorporate the use of a collections company to come after you. They may choose to sue to get their money. If they decide to sue you, they take you to court and can garnish your wages. That is expensive for a lender because they have to pay court costs.

To avoid default, you should pay all of your bills on time. If you think you will not be able to pay them on time, you should contact your lender. In cases such as those, you should call them and tell them you are having financial difficulty. More often than not, the lender is willing to work with you in settling your bills. It really benefits them to work with you because you paying some of your bills is better than not paying the bill at all. If you can set up a payment plan, you can pay some of the bills.

Paying Interest Scares Me

It may be a bit extreme to be afraid of interest rates, but you certainly should not be a fan of them. Every personal loan has interest rates, which depend on your credit score. Interest rates are annoying but a necessary evil when it comes to personal loans. Interest rates can make a huge difference in your monthly payment. Before I get into the details of how interest rates impact your monthly payment, you should understand more about interest.

When you obtain a personal loan, you borrow a set amount. That is the principal amount. This is the amount to which the lender adds interest. Most lenders have a maximum amount they allow people to borrow. Lenders add interest on top of the principle. This is a percentage of your loan. This is usually a fixed rate that can be anywhere between 7 percent to 30 percent. Each loan has a term length. This is the amount of time you have to pay back the loan. It can be anywhere from 3 years to 5 years. Like the loan amount, the term length is fixed so you know how long you will pay back the loan.


Here is an example of the impact of interest shown in numbers:

Principle amount of your loan = $5,000

Interest rate with good credit = 10% = $500

Term length = 3 years (36 months)

$5,000 + $500 = $5,500 total loan amount = $152.78 per month


Another example with a higher interest rate:

Principle amount of your loan = $5,000

Interest rate with bad credit = 25% = $1,500

Term length = 3 years (36 months)

$5,000 + $1,500 = $6,500 total loan amount = $180.56 per month


What Happens During The Application Process?

No matter which type of lender you choose for your personal loan, you still have to fill out an application. You can do it in person or online. An online application is fast and easier. These applications typically have less questions. If you apply in person, a loan consultant most likely fills out the loan for you. You have to provide documentation once you fill out the loan. Lenders take a look at the documents you provide and look at some key information. There are interested in your income. They want to make sure you have regular income to pay back the loan. They also want to make sure that the amount of income you receive covers the loan amount.

Your credit score makes a huge impact on a lender’s decision to approve you for the loan. The lender pulls your credit report to see your credit history, employment history, and credit score. They also take a look at your current debt to income ratio. This is the amount of debt that you have and how it compares to the amount of income you have. A lender may decide that it is too risky to give you an unsecured personal loan. They may ask you to provide collateral. They may even ask if you could get a co-signer for your loan. This provides the lender more security when allowing you to borrow money.

What Documents Do I Need?

The documents are typically the same regardless if you get a personal loan online or through more traditional means. The lender expects you to provide the needed documents in a timely manner. It is in your best interest if you provide them as soon as possible. The first thing the lender wants to see if proof of identity. This is for your protection as much as it is for the lender. This document should have your picture and name on it. It could be a driver’s license, military ID, or passport. It must be a valid ID, so it cannot be expired. You need to provide proof of income. This document can be paystubs, W 2 forms, tax forms and documents, and bank statements.

The lender wants to know how much money you are spending on housing. This is a good way for them to determine if you are living above your means. They may ask to see proof of your rent or mortgage payment and your utility bills. They may ask for these documents and only give you two or three days to provide them. Lenders believe this information is easily accessible to you. They may also ask for proof of any retirement or annuity payouts you receive. You have the right to ask why they need the documents, but keep in mind, failure to provide them may mean you are denied.

What About My Credit?

Your credit score plays a big role in the personal loan decision. You may think your credit score is not a big deal, but it is. It is a huge deal in every aspect of your life. If you have bad credit, it can interfere with your ability to get a loan, a house, insurance, and even a job. You would be surprised how often others use your credit score to determine something about you. It may not be fair but that is often what happens. That is why you must work incredibly hard to not allow your credit score to slip.

Credit scores range from 300 to 850 points. The lower that number is, the worse your credit is considered. Anything above 700 is considered a good score. Anything below about 650 is starting to get into the fair to the bad range. Most people fall into the 600 to 750 range. The reason for most credit scores dropping is late or missed payments. It is hard to get and maintain a good credit score. It only takes one or two mistakes and your credit score decreases. If your credit score is low, you can bring it back up but it does take consistent and hard work. You should protect your credit score and do everything you can to not let it fall below what is considered good.

How Can I Repair My Credit?

I mentioned in the paragraph above, that is it possible to improve your credit score, but it takes consistent work. If you would like to obtain a personal loan with the best interest rate, you want to make sure your credit score is good or better. You should first pull your credit report and take a good look at it. If there are any errors or mistakes, you want to correct them immediately. That is a quick way to improve your credit score.

After that, you must make sure you are paying all of your bills timely. You cannot miss or make late payments. This causes your credit score to plummet. You can consider obtaining a personal loan to improve your credit score. Once of the best ways to improve your score is to make consistent payments on time. When you get a personal loan and make the regular monthly payments, you improve your credit score. While this may seem like an extreme way to improve your credit, it is a viable option if it makes sense for you to have a personal loan.

How Can A Budget Help Me?

Yes, a budget can absolutely help you with just about everything. There are many apps and websites available to you that make creating a budget easy and fast. Creating a budget puts you on the right track to being in control of your money. If you do not currently have one, once you finish reading this article, you must create it. The actual creation of a budget is fairly simple. You write all of your expenses in one column and add them together. Then, you list all of your income in a separate column and add that together. You subject the expenses from the income and hopefully, you have a positive number. If so, this is the money you can spend, providing you are already saving money. If you are not saving money, do that now. Save the money before it is considered income.

When you create a budget, you can determine if you can afford to repay a personal loan. If you have money left after you subtract your expenses from your income, this is how much you can afford to pay back each month for a loan. It can also help you decide if you should even pursue obtaining a loan. The numbers do not lie. If you cannot afford to repay a loan on paper, chances are you cannot repay in real life.

Conclusion

We have talked a lot about personal loans. You cannot technically return a personal loan. But you can repay them early. You can potentially give them back with some fees, but once that money hits your bank account, you are essentially stuck with your personal loan decision. There are many loan options available to you, including personal cash loans and online loans. They are fairly easy to obtain. Just because you can do not mean that you should. That does not change the fact that obtaining a personal loan is a serious decision. It is a decision you should give a lot of consideration. You should not enter into any contract lightly and certainly not one where you have to make payments.

An important thing to always remember is that you must make sure you can afford to repay the loan before you sign the paperwork. Put your budget in action and make sure that you have extra money at the end of the month to repay the loan. A loan is not free money. You have to pay it back. If you do not repay a loan, there are consequences that significantly impact your finances and your credit.

If I Get Approved for a Personal Loan, Do I Have To Accept It?

When financing everyday life becomes difficult, you start thinking about ways to help your situation. For many people, a personal loan would solve most of their problems. But, it is important to be well informed about the entire process. There is a path you have to take to get the money transfered to your account. And if you want to reach that end goal, you should know about all the steps. So this is why we are discussing some of the reasons you may need or want a personal loan, as well as can you decide not to take it if you start the process and see that it is not for you.

Why Would I Want A Personal Loan?

There are any number of reasons we look into personal cash loans. Yours may not be the same as mine. That’s why they’re called personal loans.

Consolidate Debt

One of the most common is to consolidate debt and lower your overall interest rate. If you have two or three credit cards with balances on them, a year of car payments left, and one or two other expenses you need to pay soon, a personal loan can pay off everyone else and lock in a lower rate than you were paying on most of your debt. Then, instead of juggling a dozen bills every month, you’ll have one.

Medical Bills

Sometimes the issue is medical expenses or unexpected repairs. These are the sorts of things which come out of nowhere and often leave us emotionally and financially drained as we try to figure out how to take care of those we love without losing everything we own. Depending on your circumstances, the right personal loan can help you pay off these unpleasant expenses and regain some control of the financial part of the situation.

Travel or Wedding

Not all expenses are bad, of course. You may be planning a family vacation or a wedding. These can be times of great joy and lasting memories, but that fun comes with a price tag. It’s up to you to weight the costs and the benefits. If you decide to move forward, a personal loan can make the experience more manageable than maxing your credit cards or bouncing a few checks.

We can’t always control what life throws our way, but we do have some choice in how we respond. Sometimes a personal loan can save you money by helping you manage your debt and retain some control over how you move forward.

Do I Have To Accept a Personal Loan Offer?

The short answer is no. Until you’ve signed, with ink on paper or electronically, everything you’ve negotiated is just that – negotiations. You’ve asked for a certain amount; the lender has offered you specific terms, including an interest rate based largely on your credit rating. But yes, you can walk away at any point before you’ve signed or otherwise officially agreed to the personal loan terms being offered.

Do I Pay Fees If I Don’t Accept the Loan?

Keep in mind that if you’ve agreed to any processing fees or other charges along the way, those may not be refundable. These aren’t meant to be secrets. Any reputable lender will be very clear and specific about set-up fees or other costs along the way. It’s up to you to pay attention and make sure you notice if and when they do. Remember, it’s not unreasonable for the lender to charge a small fee for their time and effort. Even if you decide not to go forward with your personal loan.

Will It Influence My Credit Report?

It’s also possible that a “hard inquiry” will show on your credit report even if you decide not to accept the personal loan. Lenders getting serious about you as a client will generally run a credit check on you, and this shows up in your credit history. Unlike “soft inquiries,” like the sort made by landlords deciding whether or not to rent you an apartment or a potential employer wondering if you’d be a reliable employee, “hard inquiries” impact your overall credit rating. One isolated inquiry won’t make or break your entire credit history, but repeated efforts to secure personal loans or other funding, especially if they don’t lead to actual borrowing and repayment, will ding your credit pretty good over time.

