What is a Secured Loan and Are You Secure?

In the last couple of months, my family has run into what seems like every financial roadblock possible. Though we work hard to keep our heads above water, there are times that there is nothing more that we can do to prevent some financial problems. More times than I care to count, we have found ourselves considering loans and how they might help us improve our lives, even if it is just to ease the burden for a moment.

As much as I wish it were not true, we are not alone. Financial stress and difficult times seem to affect a lot of people, and they always have. Why else do you suppose there are so many available loan options and lenders? It would not be such a large industry if only a few people needed it.

While there is no shame in needing help, loans tend to be a bad move for many people. From my experience, I believe that is because many borrowers do not necessarily understand the loan that they are receiving, do not understand the different loan options, and sometimes because they simply cannot repay it.

At times, borrowers are not even sure what they need to apply for, and this is often due to a lack of clarity on the numerous terms and what all of these loan options really are. I have quite a few friends that have complained that the loan industry is an overwhelming and confusing place. If you have ever tried to navigate it blindly, you can most likely relate.

We want to make sure you have all the clarity you need to make good financial choices, so we put together this little guide on one type of loan that many have heard of but few fully understand secured loans.

Everything You Should Know About a Secured Loan

A secured loan is a loan for which you temporarily trade ownership of something, i.e. collateral, in exchange for the borrowed money. The lender requires collateral for secured loans so that if you do not pay as you should, they have the right to sell your collateral. This prevents them from risking much more than the time it will take to repossess and sell the item.

A secured loan is not always as handy as an unsecured loan, as you will see as you read through this article. They require extra paperwork, extra consideration, and often extra time. In addition, the borrower is not always receiving the full amount of said loan. Secured loans do have their purpose and place though, and they have helped many a borrower improve their financial state. They provide an avenue of borrowing for people whose credit history and score block all other ways.

If you’re interested in getting a loan, check out the offer of our trusted partner Fiona, insert your information and you may get offers that suit your needs best.

What Type of Credit Score Do I Need to Be Approved?

In short, pretty much any score. The beauty of a secured loan is that, generally speaking, your credit will not prevent you from getting approved. While lenders differ in their requirements, your credit score is often one of the lowest factors in a secured loan credit decision. The collateral you can provide and your ability to repay are much bigger factors. If you have some type of collateral that is valuable, which we discuss shortly, you will likely have no trouble locating a lender.

Though it is usually not a big factor in the approval decision, a secured loan with bad credit might affect your interest rate, loan repayment terms, and the collateral required. The lower your credit score, usually the higher your deposit or required collateral. Sometimes, you have to put an equal amount of collateral as what you borrow. For instance, if you get a secured loan through a bank for $500 and your credit is bad, the bank may require you to put $500 in an account that cannot be touched until you pay off the loan.

Secured Loans for Bad Credit: Personal Loans 411

This means that if you are looking to get a loan to actually use for your bills, a secured loan may not be the best option. I mean, if you have to put the entire amount you will borrow up to for collateral, you are basically just swapping the money over. If you can afford to put up that amount of collateral, however, secured loans are a great way to build your credit. Although you have put up collateral, the financial institution will report your payments to the credit bureaus. Additionally, over time, your collateral may be released, or you may be able to take out the same loan without collateral after you pay the first one off.

What Can a Secured Loan Be Used For?

A secured loan is much like any other type of loan when it comes to using it. What you use the loan for is pretty much up to you. However, due to the fact that it is secured, it is best to consider this type of loan solely for the purpose of building credit. While you can use the funds for anything, keeping credit as your main goal is a wise move.

For instance, when I started trying to rebuild my credit a few years back, I was only able to qualify for a secured credit card at the time. Secured credit cards are built on the same principle as secured loans, meaning that they require collateral. I was approved for a $200 limit but had to put a $49 deposit down as my collateral.

In truth, the additional $150 that was left on the card would not go far, especially since they also took out a $39 annual fee. Instead of relying on it for needs, I simply used it as a way to build credit. I would pay the balance in full every month, and then, after the billing cycle closed, I would use the full amount to pay what I could. I would then pay it off before the end of the billing cycle so that I was not paying monthly interest.

Since I only used the card when I had the cash to back my payment, I did not get behind. Instead, this small credit limit helped build my credit up to the point that I could then get a small unsecured loan. Viewing a secured loan as nothing more than a way to build credit should help you use it responsibly instead of getting in any further debt.

What’s the Difference in a Secured Loan and an Unsecured Loan?

Difference Between Secured and Unsecured Personal Loans

The word “secured” has been used in many different ways, so the definition can easily be skewed. The difference in a secured loan and an unsecured loan is very simple: a secured loan requires collateral while an unsecured loan does not. We are going to break this explanation down a bit farther for good measure:

Let’s say your cousin asks to borrow $100 for gas and food until payday. You know his reputation and that he does not normally repay loans. He has done such a poor job with his finances in the past that no one in the family is willing to open their wallets. He has even borrowed money from you before and not paid you back. Logically, you know it probably is not a wise move but you still want to help him out. What do you do?

You could just give him the money, either as a gift or as a loan that you hope he repays. This is an unsecured loan. The other option is that you could say, “Sure, I can help you out. I will loan you $100 but I need to hold onto your laptop until you get paid. When you repay me, you can have your laptop back.” Though you may not want to, if he fails to repay you, you can use the laptop to recoup your losses. This is a secured loan since you are holding ownership for one of his belongings until the loan is paid off.

Special warning

If you were truly offering this secured loan, it would be very smart to get the terms in writing and notarized so you cannot be accused of stealing property. If you are anything like me, you love your family but have learned not to blindly trust them. Always be diligent when it comes to your finances, regardless if you are borrowing or lending.

What Type of Collateral do You Need?

This really depends on the financial institution you are getting the loan from. Both payday loans and title loans are secured loans. With a payday loan, the collateral is the check you fill out and give them. If you do not pay, they can simply deposit the check into their account and get their money back. With a title loan, the title to your vehicle is the collateral. If you do not repay the loan, they have the right to take your vehicle. The are other types of collateral as well such as cars, a home, and more. It is possible to find a loan for pretty much any asset you might own.

Be very careful when taking out this kind of Loan. If you can’t pay it back you risk losing you asset. You need that car to get to work! This is the case with Title Loans.

When A Secured Loan Makes Sense

  • Mortgages are secured given the house is the collateral if you can’t pay back the loan you foreclose and lose the house.
  • Auto loans are secured because like a home loan, if you don’t pay it back, you lose the asset.

There are cases where you can use your asset to get another loan such as a line of credit. You might have property that you do not even realize is very valuable. About five years ago, my husband and I decided to purchase a piece of land and the mobile home that came with it. Looking at this property, we knew it was not worth much, but it was a start in the home ownership path we wanted to take. The plan was to eventually build a house and tear down the mobile home.

Over time, we began to see what a money pit it was and began weighing out our options. We feared that since the piece of land was small and needed a lot done to it that we would never be able to resell it. We honestly assumed that it was worth no more than a few thousand dollars. Then, just last year, I had to gather some paperwork related to my property from the courthouse. To my utter amazement, the stated value on this paperwork was almost six times as much as we believed.

The Moral of This Story is to Never Assume You Have Nothing of Value

I have known people who have discovered many unknown assets. One friend discovered out of the blue that a book he owned for years was actually a very valuable first addition. A friend’s cousin inherited her grandmother’s jewelry. No one else wants the jewelry as they all assumed it was only costume jewelry. They were all surprised that tucked away with that costume jewelry was actually two very valuable rings.

When my grandfather was alive, he ran a truck stop. The items he kept there are now considered “antique”. Though I cannot see anyone wanting an antique icebox, there is a market for those items. For that matter, some very old plates I found at my grandmother’s home turned out to fit into that antique category, as well. Imagine my surprise when I discovered the plates we were eating from were selling on eBay for almost $100 each. Lesson learned: if you own something and are unsure of the value, do your research. You just might be surprised at the amount of valuable assets you own, and most of those can be used as collateral. Speak with your lender to determine acceptable forms of collateral for them.

Benefits of a Secured Loan

We have previously discussed that secured loans can be great for building and improving your credit, but there are a few additional benefits as well. One is that since you are putting up collateral, the lending institution is assuming less risk. This is beneficial because it generally means that the interest rates will be much lower.

Notice I said “generally”. That is because while many loan places do charge lower interest rates for secured loans, that is not always the case. Some actually charge much higher interest, such as title loans and payday loans . If you have never had the misfortune of needing one of these, consider yourself blessed. These are high interest downward spirals that you should avoid as much as possible. There is more detail on these secured loans below.

Other lenders will likely charge lower interest rates, but they will vary from lender to lender. To avoid really high interest rates, simply do research before signing any paperwork. Some other benefits of secured loans are that they are usually easier to get than unsecured loans because it is less of a risk and you can usually get approved for larger amounts.

Risks of a Secured Loan


VIDEO: Title Loan is a Type of Secured Loan

Like all good things, a secured loan has negative sides. First, as there is extra paperwork and assessments needed for the collateral, it may take longer to get approved and receive the funds. Second, as mentioned before, if you are putting cash up for collateral, as in a bank account, a secured loan probably will not be so beneficial for you in regard to bills. Lastly, there is the risk of losing property if you do not pay as you are supposed to. It is best to aim for unsecured loans if those are a possibility for you. If they are not a possibility, be sure that you make timely payments so that you never lose your property.

Terms and Interest Rates

When it comes to the terms and interest rates of secured loans, they can vary as well. Payday loans only give you until your next paycheck to repay the loan. Many payday loans, especially for first time borrowers, do not get approved for much more than $150, though it can go up higher. The highest I have personally seen is $500, but that was after the customer had borrowed money from that lending institution quite a few times. For the $150 payday loan, the interest came to almost $30. For the $500 loan, the interest hit $88. That is about 1/5 of the amount you borrow, which I consider to be a bit high.

Title loans also have high interest raising up into the $100s. However, they have longer repayment terms. In fact, you can literally pay on a payday loan for the rest of your life. The payment the lender requires each month is nothing but the interest, so if you feel like throwing your money away, you can just pay the interest every month. However, that will never touch the principle. If you go in for either a payday loan or title loan, be prepared to make some rather large payments.

On the other hand, there are many other secured loans out there with lower interest rates. In fact, some lenders, such as banks, will also hold your car title as collateral. The difference is the interest rates and the term. With a bank or credit union, the title is literally collateral and the interest on the loan will be about the same as it is for any other loan.

Let’s take an example

For instance, my mother borrowed $2000 from the bank at one point. She used her title as collateral but her payments on that amount came to only $141 per month, and she was to pay for somewhere around two years. This loan was basically a secured personal installment loan for which the interest was added from the beginning. The monthly payments she made were much lower than an actual title loan company charges, and the payment was working on the interest and the principle.

The key to finding a good secured loan comes from doing the necessary research. It is very possible to find a secured loan that offers reasonable interest rates and good payment terms. Often, though, the best ones are not the first ones that jump out at you.

Repaying a Secured Loan

Repaying a secured loan is as important as paying back any other type of loan. Though title loan and payday loan companies do not typically report to credit bureaus, it is not safe to assume that all secured loans are the same. In fact, with most lenders, a secured loan gets reported just as an unsecured loan does. Therefore, you must treat it like any other loan you borrow.

First and foremost, never borrow more than you can repay. Borrowing $1,000 to pay bills will not help if you are adding another bill you cannot afford. My family and I have been in some tight spots over the years. More than once, my immediate inclination was to apply for a loan. The more desperate we were, the more a loan seemed like a good idea. Fortunately, my brain would kick in and say, “If you are already this desperate, how much more desperate do you think you will be when a loan is due next month?” Finding your way out of one problematic situation just to put yourself straight into another one is never a good idea.

So You Absolutely Need a Loan?

If you absolutely need to take out a loan, calculate how much you can afford to repay each month and how long you think you will need to repay it. Be smart about it. Do not take out a short term loan if you cannot afford to pay the full amount back within a month or so, as that is about the length of repayment terms for short term loans. Search for a lender that can provide the monthly payment amounts and repayment terms that you need.

After you have taken the loan out, you should immediately adjust your budget to suit the payments. If you find that you miscalculated and cannot afford the payments, consider picking up some extra shifts at your job, picking up a side job, selling some of your possessions, or anything else you can do to help make the payments.

Also, be sure you as to when you are getting the loan whether there is a penalty for paying it off early. If there is not, consider paying the loan off with your tax refund, a Christmas bonus, or another piece of additional income. The sooner you pay it off the better. Remember that how you treat this loan can and will most likely affect your credit. Do not dig yourself into a deeper hole if you can help it. Be as committed to repaying your loan as you are to make a house payment or car payment.

What Do I Do If I Cannot Repay a Secured Loan?

You took out a loan with every belief that you could pay it back, and you had every intention of doing so. Then, you get blindsided- perhaps you lose your job, an emergency occurs, you get really sick and cannot work for a few weeks, or something else occurs that knocks you down. How will you pay your loan payment? You are already scrambling to pay your rent and buy some groceries. How on earth will you pay that loan payment?

I do not know about you but that scenario sounds awfully familiar to me. Even with the greatest intentions, life can surprise you and take the wind right out of your sails. If this happens to you, start by not panicking. I know that is easier said than done but you cannot think or act rationally if you allow your emotions to control your actions. You can always take a moment to let the emotions roll, of course. You just cannot stay in that place.

Personally, if I am blindsided with something negative, I allow myself to freak out for a day. I usually do not need that long but, in my experience, it is best to let your emotions go crazy for a moment before you try to solve a problem. In my case, within 24 hours or less of my issue, my logical brain kicks back in and suddenly: a.) things do not seem so bad, and b.) a solution seems to pop up out of nowhere.

So if you are facing a crisis, there are a few things I want you to do:

1. Give yourself permission

Especially to freak out- just do not stay in freak out mode for too long.

2. Take a look at your financial situation and assess

Look at how bad it really is. It is usually not as bad as it initially seems.

