Just about all of our needs today, as well as our wants, require some money. This means that there must be a constant cash flow. Larger purchases mean that we will need a larger amount of cash - probably requiring a loan of some kind. When you have need of a larger sum of cash, here are some forms that a personal loan will come in.
One very important thing to know is that a personal loan can be used for anything that you want. If you need cash for your debt consolidation, to buy a car, pay for college expenses, go on a trip, or to buy electronics, a personal loan can help you to accomplish it. Depending on your own credit rating, and how much you want to borrow, you have the possibility of getting the money you need quickly.
Secured Loan
Secured loans will give you the largest amount of cash because it is the kind that makes the lender more comfortable. You will use either a house or a car to secure the loan. This makes that item the security for your loan. In other words, if you default in the payments, then they will get that item from you. Because of the security behind it, you will get the best loan conditions out of any other kind of personal loan. It will give you:
- the best interest rate - the longest terms for repayment - the most money.
The best conditions for this type of loan also depend upon your credit rating, and your ability to repay the loan back. One thing that you want to watch for, though, is to see if there is a prepayment penalty, which simply means that you pay a fee for paying the debt off early.
Unsecured Loans
These loans do not require you to place any kind of security on them. This means the lender is at a higher level of risk on them, and they will charge you a higher rate of interest, too. In fact, the actual rate of interest that you get will be dependent on your credit rating and ability to repay the debt. A smaller amount of cash will be given, and usually a little shorter repayment time allowed.
Unsecured loans come in several different forms - to be able to meet your needs better. Here are some of them.
Short Term Personal Loans
This type of loan is designed to be repaid in a short period of time - like its name implies. When a bank lender gives you this type of loan, some collateral may need to be provided. A bank will normally only go up to $20,000. An online source may not require the collateral, but will usually lend only small amounts of cash, too. The interest rates are high - simply because it is short-term. Having a good credit rating will help keep the interest rate low.
Payday Loans
These are very short-term loans - for only about 14 days, or two weeks. They are designed to carry you over until the next paycheck. Usually the loan amounts are less than $1,000, but some may go as high as $1,500. A credit check is normally not required for a payday loan, all they want to know is that you are currently employed and have been working there for at least six months. Your income will need to bring in at least $1,000 per month, and some may require an income of at least $1,500 per month.
When you get a payday loan, you give them permission to automatically take the money out of your checking account. The money will also be placed into that account - just to make sure that it is a real account. Usually you can receive your money in less than 24 hours, and some will give it in less than 30 minutes - even when you apply online. The interest, however, is high, and will be stated as a percentage - usually running anywhere from 25 to 30%.
There are certain priorities to remember when you have to decide which bills you are going to pay. Some will have to wait until the next pay check.
Your mortgage and home insurance should be the first on the list. Your house is what provides you with shelter. It is also good for your credit to make sure your mortgage payments are always on time.
When owning your own home there is property taxes that come along with it. Although you have taxes taken out of your pay check that does not mean that you will have enough when it comes time to pay them. So put money aside to cover taxes that you will have to pay.
The next important payment that needs to be made is your car payment. Transportation is very important. With out a vehicle it makes it hard to get back to and from work.
If you are not able to afford your car payment, it might be wise to look for a car that is more within your budget. If you have a new car, look for a used car that is still in great condition.
Most people have credit cards now days. The minimum payments can really add up. Credit cards have late fees and if you dont make a payment they will raise your interest rate, normally to 29.9%.
When you know that your interest rate is going to be raised. Look at which card has the smallest balance on it, 29.9% of $100 is better then on a $1000.
Another thing to remember is that most credit card companies will not report your late payment to the bureau until it has been 30 days late. So if you pay it 10 days late you will be ok with your credit report. Though you will still have a late fee and the interest rate could still be raised.
When you are in a situation where you are trying to decide which card to pay first it can help to look if there is a grace period on any of your cards. You can save those cards for the next pay check.
A personal loan is great for consolidating credit card debt. One of the advantages is that you will have only one payment and there are usually no late fees if they are they are not as large.
The interest rate on a personal loan is not raised when you dont make a payment either. It is important to make sure your payment is with in your budget. You do not want to have a bad mark on your credit.
The last thing to pay is your utilities. Most gas and power companies will work with you if you let them know your situation.
The cable and phone bills are not as important. These are things that we can survive with out. If the phone and cable is shut off it will not affect your well being.
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