Reasons To Reject A Personal Loan Offer

The most obvious reason is that you’re not happy with the terms. And hey – this is the 21st century. This isn’t your father’s personal loan world with you, clean-shaven and nervous, wearing your best tie, sitting in a bank lobby waiting for some shiny youngster with a name like “Chad” or “Hunter” to allow you to beg while they look professionally distant and pretend to consult their supervisor just to let you sweat.

You’re the customer. Whatever your credit score, you have the right to hold out for decent terms and attentive service from any lender you’d consider doing business with. You may not get everything you want, particularly if your credit report needs some work, but lenders can and will compete for your business. If you’re working, or have some other source of reliable income, and you can pull together a few basic supporting documents to show you’re who you think you are, you should be able to get a personal loan you’ll be happy with.

If not, there’s no crime in walking away. Be polite and professional; you never know when you’ll need this lender and these people keep notes on everything. You don’t have to buy a computer just because you enter an electronics store and you don’t have to take home a new outfit just because you walk around the mall. Similarly, you don’t have to take out a personal loan just because you did some shopping.

That said, there are times people walk away from loan offers which aren’t driven by capitalist gumption. At the risk of horrifying or offending you, please allow me to address a few less-justifiable reasons to walk away from a loan offer.

You Weren’t Prepared

The lender needs information you don’t have and suddenly it all seems like too much trouble. This isn’t a problem with the loan process; this is Adulting 101. If you’re going to apply for a loan, you should recognize in advance that you might be asked for proof of income, verification of identity, or other personal information. You’re asking someone you’ve never met to transfer thousands of dollars your way. Is it so crazy they’d like to have a reasonable idea of who you are and how to get ahold of you if anything goes wrong?

You’re Not Sure How Much You Need

This is a preparation problem as well, but far more basic. Why are you borrowing to begin with? If it’s a bill consolidation loan, what are your total debts at the moment? If it’s for a vacation, a wedding, or a remodeling project, where’s your budget and estimates? Borrowing should be far less starched and joyless than it was a generation ago, but it’s still a big step with serious long-term repercussions. Put on your big-person panties and do the math ahead of time, friend.

You’re Not Sure How You’ll Pay It Back

This is the same issue from another angle. Adulting. Preparation. Math. Grown-up life isn’t all pizza delivery and wandering around the house in your underwear. I mean, you can do that if you like, but the flip side involves being responsible and thinking things through and all that other stuff that’s not very rock’n’roll, but is pretty much essential if you want to avoid moving back into your mom’s basement when you’re 40.

Not that there’s anything wrong with that… we just want it to be a choice, and not because we refused to use a calculator.

If it sounds like I’m scolding anyone, that’s not my goal. Believe me, whatever poor choices you may have made here and there along the way, I’ve made worse ones, and more often. I’d like to help you make fewer of them, especially when many of them are so avoidable. Getting this deep into the loan process before you realize you’re not sure whether or not you’re ready to take out a loan is avoidable.

What Should I Consider Before Applying For A Personal Loan?

That’s a great question. We’ve already covered three – how much do you actually need, what documentation should you should have available, and how much can you realistically afford to pay back monthly? I probably sounded a little snippy about those before, so I won’t belabor them here. Please know, however, that I’m just trying to look out for you because I’ve been there.

OK, I lied – but just a little bit. I’ll belabor documentation, the most boring part of the process.

See, I’m the guy that feels perpetually blindsided when asked what year I got married or when we moved to such-and-such place. I know where I’ve worked over the years, but I have to look up starting and ending dates and salaries and contact information every freaking time. It’s embarrassing. Take an hour and gather some pay stubs, work history information, etc. Don’t panic if you’re asked for something you don’t have in front of you, and don’t be surprised if you’re not asked for half of what you’ve prepared. But what harm can it do to have that sort of thing compiled in some easy-to-reference way just in case?

Here are a few other things to ask yourself before going personal loan shopping:

What’s Your Credit Score?

This is easy to check, and it should give you a much better idea of what sort of interest rate and other terms you should be able to secure. The two most popular credit score models are FICO and VantageScore.

If your FICO score is below 580 or a VantageScore below 500, it’s going to be difficult for you to get credit, even on unfavorable terms. It might not be impossible, but expect to encounter low limits and high interest. Do what you gotta do, but you should be prioritizing improving your credit rating as soon as reasonably possible so that you have more options next time.

FICO Score Factors

If you FICO is between 580 – 670 or your Vantage lands somewhere between 500 – 660, you’re going to face some challenges, but a personal loan isn’t out of the question. While you should always check with your local bank or credit union, you’ll definitely want to explore a personal loan online. Online lenders generally have greater flexibility and are often willing to take greater risks. The tradeoff, of course, is that you’ll probably pay more in interest and fees than you’d like. That doesn’t mean you should resign yourself to the first offer made; you should still shop around for the best personal loan terms available to you right now.

A FICO above 670 or a VantageScore above 660 means you can afford to be a bit more selective. Anything above about 750 on either scale and chances are you’re already set for financing for just about anything that might come up. That doesn’t mean a life without problems (oh that it were that easy!); it just means more options when it’s time to deal with those problems.

And that ain’t nuthin’.

By the way, a personal loan can actually help to improve your credit score. You probably don’t want to take out a loan solely to bump your credit rating up a few points, but since you’re borrowing anyway, keep in mind that making your payments on time and otherwise staying in good standing with the lender means that six months from now, your credit report will look better than it does now. By the  you pay off the loan, it will be even better.

There are other factors, of course, but responsible use of personal loans is one important step in moving from ‘poor’ credit to ‘good’, or from ‘good’ to ‘excellent.’

What Are Some Different Types of Personal Loans?

Obviously there are dozens of possible reasons for taking out a personal loan. Presumably you’ve encountered one or more of these since you’re looking into it to begin with. There are specialized loans for many common situations in which people might need to borrow and which you should definitely consider if your circumstances suggest it. We need to get over our fear of asking questions about personal loans. We’re the consumer. It’s our right to understand what we’re getting into. Period.

Education Loans

Before taking out a personal loan to pay for anything related to post-secondary education, fill out the FAFSA and talk to a financial aid specialist at whatever institution you’re hoping to attend. Federal, state, and private aid is available for all sorts of things other than traditional four-year degrees. You may not qualify for all of it, but you might. You should at least look into it before borrowing on your own.

Vehicle Loans

Every car, truck, motorcycle, boat, and airplane dealership has their own preferred network of lenders. Don’t assume they’re the best way to go, but sometimes they are. Depending on how desperate the dealer is to move product, you may find Zero Interest offers or other unbelievable terms which make it worth your while to finance through them rather than with a personal loan or other financing you arrange on your own. Always read the small print and pay attention to the details, but consider all options before signing one of them.

Medical Loans

In recent years, several companies have begun issuing medical credit cards which allow you to pay off unexpected medical expenses over longer time periods. The interest rates vary widely (some are rather high), and not all medical providers accept them, but it wouldn’t hurt to explore a few options. As with anything, read the small print and don’t be afraid to ask questions. If they’re legit, they’ll answer as many of them as you have.

Whatever you want to use your personal loan for, make sure you find a credible lender. What if we tell you we can find offers for your right now? Loanry is a service that finds real, personalized offers for you, made by reputable lenders. By providing the required information in the form below, you allow us to match you with an offer of a lender with whom you actually may get a loan.

What Other Varieties of Personal Loans Are There?

It’s not all about purpose. There are several types of personal loans you should be aware of before you commit.

Unsecured and Secured

Most personal loans are unsecured. That means you’re not putting up specific collateral as guarantee for the loan. If you default on the loan, the lender will most likely turn you over to a collection agency and it’s all downhill from there, but they don’t automatically get your car, your house, etc. There are secured personal loans, but whatever you put up for collateral could potentially be seized if you fall behind on your payments.

Fixed and Adjustable Interest

Most personal loans are fixed interest. That means whatever interest rate you agree to when you sign off on the loan is the interest rate for the life of the loan. The obvious advantage to this is the stability. Every month, your repayment amount is probably going to be exactly the same, no matter what else is going on in the financial world at large. People do sometimes secure personal loans with adjustable interest. This means the interest rate is tied to national rates. It may rise and fall over the life of the loan. This might save you money over time. Or it can cost you substantially more than you anticipated when you took out the loan.

The other “type” of personal loan to consider is the source of the loan. As I said before, you should absolutely check out your local bank or credit union. Sometimes they offer great terms – especially those of you lucky enough to belong to a particularly good credit union.

Some of you have family members who may offer to loan you money at a lower interest rate than any financial institution can match. It’s impossible to generalize about these sorts of personal loans because they’re so, well… personal. The only suggestion I’d make regarding loans from family or friends is that you write up a specific agreement. Include interest and repayment terms, sign it, and do everything in your power to make those payments consistently – every time.

You know your family dynamics. You know your circle of friends. If your gut tells you it’s a bad idea, then it’s probably a bad idea. If you feel good about it, then go for it – but don’t drop the ball on this one. Your credit report matters, but there are things that matter more.

Finally, don’t neglect the amazing range of online lenders available to you in the 21st century, however. Obviously you don’t want to pick one at random; the internet is still the “Wild West” in some ways. But one of the services we provide, and on which we pride ourselves the most, is our ability to connect you with reputable online lenders after gathering some basic information about what you’re looking for and what you need. Don’t be afraid of finding a personal loan online, especially if you think the terms are better for you.

