About Loans

Hidden Bank Loan Charges That Would Make a Pick-Pocket Envious

2006-08-03T20:06:00.000-07:00

There can be more to a bank business loan than making interest and principal payments. Your firm may get a great rate on its new credit line or term loan but you may cry on the way home when you discover the hidden fees and charges.

Even seasoned borrowers can be caught off guard. Borrowing costs can be boosted by thousands of dollars and the effective rate on the loan increased by many basis points as a result of these hidden charges.

Here are some of the fees and charges that can increase your firm's costs on bank loans:

Commitment fees

Many banks charge commitment fees of ½% - 1% or more to issue a commitment to lend money. The fee is calculated on the available credit amount. Commitment fees significantly increase the effective rate on outstanding loans.

These fees can be negotiated. If your firm has a strong credit profile or if the competition among banks in your area is fierce, ask for a lower commitment fee or ask to have it waived.

Non-use fees

These fees may be charged in lieu of or in addition to commitment fees. Non-use fees usually range from ¼% to ½% of the unused credit facility. Although these fees are less onerous than commitment fees, they also increase the effective borrowing rate.

As with a commitment fee, you may be able to get the non-use fee reduced or waived if your firm has a strong credit profile or if the banking environment is very competitive.

Restructuring fees

When your firm has reason to restructure an existing loan, you can expect your bank to charge a restructuring fee for the privilege. For example, if your company has reason to convert a short-term loan into a long-term one, it will probably be charged for this restructure.

These fees can range from ½% to 2% or more plus any bank legal fees or out-of-pocket expenses. If your firm has been a long-term bank customer in good standing, you may be able to negotiate or eliminate the fee. But don't expect to eliminate the bank's attorney fees and out-of-pocket expenses.

Bank attorney fees

Attorney fees usually come into play when the bank uses an outside law firm. Making matters worst, many outside bank attorneys require a borrower to hire an outside attorney to issue an opinion letter covering the transaction.

Usually, only the strongest borrowers in very competitive banking situations can totally eliminate paying bank attorney fees. However, if your firm is a valued customer, your bank may be willing to have these fees capped or reduced. Often banks have some leverage with their law firms to get a discount.

Appraisal/environmental evaluation fees

These fees are charged on many asset-backed loans. They usually involve bringing in an outside expert to evaluate equipment or real estate. These fees can be significant, depending on the type of appraisal or environment issue.

Like attorney fees, appraisal or environment evaluation fees are almost always for the account of the borrower. Perhaps the best result one can expect is to have these fees capped or have the lender split the amount in some way.

Unanticipated audit expense

Many banks reserve the right to audit borrowers or to send bank personnel in for inspections. An audit may be required to review accounting procedures or to monitor collections, inventory or another aspect of your firm's operation. Also, some banks require outside audits by CPA firms in connection with extending credit. Any of these scenarios can create significant expense and involve a substantial time commitment for your firm.

Before signing, review your loan agreement carefully to identify any audit or bank inspection requirement. If your bank requires an audit or inspection that you did not anticipate, try to get it eliminated or try to negotiate limits. You may be able to get a less-stringent requirement or to negotiate a less-expensive alternative to the audit or inspection required by your bank.

If all else fails, try to get audit or inspection fees capped.

Late charges

Charges for making late payments to your bank are generally in your control. These charges can be onerous and can add significantly to your firm's borrowing cost. It is not unusual to see banks tack 300 basis points onto a customer's borrowing rate for delinquent payments.

While it is worthwhile during the negotiating stage of the loan to ask for a lower late- payment charge, the best solution is to try to avoid these charges. If you can, try to get the late-payment rate knocked down to 75 to 150 basis points above your borrowing rate.

Expiry of or Failure to Get a Rate-lock

In a stable rate environment, many banks are willing to lock the rate on fixed-rate credit transactions. Rate-locks protect the borrower from adverse rate movements prior to closing. In most cases, rates can be held up to 60 days. Rate-locks are not uncommon in real estate loans and equipment installment loans.

If your firm is negotiating a fixed-rate loan, try to negotiate a rate-lock. You may pay loan interest that is a tad higher, but a locked rate can eliminate an unpleasant interest rate swing.

Once you have locked the rate, try to stay within the holding period for closing the transaction. Most banks will eagerly and aggressively pass on rate hikes in a rising rate market, if you fail to comply.