3. Determine when you can make a payment

Try to find time within a week or two, if at all possible.

4. Call your lender

Burying your head in the sand is not going to solve your problem. Believe me. I have a friend who got a little behind on his loan payment due to a job loss. The lender called continually to see when he could make a payment but he chose not to answer the phone. It was not really that he was ignoring them. He actually had a job interview coming up and wanted to see if he would get hired so he could tell the lender something concrete. Instead, they ended up knocking on his door. From that point forward, he almost could not speak to them anymore about his situation because he had blown their trust in him.

So, again, do not hide. Face it head-on. Call your lender and explain the situation. Also, share your solution with them. If you are having a yard sale over the weekend to make your loan payment, tell them. The more straightforward you are and the more they see you trying, the more likely they are to work with you.

5. After you have given them a date and all the information, do everything in your power to keep your word

Conclusion

Now that you have some 411 on secured loans, you may be asking where to get a loan. As I stated before, there are a lot of secured loan options out there with various requirements, terms, and so on. The best thing you can do is research any personal cash loans available to you to find the pertinent information. If you need the money quickly, refine your research to the term fast loans or quick cash loans. Your research can provide you with the necessary information. However, full disclosure: that research can take a lot of time that you may or may not have.

That is the beauty of Loanry- we have done the research for you. We are connected to a large network of lenders and are dedicated to helping you find a lender that suits your needs. Instead of digging around the internet for hours trying to find a lender, we have provided a platform that makes it easier to get the money you need.

What Factors Do Lenders Use for Personal Loans?

There comes a time in all of our lives when we need a personal loan. The reasons can vary from fixing a car repair and needing help with rent to unexpected medical expenses. Personal loans go by many different names, from a consumer loan to an unsecured loan and many other names. The different names and all fine print can make it all so confusing. Do not stress too much, just keep reading to find out everything you need to know, including factors lenders, use for personal loans.

Lenders will for sure require proof of identity as well as proof of income. To do this, you need to provide some documents, such as pay stubs, bank statements, tax returns, and even student loan paperwork, if applicable. Keep reading to understand these factors in more depth. We’ve also including videos and more in depth blogs we’ve written on the subject. Here we go into depth on personal lender factors such as income requirements and what exactly a personal loan lender looks at on your credit report. Knowing the game and playing it well could save you a lot on interest and the cost of the loan overall.

What is a Personal Loan?

Personal loans can be a useful tool to help your financial situation. However, if used improperly, they can make your financial outlook even worse. A personal loan is when an institution lends you money that you must pay back. When you pay back the loan, you are making regular monthly payments for a set amount of time. The amount you pay per month does not change. You can use a personal loan for anything you choose.

However, some loans are for specific things, such as a mortgage for a house, or a car loan. There are unsecured and secured loans. An unsecured loan is one that does not have collateral to support your loan. Unsecured loans often have higher interest rates because they are a higher risk for the lender. There are many institutions that offer personal loans, including online lenders. If you decide that a personal loan is for you, you should do some personal loan shopping. A word of caution when it comes to online lenders.

Be sure that any online lender you use is a reputable one. Unfortunately, there are some people out there looking for individuals that are easy to scam. This helps you see what loans are available, as well as insuring you get the best deal.

What do I Need To Obtain a Personal Loan?

If you are considering a personal loan, it is important to knowcredit report lender review the factors lenders use for personal loans. It is also important to understand what information personal loan lenders need from you when you apply for a loan. Lenders need basic information about you when you apply for a personal loan. Believe it or not, the most important thing you need is proof of identification. This is most often the first thing that you forget to bring with you. You have a few options to prove your identity. You can use your driver’s license, a passport, or a military ID. It must have your name and your picture on it. You also may need to provide your social security number.

You should be prepared to be upfront if you have had recent or multiple changes in your address or jobs. Lenders look at frequent changes in these things as a sign that you may not be stable. Being prepared with a valid explanation can go a long way to setting a lender at ease. You may need to provide information about the other bills you have. You should bring documentation about lease agreements, utility bills, and insurance information.

The standard forms of identification are things like…

  • Driver’s License
  • Passport
  • Social Security Card.
  • Military ID
  • Official State ID

What Information Does a Personal Loan Lender Require to Apply?

Income is a Big Factor Lenders Use For a Personal Loan

Almost every personal loan lender, will verify income when taking a loan application. How much income you need when getting a personal loan varies from lender to lender, but mainly based on the loan amount. If you take out a $100,000 personal loan vs a $2600 loan then obviously your total income requirement will change.  Lenders have to have a way to understand what payments you can make against the loan on a monthly basis. A lender will also want to know what other overhead you carry on a monthly basis by reviewing your other monthly payment obligations like rent, cars, other loans, and more.

Lenders will ask for proof of income and expenses. Here is a short list of what you should have prepared if you are looking to get a personal loan:

  • Recent Bank Statements
  • Pay Stubs
  • Tax Returns or W-2s

What Does it Mean if I’m Pre-Qualified or Pre-Approved?

You may have heard the terms pre-qualified and pre-approved. Many times, you receive invitations in the mail, or via email from lenders with those words. It is important to understand what they mean. The terms can be used interchangeably, but they aren’t always. It is important to know that they can be different and engage in a conversation with your preferred lender. These can be important factors lenders use for personal loans.

Pre-qualifying for a loan means that the lender has done a soft hit to your credit. That means that lender has looked at your information, but hasn’t done anything that would impact your credit score. The lender took a quick look at your information and believes that you may qualify for a loan with them. However, this does not guarantee your approval. When you fill out an application and the lender does a hard pull of your credit, you may be denied. A hard pull it a hit to your credit and requires your authorization. The lender is able to see everything on your credit report. At times, you may receive a pre-approval from a mortgage company. This is important when you are trying to buy a home. These often are more of a guarantee of approval.

Why Does My Credit Score or More Importantly What’s on Your Credit Report Matter?

I am sure you know by now that your credit score is one of the factors lenders use for personal loans. Do you have a good understanding of your credit score? Do you know what it means for you? Your credit score is a three-digit number that can dictate many things for you. It can control if you can buy a car, a house, rent an apartment, and sometimes, it can prevent you from getting a job.

Your credit score tells a lender if you should be a loan candidate. Your credit score is something you should work hard to protect. It does not take much for your credit score to decrease. But, it will take a lot of consistent, hard work to get the number to increase. Your credit score reflects your history of making timely payments on money that you have borrowed, or bills that you owe. Typically, late or missed payments are the most common reason that causes your credit score to decrease.

A credit score falls between the range of 350 to 850. Obviously, 850 is an excellent credit score, but anything above 800 is considered excellent. Anything within the range of 670 to 800 is considered good. Most people have a credit score between 600 to 750. When your credit score falls between 580 to 669, it is considered ok, or fair. Anything that is 570 or below is considered poor, or bad. The credit score you need for a personal loan is less about the number in the end. The lower your score typically the more you will pay in interest and the amount you can borrow should be less.

Can a Personal Loan Impact My Credit?

Yes, a personal loan can potentially impact your credit score. A personal loan can positively or negatively impact your credit score. You are really in control of which one happens. If you currently have good credit, your credit may take a small hit when you obtain a personal loan. However, if your credit is in really good shape, it should not impact you too much. As long as you make all of your payments timely and you do not miss any payments, it may cause your score to go up slightly.

It will not cause it to go down. If you have good credit, but you miss payments, or make late payments, that impacts your credit score. It goes down as a result. If you become in default, which means you stop paying your loan, your credit score is heavily impacted. Your credit score goes down.

If you currently have a bad credit score, obtaining a personal loan can help you improve your score. If you make all of your payments timely and pay off your personal loan without any missed payments, your credit score should improve. In some cases, you may not have any credit at all. You have not made any late payments, but you just do not have any credit yet. In those cases, your credit score may be low. Obtaining a personal loan and making timely payments can help you build credit. Keep in mind your credit score is one of the factors lenders use for personal loans.

Can I Get a Personal Loan With Bad Credit?

It is possible to get a personal loan, even if you have bad credit. You may have to do more personal loan shopping to find one. You may ask

Moving with Bad Credit Loan

where to get a loan with bad credit? If you know you have bad credit, you may want to try to obtain a loan from a credit union. Credit unions typically have less stringent rules when it comes to loaning money. They also tend to be a little more forgiving when considering lending money to someone who has a spotty credit history. You could consider finding an online lender.

Often online lenders are more willing to lend money to those with bad credit. Typically, the application process is much faster. You can receive an approval in about 24 hours. Typically, the money is in your bank account within 24 hours of approval. Even with an online lender, the factors lenders use for personal loans remain the same.

Typically, when you have bad credit, you will receive a higher interest rate on your loan. When you receive a loan from a lender, it has interest attached to it. That means that you are paying back more money than you borrowed. An easy example is a loan with a 10 percent interest rate. You borrow $10,000 with an interest rate of 10 percent. That means you owe the lender 10 percent of the $10,000, which is $1,000. You end up paying $11,000 back to the lender over a set period of time. Someone with excellent credit may get a loan at 5 percent, while someone with bank credit, may get a loan with 30 percent interest. If the loan is for $10,000 that is the difference between $500 and $3,000 extra added on to the loan.

What Can I Do To Improve My Credit?

Knowing the factors lenders use for personal loans, it is important to make sure you get your credit in the best shape it can be. When your credit is in bad shape, it is not the end of the world. It is possible to improve your credit, but it will take consistent effort on your part. There are some tried and true ways to improve your credit. The first thing you should do is check your credit report. By looking at your credit report, you know what is on it. Once you know what is on your credit report and verify if it is accurate. Sometimes the information posted to them is wrong and if you know it is wrong, you can make an effort to correct it.

You should attempt to fix your late payments. You can dispute any late payments on your credit report. Even if they might be correct, the lender must provide proof of the missed or late payment. It takes time to gather the information, and they have a short time in which to do it. If they fail to provide the proper documentation timely, the late payment may be removed from your credit report. You could also contact the lender and negotiate payment for the missed or late payment with the lender. Sometimes, if you do this, they agree to remove it from your report.

Can I Really Use a Personal Loan For Anything I Want?

The short answer is yes, you can use a personal loan for anything you choose. You can obtain a personal loan to pay for your wedding or to take the trip of your dreams. You can use a personal loan to do home repairs or pay for medical expenses. Some people use personal loans to pay for unexpected auto repairs or when home appliances break and need replacements. However, that does not always mean that you should. When it comes to factors lenders use for personal loans, they often want to know how you plan to use the loan. This may not be a deciding factor for them, but they always want to know. Deciding to obtain a personal loan should not be a decision that you make lightly. You should put thought into the decision and make sure it is the right one for you.

What If I Need Collateral?

There are many factors lenders use for personal loans and they may decide that you need to secure your loan with collateral. Maybe you are asking what exactly is collateral? Collateral is a piece of property that belongs to you, but you give ownership of it temporarily to the lender. This way, if you default on the loan, the lender has your item which becomes their item. Typically, the lender gives you a certain amount of time to make the loan current. The lender can then sell the item to get some of their money.

This is common with mortgages. If you default on your mortgage, the lender can and will repossess the house. This often occurs with a type of personal loan called a title loan. With a title loan, you are giving the title of your vehicle to the lender. Once the lender verifies how much the vehicle is worth, they offer you a loan in an amount less than what the vehicle is worth. This protects the lender. One benefit of obtaining a loan with collateral is the interest rate is lower. The obvious downside is you could lose some of your property. If you are going to use something for collateral, you should make sure that you are going to pay off the loan on time. Or you better be prepared to lose your property. Make sure you know the factors lenders use for personal loans before you offer collateral.

Are There Any Fees For a Personal Loan?

There are often fees associated with personal loans. It is important that you understand these fees before you sign a contract. You know about interest rates, so you should always make sure you are getting the best one you can. All loan contracts have fine print and loan terms associated with them. Be sure to read all of it. There are two types of loan rates available to you. One is a fixed rate and that means the rate stays the same. This also means that your loan payment remains the same every month for the length of the loan. Variable rates are exactly that, variable. This means they can change, and most likely will. A variable rate changes when the market changes. They typically start lower but can increase. When the rates increase, so do your payments. They could increase many times over the course of your loan.

When it comes to fees, some loans have an origination fee. This fee is to pay for all the paperwork and checks that must be made for your loan. This usually is not a high amount and it gets rolled into your repayment amount. This way you do not have to pay out of pocket before you get the loan for the origination fee. Some loans have an application fee. This is a fee simply for applying for the loan. This is something you have to pay ahead of getting the loan. You also have to pay the application fee if you are approved for the loan, or not. You should avoid a loan with an application fee. An early termination fee occurs when you pay off your loan early. Some lenders charge this fee because by paying off the loan early, they are losing some of the interest. They charge this fee to recoup some of those losses. Be sure to verify your loan does not have an early termination fee. Plenty of loans do not; find one of those kinds of loans.

What Do I Need To Be Aware Of With Personal Loans?

So, you know all the factors lenders use for personal loans. Is that enough? Probably not. Make sure you arm yourself with knowledge when it comes to personal loans. We told you about the fees that may come with your loan. The fees are not the only things for which you should be aware of. A lender may try to sell you on additional loan insurance. The lender may tell you that in the event of your death, this insurance pays off your loan. Your life insurance policy should handle this, as well. They may also offer you unemployment insurance. If you feel that your job is secure, you may not need this.

Do not just blankly believe the lender when they try to sell you on these types of insurances. Ask questions and make sure you really understand what you are getting with the insurance. Also, make sure you need it before you commit to it. Remember, lenders are still salespeople trying to up-sell you. The best thing you can do is educate yourself before obtaining a loan. You know the factors lenders use for personal loans. Some lenders are hoping that you do not know anything at all about loans.

Personal Loan Shopping

Personal Loan Scams…Really?

Yes, really. Be aware that there are people just waiting in the shadows looking for someone desperate. They think people are more vulnerable when they are desperate. But, you do not have to be. Be knowledgable. Know the factors lenders use for personal loans. If something does not feel right, walk away. There are plenty of real lenders available. There are ways to determine if a lender is legitimate. Lenders must be registered in your state to loan you money. Make sure your lender is registered in your state before continuing.

