Tuesday November 12, 2019
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Benefits And Drawbacks Of Getting Loans

Another load which is common to most of us is the credit cards. Application process for credit cards is fast but the interest rates can be high. Home equity loans are commonly known as mortgages.

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A probate loan is sometimes known as an inheritance loan which someone borrow against real estate assets which the person has not yet has access to. Pixabay

In today’s world, money plays a very important part especially when we need it to get things done. Not everyone is rich with loads of ready cash at hand. In order to have access to the amount of money needed, there are various loans in the market made available to the people in need.

 

These days, we need loans to buy a house, a car, a loan to further our studies, and a personal loan to get through the month such as paying some outstanding bills. There are four types of common bank loans and they are personal loans, credit cards, home equity loans and the small business loans.

 

Personal loans are unsecured and low in value. Lenders usually need proof of assets equal or greater than the loan requested from consumer. The interest rates are generally higher and usually takes a few days to approve the loan.

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These days, we need loans to buy a house, a car, a loan to further our studies, and a personal loan to get through the month such as paying some outstanding bills. Pixabay

 

Another load which is common to most of us is the credit cards. Application process for credit cards is fast but the interest rates can be high. Home equity loans are commonly known as mortgages. Interest rates for home equity loans are usually low. The interest rates for small business loans are flexible and the terms may vary in both value and length. Getting the approval of such loan may be difficult and the process is usually strict.

 

What happens if the application of a loan with the bank has been rejected? For those who are hard pressed for money, they usually look elsewhere such as private hard money lenders San Diego. These hard money lenders provides types of loans to real estate investors and property owners who are in need of quick and flexible funding options. Their interest rates and fees are usually competitive. Generally, hard money lenders charge high interest rates compared to the bank because they are providing loans which the bank would not provide.

A probate loan is sometimes known as an inheritance loan which someone borrow against real estate assets which the person has not yet has access to. A probate funding is a short term loan which can be an advance on your inheritance, or a loan using your inheritance as collateral. Before taking any loans e.g. probate loans, it is advisable to make sure that you understand the terms and conditions before applying for the loans.

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With a bridge loan, the borrower can buy a new home and wait for the existing home to be sold without restriction and at the same time, he or she could gain a few months free of payments. Pixabay

Another type of loan is the bridge loan. Bridge loans are temporary loans taken from bridge loan lenders to cover an interval between two transactions, usually the purchase of one house and the sale of another house. It is actually something like borrowing a down payment on the new home before they sell off their existing house. This might sound like an ideal solution but it has its risk. Before you decide to commit to a bridge loan, it is better to weigh the benefits and the drawbacks of a bridge loan.

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With a bridge loan, the borrower can buy a new home and wait for the existing home to be sold without restriction and at the same time, he or she could gain a few months free of payments. Bridge loans are usually more expensive than a home equity and the borrower must be able to quality to own two homes. Borrowers have to also consider the cost of two mortgages plus the interest for the bridge loan. 

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Payday Loans: Why They Have a Bad Rep and How You Can Benefit From Them

There are payday loan companies out there that have mistreated their customers in the past that people just assume that all the companies are like that

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Payday Loans that ask you for money upfront are more than likely going to be scams. You might see them listed online as advance fee loans and these are notorious internet scams that have cost lots of people money that they’ll never get back. Pixabay

Whenever financial emergencies come up, the most reliable and, pretty much guaranteed way of getting money fast, is by way of getting a payday loan. The process to get money in your time of need is so easy… you can apply and qualify in minutes! So, if Payday Loans are so awesome in helping millions of consumers in their time of need, why has it gotten such a bad rep?

Well, you know how in certain situations, all it takes is one person to mess things up for everyone else? That’s how the payday loan industry got such a bad reputation. There are payday loan companies out there that have mistreated their customers in the past that people just assume that all the companies are like that… It’s more so the unlawful acts that made people turn away from payday loans.

Unlawful Acts of Payday Loans

Some of the unlawful acts that have been done to customers include:

  • Not fully disclosing all the terms of the agreement
  • Tacking on excessive interest rates
  • Requiring money upfront

Payday loans that ask you for money upfront are more than likely going to be scams. You might see them listed online as advance fee loans and these are notorious internet scams that have cost lots of people money that they’ll never get back. According to fraudguides.com, the way advance fee loans work is the victim will agree to pay a “finder’s fee” before getting the loan. 

In order for the deal to be sealed, the victim will have to sign a contract and within the contract, there is language and lingo that the victim will agree to pay that fee when they know the source of where their funds will be coming from. It’s not until they pay the “finder’s fee” that they learn that they are disqualified to receive the financing they need.

There obviously scams all over the world… there were actually 5 scams that really shook India back in 2015 but the bottom line is that with scams, if something is too good to be true, it probably is. Just pay close attention to what the qualifying requirements are and if they seem suspicious, look for something else… you shouldn’t have to pay money when you need it.

Why Payday Loans Have Gotten Such a Bad Reputation

Customers aren’t fully aware of all the terms of the loan agreement

This area was touched on earlier but to be fair, the reason for this can go both ways. It’s easy to say that the payday loan representative did not disclose all terms of the loan agreement with you but is that really the case? Sometimes the reality of why people find themselves in more debt than they bargained for is because they weren’t fully paying attention to the terms as the payday loan representative was stating them.

It’s very easy to do. The representative could be disclosing everything you need to know but you have this financial burden weighing heavily on your mind that you don’t even hear what the terms of the agreement are… you just simply “sign here” and “initial there” so you can get the money you so desperately need.

Now, it’s very possible that a payday loan company purposely didn’t disclose everything with a borrower simply because they want to get money but lenders are required by law to disclose everything in the loan agreement, including the repayment schedule and interest rate.

Payday Loans
Whenever financial emergencies come up, the most reliable and, pretty much guaranteed way of getting money fast, is by way of getting Payday Loans. Pixabay

The interest rates tend to be higher

Okay, so payday loan interest rates are quite high but you have to look at what you’re paying for in your interest rates… you’re paying for convenience. With payday loans, you’re getting the money you need almost instantly and they don’t do credit checks. So people with bad credit can get approved… if you were to go to a regular loan company, you would immediately be denied due to having bad credit and even if you had good credit, it could take weeks for you to get the money you need, depending on how much you’re asking for. 

So, before you continue on a rant about how bad payday loans are, remember what you’re you’re actually getting; you’re getting the money you need immediately and without a credit check.

Borrowers misuse payday loans

It’s not always the lender’s fault as to why you had a bad experience with payday loans… sometimes you’re to blame because you weren’t a responsible borrower. People don’t fully understand the purpose of payday loans… Payday loans are meant to be used for emergency situations to bring financial relief to those who need it. Instead, people use payday loans to pay for vacations and to buy expensive items. 

When people borrow for those reasons, that’s when you land yourself in financial ruin. What was meant to be “financial relief” has now turned into a financial nightmare… you then find yourself renewing the loan each pay period, not being able to pay it off or pay it down. 

Payday Loans
Payday Loans are meant to be used for emergency situations to bring financial relief to those who need it. Instead, people use payday loans to pay for vacations and to buy expensive items.  Pixabay

Borrow Responsibly

The whole reason people find themselves in more debt than they started out in is because they didn’t borrow responsibly. Of course, there are bad companies out to scam you but the secret to do your part and research reputable companies. If you can do that in conjunction with borrowing responsibly you’ll be able to borrow from anywhere.

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Also, a word of advice… learn to make better financial decisions. If there is something that you don’t necessarily need, you shouldn’t buy it, especially if you’d have to take out a loan to get it; it’s just not that serious. Try to only borrow when you absolutely have to.