How to Properly Use Personal Loan

The basic principle when spending a personal loan is that you can spend it for anything. Borrowing money without really knowing how to use it positively can be very dangerous. You will be putting your financial situation in jeopardy by borrowing and have no positive ideas on using it. Never borrow money to have extra cash on your hand. Getting a loan should always be to spend for something very vital and important. Loans can put a sizable dent on your monthly income thereby limiting your resources for other necessary expenses.


Positive Uses for Personal Loans


Personal loans have no limit or conditions on how you spend it. If you take out a loan, and there is no limitation on how to use it, it is only wise that you use the same to improve yours and your family’s future. In short, there are ways by which you can turn a loan into some kind of an investment. You can strategically use your loan by spending it for educational purposes. Using a loan to further your studies is a good thing because this will help raise your career in future thus giving you more chances of earning more. Another good way to spend it is for home renovation or to use it as a part to purchase properties. We all know that properties go up in value. If you use loan money to renovate or purchase property, this will help raise the value of the assets. Mortgage loan and home equity loan are other types of loans that would be good to apply for because they would come up as some form of an investment for you. Putting a loan on properties will make it pay for itself in the long run. Finally, it is also a wise decision to use money lender review singapore on personal loans to consolidate other loans. The best way to do this is to use personal loans to pay off your other high interest loans. This will consolidate these liabilities into one thereby allowing you to manage it more efficiently and with less interest to pay.


Where Not to Put Borrowed Money

When BORROWING money, think carefully where you use it for. When people crave to buy something expensive, their first impulse is to use their CREDIT card. Some would even apply for a personal loan singapore lowest interest rate just to satisfy their need to possess something luxurious. When you borrow money, make sure that you will spend it for the right reasons. The following are just a few of the things you should not purchase with borrowed money.


Borrowing Money to go on a Pleasure Trip


Even if you feel that you will be able to pay back a sizable loan in the next twelve months, never borrow just to finance pleasure trips or vacations. Can you imagine yourself wasting a sizable part of your monthly income paying back in installment a loan and its interest which you used to pay for a two week holiday? Sure you had fun; relaxed; experienced and seen new things but are two weeks of these things worth the financial pain and sacrifices you will need to shoulder within the next twelve months? The best solution to spend and have fun is not by borrowing from a MONEY LENDER but to be patient enough to save for it.


Never Use Loan Money to Buy Gifts for Friends and Families


It is really a very nice feeling to see how happy friends and family are when you give expensive gifts to them. But is it really being honest to yourself that you would go to the extent of borrowing large sum of money just so you can give them away as gifts. Let’s be honest with ourselves. One of the reasons why we give expensive gifts is to impress other people, friends and even families. Maybe other people or friends won’t think twice about accepting your gifts but I’m sure your family would be sadder than happy knowing that you will be in debt up to your neck paying off the loan used to buy those gifts.


Other things that you should not use borrowed money for are gifts to yourself; jewelries and gadgets, parties and vain medical expenses like plastic surgery.

Loans Available for Individuals with Bad Credit Score Part II

We have earlier been discussing ways and means by which individuals with bad credit standing can still file for loan from alternative trusted money lender singapore. We started out by saying that home equity loans and bad credit loan lenders are sources in borrowing money. Let us now discuss some of the other lenders or loan providers that may be able to financially help people with low or bad credit ratings.


Credit Union Loans


Credit unions’ loan policies are usually more flexible as compared to traditional money lenders. They don’t give much emphasis on the credit score but you need to be a member of a union to be able to apply for a loan. If you are with the working class, you are probably already a member of one. Credit unions are normally set-up to assist members in saving money and deal with any financial emergency. And since, credit unions are non-profit organizations; loans that they provide have very minimal interest rates. The flexible loan policies of credit unions allows member to easily access loans. Fees and loan charges on the loan are kept to a minimal. The loans carry very little interest and no collateral is needed to secure it (unsecured loan). The only problem that you may encounter with credit unions is that if your credit score is low, you may not be able to borrow a sizable amount of money and since the loan is unsecured, payment terms are normally short.


Applying for a Loan with a Co-signee


Another good way of getting a loan is to ask somebody to co-sign a loan with you. The co-signer also known as co-maker needs to have a good credit rating. However, getting a co-maker can be very difficult simply because of your credit standing or rating and for somebody who will co-sign a loan will mean that he too will also be fully liable for the terms of the loan. Using a good friend or a family member (sister or brother) to co-sign a loan may be your only solution in finding one.

Loans Available for Individuals with Bad Credit Score Part I

It is sometime sad that those individuals who need money the most are the ones that have very little access in BORROWING money from various lending institutions. More so if the person has a low or bad credit rating, the more difficult it is for him to apply to any kind of PERSONAL LOAN. However there are still ways by which you can still apply for a loan and have a very good chance of getting one even if you have a bad credit score.


Home Equity Line of Credit or HELOC


Most homeowners may find that even if their property is already mortgage, there’s still value left on the house which is normally referred to as equity.  If you are in need of a loan and would like to get one at the soonest possible time, you can file for a home equity line of credit or HELOC. Chances are you have a good chance of being approved because you will be using the remaining value of your property as collateral for the loan. Flexibility and independent use of the loan amount is one of the advantages when getting a home equity loan. You also get a lower rate of interest because of the collateral. However, the disadvantages of getting one are paying the closing cost of the loan; the lending company can cancel your line of credit at any time; fees and other charges may be levied if you don’t use the line of credit immediately and of course the possibility of losing your home in the event of a default.


Bad Credit Loan


There is also such a thing as a bad credit loan. As the term connotes, this a type of loan that people with bad credit ratings can apply with and are actually the ones qualified to apply. People with bad credit rating are easily pre-approved for this kind of loan. The downside to this is that the interest rates are really very high even prohibitive and the amount of money that you can borrow is very limited.

Understanding Consumer Credit and Loans

When borrowing money you will discover that there are various types of loan contracts which enforces different payday loans terms depending on the agreement reached upon by the borrower and lender. Promissory notes are the simplest form loan while more complex ones are those offered by banks and other lending institutions such as mortgage, vehicle and educational loans. Whatever types the loan is and the term it contains, they are always controlled by state laws. For the protection of both the borrower and the lender, laws for loan agreements have been enacted simply to see to it that interest rates are not abused and that both borrower and lender follow the terms of the contract. There are two general types of loan agreements entered into by most individuals today. These are consumer credits which include open-end credit option and closed-end credit option and the second are standard loans which include mortgages, educational loans, home and property loans and personal loans.


Open-End &Close-End Consumer Credit


Open-End Credit is a consumer credit type that can be used by an individual several times over on any type of purchase. Also known as revolving credit, purchases made from this type is paid in full at the end of the month, amortized monthly or by just paying the minimum amount required. The best example of this is the CREDIT card. Also known as installment loan, Closed-End credit is specifically used to pay for a specific purchase such as appliances and electronic gadgets. The credit amount plus interest is amortized monthly until the whole cost is paid out.


Loan Types


Loans on the other hand have varied types but their use is more specific. There are several variable involve when you commit to these various types of loans. Most common are educational loans for college students, mortgage loans for property buyers, car or vehicle loans, and personal loans normally used for personal expenses. There are also veteran loans which are specific for veterans who mostly are cash strapped, small to medium scale business loans and payday loans which are normally short term minimal amount being lent. The rest are home equity loans and cash advance loans.