Research any lender you are considering using, especially if it is a short term lending company. Pay attention to phishing attempts. If an offer seems too good to be true, it probably is. Research, research, research any and all lenders. Remember the basic factors lenders use for personal loans. If a lender is promising they do not need any of those things, beware.

Conclusion

So, you think a personal loan is right for you. Before you make the final plunge to get a personal loan and sign the contract, be sure you are sure. You know the factors lenders use for personal loans. This is good information, but it may not be all the information you need. You need to be sure that you can afford to repay the loan. Failure to do so puts you in a worse financial position. If you miss payments, or make late payments, you are doing worse damage to your credit. If you know from the start that you cannot afford to repay the loan, do not do it. Before you get that loan, make sure your budget has room for another bill.

Check your credit report and work on getting it into better shape before taking on more debt. Be sure you are sure. A personal loan can do wonderful things for your credit, if you can afford to repay the loan. Keep in mind the factors lenders use for personal loans. Most importantly, do not put yourself in a worse financial place just to get a little extra money up front. It may not be worth it in the long run. You are the only one who can answer that question.

How to Establish Credit History When You Have No Credit History?

Young adults and students are often frustrated by the problem of having no credit. It seems unfair, but almost every business or service requires a good credit rating before you can purchase their goods or services. Up to a few years ago, the young and students had no recourse but to use Mom’s and Dad’s credit card to establish credit history of their own. This did nothing for their own credit, though.

Fortunately, there are over half a dozen ways to establish credit history if you have no credit. Credit is no longer strictly about credit cards. Paying your rent on time (and that’s if you can find an apartment with no credit history,) paying your bills on time, and other solutions we’ll discuss here all add up to a credit history. First, though, those with no credit should understand how and why it works.

Understanding The Basics Of Credit

If you’ve never paid on a car loan, a mortgage, or had a credit card, then the Big Three (Experian, TransUnion, and Equifax) don’t know you’re there. They call this being “credit invisible.” If you’ve paid off a loan or used a credit card maybe once or twice, the Big Three call this “credit unscorable.” There simply isn’t enough information with which to give you a credit score, good or bad.

You’d be surprised how many people – 26 million to be exact – deal in cash. They buy large ticket items like cars from Craigslist, rent an credit score factorsapartment or room detailed by friends or family, and make monthly payments on other things outside the credit arena. Some don’t even have bank accounts; they pay their bills with Post Office money orders. Thus, they have no way to establish credit history.

The way lenders see it, you have bad credit due to the fact you haven’t shown a responsible repayment history. To the credit bureaus, they know nothing about you because you’re “invisible.” It’s easy to see how credit is a necessity, because cash and checks are usually not accepted in many places. How many times do you stand behind someone at a restaurant while they write a check for their meal? You can’t order pizza without a credit card, pay for something on Amazon or even get groceries without a credit card.

That’s not all. Anything in life requires a credit check. Applying for a job often calls for a credit check. The employer needs to see that you are a responsible person which means paying your bills on time. If you need health, auto, or home insurance, expect a credit check. These people need to know that you’ll pay them. Even the power company checks your credit. If you don’t have any or bad credit, expect to pay a hefty down payment as security in case you don’t pay your bills.

There are ways to establish credit history if you’re beginning from scratch. The gold standard of creditworthiness is FICO scores. Each little thing you pay for shows up there. Hold your chin up, you got this. Here’s how.

Get A Credit Builder Loan

This is one of the most painless ways to establish credit history. Go to a bank or credit union with which you have a relationship. A credit builder loan is one in which you borrow a specific amount of money. They will hold the money in an account to which you won’t have access. You will make monthly payments. When the amount is paid off, you will receive your money minus the interest you paid. They will report to all three credit bureaus your timely monthly payments which will establish credit history for you.

Most credit builder loans offer a range between $300 and $1,000. The point is not how much you borrow, but being able to repay the loan on time each month. Borrowing more than you can repay might mean late payments or no payments at all. Be very sure you can afford the monthly payments before you begin the process.

You’ll be paying interest on the loan. Some lenders don’t return the interest when the loan is paid off. Some return a portion of the interest which they call “dividends.” Read the contract carefully, and make sure you understand the interest, fees, and whether or not the lender will return none, all, or a portion of the interest at the end of the loan.

Does a Credit Builder Loan Really Work? Loan Up!

Since you’re doing this to build credit, some lenders won’t do a credit check on you. Instead, they’ll check your banking records. Here they will find if you have any bounced checks, and if you pay your bills. These things might affect your approval for a loan. You’ll need to bring with you:

  • Name, address, and phone number of your employer
  • Paycheck stubs
  • If you’re self-employed, you’ll need tax returns to prove income
  • Housing payments
  • Checking and savings balances
  • References

Two of the most important pros of obtaining a credit builder loan are that you’re basically paying monthly into a savings account. This teaches you discipline. The other pro is that when you go for other loans, you’ll have the experience and knowledge of taking out just the right amount and the ability to pay it on time every month.

Build Credit With Your Parents’ Help

Mom and Dad usually have at least one credit card. You can ask to be an authorized user of their cards. You won’t have to have a card of your own; just use theirs. Ask your parents to contact the credit card company to see if they report the authorized user’s payments to them. You need to be sure of this. Otherwise, your efforts will be for naught.

Be prepared to make your payments on time each month. If you don’t, you’re messing over the beginning moves of establish credit history as well as causing your parents’ payments to be late or non-existent. They could end up with bad credit which serves no purpose for either of you.

The biggest pro of being an authorized user on someone else’s credit card is that their credit history makes yours look good. You don’t even have to use the card. The primary card holder’s credit is reported on your credit report. How cool is that?

Build Credit With A Co-signer

If you have a parent, other family member, or a friend with good credit, you could ask them to co-sign a small personal loan in order to build or establish credit history. The payments you make will be reported to the credit bureaus, and you will establish credit history.

The only downside to co-signing a loan is that if you default on the loan or your payments are late, then the co-signer is responsible for paying the loan. Both your credit will be adversely affected. There might possibly be ill will between the two of you. Make very sure you make your payments on time for both your sakes.

Build Credit By Paying Your Bills

A great number of people assume that their rent, utilities, phone bill, cable, and insurance among others are reported to the credit bureaus. The fact is that the credit bureaus only see this information if you’ve failed to pay and the debt goes to collections. The only credit entity that does get these reports is FICO. So it does pay to pay your bills in a timely manner.

If you want the credit bureaus to be notified of your timely payments on bills, then contacting a third-party reporting agency is your best bet. Two such agencies are Credit Karma and RentTrack. Be aware you might have to pay a yearly premium for this service. It’s worth it, though, to be able to build your credit from nothing.

Build Your Credit By Buying A Car

The first credit most young people have is buying a car. Once you’re out of school or college, you have to get around to find a job. Buying a car is a sensible way to accomplish this. Make each month’s payments on time, and you will establish credit history.

Build Your Credit With Student Loans

Nine out of every ten students get their education with student loans. You may have a grace period before the student loan organization begins reporting your payments. In any case, pay them on time every single month for a good credit rating.

Applying online to a college usually means Sallie Mae. However, if you’re wondering where to get a loan, most lending institutions offer student loans. The rates and fees will vary, but they are another method of getting student loans.

Build Your Credit With Store Cards

Sears, JCPenney, Kohl’s, Exxon, Mobile and dozens of other companies offer their customers brand credit cards. If you spend lots and lots of money with these and other stores, chances are pretty good you’ll pay your monthly credit card bill.

The best way to handle store credit cards is to buy with it only what you would have bought with cash. Pay the entire balance each month on time. Ask the credit department if they report to the three credit bureaus.

Let’s Talk About Credit Cards

No one gets a credit card before they establish credit history. Credit cards are how the Big Three credit bureaus recognize people. With a credit card, you are no longer “invisible” or “unscorable.” Here are ways to get one.

Secured Cards

This is when you put $200 or $300 in the bank and let it sit there for a year or so. Don’t touch it. The bank or credit union will see this as collateral for a secured credit card. The amount in the bank or credit union is usually the credit limit on the card. You won’t be able to make large purchases, but when you make the monthly payments on time, the bank or credit union might give you an unsecured credit card a couple years down the road. In both cases, they will report your timely payments to the credit bureaus.

Secured cards were never meant to be used forever. The purpose of such a card is to build or rebuild credit. When you qualify for an unsecured card, then you can close out the secured card account. Make sure the secured card has low annual fees.

Store Cards

If you work for a major department store, a place like BF Goodrich, or you manage a Mobile gas station, chances are good that you could get a store credit card. If you’ve little to no credit, then your credit limit won’t be very high. Pay it off on time every month for at least a year, and the company usually raises your credit limit. It all goes on your credit report which gives you a track record.

Starter Credit Cards

These were devised for young people with no credit history. Adults with bad credit can start all over again with a starter credit card. Some are secured by amounts as small as $49, while others are regular credit cards. Some carry annual fees while others don’t. The credit limit is usually $300, but you’ll run into some pretty high interest rates to the tune of 20 percent.

The goal is to pay as little as possible when it comes to fees and interest. Make sure to pay the balance on time and in full if possible. In time, you’ll be able to qualify for a regular credit card with better fees and interest. Capital One offers a starter card with no annual fee just to give you an example.

Student Credit Cards

To qualify for this card, young people must be registered at an accredited four-year college. This is an easier card to qualify for, and some even offer perks like cash back. Pay the balance on time and in full, and you’ll be on your way to a good credit score.

Subprime Credit Cards

This is absolutely the last resort for anyone trying to establish credit history. These cards are usually sought by those who have tried other avenues and failed. Those with no credit at all and those with bad credit are not turned away.

The trouble with subprime credit cards is that they hit you with astronomical fees and interest. The government has tried to regulate them, but they find ways to get around it. This is a do it at your own risk thing, but we’d be doing you a serious disservice if we didn’t at least let you know that it’s there and to beware of it’s bad points.

Let’s Talk About Loans To Establish Credit

We’ve talked about car loans to establish credit history, credit builder loans, and student loans. For every thing you need to pay for, there seems to be a loan for it. Sometimes they’re called personal loans, sometimes payday loans. Let’s talk about personal loans first.

Personal Loans

There are two types of credit: installment credit and revolving credit. Installment credit is when you pay back money loaned on a car or a mortgage. Revolving credit is when you pay monthly charges against a credit card. The card revolves because the credit is available once again. Credit bureaus want to see a variety of credit on your credit report, so a good mix of both gives them reason to approve your credit.

Personal loans are installment loans that require a certain credit score to get favorable rates. You apply for a certain amount of money, sign the paperwork, and receive your funds. You will repay the money each month with interest and fees. Now you can borrow any amount, but it’s best to keep the amount low enough that you won’t have trouble repaying it. The loan terms are usually one or two up to six years to repay the loan. Make sure you pay it on time each and every month. Ask the loan officer to report your monthly payments to the Big Three credit bureaus.

Payday loans are given to people in sudden emergencies that need to be paid for right now. They are based on repayment from your next paycheck. Those just beginning to build a credit history should stay away from payday loans. They charge an insane amount of interest and fees. This often makes it hard for people to repay. They take out another payday loan to pay off the first one. You can see the trap people fall into. These aren’t reported to the credit bureaus.

Other Things You Need To Know About Credit

Credit bureaus look for five things when they check your credit. The first is a history of payments, how much you use your credit, how long you’ve had credit, hard hits on your credit, and your credit mix. When you use both revolving and installment credit and pay them off on time, your credit gets a boost.

Being new to the credit industry, you won’t recognize that it takes time to build credit. Paying your monthly amount on time takes time. It can conceivably take two to three years to build a good credit rating. Know that patience and taking your time will pay off in the end.

Beginners often think that if something is a good thing, then more of it is better. In the case of credit, this isn’t true. Madly accumulating installment loans and credit cards makes you look desperate to the credit bureaus. Pay off one loan and one credit card at a time. Give it a rest before you open another. This shows the credit bureaus that you’re a responsible person much more than a dozen open accounts.

Beginners need to know that their credit score is different from their credit report. The credit score is based on things found on your credit report, whether there are late payments or no payments, negative comments, and fraud. Be aware that you need to keep an eye on your credit reports for these things. It’s up to you to contact the credit bureaus if you find inaccurate information on your report such as a late payment when you made it on time. You are entitled to one free credit report each year. Just contact the Big Three credit bureaus for yours.

Do you remember the credit builder loan we discussed above? It taught you how to save money in a savings account. Don’t spend that money, and add to it regularly. It will be there if you get into trouble with your credit. You can use it to make payments when your paycheck wasn’t enough or pay down a troublesome balance. You got the loan to help your credit. Now let it work for you.

Where To Get A Loan

Personal Loans No Credit (Score Starter?)

I’ve waited until you read all the facts before explaining where to get a consumer loan or what Credit Shop is. You can’t just be-bop your way into Credit Shop to ask for a loan to establish credit history. The loans are between $1,000 and $3,000 which might be too much loan for you just at the beginning.

It pays to know where to get a loan from other consumer loan places. Most people think of loans and automatically think of a bank or credit union. So many people still look askance at anything outside a bank or credit union. Community banks are good places to get a consumer loan, because they don’t have a lot of competition from national banks or other huge banking concerns. Their fees and interest should be more manageable for those just beginning their credit journey.

The first place many first-time borrowers go is online. It saves driving in traffic, and hauling all that paperwork with you. Those with little to no credit history would be a good fit might be to loan shop might be OppLoans, who doesn’t require a high credit score, and their origination fees vary, so watch out for that.

Other places to know where to get a loan are finance companies. These usually have the same competitive rates as banks and credit unions. In fact, some are owned by major banks. So the first thing to look for here is fees and interest rates. Compare these to Credit Shop for a good idea of comparison rates. If you’re here to get a personal loan online to establish credit history, then make sure all that you’ve read above applies to the loan. You don’t want to start your credit journey at a disadvantage.