Many hidden bank fees and charges can be reduced or eliminated if you plan ahead and are prepared to negotiate. You are in your strongest negotiating position before your bank issues a commitment letter and before you sign the credit agreement. Always read commitment letters and loan agreements carefully. Look for hidden fees, hidden charges and unexpected requirements. You can also ask your bank to prepare a separate list highlighting all potential fees and charges.

Finance Your Home Business: Six Ways Under Your Nose

2006-07-25T20:09:00.000-07:00

There are lots of ways to get additional capital to expand a home-based business. But before you look outside for financing, leaving the decision about your company's progress and merits to someone else, consider these six ways under your nose to finance your home-based business:

Personal Savings

Savings are easy to tap and involve no paperwork.

The negatives: if you use the money in your business, it eats into your safety reserve and is no longer there for emergencies. It diverts funds from a very low risk investment to a high one.

Whole-Life Insurance

Whole life policies accumulate tax-deferred cash value that you can tap for your business. But the only way you can tap this cash without paying taxes is to borrow against your policy. As long as you keep your policy intact and pay premiums when due, loans remain tax-free.

The negatives: you will be converting a low risk investment into a high one; if you decide to terminate your policy or if you default on repaying your loan, taxes will be due on all cash value accumulated under the policy; if you die before your loan is repaid, any distributions to your beneficiaries will be reduced by the amount of your outstanding loan.

A Loan from Your 401-K Plan

You can borrow up to $ 50,000 of the money you have saved under many 401-K plans. There are no credit checks. Interest is usually a percentage point or two above the prime rate and the interest that you pay back to the plan will be tax-deferred to the plan. Most loans are repayable out of salary deductions over five years.

The negatives: you will have less money invested toward retirement; the dollars used to repay the loan will be after-tax dollars withheld from your paycheck; if you fail to repay the loan, the IRS considers your failure a premature distribution -- you will be charged taxes on the borrowed amount plus you may be assessed a 10% early-withdrawal penalty.

A Home-Equity Loan

These loans do require that you apply and be reasonably credit worthy. You generally can borrow up to 80% or 90% of the equity value of your home. Interest on these loans is generally tax-deductible.

The negatives: you will reduce the equity value of your home by the loan amount; you will be diverting funds from a relatively safe investment to a high risk one; if you default, you put your house at risk of foreclosure. Think very carefully before using this form of financing.

Personal Credit Lines and Credit Cards

They are convenient, versatile forms of financing. You can borrow and re-borrow up to the line limit as needed.

The negatives: you will pay relatively high interest rates-- rates range from 12% to over 18%; the minimum monthly payment on many of these arrangements will repay the outstanding balance within 42 months; it is easy to dig yourself deep into debt using credit lines and credit card debt; high outstanding balances against your line can negatively impact your personal credit rating.

A Margin Loan

You can use margin loans for purposes other than buying additional securities.

Any margin loan will be secured by your equity shares. Rates are often below prime, applying is relatively easy, and these loans have very flexible repayment terms.

Loans are initially limited to 50% of the purchase price of your equity securities. Loan repayments are triggered when the value of your stock falls below the margin limit.

The negatives: Because borrowings are predicated on volatile stock values, a margin loan can be a risky proposition; if you default in repaying, the brokerage firm can sell your securities to satisfy the loan; an untimely sell-off can have a devastating effect on your portfolio and negative tax consequences.

The only safe way to consider a margin loan to finance your home-based business is to limit advances to a relative low ratio of your stock portfolio value - say, 25% or less.

Most of these financing methods are under your control and don't require business plans or company financials to qualify. Although each of these methods has risks and disadvantages, so do most external methods of financing. Before proceeding with one of these financing methods, carefully consider the potential benefits, risks and consequences. Whatever you decide, it helps to know the options right under your nose.

George Parker is a Director and Executive Vice President of Leasing Technologies International, Inc. ("LTI"). He is responsible for overseeing the company's marketing and financing efforts. One of the co-founders of LTI, Mr. Parker has been involved in secured lending and equipment financing for over twenty years. Mr. Parker is an industry leader, frequent panelist and author of several articles pertaining to equipment financing.