We don’t loan money ourselves – we’re about the education and the connections. They want your business; you want a personal loan. Obviously we hope it works out, but if you decide to go another direction, we’re still happy because you’ve been presented with more options and made the choice that seems best to you.

Not to get all sentimental about it, but we get all warm and toasty about that kind of thing here. It’s fulfilling.

For you it can mean a much more convenient loan experience. The turnaround time tends to be much shorter than with conventional institutions. And you don’t have to clean up or put on a tie to apply. Honestly, you could do it in your PJs while sipping coffee out of your Spongebob mug.

Then again, I don’t general like to make important personal decisions in my PJs. Maybe you should go ahead and shower and put on real clothes first. But you can still have your coffee and fill out your info at your own desk or from your favorite recliner instead of browsing old golf magazines in the bank lobby – so that’s pretty cool.

What Should I Ask If They Offer Me A Personal Loan?

Some of the most important questions come before you begin applying, but several only occur once you’ve been offered a loan. You may be understandably relieved or excited and just want to get things finalized so you can move on, but there are a few things you should double-check before committing yourself to even the best-sounding offer.

What Fees, Charges, or Penalties Are There?

Reputable lenders will usually be upfront with any fees or other costs wrapped into the loan process, but it’s still a good idea to make sure you’re absolutely clear on what you’re being charged, and for what purpose. Just as important, you should ask them to specifically identify the section of the agreement that addresses late payments or other unexpected difficulties. None of us plan on being late, and you may worry that you’ll sound like you’re planning on blowing them off if you ask about it first thing, but stuff happens – and it’s important to know how they handle such things.

Some lenders have a grace period built in around due dates. Or some other policy indicating they’re not looking to penalize you too greatly for a late payment here or there. Others, though, have substantial penalties written into the contract language. Being a few weeks late a few times a year might add to your balance substantially. Or it can  trigger an interest rate increase, or any number of other things. Make sure you know what those are.


Is There A Penalty for Early or Over-Payments?

It sounds crazy, doesn’t it? The idea that you might be penalized for making your payment too early? Or for paying extra? Or even paying off the loan ahead of schedule?

Different lenders treat these things in very different ways. Keep in mind that while of course they want you to pay back the amount they loaned you, their profit comes from the interest you’re paying on top of the amount of the initial personal loan. That means they make more when you take the full term of the contract to repay the loan. And while they’d never put it this way, they’re not always all broken up if you’re late a few times along the way as long as you keep paying, because those late fees and additional interest are more money for them.

You can’t blame them. They’re not evil for wanting to make a profit on your loan. Restaurants are hoping your order alcohol or desert for the same reasons – they make more that way. As long as everyone’s honest about the terms and expectations and follows through on what they’ve promised, that’s just capitalism in action. They want you to pay the loan off successfully; they’re just not in the same hurry you are to get there.

Who Do I Contact With Questions?

Most personal loans have repayment terms of a couple of years or more. We don’t know what might come up during that time. Or what questions you might have for your lender along the way. I like to clarify up front the best way to reach my lender. And also how quickly I can reasonably expect a response. It’s not a guarantee of anything. But how they handle this question at the beginning of the process is often a pretty big hint how they’ll handle any effort I make to reach someone there a year from now.

Norman Vincent Peale quote

Alright. You’re set. Where you go from here is up to you. I’m sure you’ll make the best decision you can for your specific circumstances. In the end, that’s all any of us can do.

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Everything About Personal Loans, You Were Afraid to Ask

Life happens. When you least expect it, some huge bill rears its head. Perhaps your pipes burst, your teen borrowed the car without asking and wrecked it before you got to add them to your insurance policy, you broke the crown on your tooth or your child’s vocational school does not offer a financial aid package. In each of these cases, personal cash loans can get you through.

Personal Cash Loans Defined

The term personal loan refers to a fixed amount installment loan that requires no collateral. Unlike mortgages, these loans are unsecured by collateral like your vehicle or house. You have a finite loan term in which to repay them and a variable or fixed interest rate. The loan term usually spans two to five years. You get a lump sum at the time you take out the loan. You then repay it month by month including interest. These payments reduce the amount you owe from the principal and the interest, but that just reduces the amount you owe.

Choose your repayment terms wisely. You’ll typically have options of 12, 24, 36, 48, or 60 months. While a longer repayment period provides a lower monthly loan payment, you will pay more interest. A shorter repayment period reduces the amount of interest you pay and can help you net a lower interest rate.

Credit cards are not personal loans even though they do not require collateral. They are revolving accounts that have much higher interest rates than personal loans, too. With a credit card, when you pay down the total owed debt, it leaves open credit for you to borrow from again.

Reasons to Take Out Personal Cash Loans

Needing a personal loan fast does not have to mean something bad happened. Just as often something happens while planning a wedding or vacation that makes it cost more than originally planned. Sometimes you or someone in your family needs an emergency medical procedure or you need help with funeral expenses because the life insurance did not cover the entire cost. Here’s a run-down on the situations and types of personal loans you’ll most commonly need.

Medical Bills

Medical expenses do not happen in a predictable manner. You could become injured in an accident or fall ill. Medical costs keep rising – even for those with employer-sponsored health plans. According to the Kaiser Family Foundation, during the past five years, health care costs went up 18 percent. To address these rising costs or an emergency medical situation, you could take out a personal medical loan or a medical credit card. Typically, the loan will prove cheaper, while the you can re-use available credit on the card.

Vacation Plans

Sometimes you think you have planned for everything with your vacation, then something happens to drive the cost up. Perhaps you already have the plane tickets, but the hotel you’d reserved had its pipes burst or experienced a fire. Now, on short notice, you need a new hotel with rates having gone up and little available. You need an emergency personal loan to fund the change in vacation costs.

Wedding Expenses

Perhaps your wedding planner’s estimates and projections came in way under the actual costs. Your reservations are made and orders submitted and now, you cake cost $1,000 more than planned. Rather than cancel the reception, you take out a tiny personal loan, knowing you can pay it back easily with the wedding money gifts.

Home Improvement Needs

It would be great if the only time you needed to renovate was when you wanted to do so. Unfortunately, pipes burst, fires occur, wiring fizzles out and sometimes, your mom or mother-in-law needs to temporarily move in with you due to a medical issue. You might need to enlarge the bedroom and bathroom doors to accommodate a wheelchair. When this happens and you are not ready, you need money fast. A home equity line of credit can help, but it takes much longer to apply for and set up than a personal loan. Perhaps you just purchased your home and have no equity, plus you have poor credit and barely obtained your mortgage. You can turn to installment loans for bad credit.

Relocation Expenses

You just landed your dream job and it is in New York City! Wow, relocation from Los Angeles, CA will cost a lot. You already thought living was expensive in Orange County. But you just saw Manhattan’s rents and now you know you need a relocation loan because you need to have somewhere to live. Plus you have to pay for the professional packers, professional movers, packing materials, a rental truck and potentially, storage fees. You can choose from one of the many unsecured personal loans online and easily re-pay the installment payments with your juicy new salary.

Types of Personal Cash Loans

Unsecured Loans

Unsecured loans cost the most since they do not require collateral. This causes more risk for the financial lender. Though you can obtain them quickly, both the fees and the interest rates typically cost more than other personal cash loans.

Secured Loans

Secured loans do require collateral, an asset the financial firm can sell to recover the money lent out, if the borrower misses payments. This could be your car or house. If you need money fast, an unsecured personal cash loan delivers it quickly. If you have time to take qualifying, wait for a secured loan since it typically offers better interest rates.

Difference Between Secured and Unsecured Personal Loans

Open-End Credit

Open-end credit like a home equity line of credit refers to a credit line that lets you withdraw money when you need to, up to the credit limit during an extended period of time. You typically do not need to pay interest on the money you do not withdraw from the account. This works best if you need small amounts over an extended period.

Home Equity Credit

Home equity credit line refers to a loan you obtain if you have built up equity in your home, apply for a line of credit that accesses it. This can take longer than a personal loan to obtain, but typically, it offers a better interest rate.

Closed-End Credit

Closed-end credit refers to a credit line similar to a traditional loan with a set lump sum on which you pay interest. You also pay back the principal. This works best if you need a large amount of money at one time. Some of these require a single payment loan which is just what it sounds like – you repay the entire loan all at once, plus interest. Beware of this type of loan. Unlike installment loans, you will not get multiple payments to make repayment easier. then you will have to repay the full amount you borrowed, plus interest, in one sum. These are common as appliance loans or consumer installment loans.

Alternative Loans to Personal Cash Loans

Depending on your need, you may have alternatives to a personal loan. These could cost you less. You should consider those choices first.

  • Educational loans: The federal government offers subsidized and unsubsidized loans for obtaining education at accredited institutions of higher learning.
  • Auto or motorcycle loans: You can obtain a specialized loan for purchasing a vehicle. They generally require collateral or a co-signer.
  • Medical loans: You can obtain a medical credit card or loan to cover lower cost treatments and surgeries. These can carry interest rates up to 25 percent.
  • Peer to Peer loans: Peer to peer (P2P) lending sites offer a crowdfunding mechanism that lets you obtain loans from more than one individual, but as a single loan. They each contribute a small amount toward the total loan need.

How Your Credit Score Affects Your Personal Loan Qualification

Whether you get any loan comes down to your credit score. It determines the “if” and it determines the interest rate you obtain. Personal cash loans, also called unsecured loans, carry higher interest rates than secured loans.

Depending on the credit reporting agency, your credit score ranges from 280 to 900. Equifax starts at 280 and ranges up to 850. Other agencies begin at 300 and range up to 900.