Now we come to personal loan offices in our where to get a loan conversation. If you don’t live in a town with a Credit Shop or you don’t want to go online for an installment loan, then a personal loan might be just the thing. There seems to be one on every corner of town. That’s how prevalent they are. They serve a purpose, though, and might be a good fit for you.

Check your Credit Score
See Your Credit Score Instantly

Conclusion

Know that we all understand your frustration at being too young for a lot of things. You’re old enough to vote and drive a car, but you can’t have credit. We understand how it feels to wonder what to do and where to go for answers. We hope this conversation helps you at least get an idea what to look for when you do begin your credit journey.

You should know that before you look online for personal loans, there are companies that don’t lend-they direct. You explain your needs, your time frame, the amount of money you need to borrow, and they can help you find a company that might fit your needs. They don’t lend. They know bunches of lenders, though, so their website is an interactive framework in which you find a lender for you. Without these free services, you’d have to do all the footwork yourself. We’d like to help, so let us know how your credit journey is going.

Line of Credit vs. Credit Card: Swipe Here or Draw?

Line of Credit vs. Credit Card

When it comes to finances, there are so many terms and definitions that it is easy to get confused. Many of these terms sound similar, and the available definitions on Google often serve to only add to the confusion. Not everyone is a finance guru, so some of us appreciate much simpler definitions. After all, how are we to know what to apply for or what we are getting into if we cannot even understand the textbook definitions?

For the moment, we are going to speak about the two often confused terms and how they differ: line of credit vs credit card. And for those of us who appreciate simplicity, we will be breaking the terms down into useful definitions and explanations. The simpler, the better, in my opinion. Let us begin.

Line of Credit VS Credit Card: Which is Best?

In truth, it is a matter of need and preference. Both offer benefits and risks. Both can be harmful and helpful. Each can be either the answer to your prayer or temptation you do not need. Either way, in order for you to choose between a line of credit vs credit card, you need to understand them on a basic level in order to make an accurate assessment. Below you will find the pertinent information needed to decide on a line of credit vs credit card.

What is a Credit Card?

Yes, it is a card that has credit on it, but how exactly does it work? What does that credit mean? Let’s pretend for a moment that I am yourhow to consolidate credit cards using a personal loanbest friend. You ask me if you can borrow $500 to pay your power bill because your check will not get to you in time. I know that you make enough money to pay me back, so I say “yes”.

However, instead of just handing you $500 cash, I hand you a card, and I say, “There is $500 on this card that you can use. Next month, I will need you to pay me back at least $50. Every month, you can use whatever is available of the $500, but I need at least $50 a month.” It sounds like a good deal, so you accept. These are the basics of a credit card. Like all things in life, there are pros and cons, so let’s get started on those.

Benefits of a Credit Card vs Line of Credit

First and foremost, the credit is available when you need it, as long as you are paying on it. You have the convenience of pulling the card out when you need it and simply swiping it. There is not waiting for the cash to be put in your hand. As long as it is available on the card, you are free to use it.

Minimum payments are usually not very high, so you probably will not have a hard time making those payments. My credit card has a minimum payment of $25 per month. Even during the tight financial months, I can usually squeeze $25 into the budget without too much stress. Also, making timely payments can improve your credit score as well as increase your credit limit on your card.

If you are thinking about taking a credit card, Loanry is always here to help you make the best decisions. We bring you reputable lenders and credit card companies, together with our partner Fiona. If you’re interested in getting a credit card, start here:


Drawbacks of a Credit Card

One of the biggest drawbacks of a credit card is that the minimum payment required is not really helping you at all. That is because the interest on credit cards is compounded. In simple terms, compounded interest means that it is added monthly. If your interest rate is 10%, your interest will be 10% of the balance on the card for that month. Next month, the interest will be calculated again, and added on top of the previous interest. So, if that is the case, what do you suppose happens if your minimum payment is lower than your interest?

In the simplest answer possible, you will dig yourself into deeper debt every single month. Let’s say you have a credit card with a $200 limit, and that card charges 20% interest. You used $150 of your available credit and your minimum payment is $25 per month. Follow along below to learn what happens if you only pay that $25 minimum.

Month 1         Month 2         Month 3         Month 4

Total Due:                  $150               $155               $161               $168.20

Interest Rate:                20%                20%                20%                20%

Interest Due:              $30                 $31                 $32.20            $33.64

Total w/Interest:      $180               $186               $193.20          $201.84

Payment:                     $25                 $25                 $25                 $25

Balance:                    $155               $161               $168.20          $176.84

As you can see, your interest is higher than your payment, so paying only the minimum payment will not get you out of that debt. These numbers are just examples- yours might be higher or lower. The key to getting out of credit card debt is to always make more than the minimum payments. Many cards do not add on interest until the end of the billing cycle. If it is possible for you to pay all or at least some of your balance before then, you will save yourself some cash.

Secured VS Unsecured

As with most loans, there are secured and unsecured credit cards. Secured cards can be of great help to those who have no or low credit. Basically, you pay a deposit on the card, and the company issuing you the card will hold that deposit. Once they have received the deposit, they give you credit. Sometimes, you have to put up the entire amount of credit as a deposit, and sometimes it is just a portion.

For instance, if they are giving you $200 in credit, they might require that you pay as low as $50 as a deposit or may require that you pay the full $200 as a deposit. This minimizes their risk, which is why they are willing to give you credit. If you make timely payments for a set amount of time, the deposit will be returned. Also, they report to the credit bureaus. So even though the cards are secured, they can improve your credit. Unsecured credit cards are simply approved or not according to your previous credit, your ability to repay, and your promise to pay.

What is a Line of Credit?

A line of credit is slightly different from a credit card in how it works and is given. Let’s go back to the example of you and I being besties and you needing some money. You again ask me for money but this time you have different needs. Maybe you want to take some classes at the community college and you have to pay cash. We know that the classes will cost $1,000, but we have no idea what the materials and supplies you need will cost.

This time I say, “I am going to open a bank account and put $3,000 in it. You can borrow anything you need up to that amount. I will leave that money available to you to borrow as often as you need for the next three years as long as you pay the agreed upon interest.”

You take the $1,000 for the classes and register. Two days later, you receive a list of textbooks you need to purchase and find out the total of them is $600. When classes start, you learn that there are lab fees and other costs you had no idea about. Fortunately, it is not a big deal because you still have $2,000 in the account. You take the $800 you need and leave the rest for future use.

The following month, you pay the required interest on what you have borrowed plus $200 on the principle. Now, you still have $1,600 available when you need it. Every month you pay more than the interest, you are replenishing your line of credit. Though some variables may change, this example is the basic idea of a line of credit.

Benefits of a Line of Credit vs Credit Card

One of the major benefits of a line of credit is that you have access to cash. While you can get a cash advance on a credit card, it is generally not a high amount and the interest is often higher. Plus, there are often fees for getting a cash advance. With a line of credit, the expenses associated are often lower than that of a credit card.

You also have flexible repayment options, usually from one year to more than ten years, and the APR is most often lower than that with credit cards. Lastly, there are very few restrictions, and they are an open ended credit line.

Drawbacks of a Line of Credit

First, the interest rates are usually variable, so your interest may change from month to month unlike a fixed rate loan. Lines of credit generally require an account at the financial institution you are borrowing from and a very good credit score. Additionally, you will likely find yourself paying both monthly and yearly maintenance fees so long as the line of credit is open, even if you are not using it.

Secured VS Unsecured

Most lines of credit are unsecured. This means that you provide no collateral. However, as the lending institution assumes a higher risk, it is more difficult to get a line of credit vs credit card, personal installment loan, or other loan options. If you get approved, though, you have a revolving line of credit that can be handy when you are in need.

Similarities and Differences

Now that we have broken down each separately, let’s take a closer look at which is better between a line of credit vs credit card. The two are similar in the sense that in ways, they are both lines of credit. As you generally borrow, payback, and replenish your credit card funds, it is technically a line of credit.

However, a line of credit is often much higher than a credit card. Credit cards are generally a few hundred to a couple of thousand dollar limits, though some may go higher. Lines of credit can start as low as $1,000 and go as high as the institution allows, though most cap out by $100,000. The highest most go are $25,000.

Interest Rate Differences

You will also typically notice a difference in interest rates in a line of credit vs credit card. These differences can vary widely, as well. Some credit cards offer 0% APR for the first year. With lines of credit, you begin paying interest the moment you take out any of your available credit. However, when interest rates begin, lines of credit often run from 9% to 23%.

Credit card interest rates usually start at 23%, though you may find some a little higher or lower. It is also important to remember that with a line of credit, the interest rates- unless stated otherwise- are variable. You may find yourself paying 9% one month and jolting to 23% the next. This makes it rather difficult to budget your payment.

Also, as previously mentioned, most lines of credit require that you have an account with that institution. This is not always the case with credit cards. In fact, some credit card companies do not have other account types.

Lastly, consider the actual rewards when it comes to a line of credit vs credit card. Most credit cards offer some type of reward. It might come in the form of cashback, airline miles, or other rewards. I have yet to find a line of credit that offers any reward beyond borrowing the money and building your credit- if you pay on time.

An Invaluable Lesson

There is one major downside that comes with both options. Regardless of your choice between a line of credit vs credit card, both can impact your credit hugely. If you have never looked at your credit report or really paid attention to it, I am about to tell you something really important, so pay attention: the more you borrow, the lower your credit score. If you borrow more than 30% of your available credit, your credit score drops.

Wait- what? But doesn’t it look good if I can borrow a lot of money?

Yes, unless you are borrowing it. I know, it sounds crazy, but it is true. The percentage of your available credit that you use at a time is called “credit utilization”, and it is a big factor in your credit score. The lower your credit utilization, the better your score. At the same time, they want to see you use credit. There is just a fine line between using it and using it too much.

Let me help you draw that line. If you have a $200 credit limit, the maximum you use should be $60. If you borrow more, try your best to pay it down to 30% before the billing cycle closes. Keep the amount you borrow as low as possible. However, do not ignore your credit. Sadly, using no credit can hurt you about as bad as using too much.

True Story

About five years ago, my husband and I really began trying to clean up our credit. We have been aiming to buy a family home for years and knew our credit would have to improve. We started paying every dime we could to debts, even if it was only $5 at a time. Slowly, we saw our debts dwindling and our scores rising. But goodness, those scores were rising very slowly.

We also made the decision to not use any more credit at all. We did not want any loans to cancel out our other hard work. After three years of paying debts and staying away from credit, we applied for a home loan. And we were denied.

Thinking that maybe our income was too low for approval, I reached out to the finance company. The agent told me, “No, it’s not your income. Actually, that and your work history look great. The problem is you two are not using any credit.”

I have to admit, this completely confused me. Some part of me thought that not using credit and paying for everything out of your income showed great responsibility, but nope.

She went on to explain that lenders want to see that you use credit and are good at paying it. However, they do not want to see you use more than 30%. Learn from our experience: use your credit, just do not abuse it.

Which Should I Get: Line of Credit vs Credit Card?

A major factor in this decision is what you need, or will use, the money for. Are you looking to Credit Card Comparisonmake a large purchase? Paying ongoing extra expenses, like the college example? Or is it more for everyday expenses?

If you just need something to help you put gas in your car or to buy groceries and tissue between checks, a credit card should suffice. If you want to buy a car with cash, need to make repairs to your home, or something similar, you should probably go for a line of credit.

Then again, maybe it is best not to choose between a line of credit vs credit card. Consider applying for both. Just because you have them does not mean you have to use them. If you get approved for both, you can leave them alone until you need them. How much peace of mind would it give you to know that you have money to the side in case you need it? Everyone needs a rainy day fund. Perhaps these credit types can serve as a rainy day fund until you can save one separately.

Line of Credit for Planning Ahead Security

Also, it is likely a good idea to apply for a line of credit long before you actually need it. Let’s say your car breaks down- a common occurrence for the fortunate among us. If you have no money put to the side, or money available to you through credit, you will have to find a way to cover it. If you apply for a line of credit then, it may take a few days or more to be approved. That means you will be stuck worrying about how to get around until you find out if you were approved.

On the other hand, if you applied and got approved for a line of credit months in advance, the stress would lessen. After the initial shock, frustration, and, “What do I do?” reaction, you will remember that you have some money available. You just need to get to the bank to retrieve it. Before you know it, you are back on the road. The bottom line is that it is better to be safe than sorry, so applying for both a credit card and line of credit well before they are needed might turn out to be very beneficial to you.

Conclusion

As you can see, making a choice between a line of credit vs credit card is a personal and situational choice. However, you may find it helpful to have both available to use depending on the situation you face. Another similarity between the two is that lenders for both are widely available. When you are trying to decide where to get a loan or where to credit card shop, Loanry can help. Whether you are searching for a line of credit or a simple credit card, we can help you find a lender that may suit your needs.

How Do No Hard Credit Check Loans Work?

No Hard Credit Check Loans

What are some no hard credit check loans? Traditional unsecured personal loans online will require a credit check and your credit score is an important part of the process, but there are options for no hard credit check loans.

Everything About No Hard Credit Check Loans

No hard credit check loans can be a good option for those who have bad credit and don’t want a credit check on their report. When speaking about credit checks, it’s important to know the difference between a hard and soft inquiry since each one will affect your credit a bit differently. Here is the list of no hard check credit loans:

Payday Loans

This is the leading type of personal loans that don’t require a credit check. You can find these loans online or through your local community. A payday loan will usually come in an amount that is equivalent to your paycheck or less. They will need to be paid back completely in one or two installments.

Local Financial Lenders

Financial lenders in your area can also offer no hard credit check loans. These lenders will advertise the service by mailing out checks that customers can take to their local bank and deposit. Once a check has been deposited the customer has accepted the terms of the loan, which will include the monthly payment terms that were attached.

If you are nervous about approaching lenders, you shouldn’t be because it can be in your best interest. Dealing with a lender directly, even if you don’t have a perfect credit score, will give you different options for approval such as proof of income or employment.