Home Loans in the UK

2006-07-08T01:13:00.000-07:00

Owning a home is the most important dream of any person. It is one of the basic necessities of life as stated by Maslow in his 'Theory of Hierarchy of Needs'. People generally desire to have a home which not only gives them shelter, but also should be the expression of their artistic tastes, and an object of pride. Owning a home is a matter of spending of life's savings. For some- belonging to the high earning group, it is not a problem; but for others arranging finances for their dream home is a very crucial decision, they ever take in their life. To enable people to realise there dream, financial institutions and banks offer home loans to people.

Home loans play a very important role in the lives of UK nationals. Every year there are borrowings worth billions of pounds by the UK nationals for home loans. Now days, home loans have become a necessary part of life as it is not essential that one has the necessary amount of money to finance his immediate requirement for purchasing home. One can avail home loans, after signing a document with a financial institution on a specified amount of money to go with the purchase with that borrowed money. Lenders and financial institutions keep the house or any other residential property as collateral. In the UK, home loans are offered by innumerable financial institutions at various APR. The amount of loan approved usually depends on the income and assets of the borrower and his capacity to pay back the loan.

In the UK, home loans offered are of two types:

Fixed rate home loan

Variable rate home loan

Fixed rate home loans are offered to borrowers at a prefixed rate of interest for a specified time period. In case of upward fluctuations in interest rates in the market, customers enjoy the benefit of not paying any extra sum money on the increased rate of interest. Variable rate home loans, on the other hand are left to the mercy of lenders and government regulations. In case of upward trend, the borrowers have to tighten their budget.

With the ever increasing competition in the market, more and more financial institutions are offering home loans at lower APR along with customer oriented services. All companies claim to be the leading loan and other financial services provider with the best service. In order to tap the growing market companies and lending institutions are coming up with more innovative products to cater to the requirements of all the customers. With the advent of internet, the services offered have become more fast and efficient. Now one can compare the best rate offered in the market at the click of the mouse.

The complications in home owner loans fall when borrower defaults in the payment of the monthly installment. In many cases, it has been seen that lenders start charging more interest rate than the standard rate. Wise borrowers, in such situation, switch over to a new lender for better rate of interest and fee waivers. This is termed as remortgage. Remortgage is a very prudent way of avoiding heavy interest rate. There are innumerable agencies which suggest better remortgage options to the borrowers.

Moreover, with gradual shift from the sellers' market to the buyers' market, the ultimate beneficiary is the customer. Companies even offer value added services to the borrowers to evolve brand loyalty. Companies are even leveraging strength from modern management practices and corporate governance. In the long run, company which offers the best financial solution with the right set of marketing mix will win the race.

Law Practice Finance

2006-06-30T02:17:00.000-07:00

How do you finance a growing practice? It is impossible to have a successful practice without good cases and managing good cases to a successful conclusion requires money for working capital. So, how does a growing practice secure the working capital it needs?

Historically, growing practices in need of working capital have had limited financing alternatives. A law practice's largest and most valuable asset, their case inventory, has been of little value for financial transactions. Most firms find that banks will only lend them rather small amounts, if they will lend at all. Banks simply do not view potential fees from cases as adequate collateral for a loan. They are simply not set up to evaluate this type of collateral. This makes it all but impossible for the smaller firm to finance large cases.

Previously, the only alternative has been to give up a large portion of the fee to a financially stronger co-counsel willing to finance the case.

Attorney Financing With a Non-Lawyer Third Party This paradigm has changed with the introduction of asset-based lending to the legal profession. The development of highly specialized litigation finance companies knowledgeable in case and attorney evaluation now make loans available to many practices for which no financing has previously been available. Moreover, their loan-to-value ratios are double or triple those of traditional financial institutions.

Non-traditional lenders are starting to provide loans that more properly reflect the value of a practice's contingent assets - case inventory. While financial condition of the parties always matters in a capital transaction, even more important are the attorneys' skill, track record and case inventory.

Ethics Issues

Financial transactions with attorneys are shaped by ethics issues. The intrinsic problem is that the non-lawyer entity has an incentive to attempt to "maximize its earnings to the detriment of the representation of clients." The attorney must maintain control and independent professional judgment: the non-lawyer entity must have no power or authority to direct or control the activities of the lawyer (RPC Rule 1.7(a); RPC Rule 5.4(c)). (It goes without saying that lawyers may not split legal fees with a non-lawyer entity. RPC Rule 5.4(a))

Various Rules of Professional Conduct require that:

(1) there must no interference with the lawyer's independence or professional judgment or with the client-lawyer relationship, and

(2) information relating to representation of a client is protected as required by RPC Rule 1.6.