Anything above 760 qualifies as “excellent.” Beneath that – from 725 to 759 – you qualify as a “very good” credit risk. Higher credit scores get you better loan rates. Lower scores get you worse rates or turned down for a loan. The finance industry refers to those with very good and excellent credit as “prime” borrowers and offers them prime interest rates. That means the best interest rates. They refer to those with good to less than good rating as “sub-prime” and offer sub-prime interest rates.

How Can I Get Personal Cash Loans with Bad Credit?

Here is a truth that no bank, credit union or online lender wants you to know – you can get a  personal cash loan regardless of your credit score. It will be easier if you have a good credit score. You will obtain a much better interest rate and loan terms if you have a great credit rating. Perhaps you are sitting there thinking, “I need cash now.” You can qualify for fast personal loans for bad credit. It will be much easier to get personal cash loans with bad credit than if you have no credit.

If you experienced problems qualifying for traditional installment loans at your bank, try getting personal cash loans online. Using a site like Loanry can help you find fast loans that do not rip you off. You can qualify although you have a low credit score.

One good thing about taking out personal cash loans for bad credit is that it will raise your credit score as long as you make all of the payments on time. You will achieve an important goal in addition to affording the need that caused you apply for the loan.

Repaying a High Interest Loan

Here’s why you should avoid those really high interest loans if at all possible. You have to pay it back every month. The payments can be huge . The size of the payments can make it tough to make the payments. That causes you to pay late or miss payments totally. That further tanks your credit score. The missed or late payments remain on your record for seven years.

Even worse, the lending institution can recall your loan at any time. If you cannot pay it in full, they can take you to court. The court can order your wages garnished. Garnishment means that the lending institution gets its money before you get your paycheck. The federal and state government gets its taxes first, then the lending institution gets its funds. You get what is left of your own paycheck. It is far better to take a second job or start a side gig that earns you legal money.

Oh, the Fees

You might land a terrific interest rate despite fair to middling credit. Beware. That does not mean you got a cheap personal cash loan. Compare each loan’s total cost before choosing with whom you’ll do business. Read the loan conditions. It might include additional fees or higher fees. Look, not only at the late fees, but early repayment fees. While banks and credit unions do not want you to pay late, they also do not want you to pay early. Your extra payments and early payoffs cut into their interest payments. They want to maximize the amount of money they make for taking on the risk of loaning you money.

Also, watch for scams and fake loans. While an application fee of about $50 or less is standard, scams charge an “advanced fee” that they require you to pay before they loan you the money. The scam part is they never loan you any money. You pay the fees in advance and the so-called lending institution steals the money.

Do look for credit unions offering alternative lending programs that offer low interest rates to individuals with poor credit scores. Their not-for-profit status lets them charge lower interest rates than banks.

Improve Your Credit Score

You can determine ahead of time what loans you could get. Use a site like Creditry to obtain your credit score. If it falls beneath the very good cut off point then work to raise it. While you can still get a loan with a lower credit score, it is better if it is a higher credit score, so get to work improving it.

Step one, get your credit reports from all of the three main credit agencies. Compare the reports. Check each for mistakes. Make a list of the report mistakes and contact the appropriate agency to correct them. Each agency uses its own correction form that you can typically download from their website.

Perhaps getting the mistakes removed did not completely solve the problem. Step two becomes you doing one of three things to reduce the amount you owe:

  • consolidate your debt,
  • get financial counseling,
  • get a second job.

Step three, make your payments on time. Making just six months of timely payments can improve your credit score. It happens that fast. One of the simplest reasons that people’s scores drop is late payments. Another is missed payments. If you combine consolidating your debt with making timely payments, you can raise your credit score quickly. If you did not consolidate your loans, choose the smallest account and pay off that balance. Leave the account open, but paid off to improve your credit utilization score.

Personal Cash Loans for Debt Consolidation

It may sound silly to take out a loan to improve your credit score, so you can obtain better loans. But it all makes sense when you learn what a debt consolidation loan does. It lets you pay off your loans while saving money. Right now, if you have poor credit, you probably have lots of credit cards or loans with high interest rates.

A consolidation loan lets you obtain the money to pay off all the other credit cards and loans. It leaves you with a single loan to pay at a single interest rate. Start the search for personal loans for bad credit near me with local lenders. They typically prove more friendly to those with low credit scores who live in their community. As long as your leave your other credit cards open, you can quickly raise your credit score. That is because you will reduce your credit card utilization.

That term refers to the relationship between your total credit limit and the amount you use of the credit limit in a single month. Consolidating your debt reduces your credit utilization which results in a better credit score since you no longer have as many credit lines in rotation. Every month your creditors report to the credit bureaus receive a monthly update on your credit utilization.

Financial Counseling

Meet with a financial advisor or counselor to learn how you could budget better and reduce debt. Discuss your current credit situation and set financial goals. You might think this does not dovetail with quickly obtaining money, but if you begin financial counseling and learn how to manage money better, you probably will not need future loans.

The advisor or counselor helps you develop a customized plan of action to improve your credit and your finances. They can assist you in the completion of your personal loan application, too. The advisor can teach you how to use tools like a personal loan calculator so you can determine ahead of time how much you could borrow without overextending yourself.

Get a Second Job

Okay, get a job if you do not already have one. Do not borrow money. Do not take out credit cards. Work. It is that simple.

If you already have a full-time job, take on a second job. Work weekends, nights, early mornings, whenever the hours are available from a legal employer.

If there are no jobs available near you, find work online. Just like finding unsecured personal loans online, you can find work online from places like Freelancer, Textbroker, WriterAccess, Upwork and others. You can make appointments for people, answer phones, do data entry and more.

Before you can qualify for most personal loans online, you need decent credit. That means paying down what you owe.

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Obtaining Personal Cash Loans

Personal loans range widely in their amounts. The typical range starts at $1,000 and goes up to $50,000. That does not mean you will qualify for a $50,000 loan. It means some financial institutions cap their loan amounts at that level. You may only qualify for a $2,000 loan, depending on your credit score.

How Loanry Helps

Loanry connects people in need of capital with an array of available financial lending institutions. Regardless of what you need a personal loan for Loanry may help you find a trusted lenders who offer it.

We also provide free tips and tools, like this blog, so you can learn about, traditional-term business loans, or find out if it’s a good idea to pursue an emergency car repair loan or refinance those student loans. Loanry provides financial access and education so you can make the right choice for you. Here are some lenders we suggest you consider.

Personal Installment Loans and Personal Cash Loans

You might find it confusing, but personal installment loans and personal cash loans are not the same thing. This article centered on installment loans. You should visit Loanry to find a lending institution that offers them. On the other hand, a personal cash loan bears close similarity to a payday cash loan. It provides you quick, often same day or next day cash, directly into your bank account. You can apply for and obtain these online.

Both Loanry and Cashry offer a simple process that may help you find a lender who would fit your needs. Let’s be frank. You are not promised a loan from these financial institutions. But you just might avoid pounding the pavement to locate lenders who loan to those with bad credit or a defaulted student loan or an eviction.

Once you get connected with the lenders whose requirements you meet, you can start the application process. Neither Loanry nor Cashry lends you the money. Each is a loan mall. We help you enjoy personal loan shopping from home. Our other goals include helping you educate yourself on credit building, loans, credit cards and how to develop healthy finances. Remember, we do not extend loans. But, we might help you in obtaining one.

You’re Ready to Apply for Personal Cash Loans

You found the lenders to which you want to apply. Also, you obtained help from a financial advisor to complete the applications. And you got pre-qualified for a loan! Go you!

Now, you get to prove you are you. Sounds funny, but lenders require a plethora of documents before they will hand you the money. You need to prove your income. Usually this means presenting pay stubs or evidence of direct deposits to your checking or savings accounts.

You also have to prove your identity. You will need your birth certificate, driver’s license and Social Security card. The lender may also require a passport. This protects you and the bank from identity theft.

Knowing what documents you will need to provide, you can get them together ahead of time. Having these ready can shorten your waiting period while the lender makes a loan decision.

Be prepared for the fees, too. You will pay an application fee with each loan application. Even if you get turned down for a loan, the bank gets to keep your application fee.

Conclusion

By conducting your loan search properly and targeting lending institutions likely to loan to someone of your credit history and credit score, you can quickly obtain the loan you need. Your financial future is yours. Let us help you manage it wisely.

Does a Bankruptcy Include a Personal Loan?

If you are in a position where you are considering bankruptcy, you are already in a bad spot. Filing bankruptcy should be a last resort. You should only consider this when you are completely out of options. You should think of it as the end of the road, or rock bottom. Once you are there, you have to work really hard to get yourself out of it.

Bankruptcy of today is different from in the past. Today not all debts are written off under the bankruptcy umbrella. However, even under the new rules, bankruptcy include a personal loan as a debt that is discharged. Keep reading to find out more information on bankruptcy and how to avoid it.

Let’s Talk About Debt

If you are thinking about bankruptcy, you may not fully understand how debt works. To make good decisions, you need to know all the information. I am going to share some basic information about debt. You may already know this stuff, but hang in there with me. Debt is not always a bad thing.

It must be used properly and in moderation or it becomes a monkey on your back. Debt is the way you make big purchases, like a house, or car. We cannot afford to pay for a house in cash, so we take on debt to buy a house. This means, a lender gives you the money for the house and you sort of become co-owners of it. They are the strong silent type, so as long as you pay them what you promised each month, they leave you alone. However, when you do not pay as promised, they can take back the house.

When you have too much debt, you put yourself in a position where you owe more money than you earn. When this happens, you can no longer pay the bills and you miss payments. The debt piles up higher, your credit score drops and the collection calls start. I got a little ahead of myself there.