Title Loan Companies

You may have seen signs for no credit check required loans. These companies are offering quick cash loans with no credit check but there is a catch. These loans usually require you to secure the loan with your vehicle title. These loans are secure because there is collateral as a requirement. You are still able to drive your vehicle while you are paying off the loan but you will be required to surrender it if you fall behind on any payments.

Online Personal Loans

There are plenty of unsecured personal loans online options to credit shop. You can take advantage of a lender search tool that will give you a list of lenders that don’t require a credit check and start from there.

Where To Get a Loan?

There are different options for where to get a loan and one with no hard credit check that you can consider.

Online

Getting no hard credit check loans online can offer you a number of benefits, such as easy access, convenience, saved time, and low rates. When you apply for a loan online, you can do so from the comfort of your own home and you don’t have to wait in line or schedule an appointment. You will need the following information to apply for a loan online: name, address, Social Security Number, and proof of employment or income. Other information could be required, depending on the different standards of the lender. When you are filling out the form, it can be easy to miss a box so be sure you are paying attention. Missing crucial information can delay your loan.

If you’re interested in getting a personal loan online, you came to the right place. Loanry bring you carefully selected reputable lenders.

Easy Access

When you get a traditional loan, there are a lot of hoops that you have to jump through. However, a personal loan can require less information and may have more flexibility. The approval time is usually pretty quick. It can take weeks to get approved for a traditional loan, but online, you may even see instant approval. Depending on the lender, the longest you may have to wait for your funds could be three days, which is still shorter than a traditional loan.

Save Time

If you are in a hurry and need money quickly then it may be in your best interest to apply for a personal loan online. Traditional loans will have a lot of different steps before the loan gets approved. In addition to quick approval, there is usually a lot less paperwork, which can also help you save time.

Low Rates

Even with a no credit check loan, you can usually find lower rates online. It’s in your best interest to find the lowest rates since it will be less out of pocket money for you. One of the best parts about getting a loan online is that you can compare the benefits of rates from different lenders and choose the one that will suit your needs. Corresponding with an online lender can make the process easier and may help increase your chances of approval.

Credit Union

Credit unions focus on the community so they will be local to your state or specific region. They will also work together to better serve you. Many of the services a credit union will offer will be more convenient than a bank. Getting a loan from a credit union means you aren’t just an average customer and, if you become a member, you could have access to lower fees and better rates.

Banks

Getting a loan from a bank will come with some advantages and disadvantages, depending on the type of loan you are getting. It helps to know the difference between a hard and soft inquiry when getting a loan from a bank. It’s also important to know about the two types of loans and the pros and cons of unsecured and secured loans. If you are getting a loan from a bank, you want to choose an unsecured loan. This way you don’t have to worry about your assets, including your home. Experiencing financial hardship can make repaying the loan difficult and you don’t want to risk losing everything you have worked hard to get.

What Credit Score Do You Normally Need for a Loan?

One of the reasons you may be considering no credit check loans is because you know your credit score isn’t good enough for another type of loan. There are options for every credit type and it helps to know what your credit score falls under. Unfortunately, your credit will have an effect on a personal loan. Before getting a loan, you can do your best to fix up your credit.

When you are working on your credit score, be sure you that you aren’t applying for other credit forms at the same time and there aren’t a bunch of hard inquiries. You shouldn’t be falling behind on any bills or payments that need to get paid. Keep all your accounts open since closed accounts will look bad, especially any recently closed ones.

Good Score for a Personal Loan

A good score for a personal loan is between 700 and 750 and this means you will get lower rates and possibly fewer fees. This shows you have done what you are supposed to when it comes to credit and are paying down your debt for a lower debt-to-income ratio.

Fair Score for a Personal Loan

A fair score is between 650 and 700. This can be the case for many people and you have to work at the different ways needed to improve your credit score.

Bad Score for a Personal Loan

A bad score is considered between 560 and 650. Usually getting a loan with a bad credit score can be harder, but it’s not impossible. An option for a bad credit score is shopping for a loan from an online lender. It’s important to do your research and know that if you have a higher interest rate it can be harder to repay the loan. If you fail to repay the loan then it hurts your credit score even more.

What Makes Up Your Credit Score

There are a number of things that make up a credit score. New credit accounts for about 10% of the score. If you have recent loan applications or credit card applications these will play a role. Have you been approved or denied from these applications? Why have you been denied? It’s important to address these issues before applying for more money. The types of accounts you have on your profile will account for another 10%. Lenders want to see a mixture of accounts and make sure that you know how to borrow and repay from different sources.

Lenders will likely find out if these mixed accounts have been Credit Score Factorsopened impulsively by looking at your behavioral application patterns. Your credit history accounts for another 15%. During the time you have had a credit history, you need to show that you are responsible. Your debt-to-income ratio will factor in about 30%. Lenders want to make sure you don’t owe more than you are making and you aren’t using more than 30% of the credit in your favor. Payment history accounts for about 35%. Past and present delinquencies will be looked at, along with general payment history.

Can You Get a Loan without a Credit Check?

Even if you have found a loan that doesn’t have a credit check requirement, it’s still important to know the difference between a soft and hard inquiry. It is possible to get no hard credit check loans. However, getting no hard credit check loans is not easy. These loans can be useful in a number of situations, including emergencies.

What Can You Use in Place of a Credit Check?

Depending on the lender and the type of no hard credit check loans you are considering, there could be different items that can be used in place of a credit check.

Secured Loans

In place of a credit check, some lenders may use a form of collateral that has a value equal to at least the amount you want. Collateral can be anything from vehicles to electronics. You will also need income verification in order to get loan approval.

Unsecured Loans

Unsecured loans don’t require any collateral. However, you may have a higher than normal interest rate. This can double the overall payout of the loan. The higher the interest rate, the higher the monthly payment will be. You will also need to be prepared for income verification. This way lenders can make sure you have the financial means to pay back the loan.

In order to help understand your credit score, you need to know the difference between a hard inquiry and a soft inquiry. These different inquiries will affect your credit differently.

What Does a Hard Inquiry Mean?

A hard inquiry will happen when a lender checks your credit report. When you are in the process of applying for a loan, the lender will need to check your credit. They use a hard inquiry to determine whether your credit score is worthy and if you are financially responsible before denying or approving the loan application. You need to be careful with hard inquiries because they will remain on your credit score for at least two years. Too many hard inquires can lower your credit score. Applications that will count as a hard inquiry include auto loans, mortgages, student loans, personal loans, and credit cards.

The effect a hard inquiry will have on your credit report will depend on your unique credit history. For many, a hard inquiry will only affect your score by five points. What matters is how much credit you have and the accounts on your credit report. For someone who doesn’t have a well-established credit history, a hard inquiry would have a great impact.

Having multiple hard inquiries on your report makes you look riskier to lenders. If you look riskier, you have a lower chance of being approved for a loan. If you have six or more hard inquiries then you have a higher risk of filing for bankruptcy. These inquiries are what lenders will use to determine your financial risk before approving you’re for a loan. However, it doesn’t play as big a role in your credit report as other items, such as overall debt and late payments.

What Does a Soft Inquiry Mean?

A soft credit inquiry will happen when you or a company is checking your credit, usually in the form of a background check. This soft inquiry could be a mortgage lender that pre-approves you for a loan. Soft credit inquiries can actually happen without your permission and knowledge since they don’t affect your credit score. Some examples of soft inquiries include viewing your credit, pre-qualified credit card offers certain kinds of payday loans, and background checks or employment verification.

Reasons Loans Can Be Rejected

There can be a number of reasons why a loan is rejected. Some of it has to do with your credit report. If you are using a no hard credit check loan then your credit report won’t play a role but other items may. If your employment is unstable because you change jobs frequently, this can be bad. This is also usually a bigger deal for those who are under 30 and in the job hopper generation. Too much instability can be a bad thing.

Layoffs can happen and companies can change but you need a steady employment history in order to get the best interest rate on your loan, especially if you aren’t using your credit history to back you up. If you have insufficient income overall, you can also be denied a loan. You need to prove that you will make enough money to be able to pay it back. If you have been shopping around for a loan a lot recently and have too many loans out or too many applications with rejections, this could be a reason why your loan gets rejected. When you have too many rejected applications then be sure to give it some time before you start applying for new loans.

Should You Avoid a No Credit Check Loan?

While the interest rates can be higher on no hard credit check loans, if this is your only option you shouldn’t avoid it. Some states have capped the annual percentage rate that can be charged on loans. If you live in one of these states, this can benefit you. If you don’t live in one of these states with restrictions then you should know that you should see interest rates that are higher. Some lenders may not charge interest if you pay back the money by a certain date. If you can feel confident in your financial position in order to pay back the loan, this can be helpful to get a lower interest rate.

However, if you don’t pay it off in time then you could end up in a cycle where you are just paying interest and not making a dent in the balance of your loan. You may want to avoid title loans and payday loans since both of these loans may require that you pay back the loan quickly and it usually is within a month of taking out the loan. Both of these options can present the danger of not being able to pay back the fees and interest. If you choose a title loan then you can end up losing your car and be in a worse financial situation.

Being Pre-Approved Versus Pre-Qualified for a Loan

Some lenders can use the terms pre-approved and pre-qualified interchangeably. Other lenders will have different ways of viewing these terms but the process could be similar. Being pre-approved or pre-qualified can trigger a hard inquiry on your credit report.

In order to apply for a loan, it may be a requirement to provide more information about your financial or employment background. A hard inquiry will require your consent. You may be pre-qualified for a loan and not want to commit to a deeper credit search until you are ready.

How to Pre-Qualify for a Loan

There are a number of reasons to get a personal loan, including even helping with your credit, but it’s important to know about the process in order to know how it benefits you. As you are shopping for personal loans, you need to know the lender’s pre-qualification process. To pre-qualify, you may need information about your current financial situation and your employment. This can include the name of your employer, how long you have been with the company, and your salary.

Some lenders could also ask about previous employment. Other requests can include auto, mortgage, and other loan information. Lenders want to know about your payments. By self-reporting this, it can help them assess the likeliness that you will qualify. You can either choose to accept or decline a pre-qualified offer. However, you can use the offer, which should include the interest rate, and the monthly payment amount in order to decide which lender could be the right choice for you. Lenders can get the information they need to pre-qualify you with a soft check so you can get different quotes without having to have a hard inquiry on your report.

How Do You Improve Your Credit Score for Any Future Loans?

While improving your credit score takes time, there are ways to do it for future loans if you don’t want to consider any hard credit check loans. Some of the tips to improve your credit score include staying current on bills, reducing debt, and taking on a co-signer. It’s important to always pay your bills on time and not let them be 30 days late.

Once you have met the 30-day threshold, the lenders will usually apply this to your credit report and it will decrease your score. Most items will stay posted for about two years once they reach your credit report. If you have outstanding debt, such as medical bills or loan payments, try to pay them off as quickly as possible. A lot of debt can cause your score to go down because it increases your debt-to-income ratio.

Alternative Loan Options

There are other alternate options in the place of no hard credit check loans if you choose. If you feel comfortable with it, you can reach out to a friend or family member that is financially stable and ask about getting a personal loan from them. Since it’s not a conventional loan, there won’t be a credit check. You may also not see offers with overly high-interest rates that some local lenders may have. Even if it is not a traditional loan, you still need to make sure to pay back family members and friends.

Personal Loans No Credit Check: Check Here

The other option is a cash advance. If you have a credit card, there may be the option for a cash advance. Take the card over to the bank and have a cash advance taken out on the card. This will show in the overall balance. Cash advances do tend to have a higher interest rate than a normal credit card interest rate, which can be already high. It may still be less than what a local lender is offering you. The cash advance will combine with your normal monthly credit card payment so this will eliminate the need for a second payment and you can keep better track of your finances.

Conclusion

There are a number of different places to find no hard credit check loans but online can be your best bet in order to do your research and find the lowest rate possible given your situation. Pre-qualifying for a loan can be a helpful option but each lender will have different pre-qualification guidelines you have to adhere to. It’s always a good idea to work on improving your credit so you can get better loan options for the future.

Unsecured Loans in California As Soon As Tomorrow

Unsecured Loans in California

Unsecured Loans in California

Personal loans can be used for anything an individual needs. Anything other than business, but sometimes people use them for start up cost. Otherwise, it will be a business loan. Either a loan for working capital, advertising, business expansion, and the like. You can use a personal loan for emergencies, holiday expenses, car/house fixtures, shopping, and other personal needs.

Also, when it comes to personal loans nowadays, there are many choices available with more lenient requirements. We no longer live in a day when the only way a person can get a personal loan is by going to a traditional bank or credit union. Nor in a day these financial institutions require you have what some refer to as the three C’s – credit, cash, and collateral.

We live in a time now when you can get a California personal loan even with bad credit. There is no need for collateral. When it comes to cash, you must show proof of income. However, you don’t have to have a lot of money. You just need a steady monthly income that is as low as $800 a month in some cases.

There are so many personal loans available that you can get with fewer requirements now. Furthermore, these personal loans can be categorized as secured personal loans and unsecured personal loans. They vary in terms and interest rates. So, there is a personal loan out there that is just right for you.

Where to Get a Loan

Getting a loan is easier than ever before. You don’t even have to commute to a traditional brick and mortar company many times to get a loan. Just from the comfort of your home, you can loan shop online. And even if you are still required to go to a physical building after loan shopping online, there will point you to personal loan companies near you in California.

There are unsecured personal loan companies in several locations in California throughout cities and towns across the nation. You can start by searching online for the right personal loan company instead of wasting gas or bus fare to travel from place to place. While checking online, you’ll see guidelines to determine whether the business suits your needs. You will also be able to find out what information you should provide to complete the application process. You will most likely be able to complete the application process online. Loanry cuts the time you spend researching. We can connect you with reputable lenders right away.

From there, you can proceed by either getting the results of your application or by getting instructions on where to complete the rest of the application process. You may also obtain instructions on the information that they will require you to submit. (i.e., proof of income, bank account information, driver’s license, etc.). If applicable, there will be a location nearby to complete the loan process that they will tell you.

