Personal Loans Financing

Many consulters suggest that one should resort to personal loans for financing trips or vacations instead of other financial products like credit cards. Such suggestion is undoubtedly well founded but...

Many consulters suggest that one should resort to personal loans for financing trips or vacations instead of other financial products like credit cards. Such suggestion is undoubtedly well founded but not everybody knows the reasons that justify the advice. The costs of financing should be measured both by comparing the overall amounts spent on interests but also by how the monthly payments affect the borrower’s budget.

Personal loans present significant advantages when compared to credit cards for financing trips. However, there are many considerations to be taken into account, especially when there are certain promotions by credit card companies that can offer more benefits than paying the whole trip in cash and in advance. Therefore, there is no general answer to the question: should I pay with credit card or take a personal loan? It will all depend on the particular case.

The Interest Rate Issue

Personal loans tend to charge lower interest rates than those charged by financing unpaid credit card balances. While credit cards can charge up to 20% APR or even more, personal unsecured loans rarely exceed 10% or 12% APR. Thus, financing your trip by taking a personal loan will end up being significantly cheaper unless you repay your credit card balance within a short period of time.

Moreover, personal loans come either with a variable interest rate or a fixed interest rate. By requesting a variable interest rate personal loan you can get significantly lower rates. However, you need to bear in mind that variable rates can increase suddenly due to market variations and you might end up paying more than what you would have paid if you selected a fixed interest rate personal loan.

The Monthly Payment Issue

The advantage of personal loans when it comes to monthly payments is that the installments are fixed which is perfect for those with little discipline that always feel tempted to pay only the minimum payments on their credit cards and keep spending without control. This way you will know exactly how much you owe every month and you will be able to repay your debt sooner. Obviously, some will prefer the flexibility that credit cards provide. It all depends on how much self-control you have.

But, besides the discipline issue, fixed personal loan monthly payments are a lot easier to budget and since as explained above, the interest rate is lower, smart borrowers will prefer it over credit card financing. The monthly payments can be easily included in the budget and calculated as an additional expense letting the applicant to make the necessary previsions to afford the payments without hassles.

Credit Card Offers From Time To Time

Often, agencies agree with credit card issuers and present offers for credit card holders that excel the advantages that can be obtained by financing with a personal loan. In such cases, after you have considered the offer carefully and watched for any hidden cost that agencies like to conceal on the fine print of the contracts, you can assuredly choose credit card financing over taking a personal loan. Other than that, it is always advisable to use a personal loan unless you can not afford the monthly payments or you do not meet the requirements for approval.

Ten Ways Of Financing Real Estate

Do you remember when real estate financing meant you saved up enough to put 20% down on a house, and then you got a mortgage loan for the other 80%? Well, you can still do that, but there are many more options now. Here are ten of them.

1. Gifting programs. In some parts of the country, builders fund foundations that give you a portion of the downpayment, so you can get into a home with as little as 3% downpayment from your own pocket. FHA and other lenders have so far approved of or allowed this.

2. No-doc loans. These and "low-doc" loans, meaning no or low documentation requirements, are back, and you can find them through online banks. These are for those of you with bad credit but 20% to 30% to put down on a home. You don't even have to have a job.

3. FHA loans. The Farm Home Administration doesn't actually loan the money, but guarantees your loan for the bank, so they can loan up to 97% of the purchase price, depending on the particular FHA program.

4. VA loans. If you have been in the armed services, have a decent job, and can save two or three paychecks, you can probably get a home with a VA loan.

5. Land contract. Also called "contract for sale" and other names depending on the part of the country you are in, this just means that you make payments to the seller instead of a bank. It's up to you and them to negotiate downpayment amount, interest rate, and the term of the loan.

6. Seller-carried second mortgages. Some banks will allow you to have as little as 5% into a home purchase, but will then only loan you 80%. The seller can take payments on a second mortgage from you for the other 15%.

7. State housing programs. Almost all states have some sort of financing help in the form of a loan-guarantee program or outright loans for low-income buyers.

8. Family loans. It may not be out of charity that a brother or a friend lends you the money to buy a home. A 7% return might look awfully good if their money is sitting in the bank at 2%.

9. Manufacturer loans. Some manufactured-home companies are arranging financing with 5% or less down for their buyers. They must feel their money is secure, since a good modular on a piece of property is nothing like a mobile home on a rental lot.

10. Credit cards. This is a risky one, but if you have a low-interest credit card, you can use it to come up with the downpayment, especially if you can pay it off soon with a coming tax refund, for example. Banks generally won't allow this, but you can combine this with seller financing.

Are there more ways to approach real estate financing? You bet. This was just to get you thinking.

Can't get a business loan? Look into these two alternatives

Sooner or later every business will need financing to be able to survive and grow to the next level. This is true for every company, regardless of size. If you are a business owner and you need money,...

Sooner or later every business will need financing to be able to survive and grow to the next level. This is true for every company, regardless of size. If you are a business owner and you need money, your first stop is likely to be your bank.

Banks offer a number of financial products, but business owners generally try to get business loans or lines of credit. While both can help you grow your business, they are also very hard to qualify for. Banks usually require that the business have significant assets, collateral and 3 years of audited financial statements.

What if you don’t meet these tough criteria? Are there any alternatives?

There are two financial products that may be able to help you significantly. Let’s look at two statements:

a) I have a lot of money tied up in slow paying invoices - and/or -
b) I have a big purchase order and cannot afford to pay my suppliers

If you can answer yes to either of these statements, you can benefit from either factoring or purchase order financing. Both are great alternatives to bank loans.

Factoring provides you with financing based solely on your slow paying invoices. The financing is determined by your invoicing. If your invoicing grows, so does your financing.

Purchase order financing is ideal for distributors, wholesalers and resellers who work with large purchase orders but cannot afford to pay their suppliers. The purchase order financing company pays your suppliers and helps you deliver the sales. They get paid once the end client pays the invoice for the delivered products.

Both invoice factoring and purchase order financing are easy to qualify for and available to businesses regardless of size. They are ideal products for businesses that are growing.