You take on debt to borrow money to pay for things you cannot afford outright. When you do that too often, you fall into a cycle of not being able to pay any of your bills. You should work hard to prevent this. If you know how much debt you can afford, you can prevent yourself from drowning in debt.

What Is Bankruptcy?

Nolo, an internet site for legal information and assistance, states bankruptcy is a way to get a “clean financial plate as a fresh start”. Most individuals would file Chapter 7 bankruptcy. This allows the debtor, the person filing bankruptcy, to have certain debts wiped away. Filing bankruptcy is not as easy as it once was. Not everyone qualifies for bankruptcy and not all debts are removed.

The debtor is still responsible for student loan debt, income taxes, and child or domestic support. Before considering filing for bankruptcy, make sure you understand all of your debt to ensure it qualifies. Keep in mind that filing bankruptcy has a negative impact on your credit report and may stay there for seven years.

Are Personal Loans Discharged During Bankruptcy?

Yes, personal loans, including loans from family and friends, are discharged as a result of bankruptcy. During bankruptcy legal obligations are discharged, which means that you are no longer obligated to pay those debts. Bankruptcy include a personal loan, credit cards, and medical bills. This means these debts go away and the debtor does not have to consolidate them into one monthly payment. There are a few catches. The debtor must agree to sell some of your property to pay back the debt. Some property is protected under state laws.

Here is a short list of Debts Included in Bankruptcy including Personal Loans

  • Credit cards
  • Unsecured Loans like Personal loans
  • Car repossessions or Title Loans
  • Bills for Medical Expenses
  • Foreclosures
  • Legal problems and judgments
  • Outstanding rent payment
  • Utility Bills

Please note that you should also talk to a bankruptcy attorney to discuss other debts that may fall into the above list and other implications of a bankruptcy.

Is Filing Bankruptcy A Good Idea?

There is not one good answer that works for everyone. It depends on your situation. Bankruptcy should always be a last resort when you have no other options.

Smart Money Tips!

You need to consider if you are willing to have something on your credit report for seven years that will seriously impact everything you want to do. Also consider if you are willing to sell all your assets, except the ones that you really need. You may think, “well, I don’t have any real assets to lose.” That may be true.

Perhaps your credit score is already in a bad place and it cannot go down too much further. When you are faced with no other options and you feel yourself drowning in debt, possibly this is the right move. You know bankruptcy include a personal loan and potentially other debts, so it may be right for you.

Do I Have Other Options?

There are definitely other options you should consider before bankruptcy. One of the first things you should consider is consolidating your debt to a lower interest. When you do this, you are getting personal loans for bad credit to pay off all of your debts. This way you have only one payment per month. You pay off all of your single debts and focus on just this one.

It may not impact your credit score at all, or impact it minimally. You may face higher interest rates, but it might be worth it to you in the long run. Getting personal cash loans may be a viable option for you. Perhaps you can borrow money from a family member, or friend. You may want to consider borrowing a loan from your own 401k. These all may be better alternatives to considering bankruptcy include a personal loan.

Can I Negotiate To Lower My Debt?

If a personal loan is not for you or you cannot get personal loan online, you may want to consider negotiating your bills instead. You probably have a decent amount of bills each month. How do you know if you are getting the best deal? Research, my friend, research. You have to advocate for yourself. Let’s face it, businesses are out to make money. After all, that is why they are in business.

They are not going to determine if you can get a better deal and save money. You have to do that for yourself. Once you do all the research to see if there are better plans or rates available, you have to call each company, or credit card to negotiate a better deal. This takes time, but it can save you hundreds of dollars per month. In the end, it may not save you from facing a bankruptcy include a personal loan and other debts, but it just might.

The last thing lenders really want is for you to default on what you owe them. They do not even want you to file for bankruptcy because they probably will not get any money that way. If you are honest and up front with them, they may be willing to negotiate with you to create payments you can afford, so they can get most of their money.

If I File Bankruptcy, Then What?

You decide to file bankruptcy, so now what? There are some things that you need to know that you probably do not. Bankruptcy is going to cost you. You already know it is going to take time and it is going to be a hit to your credit. You also know that you may have to give up some assets. It is also going to cost you money. You need a lawyer to handle the process. The more complex your situation is, the more you have to pay the lawyer.

On top of the lawyer, you will have court costs and other fees. Funny isn’t it? You are working hard to get out of debt by paying out more money that you have already said you do not have. If you decide to go through the process, you should constantly monitor your credit report. Not only will it be a black mark for seven to ten years, but some of the information may be wrong. If it is wrong, you need to dispute it to have it removed. Remember, while bankruptcy include a personal loan, it may not include all of your debts.

What Happens To My Credit?

You know that filing bankruptcy impacts your credit, but let’s talk about just how much. Your credit score can decrease by about 160 to 220 points. That is significant. If you have good credit before bankruptcy, it will be poor by the end of it all. That type of decrease makes it really challenging to obtain new credit, such as a credit card, car or house. At the time when you are considering bankruptcy, you may think that you need to take care of the immediate problem.

You may not think of the long range implications. But, ten years is a long time and so many things can change. Be aware that making a bankruptcy decision impacts every decision you make for the next ten years. It may seem like the answer now, especially when bankruptcy include a personal loan and most other debts. However, it may not always be the best answer.

Can I Repair My Credit?

I told you the bad news, so now I want to brighten things up a bit. All is not lost as you can repair your credit. It takes hard consistent work, but it is possible. When you plan on a bankruptcy include a personal loan and other debts, you should already start thinking about fixing your credit. It is an uphill battle, for sure. However, many people have faced bankruptcy and were able to turn it around. You can, too. You just have to be focused on that goal.

Start by having a positive payment history. Any bills that you keep after bankruptcy, you should pay them in full and on time. You could get a credit card, even if it has a low limit, and begin to build some positive credit again. When you use the credit card, plan to pay it off each month in an effort to build positive credit again.

What Kind Of Loans Can I Get After Bankruptcy?

When you are working to build credit after bankruptcy, you should be careful. You do not want to end up in the same place you were before filing bankruptcy. You also do not want to take out any kind of loan that puts unreasonable repayment expectations on you.

Loans such as paydays loans may not be in your best interest. Payday loans must be paid back within two weeks. You must pay them in full. You may want to consider short term loans that you are able to repay. Typically, these are loans for small amounts and they must be paid back in a short time frame, such as a couple of weeks. Before you consider taking on this type of loan after bankruptcy, be sure you can repay it on time. Keep in mind the purpose is to repair your credit.

You can look for the best loan for you here, on Loanry. The best part of shopping online for a loan isn’t just that you don’t have to go anywhere, it’s also goes extremely quickly. You can get offers from lenders within next few minutes and see what your options are.

A Little Bit About Budgeting

It is never too late to learn how to budget your finances. The sooner you create a budget for yourself, the better able you are to control debt. If you do not control your debt, it will control you. There are some key points to remember when it comes to budgeting. First, you must know your income and all your expenses. You have to write it down. Do not guess because you will forget something. Then, you must organize it all and put it into categories. Then, you rank the importance of each expense. When taking these actions, you must be critical.

Let me give you an example:

Food is important and it should be ranked high. However, eating out is not important and should be ranked low. There are many more affordable ways to eat than eating out. When creating a budget for food, you should call it groceries. Then, you should consider the most affordable way to buy your groceries. This may seem like a tedious task, but once it is done, you will not have to recreate it all over again. You will most likely have to tweak it, but not redo it. In this technological world, there are many budget websites to help you.

Secured vs Unsecured Loans

When you are looking to use a loan to improve credit after bankruptcy include a personal loan and other debts, you may need to consider a secured loan. An unsecured personal loan is one that does not have any type of collateral attached to it. This is risky for the lender because if you default, they lender typically loses most of its money. A secured loan is one that has collateral attached to it. If you default on a secured loan, the lender can take your collateral as their own. This happens most often with cars and houses. You use the car or house as collateral and if you default, the lender takes them.

You could also consider having a co-signer on any type of loan for which you apply. A co-signer is agreeing that you will pay the loan. If you do not pay the loan, your co-signer must pay the loan for you. If neither of you pay the loan, it impacts credit for both of you. This also gives the bank more security that you will pay your loan on time.

That Budget Thing Again

The Best Way to Create an Emergency Fund: Money 911

It always comes back to your budget.It is important that you save money. I know it often seems impossible, but save a little bit of money with each paycheck. If you do not touch it, you will be surprised at how quickly it adds up. You can have that money for emergencies and protect yourself from considering bankruptcy include a personal loan. When you have some money saved in the bank, it can save you from a lot of stress. It is never too late to create a budget. Taking care of yourself includes securing your finances. You can take control of them today.

Conclusion

This posting has focused heavily on bankruptcy include a personal loan and other debts. It is not just about bankruptcy. It is also about securing your finances and preventing bankruptcy. No one makes that decision lightly. You should consider the short term and long term implications of filing bankruptcy. When you arm yourself with knowledge, you can save yourself a lot of headache.

Getting a Personal Loan to Pay Off a Credit Card

If you are struggling to pay off credit card debt then you may be wondering if you should take out a personal loan to pay off a credit card or multiple cards. A personal loan is money borrowed from an online lender, credit union, or bank. It is paid off in monthly installments. The typical payoff period is between two and five years.

The interest rates can range from 6% to 36% depending on a number of factors. Many personal loans are unsecured, which means you don’t need to have any collateral in order to get one. You can use the money you get from a personal loan for any reason. This including to pay off high-interest credit card debt.

Should You Get a Loan to Pay Off a Credit Card?