What You May Likely Need for the Application Process

As mentioned before, many of these companies approve loans for bad to good credit, no collateral, and so forth. In these cases, these loans are considered to be unsecured personal loans. However, even though unsecured loans in California are convenient in that you are not required to have the three C’s; there are other details you must follow in order to go through the smoothest application process possible. The following includes other details most likely needed to complete the application process quickly and efficiently:

Obtain Clarification about Your Preferences

Before going to a financial institution, you should perform your due diligence. For example, know what lenders look for on your credit report and what other items they might collect. The aim is to find out the details of the application process and other terms by thoroughly checking loan packages. Especially when you California loan shop online. Please be aware of the type of loan you want and the terms that are affordable to you.

Ask Questions

You can contact the business via phone, instant chat, their online form, or email. Make sure to ask all the questions to ensure you have all areas covered. You also can make sure they have loan packages you desire. Other questions to ask the company include loan eligibility, timelines for the application and approval process. Of course don’t forget to ask about the required documents and materials. Different financial agencies have different requirements and finding out the requirements upfront will save you a lot of trouble.

Find out the Limitations

Even though many agencies accept bad credit applications, they have their limitations concerning the lowest credit score they will approve. There may be other guidelines, such as the least amount of steady income you must have, the acceptance of their terms, and the interest fees.

How to Find California Installment Loans Online

Personal Installment Loans

A California personal installment loan is a consumer loan that is paid on a fixed schedule with a principal and interest rates. The length of time to pay off these loans can range from a few months to several decades. You can use these loans for various reasons. Also, these loans are typically more affordable and safer than title and payday loans. As mentioned these loans can be secured or unsecured personal loans.

Personal installment loans can be retrieved fairly easily as well. You can accept a personal installment loan offer on a network. Also, you can carefully read the loan offer terms before accepting the terms. You also can digitally sign the agreement. The funds could enter your account withing 24 hours to a few days, depending on the lender. For instance, unsecured loans in California will normally can enter one’s personal bank account within 24 hours. These loans are not secured but unsecured loans in California which have a log of competition and being unsecured makes less paperwork required to show collateral, for instance.

When Should I Receive My Funds?

Depending on the lender, you should receive your funds within a few days, though it could vary from one business day up to several weeks. They will typically deposit the funds into the checking account you specify during the loan process, and you can then withdraw them as cash, spend them via your bank card, or use them to make payments and purchases online like any other funds.

With an installment loan, you’ll not only have a significantly lower interest rate, but you’ll be able to make regular monthly payments and be more likely to stay on track. Plus, those regular payments can also help you boost your credit score when you make them on time each month. This can help ensure you’ll have an easier time finding the financing you need in the future.

If you can’t qualify for a personal installment loan due to your bad credit, you should still explore every other option you have before taking on an expensive and potentially dangerous short-term loan. That includes consumer credit cards, as even the worst subprime card will charge less interest than a payday loan.

How Soon Can I Get an Installment Loan?

If you apply right now for a Personal Installment Loan then you can potentially have anywhere from $500 to $25,000 cash in your bank account as soon as tomorrow morning. That’s right, tomorrow morning, but not in all cases!

Lender’s sometimes even accept applications 24 hours a day – 7 days a week but all final processing for California cash loans is usually done during normal business hours and funds could be sent via ACH directly to your bank account.

You can borrow between $500 and $25,000 instantly. However, personal installment loans are usually based on your income and therefore only borrow the amount you can afford. The lender will certainly allow you and even encourage you to repay the loan in full any time you can afford it.

California Cash For When You Need Money Now

More Details on Secured and Unsecured Personal Loans in California

California secured personal loans are loans in which lenders require borrowers’ to make pledges or promises of collateral for the loan if the individual defaults on it. The most common types of secured loans are home or auto loans. If the home goes into foreclosure or the car gets repossessed, the lender can retrieve the home or auto, auction it, and then bill you for the rest if the balance is not paid in full after auctioning it. Because of this, carrying full coverage insurance may be required for your collateral when it comes to a secured loan. This way, the lender will have a shared interest in the home/car which will protect the both of you.

There are much more unsecured loans in California and other places in the market than secured loans. This fact is good for those without collateral even though lenders know that the risks are higher with these loans.

In a consumer credit report in December 2018, TransUnion forecasted that the US credit card balances would increase by 4% in 2019 to $840 billion while balances of personal loans are expected to increase by 20% and reach an all-time high of $156.3 billion by the end of the year. Also, there has been an increase in peer-to-peer lending via mobile and online lenders that coincide with a keen increase in unsecured loans. TransUnion discovered that financial technology firms (fintechs) accounting for 38% for unsecured loan balances in 2018. This amount increased significantly from only 5% in 2013.

What about the sorted risks associated with those loans?

Another difference between unsecured personal loans and secured personal loans is the sorted risks associated with either type of personal loan. With the secured personal loan, you can lose your home or car when you default on the loan. With unsecured personal loans, lenders may report negatively on your credit, they may put a lien on your home, or they can garnish your wages when defaulting on a loan.

Different Types of Unsecured Personal Loans

There are also different types of unsecured personal loans available, including student loans, personal loans, and credit cards. These loans are all term or revolving loans. The other type of unsecured personal loan is called the consolidation loan.  A revolving loan is a loan with a credit limit that you can repay, spend, and spend again. Personal lines of credit and credit cards are examples of revolving unsecured loans. A term loan is a loan that requires the borrower to pay in equal installments until they pay off the balance in full. The consolidation loan is a signature loan from a bank used to pay off credit card debt in equal installments until the balance is paid in full.

Other Important Notes

With all these wonderful features about unsecured loans, there are some things to take into consideration. For one, these loans are riskier to lenders, so these loans carry higher interest rates. Also, these loans require higher credit scores many times. In these cases, these loans don’t require a perfect credit score. As a matter of fact, these average scores can be an average score of 620, for instance.

In 2006, California’s income per capita was $38,956 among various professions and regions, thus ranking 11th place among the states in the US. Some areas in this state have a greater need for finance than other areas in the state, and thus, different types financing is required. Furthermore, borrowers of unsecured loans in California with average credit scores of 580 to 720 are typically approved for these personal loans.

Payday loans are considered unsecured personal loans that provide merchant cash advances. Even though these loans may be partially secured by these companies requiring an agreement to permit automatic bank withdrawals from the applicant’s checking accounts and a postdated check, it is still known as an unsecured personal loan. There is no need for collateral, like your car or home. These types of loans have a short term, comes with a higher interest rate, and you typically pay them back in a single lump sum on your next pay period.

What else do lenders take into consideration?

Besides the stipulations concerning income and credit score, lenders take into consideration other details when it comes to being qualified for a personal loan in California. Lenders look at the debt-to-income. Even if your credit score is fairly descent if you have more debt to the amount of your income, the lender still may reject you. Also, even if your credit score isn’t so great, paying back your credit score will be a spectacular way to improve your score. Lenders will report to credit agencies and through consumer reports that can help you greatly to obtain future credit and loans.

Several ways to improve your credit for improving your chances to get approved for a personal loan include the following:

  • Following your total payments’ groupings
  • Choose which groupings to make several small payments to become current on bills
  • Lower balances and request for an increase of credit limit
  • Improve credit utilization and eliminate card balances by using debt consolidation loans
  • Pay on-time to improve your credit>

Other ways to improve your chances of getting a loan include feeling and looking organized. You must be confident to go through the loan application process.

Conclusion

Unsecured loans in California are an amazing relief for us these days. You can use these loans for any personal thing or situation an individual needs the loan for. You can use unsecured personal loans for emergencies, holidays, car/house fixtures, shopping, and more. Also, when it comes to personal loans nowadays, there are many choices available with more lenient requirements.

We no longer live in a day when the only way a person can get a personal loan is by going to a traditional bank or credit union, and the person must have what some refer to as the three C’s- credit, cash, and collateral. Furthermore, we don’t have to worry about the possibility of losing our homes or vehicles when defaulting on these loans. There are negative consequences of negative reporting being on our credit. However, we all can take care of that situation when a short amount of the defaulting on a loan occurs.

There are much more unsecured loans in California available that you can get with fewer requirements, and the process can be quick and easy so you may receive funds into your account in as soon as tomorrow.

Consider different types of unsecured loans

There are also different types of unsecured loans in California available, including student loans, personal loans, and credit cards. These loans are all term or revolving loans, and there is also the consolidation loan. A revolving loan is a loan with a credit limit that you can repay, spend, and spend again. Personal lines of credit and credit cards are examples of revolving unsecured loans. A term loan is a loan that requires the borrower pays in equal installments until there is no balance, and the consolidation loan works as a term loan that is a signature loan for credit card debt.

There are some things to take into consideration. For one, these loans are riskier to lenders, so these loans carry higher interest rates. Also, higher credit scores may be required for these loans many times. In these cases, these loans don’t require a perfect credit score. All in all, with all these options available, there are unsecured loans in California available for you.

Your Guide to Personal Loans for Emergency Home Repairs

As a homeowner, there are times when you will have to carry out emergency home repairs. Whether the repairs are from faulty systems, wear and tear, or natural phenomena, it will be important to figure out where you will get money to finance the works. Personal loans for emergency home repairs are becoming increasingly common and popular. However, you should familiarize yourself with the products and the various options available to you before taking out this type of personal loan.

A good number of consumers do not know where to get a loan when they need extra cash for such an emergency. This is why we make it easy for consumers to not only find a lender but also help them avoid common scams. By facilitating the process of financing home repair services, we help ensure a seamless process and convenient borrowing experience. Here is what borrowers need to know about emergency cash loans for home repairs.

Emergency Home Repair Loans

Sometimes, you may find yourself stranded when your home needs emergency repairs, but you do not have money to pay a contractor to do repair loansthe job. What most people do not know is that personal loans for emergency home repairs can make for a great way to access the financing you need, allowing you to pay back the loan later over a period.

Emergency home repair loans are one of the many types of personal loans available in the loan market. This type of loan would be ideal in case you do not qualify for other loans if the amount required is too small to take out a home equity or you cannot afford to pay for the emergency home repair yourself. Just as with any other type of personal loan, home repair loans have a fixed interest rate and are paid back in specified installment amounts over a fixed time.

Numerous lenders offer repair loans for emergencies. However, the loan terms vary by the lender. This means that you should not only find the right lender for your circumstances but also understand what you are getting yourself into before making a financial commitment. In short, borrowers have to take time to shop for emergency repair loans and carefully consider the different options available.

How a Personal Loan Works

The period after your home has been affected by destructive events can be characterized by confusion and a feeling of helplessness. This could leave borrowers wondering where to get a loan. However, before taking any step, it would be essential to understand how these personal loans work.

Personal loans are consumer loans that are granted for personal, family, or household use. As installment loans, it means that borrowers borrow a fixed amount of money. And pay it back in monthly installments over the life of the loan. This period will normally range from 12 to 84 months, with the borrower paying back both the principal and accrued interest by the end of the period. The account is usually closed once the loan has been repaid in full.

There are two types of personal loans: unsecured and secured loans. Unsecured loans are not backed by collateral, meaning that the lender will determine whether you qualify for the loan based on your financial history. Secured loans, on the other hand, are backed by collateral. As such, the lender will have the right to claim your asset if you are unable to make your payments.

Personal loans for emergency home repairs are consumer loans meant to carry out repairs after your home has been damaged. In fact, using a personal loan to carry out home repairs is one of the smart ways to use this type of loans. This is because home repairs and improvements will help to increase the value of your property. Similarly, by making your home more functional and comfortable, you will enjoy the peace of mind you need to do other things productively.

Common Home Repairs

Home repairs come in different forms. While some make for small projects that you can do yourself, others are larger and will require that you call in a contractor. If you find yourself in need of personal loans for emergency home repairs, you should take time to loan shop to ensure you find the right product for your needs.

  • Water heater replacement – if your water heater is older than 10 years, there is rust in your faucet water, rumbling and noise or water leaking from the heater, you should consider replacing it.
  • Roof repair – roof damage can occur as a result of weather damage, damage from trees and power damage, missing or cracked shingles or leaks.
  • Frozen or broken pipes – decreasing water pressure, water discoloring, and reoccurring leaks are some signs that you may have broken pipes and need emergency home repairs.
  • Damaged gutters – if you notice broken seams where gutters meet, cracks and leaking or water around the foundation, you should determine whether you need home repairs. You can take personal loans for emergency home repairs to help you cover the costs upfront.
  • Restore walls and ceilings – discoloration, holes, and dents on walls as well as a buckling ceiling will need to be repaired. If you notice such defects, it could be time to call a contractor.
  • Replace flooring – you may need to take out emergency cash loans to replace flooring that is stained, chipped, weathered, or has stains from flooding or leaks.

Ways to Finance Emergency Home Repairs

While personal loans for emergency home repairs can help cover these costs, this is not the only way to finance such repairs. Before you start thinking about where to get a loan, you should explore these options to find out if they will work for you.

  • Homeowners insurance – before paying for any home repairs out of your pocket, you should find out if the damage is covered by your home insurance. You may only have to pay the deductible, a factor that will save you a significant amount of money.
  • Tap your equity – how much equity you have in your home may make it possible for you to take out a home equity loan or line of credit. However, you should carefully think about interest charges to determine whether taking this step will be worth the while.
  • Government assistance – there is a possibility you will qualify for a program issued by the local Housing Authority. This will depend on your age, location, and income. Homeowners may also be eligible for repair loans and grants offered by the government.
  • Disaster relief – if your home suffers damage as a result of a natural disaster, you may be eligible to receive funds from the Red Cross or the Federal Emergency Management Agency. It is important to note that these funds are suppose to cover only small repairs that ensure safety and sanitary living conditions.
  • Nonprofit organizations – depending on the circumstances, there are several nonprofit organizations that may be willing to help home repairs.

Other Options to Consider

In addition to the options mentioned above, there are other alternatives to personal loans for emergency home repairs. Here are some of these options that are available to almost every homeowner.

