DIFFERENT USES FOR PERSONAL LOANS
Different Uses For Personal Loans
Personal loans can be used for anything, but they are usually used to consolidate debt.
Here is a look at different uses for your personal loan that you may not have thought of.
Make It Green
You can use a personal loan to make your home more environmentally friendly. These types of home renovations can actually help you to save money in the long term, improve the energy efficiency of your home and also reduces your carbon footprint, making your home better for the environment.
Weddings can cost a lot of money and many people will turn to credit cards to help cover these costs. However, credit cards have a high interest rate and a personal loan might be a better choice to cover these expenses.
If you have yet to create a line of credit for your business and you need to start from scratch, then you may want to think about taking a personal loan that will help to get things moving.
Vacations can be expensive especially if you are flying to your destination and even more so if the whole family are going on holiday. You can use a personal loan to pay for this and using some money saving tips you can make the loan go even further.
A Major Purchase
If you need to buy something that doesn’t fit into your monthly budget like an appliance, furniture and other such things then you can save up for the item, but you could also finance these purchases with a personal loan.
Even if you have medical insurance, it might not cover everything and if you don’t have insurance then you will need to pay the full medical bill. Instead of leaving your medical bills unpaid, you can pay them through the use of a personal loan.
Making home improvements or renovations can cost quite a bit of money and few of us will have this type of cash saved up. You can pay for the costs of home improvements with a personal loan.
A personal loan can be used for anything that you want, as you are not restricted like with other loans. A personal loan should only be taken though if you are able to make the monthly repayments.
TOP REASONS TO FINANCE YOUR HOME REMODELING OR REPAIR PROJECT
Top Reasons to Finance Your Home Remodeling or Repair Project
If there is an unexpected repair in your home or you are planning a remodeling project then you probably don’t have the cash in hand to cover these costs.
There are a number of ways that you can pay for your home project without having to use a credit card or incur the expenses associated with a home equity loan.
You are able to finance your project through the use of an unsecured installment loan.
Here is why you should consider finance to pay for your home remodeling or repair project according to enerbank.com.
You Can Get The Money You Need
If your home project is going to cost quite a bit of money then an unsecured installment loan is the best choice. These loans will offer you higher amounts than your credit card so you are able to get the money you need so that the project can be done right.
You should always allocate more money than what you have budgeted for so that any unexpected expense out of budget can be covered. Look at adding 10% for any surprises and another 20% for any unforeseen fees or labor.
No Payment and No Interest Options
There are a number of banks that offer same as cash loans, which have no payment and no interest payment options. These will defer payments and interest for a set period of time.
These can create a great financial bridge if you are expecting a financial windfall in the future like a bonus or an income tax refund.
Simplify Decision Making
If your credit is good then you can increase your buying power through the use of an unsecured installment loan.
You are able to get the most value from being approved for an unsecured loan and you are able to make decisions based on what you want.
Quick and Easy Qualification
It is quick and easy to apply for an unsecured installment loan. Unsecured installment loans do not need collateral in order to get them and you can compare loans and get the best one for your needs.
Reduce Closing Costs
An unsecured loan usually has no closing costs or fees for processing so you will get the entire amount that you applied for.
Taking an unsecured loan to improve your home is a great way to finance any project that you may have. You will be able to start the project right away and add value to your home.
PAYING FOR YOUR HOME IMPROVEMENT PROJECT
Paying for your Home Improvement Project
Home improvements cost money whether you just want to make your home more attractive or have bought a fixer upper that you plan to improve over time.
If your home improvement project is small then you wont need a lot of money, but if you are planning to do a large improvement then you will need to look at your financial options on how to make your home improvements happen.
If you have saved up money and have a substantial amount then you can pay cash. Keep in mind though that if you pay with cash you will lose the ability to invest that money and reduce the amount of money that you have for an emergency.
If it is a big project then credit cards could be your worst option as the interest could be quite high and it may take you a while to pay off the balance. If you are able to pay the balance off quickly though like in a month or two and have a credit card that you earn rewards on then it could be a good option. A credit card that has 0% interest for the first year is also a good option as long as you can pay the balance off within the promotional period.
Short Term Loans
You are able to get a personal loan from a bank or credit union that can be repaid over a term of 24 to 60 months. The interest rates on these loans do vary and are usually lower than credit card interest rates.
Home Equity Loan
A home equity loan requires you to have sufficient equity and a great credit, but they do have low interest rates. Your home acts as the collateral for the loan so if you default on payments then you could lose your home.
Cash Out Refinancing
If you have had your home for a few years, have paid down your home loan balance and the value of your property has increased then a good option could be a cash out refinance. Bear in mind though that your payments could go up if your interest rate is lower as you are increasing the size of your loan.
THE BEST WAY TO FINANCE BUYING A CAR
The Best Way to Finance Buying a Car
It is not a simple decision to buy a car whether you buy outright or buy a car on finance.