If you have a pile of bills then you need to start making some decisions. You can try to continue to pay each bill each month or take out a personal loan to payoff debt. Every month you are struggling to meet the bill and credit card deadlines is another month that can lead to more expensive fees. Fees will add more to your overall debt numbers. If you are paying only the minimum on your cards then this adds more to the interest you are paying in a lifetime. The best solution would be to pay off your debt as soon as possible and a personal loan can help.

That said, before you jump into another loan to you have to ask this very important question.

Are you saving by transferring your credit card debts to a personal loan, either by lowering your monthly payments or reducing your interest rates? If neither, it’s probably best not to transer your debt. That said, personal loans often carry better interest rates if your credit is at least fair.

Where to Get a Loan to Pay Off a Credit Card

In order to get a personal loan to pay off a credit card, you have to start with the lender. While traditionally this meant visiting a bank in hopes that your application would be approved, you have more options today. One of the most popular ways to get a loan now is with an online lender. With loan places online, customers can truly shop around for the best interest rates and the best loans for their unique situation.

Finding the right loan from the start can be an important step in taking control of your financial future. And you already took the first step, by coming to Loanry. We connect you with reputable lenders to make the application process a bit easier and less time-consuming for you.

What Factors Go into a Personal Loan Rate?

Lenders can make their decision about you getting a personal loan to pay off a credit card based on a number of different factors. This can include credit score, debt-to-income ratio, and credit report. It’s not surprising that those with good credit will get loans with the lowest rates.

There are also lenders that will offer personal loans to those with bad credit. However there are usually fees associated with this. For those who don’t qualify for a personal loan, there may be other options. Among which secured loans or loans that require a co-signer. I’s best to compare rates from multiple lenders before choosing.

The loan with the lowest interest can usually be the least expensive but you should also look at other things such as repayment details. Many lenders will allow you to see the estimated rates without an impact on your credit score. An online loan marketplace can also make it easier to compare several loan offers all at once. Once you qualify, you are able to get the money from a personal loan as quickly as the next day.

Finding the Right Personal Loan to Pay Off a Credit Card

In order to find a personal loan to pay off a credit card, you will first need to figure out what you are searching for. You need to consider your needs, your credit, and your current financial situation.

How You Will Use the Loan:

If you are getting a personal loan to pay off a credit card then this could affect your choices. Personal loan providers will generally allow you to use the funds for any purpose but some could have limits. There are even companies that will focus solely on credit card consolation loans.

How Much You Need to Borrow:

Once you know how you are using the loan, you can figure out how much you need to borrow. You need enough to pay off the costs of your debt. Do not forget with any fees that you don’t want to pay out of pocket. You can use an online calculator to help you figure out how much you need and help add up credit card balances. Many lenders will have a minimum and maximum balance you can have for personal loans. This number is important to note since it can limit the number of lenders that are available to you.

Look at Your Financial Situation:

You don’t want to get in a worse debt situation by taking out a personal loan that will stretch your finances too much and you can’t pay back. How do you currently feel about your financial situation? Are you constantly scrambling to avoid falling behind on your bills? If you are struggling to make minimum payments then a personal loan may not help. Instead of considering new debt, you may want to look at different ways you can realistically handle your debts.

Calculate Monthly Payments:

Before you get a personal loan, you need to make sure you can actually afford the monthly payments. This means choosing terms that will result in an affordable payment. Payments for these loans can be determined by the initial balance, the repayment length, or an interest rate. An online monthly payment calculator can help you see how different loan terms can affect the monthly payment. When you are getting personal cash loans, be sure to keep these payments in mind.

Check Your Credit Score:

Once you understand your current financial needs, you need to check your credit score. You can view free reports online. This will show you how your credit history will be viewed by lenders. You will need to check the lender’s requirements to see if your credit score will match with their application. A good credit score for a personal loan will be at least 680. With this score or higher, you can get a wider range of personal loan options and a lower interest rate. If your score is lower than 580 then you shouldn’t panic. There are still personal loan options for those with bad credit. However, you may have to do more legwork to find the loan and pay more.

How to Get a Personal Loan to Pay Off a Credit Card

Once you learn more about what type of personal loan to pay off a credit card you need, you can then compare personal loan companies to find the right loan. As you shop around for personal loans, you want to compare offers to find the best provider. Be sure to check out loan companies of all kinds, including those online lenders. The various types of lenders have different business models and structures, which means that they will have different interest rates, fees, and underwriting processes.

Identify any lenders that meet your needs.

As you are looking at each one, check the loans against the list of requirements. If you have a great credit score then your goal may just be to keep costs to a minimum. If you have a lower credit score then your goal is to look for lenders that will actually approve your application. Be sure to research the credibility of each lender in order to make sure the offer is legitimate. It’s best if you can try to find three lenders that meet your credit requirements and personal loan needs.

You should get multiple personal loan pre-approvals so you aren’t just settling for the first lender you come across. In order to get the best deal on your personal loan, you need to have different options. You can get these options when you have pre-approval from different lenders that meet requirements on your checklist. In the pre-approval process, a lender will ask for information, including your name, contact info, employment history and income, and loan details such as how you intend to use the loan. The process can also involve a credit check. Make sure the lender is using a soft credit pull so that it won’t affect your credit score. Lenders will use the information they gather to see if you would be a good fit before they give you pre-approval.

Compare interest rates

Once you have pre-approval then be sure to compare interest rates. One of the most important factors that determine the cost of the personal loan is the interest rate. The lender will need to be clear about the interest rate. Reputable lenders will be transparent about their rates. Chances are high that the personal loan with the lowest interest rate will also be the most cost-effective option. However, you still need to make sure you can afford the monthly payments.

Be sure to watch out for other fees.

The lender should be upfront about the costs and work with the borrower in order to calculate interest. Some lenders will charge an origination fee, although some won’t charge this fee at all. Some lenders that don’t charge fees have higher interest rates. You have to look at everything when determining the right loan for you.

Paying Off Your Personal Loan

Once you have used a personal loan to pay off a credit card, you still have to pay back the loan. Paying off a loan early may have a few consequences for your credit. These consequences may not be negative but it depends on your current credit situation. If you wait to pay off the loan and follow through on the terms of your contract then your credit score can benefit. If you pay off the loan early then it’s possible you can see a drop in your credit score. The reason this happens is that lenders want to encourage customers to pay the entire interest of the loan. If you pay it off early then you aren’t paying interest on the loan and it will reduce the money that a lender can make on you.

Paying off your loan early then it doesn’t matter if you have a bad or good credit score because everyone’s score will drop slightly. If you pay off the loan early, it also reduces the number of credit lines you have open, which is a factor in credit scores. The longer you have an account open, the better it is for your credit score. When you close an account early then you will shortchange your credit age.

Pay off the Loan Early if You Can

However, even with a slight ding in a credit score, it may make sense for you to pay off the loan early. When you pay off the loan early then you are getting out from under a pile of debt. There is a psychological burden of being in debt and you can free yourself from this by paying off your loan early. This will help reduce any financial stress and a number of health concerns that can come from stress. You will no longer have to be paying interest on the loan and can avoid any potential late fees. Having no more payments increases your spendable income that you can put toward savings goals.

What Is Debt Consolidation?

Debt or bill consolidation is the process of consolidating your debts and taking out a loan to pay them off at all once. Getting a personal loan to pay off a credit card has become a popular option for many people because it can help pay off high-interest debt and save money in the long run. It can help you pay off debts sooner and you can avoid being in debt for an extended period of time. There are some advantages and disadvantages of debt consolidating that you should be aware of in order to do what is in your best interest.

Bill Consolidation Loan: Popular Choice

You can do debt consolidation in a number of different ways.

A personal loan to pay off a credit card is a popular way to do debt consolidation. Looking at different loan places will allow you to find the best personal loan for your situation. Before you apply for this type of loan, be sure you have a plan on how to pay off the debt. Personal loans can be good for those with moderate debts. It also helps if your credit score is higher, as you will get a better rate. Those with low credit scores may not qualify for these types of loans or have a loan with a much higher interest rate.

Depending on your credit card, you may also be able to do a credit card balance transfer. Some providers will make you pay a fee before you are able to do a balance transfer. If you have a good credit line then you may have a bit of leeway in how much you are able to transfer. The interest rates on credit card balance transfers can also be very high.

Home equity loans are a secured loan that you can get if you are a homeowner.

You use your home as collateral to get a home equity loan. The advantage of these loans is that the rate is not as high as other loans. Secured loans can also be easier to get because the lender has some way of getting their money back. Keep in mind that if you are unable to pay back the loan, you will lose your home. This can be a dangerous option unless you are sure you will repay the loan.

Advantages of Debt Consolidation

The main advantage of debt consolidation is that you can make one monthly payment for your debt, which can make it easier for you. Having one monthly payment can make your debt easier to manage, especially if you have a hard time keeping track of all your debts. If you choose the right option for debt consolidation, then you may be able to save money in the long run by paying less interest than you would normally have otherwise. Be sure to understand the terms of your personal loan to pay off a credit card so that you aren’t hit with fees for paying it off early or getting into more debt.

Disadvantages of Debt Consolidation

The success of debt consolidation will depend on your credit score. If your credit score is bad, the interest on a loan can be higher than what you are currently paying. Interest rates can vary depending the market conditions and the loan type and you can never predict when they might rise. The repayment period can be long and, if it’s too long, you can end up paying more in interest. Even though it feels like you are getting out of debt and have less of a debt burden, you do still owe a bit of debt and should still refrain from using credit cards irresponsibly. Since you are only making one monthly payment, you can also be tempted to take on other small loans and think you can pay them off quickly.

Can Debt Consolidating Hurt Your Credit?