Other options available to you – before taking out personal loans for emergency home repairs, you should consider the other options available to you. There could be more affordable ways of financing home repairs.

  • Credit cards – you may want to consider financing some of the home repair projects using a credit card. You will be able to save some money if your card has an offer of 0% introductory APR on purchases. This would also be a great way to access the money you need within a short time and without much hassle.
  • Peer-to-peer loans – this is a creative way to raise the money you need to repair your home. Several investors fund a loan by providing a small amount of money to various projects as a way of diversifying risk. Most of these loans have relatively short repayment periods, meaning less interest and allowing you to get out of debt quickly.
  • Alternatives other than loans – there are other ways that you can finance repairs apart from loans. You should consider saving up cash before such emergency repairs become necessary. This effectively means planning for such occurrences in advance. In case your project can be completed in phases, you can pay for the project when you have money for each phase.

Emergency repair loans require that you pay back the money you borrow with interest. Borrowers should have this in mind when applying for the loans.

Factors that Determine Your Eligibility

Even as you shop for a repair loan, it would be important to check the eligibility criteria for most lenders. This will go a long way in helping you to avoid the frustration associated with getting your loan application rejected.

Here are Some of the Factors that Determine Your Eligibility for Personal Loans for Emergency Home Repairs
  • Your income – lenders will only be willing to make loans to borrowers who can pay them back. Depending on how much you are looking to borrow, the lender will consider your income to determine whether you can afford the loan. Borrowers are more likely to be approved for a loan if the payments are a small portion of what they earn.
  • Your employment history – since most people get their income from employment, most lenders will want to know if your work situation is stable. Borrowers with steady employment will find it easier to access the funding they need to repair their home.
  • Other debts you owe – apart from income, the number and amount of debts you owe will affect your likelihood to pay back. It may be difficult for lenders to give you another loan if you are already drowning in debt.
  • The loans you have applied for recently – lenders consider you to be a high-risk borrower if you have several loan applications over a short period in the recent past. Going on a borrowing spree is one of the signs of a possible default.
  • Collateral – in case some of these factors make it difficult for you to qualify for a loan, some lenders may consider offering you a secured personal loan. If you have collateral to guarantee the loan, you may increase your chances of getting an approval for the loan.

Another factor that will play an important part in determining whether you qualify for these loans is your credit score. It is important to have a good credit score to increase your chances of qualifying for a loan as well as accessing higher limits.

Best Ways to Qualify for a Personal Loan


Every borrower will want to increase their chances of getting approved for personal loans for emergency home repairs. Here are some of the best ways to qualify for loans.

  • Ensure your credit is in good shape – your credit score and history is what lenders rely on to establish your financial habits and borrowing behavior. Since emergency home repairs are usually unexpected, you should prepare for such incidences by improving your credit score early enough.
  • Reduce your debt as much as you can – your debt-to-income ratio, as well as the amount of debt you owe, will determine whether you qualify for a personal loan. To increase your chances of qualifying for these loans, you should try to reduce your debts as much as you can.
  • Consider a co-signer – in case you have a low income or poor credit score, getting a cosigner with a higher income, and better credit score will increase your chances of getting a loan. By agreeing to be your co-signer, the person agrees to pay the loan in case you default, reducing the risk to the lender.
  • Personal loan shopping – shopping around for loans will help you know where to get a loan. Such information will help you identify lenders with flexible requirements and loan terms.

Why Consider a Personal Loan for Home Repairs?

There are many reasons why you should apply for and take out personal loans for emergency home repairs. Considering that events that lead to emergency repairs occur unexpectedly, these loans allow you to start repair works immediately. Defects in your house can greatly compromise the functionality of your home. With home repair loans, you will have the money to cover the costs upfront and payback in installments that are spread out over time. Compared to credit card loans, personal loans for emergency home repairs have a lower interest rate. This means that the cost of borrowing will not be as high, allowing you to pay back the loan comfortably without much strain. These financial products can also help you make repairs conveniently and affordable.

Home repair loans are a type of personal loan. As such, the loans require that borrowers pay fixed monthly installments over a specified period. With such an arrangement, borrowers will be in a better position to plan their finances and make payments on time.  Another reason to get a home repairs loan is that it allows you to access a considerable amount of money. Most lenders will actually offer the amount you need to ensure that you complete your project. It would be important to find out how much you will get from each lender when looking for where to get a loan.

Factors to Consider Before Taking Out the Loan

There are several factors that borrowers should consider before taking out these loans. This will help them to find the right loan for their needs and understand the financial commitment they are making as they take the loan.

  • Find the right lender – the importance of finding the right lender cannot be emphasized enough. As you shop personal loans, take time to go through the terms of the lender to avoid making common mistakes.
  • Interest rates – different lenders have different interest rates for their home repair loans. You should remember to compare interest rates from several lenders to ensure that you take out the most affordable loan.
  • Fees – just as with interest rates, the fees charged on the loan will directly affect the cost of borrowing. Make sure you find out whether there are any hidden loan fees and charges.
  • Loan term – how much time you will have to pay back the loan will be an important factor to consider. This will determine how comfortable you will be able to service the loan.
  • The amount you need – the amount you need to carry out repairs should guide you on how much you should borrow. The loan amount will, in turn, affect how much you will pay in interest as well as determine whether you will get your application approved.
  • Your ability to repair – most borrowers take out loans once they find out they qualify without taking time to evaluate their ability to repay. Ensure that you will be in a position to pay back the loan without financial strains that could result in frustration.

Disadvantages of Personal Loans for Emergency Home Repairs

Benefits and Downsides of Personal Loans: Loan Shopping 101

For all the advantages associated with personal loans for emergency home repairs, they are not without some disadvantages. Knowledge of the downsides of these loans will help you decide whether you need to borrow money.

Every time a borrower applies for and takes out a repair loan, it shows on their credit report. Too many applications over a short period will make a borrower less attractive to lenders, making it harder to access loans in the future.

Any rejections will also show on your credit report, a factor that could damage your credit score. It is important to not only check your score before submitting your application but also take the necessary steps to boost a weak score.

Just like any other personal loan, late or missed payments on these loans will hurt your credit score. It is critical to ensure that you can afford the loan before approaching lenders to funds to finance home repairs.

In case you have a poor credit score, there is a good chance you will pay very high-interest rates. Financial experts advise borrowers to resist the urge to apply for these loans in case the lender’s interest rates are too high.

Choosing the Right Lender

In addition to choosing the best personal loans for emergency home repairs, borrowers should also pick the right lender for their needs. Below are some of the ways to identify a good lender with whom to work.

  • Recommendations from friends and family – friends, family, and colleagues who have taken out these loans before can help you to identify reliable lenders. Based on their experiences, you will be able to gather information relating to the terms of different lenders. Some may also suggest lenders who offer tailored loan products to consumers.
  • Loan brokers and aggregators – the process of looking for the right lender can be tedious and time-consuming. Working with experienced loan brokers and aggregators will make your work easier. You will not only save time but will also get a list of potential lenders with whom you can work.
  • Doing research – one of the best ways to find a lender is to shop for personal loans. Today, it is possible to use the internet to access reviews from former customers and also learn more about different lenders. There are also third parties that can help borrowers to identify reliable lenders. We make it easy for consumers to find reliable lenders who give personal loans for emergency home repairs.

How to Use a Home Repairs Loan Wisely

While emergency loans can help you meet your financial needs, they can also land you in a lot of financial trouble if not used correctly. Borrowers should ensure that the money borrowed is used in the way it was intended.

Before you take out personal loans for emergency home repairs, it is important to know the specific types of repairs you would like to do. You should consider listing the repairs down, before working with your contractor to estimate the cost of each of the repairs. This will help you to determine how much you need for the project. Once you have received the funds in your bank account, you must ensure that you stick to the plan. All the money meant for home repairs should be used for that purpose without diverting it to other activities. By doing this, you will benefit from the loan in terms of restoring your home to its rightful condition and increasing its value.

Conclusion

Lastly, borrowers should remember that they have the responsibility to pay back their personal loans. This requires that they not only make sure that they can afford to make payments but also that they put in place measures to see to it that all payments are prompt.

With this information, borrowers will not only know where to get a repair loan but will also be in a better position to make informed decisions. Taking the best personal loans for emergency home repairs can help borrowers to enhance the functionality of their homes. To ensure that the funds help to meet the set goals, it would be important to do some research. One of the best ways to achieve this is through a third party that is not a lender, but helps you find one. We strive to help consumers to find reliable lenders easily and avoid falling prey to scams. Work with us to improve your borrowing experience and find a home repair loan that might meet your needs.

Do Personal Loan Companies Require Proof of Income?

We do not like to admit it, but we all fall on hard times. We have all seen times when we lose or decrease our income. There are even times when we face unexpected expenses for emergencies. We all wonder at some point where to get a loan. We also wonder how to find the best loan for my needs. Facing that situation is difficult and stressful, but finding the right loan does not have to be. You just have to know some key information and use tools to loan shop online. Continue reading to find out more information about personal loan proof of income.

What Is A Personal Loan?

Let us talk about personal loan basics, first. If you are considering a personal loan or even unsecured personal loans online, you should know some information. A personal loan is when a lending agency gives you money that you must back. You are required to pay back the loan with regular monthly payments over a set period of time.

That period of time is usually three to five years. That time period could be different based on the lender. Personal loans are considered unsecured loans, which means you do not have to provide collateral to get the loan. You often must provide personal loan proof of income.

Do I Need Proof of Income?

A lender always wants to see personal loan proof of income before approving you for a loan. For a regularly employed person, it is not difficult to provide proof of income to a potential lender. However, there are non traditional employees working. They may be self employed and do not give themselves a pay check. The total income of the business may be payable to the self employed person.

There are other individuals that have S Corporations, also known as S Corps. These individuals separate the earnings of the business from their personal earnings. This protects these individuals from a liability associated with the business. However, it also requires that this individual takes a paycheck. If he or she does not take a paycheck, that person really has no proof of income.

What Qualifies as Proof of Income?

For those who are not a typical employee and do not have a regular paycheck to provide to a lender as personal loan proof of income, have no fear. There are other Personal Loan Proof Of Incomemeans of proof of income that lenders accept. A W2 is an important tax document that tells a lender how much money you have made in the previous year and from which employers. A lender may also accept your tax returns if you are self employed. This clearly lists the income you earned for the prior year. However, keep in mind, a tax return only lists the income that you claim.

If you do not claim it, it does not show up on your tax return. Be careful and make sure you have claimed all of your income if you present your tax returns. You may also be able to provide a payroll schedule or payroll documents as proof of your earnings. This is especially helpful for those who do not get paid on a regular basis.

If you are a contractor or work as freelance employee, this may also be a great way for you to prove your income. A signed letter from employer is another personal loan proof of income that a lender may accept. This is a letter signed by your stating that you work for that company. This also acts as proof of income and that you are able to repay the loan.

You may also use bank statements that includes statements of direct deposit which shows that your employer has made deposits into your account. It shows how much is being deposited and how often. If you are of retirement age, a lender may ask for other personal loan proof of income.

You may need to provide statements of how much money you are receiving in Social Security benefits, if that applies to your situation. If you are old enough to supplement your income with investment income, a lender may request that you provide proof of that income. The same is true if you receive income from any type of retirement savings account. Be prepared to show proof of any type of income that you receive.

Can I Get a Personal Loan Without Proof of Income?

I am going to be honest with you here, it is difficult to get a personal loan without any proof of income. There are, however, other loans that you may be able to obtain. There is loan that does not require you to have a job. A title loan is when you use the title of a car, vehicle, or motorcycle as collateral for a loan.

The way it works is quite simple. You give the lender the title and the lender lets you borrow a set amount of money. You cannot borrow more than the value of the vehicle that you are using as collateral. Typically, the lender does an appraisal of the vehicle you are using as collateral to determine how much it is worth. In general, you have about 30 days to repay the loan. If you do not pay back the loan, the lender takes the title and keeps your vehicle.

How Much Money Can I Borrow?

Personal loan amounts can range from $1,000 to $100,000. Your income is a huge factor in how much you can borrow.

Lenders want personal loan proof of income to help them make a decision. You need to earn at least $15,000 a year to get a loan at the lowest amounts. If you want a higher amount such as $100,000, then you need to make 10 times $15,000, so roughly about $150,000. This type of income helps the lender feel confident that you have funds to pay the loan. Either way, the lender wants personal loan proof of income to provide proof of your annual income.

What Are My Chances of Getting Approved for A Personal Loan?

At the end of the day, the lender decides if you get a loan. There are certain things you can do to improve your ability to get a loan. You can help yourself by doing these things before applying for a personal loan. First, you should get a copy of your credit report and review it. There may be errors on it that you should fix before applying for any personal loan.

Determine your credit score, so you know where you sit on the credit scale. You cannot work to correct your credit problems unless you know your credit score. You should begin to pay down as much of your debt as possible. In addition, focus on your current debt by paying all of your bills on time. You must pay the appropriate amount on time every month to improve your credit score. Most importantly, do not file for bankruptcy as that stays on your credit record for seven to ten years.

Other things that impact your credit in a negative way are constantly changing jobs. Staying in a job shows that you have stability and make lenders willing to lend you money. It shows that you are responsible and more likely to not default on the loan.

Are There Different Types of Personal Loans?

Yes, there are several different types of personal loans. What really defines them as a personal loan is that they are unsecured. There are medical loans available to those who need money specifically to pay medical bills. There are vacation loans for those interested in paying for a vacation in one amount without having to save the money. Some are even taking out wedding loans when they need money for their wedding. You can get a debt consolidation loan that is a personal loan.

You can even get personal loans online. When you loan shop online be sure that the lender is a reputable one. Be aware that most online loans have a higher interest rate. No matter which one you choose you must provide personal loan proof of income.

Why Should I Care About the Interest Rate?