A car is actually one of the most expensive things that you will buy, so it’s important that you ensure you get the best deal on financing.
Cash or Savings
When the interest rates are low then your savings will most likely not be earning much in a bank. So instead of keeping your savings and borrowing at a higher rate of interest, you could use them to fund some or even all of the costs of a car.
You should ensure that you have enough savings left for an emergency once you have paid for your car. If you do not have enough savings to pay for the car outright then you could use them to make a large deposit. You might be better off buying the car on your credit card so that you are able to benefit from credit card purchase protection, you can then use your savings to pay off the credit card.
A personal loan is usually the cheapest way to finance a car deal, but only if you have a good credit rating.
You are able to get a personal loan from a bank, finance provider or building society.
A personal loan should not be secured against your home, as you do not want to put your home at risk if you fail to keep up with the repayments.
When you are looking for a personal loan, you will need to shop around so that you can get the best interest rate by comparing the APR.
Personal loans can be arranged over the phone, Internet or face to face. The loan will cover the whole cost of the car and if you shop around you could be charged a competitive fixed interest rate.
A hire purchase is where you buy a car on finance and is then paid in installments where the payments are spread over 12-60 months and you will usually have to put down a 10% deposit.
This type of loan is secured against the car so you will not own the car until the last payment is made.
Hire purchase loans are easy and quick to arrange, the deposit is quite low, the repayment terms are flexible and there are competitive fixed interest rates.
Personal Contract Plan
This is a variation of the hire purchase and results in lower monthly payments. With this type of financing you will not pay the car outright, but instead agree to pay the difference between its sale price and its price for resale back to the dealer.
This is based on a forecast of annual mileage over the term of the agreement. The payments are spread over 12 to 36 months. Once the term has ended you are able to hand the car back to the dealer and pay nothing, trade the car in and start again or pay the resale price of the car and keep it.
Personal contract plans have lower monthly payments; a low deposit, flexible repayment terms and you are able to choose at the end of the term what you want to do.
You are able to pay a dealer a fixed monthly amount for the use of a car that includes servicing and maintenance as long as the mileage does not exceed a certain amount. Once the agreement ends you hand the car back.
WHAT TO USE PERSONAL LOANS FOR
What to use Personal Loans for
What can you use a personal loan for? Well borrowers can use a personal loan for pretty much anything.
Why Take a Personal Loan
Personal loans were once used for large purchases like home appliances. Now though even though these purchases are to large to be covered by one months paycheck they can still be paid off quickly due to financing options on offer or payments can be spread out over a credit card.
A personal loan is then used for:
- Debt consolidation – if you not able to get a secured loan then a personal loan can be used to consolidate debt with a lower interest rate than a credit card.
- A Wedding – weddings can be expensive and many couples and parents will take out a personal loan to pay for this.
- A vacation – a large vacation can be paid for through a personal loan.
Combining with Credit Cards
One reason that a personal loan could be taken is to take advantage of the benefits that are offered by credit card companies and retailors.
For instance you may want to pay down your credit card balance and transfer them to an account that has a 0% rate for up to 18 months and then pay off as much as possible in that time. At the end of the term though the rate will increase. It might be a wise move to pay the remaining balance with a personal loan that has a lower interest rate.
There are also retailors that offer 0% financing for a certain time, but if the balance is not repaid on time then interest rate will start. Consumers can avoid this by transferring the balance to a personal loan before the end of the term.
Consumers might also use their credit cards to make expensive purchases to take advantage of the rewards programs. However, the interest rate that is on the rewards cards is often higher than other credit cards. The balance could then be paid off using a personal loan.
HOW TO FINANCE A REAL ESTATE INVESTMENT
There are few ways in which you are able to finance real estate.
The traditional way to finance real estate is through a credit union, a bank or another home mortgage company.
However, the criteria in order to get finance from one of these institutions are strict.
You will need to have a great credit score of 680 or better. You will also have to provide full documentation of income and debts.
Seller Carry Back
If you hear of someone talking about buying on terms then they are talking about creative financing.
This refers to any financing method that is not traditional. You will need to know these methods so that you can buy properties using Other Peoples Money. Investors will usually try and use as little of their own money as possible.
The seller carry back is a form of owner financing where the seller will agree to carry the note for the purchase. This will work when you find a seller that owns their house free and clear. They do want the property anymore and are fine with receiving monthly payments on it.
The seller will usually have a time limit in place for when the note has to be paid in full.
The subject to method allows you to finance real estate quickly, but it is a short-term solution.
You will buy the property on the condition that existed finance stays in place. The title is transferred, but the home loan stays in the sellers name and the buyer makes the payments. This is short term, as the seller will not like having the loan in their name for a long period of time.
This method means that the seller provides a second mortgage. This will be enough to cover the down payment.
The lease option means that you get into the house for little to no money down and you are able to buy the property in the future. This gives you the time to get the fund together.