If you want to keep your credit score high or work toward improving it then taking care of your debt in an efficient and timely manner is important. There is a bit of irony with debt and credit because the lower the score you have, the more expensive it is to pay off. If you have a high credit score, such as 750 or better, then you can qualify for credit cards and lower interest loans. Decent scores between 650 and 730 can also get lower interest rates. If your score drops below 640 then interest rates can be as high as 20%.

Paying back debt can then feel like an impossible task. There are products out there, such as a personal loan to pay off a credit card, that can help you get back on track. A personal loan can actually help your credit score if you pay it back each month on time and don’t pay it off early. If you miss payments or are late then your credit score can suffer.

Benefits of Credit Card Use

One of the benefits of credit card use is that you get a replenishable line of credit. You can pay for purchases over an extended period of time and get more flexibility. There are a number of benefits of responsible credit card use. A basic credit card is a form of a loan that you will get from a financial institution such as your credit union, local bank, or online lender. You can also get credit cards through stores that have specific benefits when used at that business. It’s all just a fancy loan.

The credit limit will be how much you can borrow at one time. You shouldn’t borrow up to your limit since you will pay interest on what you currently loan. Unlike a traditional loan, monthly payments are based on how much you have used instead of the total amount that is available to you.

Protecting Yourself:

Many credit cards will have fraud protection and other customer assistance. It can be much easier to dispute a charge on a credit card than other forms of payment. If you do ask the credit card company to dispute a charge for a legitimate reason then you have more leverage. While this may not be one of the first things you think about with credit card use, it’s important when you need it.

Organizing Yourself:

In a world that is becoming less cash focused, credit cards can help you keep track of where your money is going. Some people find it easier to manage their budget with credit cards or adjust spending habits. The month’s purchases are laid out and you can see your spending records when you look at your credit card bills. However, this benefit is only good if you are actually paying most of the balance each month in order to avoid late fees or interest.

Rewarding Yourself:

There are ads all the time for extra cash back or extra miles. These promotions are usually offered with the awareness that many people aren’t going to make enough use of them to offset other fees or interest accruing on the card. However, responsible card users can benefit from these promotions if they do it correctly. Credit card management includes paying attention to the pros and cons of each card when you are deciding which cards to get and which cards to use in your daily life.

Build Your Credit:

In order to build your credit, you need to have credit. Building credit is the best reason to have a credit card and use it responsibly. If you have a limited credit history or a spotty credit history, credit cards can make things better over time. Almost everyone can qualify for a card, but if you have bad credit or no credit at all, your card will likely have higher interest rates at first. Make some small purchase and then pay them off. Continue doing this and then after a year, ask the credit card company for a better interest rate or find a card with a lower interest rate. Don’t cancel the current card but stop using it. Having available credit is one way to improve your credit score.

Rebuild Bad Credit:

If you have really bad credit and a card, even with a high interest rate, isn’t possible for you, then you may want to consider a secured credit card. This is one where you deposit a set amount of money upfront. This card operates like any other credit card but you can’t spend above the amount you have on deposit. This may sound like a debit card but it has all the benefits of a credit card. Payments on the secured card are treated just like payments for any other debt when it comes to credit reporting. If you make your payments and avoid maxing out the card then you can qualify for an unsecured card and get a higher limit. If you keep using the card responsibly then you can also start to qualify for lower interest rates.

Dangers of Credit Card Use

While there are plenty of benefits of credit card use, there are also some dangers you should keep in mind.

Designed to Keep You in Debt:

Credit card companies need a majority of their customers to keep spending and then keep paying interest. They don’t want a lot of customers who just pay off their balance every month. Unlike other loans, such as personal installment loans, credit cards are designed to keep you using and paying. Once you know this, you can find a balance on which cards you are using.

Interest Fees Can Add Up:

It can be easy to lose track of how much you are spending and how much you are paying in interest and other fees. Credit cards will usually have a high interest rate even if it starts out low.

Minimum Payments Are Like Other Payments:

When you pay any other bills, you are caught up or make a dent in your debt. If you are just making the required minimum payment on the credit card, your balance won’t go down much. It may even go up, even if you don’t make any additional purchases. Minimum payments are designed to keep you paying fees and interest on the card without your balance going down. If you have a high balance then you can fall further into debt each month. It’s better to make just the minimum payment instead of not making a payment at all, but you do want to find a way to pay down the balance more consistently if you are going to get out of debt.

Allow You to Be Impulsive:

Credit cards can offer a lot of freedom and can cause you to be impulsive. Many people don’t think of it as spending money until they get the bill at the end of the month and it’s much higher than they thought.

Interest on a Credit Card

Like with any loans, you will pay interest on a credit card. Interest on credit cards is called APR (annual percentage rate). You can avoid paying interest if you pay your balance in full each month. The APR for credit cards will be calculated on the balance on your card. Another item that makes a credit card different than a traditional loan is that once you pay back what you borrow then that money becomes available for you to use again. While this is a great feature to have, you do need to pay attention to the interest on the cards, as interest is one thing that can get people into trouble when it comes to credit card debt.

Final Thoughts

Getting a personal loan to pay off a credit card can be a good choice if you do your research and pick the right lender. Before applying for loans, spend some time paying attention to your credit score to see if you can qualify. This will help you look for lenders that can help you get a loan. Debt consolidation has many benefits if you are able to find the right loan lender and research the process. Credit cards also offer many benefits but you have to be careful about their use so you don’t end up in a situation with debt that you will never be able to pay off. The interest rate on credit cards is what makes them dangerous. If you are looking to pay off some credit card debt, do your research into personal loans.

Personal Loans versus Credit Cards: What is Better?

Both personal loans and credit cards offer a lot of benefits. And they are both advertised on a very constant basis, so they cannot really be ignored. When it is time to choose one, however, confusion can set in, and that is never a good feeling. It is also not good for decision making. In my firm belief, knowledge is actually power. When I am educated on something, I feel much more confident, and I am much less likely to make a bad choice. On that note, let’s dive into how personal loans versus credit cards work, how you can benefit from them, and how they compare to one another.

How Credit Cards Work

It was only recently that I learned that there are many people who do not know how exactly credit cards work. And who can blame them, really? When you sign for a credit card, you get a long list of terms and conditions that give you a headache to read, and hives trying to understand. That’s if you do not fall asleep by the third section or so. Be honest, how often have you read all of the terms and conditions? How often have you skimmed or just completely bypassed them? Nobody? Yeah, me neither (ahem).

In truth, though, there are few people who really know all that they need to know about credit cards. This lack of knowledge is usually what gets them into trouble. So let’s just break it down a little bit. In the most basic explanation, when a credit card company decides to lend money, they attach said money to a card. You swipe the card, the money is subtracted from your account, and the credit card company covers the purchase with that.

Now, they have actually loaned you some of that money, and they are going to charge you interest. Interest is really just a fee you pay for borrowing the money. Simple enough? The problems come in when the credit card holder does not know the interest rate or how it is calculated, what fees come with being a cardholder, or that the minimum payment due is way less than what should actually be paid. For future reference, just in case you want to skip over the terms and conditions, at least look for the three things listed below and be sure you understand them.

Associated Fees

Some credit card companies charge different fees in addition to the interest. Here are some of those fees and what they mean to you:

-Late Payment Fee:

This is pretty self-explanatory but do understand that if you have a late payment fee by the end of the billing cycle, you will probably get charged interest for that too. A $30 late payment fee can quickly double or triple if interest continues to grow.

-Returned Payment Fee:

This is simply when you make a payment but do not have the funds to cover the payment, which can lead to more interest just like a late payment fee.

-Annual Fee:

Some, though not all, credit card companies charge annual fees. Before you run away from that fee, though, check out what the card can offer you. No one wants to pay a fee but if you that fee is only $20 and you get $300 worth of perks you can use, I would say it’s worth it. Do your research here and checkout reviews from other customers.

-Cash Advance Fee:

Many credit cards will allow you to withdraw your credit as cash, but they usually charge a fee for it. While this option is great when you are ina cash pinch, it may cost you more than its worth.

Personal Loans versus Credit Cards

-Over-Limit Fees:

This is very simply the extra money you pay if you use more than the credit card company approves. Going over your limit is not possible on all cards. Some set very strict limitations, which is good since it keeps you from over-spending. It is important to know from the beginning whether or not this is possible with your card.

You might notice other fees mentioned on your terms and conditions, like foreign transaction fees. Unless you travel outside of the country, this will not affect you. If you do travel to other countries, learn this fee, as well. For any other fees that you do not recognize, ask your credit card company to explain them to you.

Interest Rates

It is really, really, really, super duper important to understand your interest and how it gets added on. First and foremost, know your interest rate. You can find credit card interest rates all over the place. You might find a 0% APR credit card, then again it may go up to 30% APR. Typically, they fall somewhere between 13% and 23%. 

Now for a little math lesson, and a little vocabulary along the way. Unless your credit card says otherwise, your interest will be compounded. If you Google compound, you will notice that it is described as something being added onto something else, a mixture of things, and so on. My favorite definition of compounded when referring to interest is a little lower down the page. As a verb, compound means “to make something bad worse”. Yep- I think that about explains it.

If you look back to the first definition, you may be wondering how this all applies to interest. Every month that you owe money on your credit card, you get charged interest and that interest is added to your regular balance. The next month, interest is added again, but it does not just get added to the amount you have used. You are also charged interest on last month’s interest. And that continues until it is paid off.

Let’s take an example:

So, if you spend $200 of your $500 credit limit, and your interest is 20%, you owe $240 the first month. You make a minimum $20 payment, which leaves your balance at $220, so $20 of that is still interest. The next month, if you have not used any additional credit, your interest will be calculated with your balance of $220. The interest would be $44, making your balance $264- $64 of which is interest. Again you make a minimum payment and again you still have interest.