Interest rates are incredibly important. The most basic definition of an interest rate is the amount a lender charges you to borrow money. The base amount you borrow is the principle. For example, you want to borrow $10,000. That is the principle amount you are borrowing. The lender assesses your credit worthiness (more later in this article) to determine how much interest to charge. Interest is referred to as the interest rate. An interest rate can as low as 5% or as high as 29%.

Your credit dictates the interest amount. If the lender charges you 10% interest, that adds $1,000 to the amount you borrow. Now, you pay back $11,000. This does not include any fees the lender may charge. The lender uses this amount to determine how much you repay per month. A higher interest amount can significantly increase the amount you pay per month. Always be sure to read the fine print.

How Can I Qualify for A Personal Loan?

Now you think you want to apply for a personal loan, but you wonder if you can even qualify for one. There are some things of which you should be aware to help qualify before filling out personal loan paperwork. You must submit some type of personal loan proof of income. Lenders look at your credit rating to determine if they want to lend you money. They look at your debt to income ratio.

The best way to understand this concept is to understand the amount of money you bring in each month in income. Then you must understand how much money you owe in debts and expenses each month. When you have a good concept of these numbers then you can see the difference between the two.

Can I Get A Personal Loan with Bad Credit?

A lender uses your credit score to determine how safe it is to loan you money. Your credit score is an important three digit number that determines many things for you. It indicates to lenders how likely you are to pay back the loan and tells lenders what your credit history has been. It gives them a picture of whether or not you pay your bills and if you pay them timely.

A credit score can be any number from 300 to 850. The higher the number, the better your score. If your credit score is 800 – 850, it is excellent and if it is 749 – 700, it is really good. If it is 670 – 739, it is good and if it is 580 – 669, it is just ok. Anything below 579 is bad, or poor credit.

What Should I Do If I Have Bad Credit?

It is really hard to maintain exceptional credit. It is much easier than you realize for your credit score to drop. For example, it only takes some late or missed payments for the numbers to decrease. Unfortunately, it is much harder to increase your credit score than it is for it to decrease. It is not impossible, but it takes hard and consistent work. There are some things you can do to help yourself immediately. First, check your credit record and make sure that all the information listed is accurate.

If there is any wrong information, you must fix it immediately. You should begin to pay off as much of your debt as you can. You could also consider having a co-signer on your loan. Since personal loans are unsecured, there are no guarantees to the lender that you pay the loan. If you have a co-signer, that person promises to the bank that you will pay the loan. If you do not pay the loan, your co-signer is then responsible for paying it. There are some lenders that are willing to give you a personal loan proof of income submitted.

How Do I Know If A Personal Loan is Right for Me?

You are the only one who can decide this for you. No one else can make this decision for you. There are some things to consider before you decide if you want to apply for a personal loan. The most important thing to determine is can you repay the loan? Do you have enough extra money every month to pay  the loan amount? If the answer is no, stop here.

A personal loan is not right for you. Obtaining a loan that you cannot pay back only puts you in a worse financial position. You must remember that while you get one lump sum from the lender, you still must pay it back. If you are not sure if you have enough money to pay back the loan, you can use a loan calculator.

A loan calculator helps you determine how much you can pay. You enter how much money you earn in income per month. Then you enter in all your debts and expenses. The calculator determines how much money you have at the end of each month to pay back a loan. If you do not have enough money to cover the loan, stop again. Do not proceed with the loan. Missing payments or making late payments decreases your credit score and puts you in a worse place.

Can I Get a Personal Loan Online?

In short, yes, you can get a personal loan online. There are some things of which you should be aware when considering a loan online. There are some online lenders that are not reputable and are looking for people to scam. They probably figure that people who are in a desperate situation are the easiest to scam. Be careful of online lenders. Make sure that you do your homework when searching for an online lender. Make sure you know everything you can about them. An upside to online lenders is a quick turnaround time.

You usually get a decision in 24 hours and then the money is in your bank account in less than 24 hours. They still require personal loan proof of income. However, online lenders save you from having to go into a bank and wait for someone to be available. The application process tends to take less time because they are shorter to fill out. Be aware that there is a down side to online lenders. Typically, the interest rate with an online lender is higher than many other lenders. Usually online lenders cater to individuals that have less than perfect credit.

What Fees Are Associated with Personal Loans?

5 Personal Loan Fees to Know: Borrow Smarter

There are always fees associated with personal loans. Before you sign the contract for a loan, be sure to read the fine print and understand what you are getting yourself into. Keep in mind no matter what type of loan you obtain, you must provide personal loan proof of income. Some of the fees you can expect when it comes to a loan are application fees.

This fee covers the cost of fees for running your credit. These fees typically are nominal but if you have more than one application, the fees add up quickly. If you are not approved for the loan, you do not get that money back. If you can, find a lender that does not charge an application fee.

Administrative fees cover the cost of processing the application for your loan. There are lenders that do not charge administrative fees, so you should find one. Another fee that you should be aware of is an origination fee. This fee combines application and administration fees together in one sum. It usually adds in a fee that is subtracted from the payout amount.

This way, you do not have to pay a separate fee out of your pocket. Some lenders have a prepayment penalty. This means that if you pay off your loan early, you have to pay a fee. Many lenders do not have this fee, so be sure to research any fees that your lender has with your loan. No matter what type of fees the lender has, you still must provide personal loan proof of income.

Conclusion

When you find yourself in a position when you need a loan because you are facing some type of financial hardship, you must consider some things. First, you must always have your paperwork in order and be ready to present personal loan proof of income. Then you must consider if a personal loan is really right for you. If you are not able to pay back the loan, you should not obtain a loan. You put yourself in a worse financial position if you do not pay back your loan. Missing or making late payments decreases your credit score.

There are some things you should do if your credit is bad. You should pay off as much of your debt as you can to increase your credit score. One way to be able to pay off your debt is to create a budget for yourself. When you create a budget, you can remove all of your unnecessary expenses.

Once you list out all of your expenses, you can see what items you paying for that you no longer need. If you have gym membership that you have not used in a year, cancel it. You have magazines or subscriptions that you no longer use, cancel them. Once you create a budget for yourself, be sure to stick to it. The best way for you to be debt free is to work hard at reducing your debt and improving your debt to income ratio.

When looking for a lender, read all of the fine print so you know exactly what you are getting with your loan. Make sure you know about the fees that the lender charges before signing a contract. Make sure you know all the documents you have to provide to the lender, including personal loan proof of income. If you opt for an online lender, make sure it is a reputable one and not someone looking to scam you during an already stressful time.

Check your credit score and get your credit report. This empowers you to know the data with which the lenders are using. When you have this information, it can help you make better decisions about your loan options. Maybe you will decide now is not the best time to obtain a loan. Maybe you will decide to pay off more of your debt. No matter what you choose, make sure it is the best option for you and will not hurt you in the long run.

California Cash For When You Need Money Now

California Cash

There are times when you find yourself in a financial emergency and in need of quick cash. Such times are when you require a cash advance, which is another word for a personal loan. This is a loan you can borrow and pay back in installments over a given period of time. When you need a loan or advance cash and you can get advance cash from a bank but if you have the baggage of bad credit on your back, the bank may not be the best place to seek financial aid.  There are many options when it comes to getting money when you need it; California personal installment loans online are one option many turn to when they need California cash. In other words, they live in California and need money.

Getting A California Cash Loan

In order to find a loan shop online in California, you need to first determine if the lenders you are working with are legit. A legit cash advance is one that is given to you legally, both online and in-store loan applications require the lenders follow the regulations of the specific state to ensure the legality of the service.

Like many cities, getting a loan is very legal and very possible in California. There are regulations that have been put in place to govern all the functions of loan service providers. These regulations have been put in place by the California Deferred Deposit Transaction Law or Department of Business Oversight. These regulations require all loan service providers to have valid licenses in order to be allowed to operate in California. The regulations have also set the maximum amount of cash you can borrow. These regulations also ensure that borrowers who don’t pay their loans cannot be taken to court by the service providers for debt collection.

Finding a certified cash lender in California

Despite how tough your financial status might be, it does not mean that you have to settle for a lender who is not credible. It also does not mean that you should settle and take the first short-term loan or cash advance option presented. Payday loans and other short-term cash advances have not been legalized in every state, so you have to be very carful not to apply for a cash advance in a state where it is illegal. There are specific states where these services are legit, but even in these states, the loan service providers have to abide by a certain code and strict state specific regulations.

In California for instance, these services are legal meaning that you can confidently apply for cash without fear of violating any state regulations. All the lenders are required to comply to these regulations and abide by them, otherwise their license would be revoked. In order to find a legit lender and to know where to get a loan in California, you need to have good knowledge of your state specific laws and have a baseline for finding the deal that best works for you..

Finding a trustworthy lender in California can be very difficult especially because there are very many lenders today. Both online and store lenders have made it difficult for a person to determine the credibility of a lender before going to them for a cash advance because there are so many of them and the information some lenders provide for the terms and conditions of a loan iare vague and untrue sometimes.

It is thus important to find a California lender who is credible and who is trustworthy to keep their word when it comes to following the terms and conditions of the loan agreement in the initial stage of cash loan application.

Before Applying for a California Cash Loan

In order to find a California lender that may work your situation, you need to do a thorough research. Also, it is important to carefully and analytically go through the terms and conditions before signing for any loan or cash advance. The terms of roll overs and late payments are outlined here which is why you need to be extremely careful, ask questions where you don’t understand and if possible compare the terms and rates of different lenders.

Why take a Loan in California?

There are many reasons which make California cash loans stand out from any other types of loans. These reasons are inclusive of the following;

California loans for bad credit: most people fail to qualify to get loans because of bad credit history. Traditional financial lending institutions are reluctant to approve loans for borrowers with bad credits because they pose the risk of defaulting on their payments. Low credit scores work against you when you apply for a loan or a cash advance in a bank. In California however, you can apply cash despite low credit as long as you demonstrate the ability to repay the loan.

Easy application: unlike bank loans, California cash loans online are very easy to apply. Regardless of whether you do an online application or if you visit the cash advance service providers in person, the application process only takes a few minutes. This is very convenient especially if you need cash fast. When applying for a loan in a traditional financial lending institution, it usually takes more of time to process the loan and for approval. This can be problematic especially if you need the cash for an emergency, which is why online lenders are a suitable option in such cases.

California Loan Options

There are a range of options to choose from: when applying for a cash in California, there are many options you can choose from depending on your preference and the urgency. There are a variety of online lenders from whom you can get the cash advance loans as well as different physical locations where you can go to get these services.

Privacy of the borrower: the California cash regulations require that the privacy of the borrower be a top priority for the lender. This means that what and when you borrow a cash advance remains between you and your lender and it is not treated as public information.

California quick cash online: unlike bank loans, California cash loans may not require you to wait for a certain amount of time or days for your loan request approval and passing underwriting. As soon as you sign the loan contract and accept the terms, you are able to access your cash if you visit a physical service provider. For online lenders, the money may transfer to your account as soon as one business day as long as you have provided your personal bank account details.

Charges for cash in California

Every state has state law restrictions that are put in place to safeguard the interests of the borrowers. The California state is no exception. When applying for a loan in California, there are state specific charges that you have to adhere to.

Rollover fees: In California state, the lender can allow an extension or a payment plan. This does not necessarily mean that the lender has the power to charge the borrower any additional fees when repaying the loan.

Collection fees: the most a California advance service provider can charge for insufficient funds is $15. This charges only apply once and you do not have to pay any fees for a late payment.

Finance rates and fees: there is a minimum fee the lender can charge the borrower in California. This charge is normally 15% of the check’s face value fee. The maximum charges vary depending on the term of the cash you are seeking for example for a 14-day loan, the finance charge is around $17.65 for a $100 loan.

Qualifications for applying for a cash in California

In order to qualify for a personal loan in California, there are certain lender requirements that you need to meet. Whether you do an online application or if you visit a store to get the California cash advance, there is a set eligibility criterion that you have to meet;

  • You must be 18 years of age and above which is the legal age that considers you an adult
  • You must have a verifiable and a steady source of income
  • And you must be a citizen of the United States or a permanent resident of America

When applying for a California cash loan, there is certain information that a lender may require to enable processing of your loan request. The state laws require you to provide your name and your contact details, your income details, the contact details and the name of your employer, and your social security number and details. After provision of the above information and if you have met all the requirements listed above then you are considered eligible for a cash advance in the state of California.

You can choose your repayment plan by simply doing a calculation of the amount of money you think you will require in order to determine California personal installment loans repayment date that works best for you to avoid any future inconveniences.

How to apply for cash in California

Applying for a cash in the state of California is not a difficult task and it does not take long. Compared to other cash advances and bank loans, cash advances in California are not hectic to apply and they don’t take up much of your time. All you need to do when to access a loan shop loan is to fill out an online application from your computer of from your smartphone.

It takes only a few minutes to know whether you have been approved for a cash advance or not, which is very convenient especially if you are in an emergency situation. It is important to note that applying for a cash advance does not require you to have an outstanding good credit, so it does not lock out people with bad credit or low credit scores.

 

The only thing you require is your contact information, an operational email address, a source of recurring income and a bank account to check when the funds show as a credit on your account. As long as you make your application on a weekday, you may get your cash within 24 business hours or less.

It is also very easy to keep track of your finances because all the details of your application are in your phone or on your home computer. This makes it very easy to manage finances, to be accountable for your money and to prevent wastage.

When You Should Get a Personal Loan: Smarter Finance

Conclusion

Apply for a Loan in California is a usually very easy and stress-free task. You can apply for a loan to help solve emergencies at home, to pay small bills and to take care of other minor financial expenditures. It does not matter if you have bad credit or a bad credit score, you may qualify for California unsecured personal loans especially from online lenders.

The criteria for these specific California cash loans from online lenders is also a bit relaxed when compared to bank loans and other lenders which makes it both easy and convenient. If you are on a lower income, you may be able to get a cash loan; also, if you are a recipient of government benefits which may be a hindrance when applying for loans. Despite there being less restrictions, the lenders have to stick to the state specific regulations and the state mandated APR. There is also a maximum limit to the amount of cash these lenders can give out.