Do you see what I mean? Every month, interest is just piled on top of itself, and if you carry on paying just minimum payments, you will find yourself in a debt hole so big that you cannot see the light. Make sure that you understand your interest before you use your card.

Payments

Carrying on from the last section, credit card payments can be tricky little guys, too. When you get your terms and conditions, look at the minimum payment amount. Now, do yourself a favor: multiply your credit limit by your interest rate. That is the amount of interest you will owe if you had to use every bit of your limit, so it’s your worst case scenario. Does your minimum payment cover that amount? Most likely not, so you will have to pay more than the minimum payment to stay above water. At the very least, you need to pay your interest and as much extra as you can to pay off your balance.

It is also important to understand that credit cards affect your credit in more ways than just saying you pay or you do not. They can affect your credit utilization, which is a big deal. Lenders want to see that you have money available to you but that you are in good enough shape, you really do not need it. Ideally, they want to see that you are using 30% or less of what is available.

So every time interest is compounded on your credit card, it shows as you using more of your credit. Your credit is going down over something that you did not even get to enjoy because 90% of it was interest. I don’t know about you but if I am going to go into debt over something, I would at least like to get some enjoyment from it.

To shop for various credit cards and find the best one for you, look at the following list. Now that you know all about credit cards, you are capable of making an informed decision for your situation.


How Personal Loans Work

Personal loans work a bit differently. You get approved for a loan, the lender gives you your cash- or a check or direct deposit. You are sent home with a payment plan. If you follow it, you will have your loan paid off on time. A minute ago I mentioned credit utilization and how a credit card can affect it. A personal loan can, too, but it happens in a different way.

Any time you open up a new account, your credit is affected. Over time, it will either improve your credit or make it worse. With a credit card that continues to compound interest, it will just get worse and worse. With personal loans versus credit cards, the biggest hit to your credit is the initial one when you get the loan. As you make payments and decrease your balance, your credit improves.

Obviously, you can do this with a credit card, too, if you can pay the balance in full each month. It is just that it is often easier and more attainable for a personal loan to improve your credit. When you are not fighting an uphill battle with interest, you can usually pay things off more quickly. In one way, personal loans are no different than credit cards, and that is that you have to know your fees, interest rates, payments, and how it all works. Any time you sign a financial contract, you need to understand it. Below are some things to look out for and understand.

Associated Fees

Some personal cash loans do have fees attached to them, but you can find loans that do not. Two of the most common fees you might run into are application fees and origination fees. Application fees cover the costs of actually processing your application, so they are non-refundable. They also must be paid before they start the process.

Origination fees cover any costs that might be associated with the lender giving you the cash, such as processing fees. This amount is usually a percentage of your loan and taken out of the loan upfront. If you are approved for a $1,000 loan that has a 10% origination fee, you will actually only receive $900. This means that if the lender charges an origination fee, you need to apply for more than you need so you still get the full amount.

As previously stated, not all loans require fees. When you do run into them, they will vary between loan places. You can always ask up front what fees might be required, or read the terms and conditions, as lengthy and boring as they may be.

Smart Money Tip!

Typically, interest rates will be much lower for personal loans than they will with credit cards. You will often find them between 5% and 36%, with higher credit scores getting lower interest rates. The good thing about personal loan interest rates is that with most loans, the interest is calculated for the entire loan at the beginning, and then it is spread out over monthly payments.

So, even if a credit card’s interest rate is lower than a loan you find, check how the interest is determined and whether or not it is compound. A credit card with even 2% interest can grow into a monster if the interest is compounded monthly.

Payments

Loan payments are also typically different from credit card payments. With a personal loan, you can get fixed interest and fixed payments for a fixed term. If you get a personal loan for the $500 instead of the credit card, your monthly payments will look much different. We’ll say that the interest on the loan is high at 36% and your repayment term is one year.

$500 x 36%=  $180 Interest
$500 principle + $180 Interest= Total Due $680
$680 / 12 months= $56.67 per month (including interest)

That is a little more than double the credit card’s minimum payment and yet you will have it all paid off in one year. With the credit card, you could literally owe for the rest of your life.

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How to Choose Between Personal Loans versus Credit Cards

We are now down to why you came to this article: you need to know how to choose between personal loans versus credit cards. Here’s the thing- choosing between them is really all about what you need and what you plan to do. Before you go any further, you need to be clear on your goal. Are you looking for a way to pay a bill? Buy a home? Buy a car? Go on vacation? Or just build up some credit?

Hopefully your goal is not just to spend money for fun, but if that is your goal, be honest about it. What you need the money for will often tell you which one you need between personal loans versus credit cards. For instance, if it is a really short term loan that you can pay off in a couple of weeks, like gas or groceries, a credit card would be better. The following are times when you should definitely look for personal loans versus credit cards.

If You Need a Large Amount

When you need a large amount of money that you cannot pay back quickly, choose personal loans versus credit cards. Again, the interest will be calculated and spread out in manageable payments. Using a credit card for a large amount is more than likely going to dig you a very big hole.

When You Need to Borrow for a Long Period of Time

When comparing personals loan versus credit cards to use for a long time, personal loans most definitely win. Think about the interest we talked about. It is just going to grow and get larger over time with credit cards. Personal loans spread your interest and payments out over the full term, which is typically between one and three years, though it can vary. Personal loans were designed for long repayment periods. Credit cards were not.

If You Need Cash

This may seem obvious, but credit cards are not cash. You can get cash advances from credit cards, but there is likely a fee associated with that- and a hassle. On the other hand, a personal loan is cash. Even if it is handed to you in the form of a check, you can take it to the bank and get cash without an additional fee. If you need the money specifically for a cash transaction, like maybe paying your best friend back or even paying your landlord who has not way to accept a credit card, a personal loan would be more convenient.

When You Need to Consolidate Debt

Let’s say you owe $2,000 in debt. Thanks to the interest on all of these debts, you need to pay $500 per month just to keep the bill collectors off your back, but that $500 is not really helping you get out of debt. Instead of working yourself to death, try applying for personal loans versus credit cards. If you are approved for a $2,000 loan at a 14% fixed interest rate, the entire interest is $280. If you use that loan to pay all of the debts off, you only owe one payment. So there is the convenience, but there is another bright side.

Even if your repayment term is only one year long, your monthly payment will only be $190. That is almost one third of what you were paying every month when you were paying separately. The even better part is that, as long as you make your monthly payments, your loan will be completely paid off at the end of your repayment term. So in short, you are making one lower payment with lower interest to get everything paid off with personal loans versus credit cards or separate debts which can be endless.

When You Need Set Payments and Terms to Actually Pay Off

Your monthly payments with credit cards depend on how much credit you have used. If you have used $200 and your interest rate is 20%, you will owe $240. However, that is probably way more than the amount that the bill states as due. In fact, if I have not made it clear enough, that is the big way that credit card companies make money. If you only pay the minimum amount, it is not even going to touch the full amount due.

The following month, even if you do not use the card again, you will owe more. This is because interest is calculated again and it includes the interest that you did not pay off the previous month. It is a tangled web that just spreads as long as you will let it. All the credit card company needs is your minimum payment. As long as you are paying that, they will also let the web continue to grow.

Personal installment loans, on the other hand, generally have a fixed interest rate and fixed monthly payments that are due for a certain period of time. When that time is up, your loan should be paid off. When you pay your monthly bill, you are working toward the principle as well. You know how much is due every month. While you can expect the same minimum payment for the credit card each month, that amount is actually putting you in a deeper hole- I repeat this fact because I really want these words to stick in your head. The bottom line is that when comparing personal loans versus credit cards, if you want a fixed monthly payment that will eventually end, personal loans win.

If You Don’t Need Additional Temptation

I definitely do not need additional temptation. With a personal loan, I know how much I am approved for. I know off the bat how much I have to use, so I tend to be more careful. If I get a loan for $4,000 to buy a used car because my car stopped working, I know that I only have that $4,000. I cannot spend that money on anything else or I will not have the money for the new car. We have to have a car to get around, so unless my children are starving or without necessities, that loan will only be spent on the car.

This can be different with a credit card, even when you know better. Let’s say I got a credit card with a $500 limit for the purpose of emergencies and necessities in between checks. Sounds reasonable and like a great idea- until one of my kids needs new shoes. I can find a way to hold off on the shoes, but it is just so much easier to get them on the credit card and tell myself it’s no big deal. That might be true with some people- some really strong willed people.

Me, on the other hand, as soon as a bill with a disconnection notice comes in the mail, I would probably use the card again. Maybe even when I just had a bad day and “need” some ice cream to make it better. And then again when my kid needs those shoes. Why? Because like many people, I live paycheck to paycheck, and sometimes those paychecks are not enough, especially when your car breaks down or the laptop you use for work stops working.

A credit card gives a convenient way out.

Most people are aware that a credit card needs to be repaid, but they also know it does not have to be paid just yet. When you are drowning in a sea of financial struggles, a credit card seems like a life line. It can ease that weight for the moment. It can provide things that we need and want right now instead of having to wait and save. In a world of instant everything, is it any wonder that we expect and choose instant gratification and solutions?

When it comes to personal loans versus credit cards, credit cards definitely have their advantages, but those advantages come at a very steep price. For these reasons, I feel safer taking out a loan than opening a credit card. How about you? Can you responsibly handle a credit card? Or will it get you into more trouble? If you know that a credit card is not a good idea in light of your will power and spending habits, go for a personal loan instead.

Conclusion

I hope you have enjoyed and gained some insight from the comparison of personal loans versus credit cards. And I hope that you are confident enough to make good choices. When it is time to look for a personal loan or compare credit cards, let us here at Loanry, help you find a lender that might be a good fit for you.