(3) revealing to a third party any information acquired during the professional relationship with a client ("Confidential Material") unless the client gives informed consent.

If these conditions are met, a financial arrangement with a non-lawyer entity is permissible if:

o Repayment is not tied to the results obtained by the lawyer

o The rate of interest charged is absolute and not contingent on the outcome of the litigation.

Since there is no way to achieve this with a non-recourse transaction, the attorney must be responsible for the loan.

Beware of Sham Transactions

There are private lenders that have attempted to avoid the restrictions imposed by the Rules of Professional Conduct by using a law firm as a conduit for its transactions. If the law firm is offering nothing but financing, this transaction is likely to be considered a sham and required to comply with all of the appropriate rules.

Factoring Fees on Settled Cases

It is important to point out that there is a great distinction between a contingent fee on an unresolved case and an account receivable on a settled case. Since the issues have been resolved, the latter presents no conflict (assuming the transaction does not run afoul of 2) above); the receivable can be sold, factored or otherwise financed like any other receivable. Fees can be factored on a recourse or non-recourse basis at very reasonable costs.

The Structure of Today's Market

Every credit market has a hierarchy and this one is no different. Rates vary from about 5% for the most creditworthy to 60% for the least.

Since case expenses including working capital represent only a small fraction of the value of a case, even the highest rate loans, which are primarily asset based, represent very favorable economics for the growing firm. Consider the following alternatives for a firm that needs $50,000 in financing in order to handle a $500,000 case with a contingency fee of 33% (potential fee of $165,000):

(1) Co-counsel Financing: 50% of the fee equals $82,500;

(2) Working Capital Loan at 60% equals $30,000 per annum. Depending on the case duration (break-even is 33 months)

Prime Borrowers

The largest and most creditworthy firms have always been able to get bank financing at reasonable terms; these have always been credit transactions rather than asset financing. Generally, the bank will take a blanket security interest on all assets of the firm, including case inventory and will usually require the personal guarantees of the principals, as well.

These prime borrowers can use their financial strength to borrow and then turn around and invest the capital in cases brought to them by smaller firms unable to get the financing themselves. The cost of these transactions can be huge since they are based on the results of the case rather than on the amount that is financed.

Non-Prime Borrowers

Just below these prime borrowers is a group of firms that are creditworthy enough to secure a bank line but not at the best terms. The amount of the line is usually insufficient and the rate is well above prime.

These firms can usually obtain significant funds from a non-bank lender at rate of 16% - %20%. A security interest and personal guarantees will be required.

All Others

The vast majority of firms have been limited to the amount of capital they can borrow on their own personal credit.

Footnote 1

RPC Rule 1.7(a), a conflict of interest exists if the representation of one or more of a lawyer's clients is materially limited by the lawyer's responsibilities to a third party or by a personal interest of the lawyer. This conflict can be waived by the client. However, regardless whether there is no conflict, or there is a conflict that is waived by the client, the lawyer must still insure that (1) there is no interference with the lawyer's independence or professional judgment or with the client-lawyer relationship, and (2) that information relating to representation of a client is protected as required by RPC Rule 1.6.

RPC Rule 5.4(a) prohibits a lawyer from sharing legal fees with a non-lawyer entity. RPC Rule 5.4(c) prohibits a lawyer from entering into certain arrangements with a third party that would give the third party the power to direct or regulate the lawyer's professional judgment in rendering legal services to a client.

RPC Rule 1.6(a) generally prohibits a lawyer from revealing to a third party any information acquired during the professional relationship with a client ("Confidential Material") unless the client gives informed consent.

Steps You Can Take To Protect Your Financial Information and Personal Identity From Fraud

2006-06-21T00:51:00.000-07:00

Financial fraud and identity fraud are one of the fasted growing forms of fraud. The first line of defense to protecting yourself begins with you. Here are some steps you can take to help you protect and fight against financial and identity fraud.

1. Review and Protect Your Information - The first line of defense in financial fraud is to periodically check your credit report to ensure all your information is accurate. Remember there are three credit agencies (Equifax, TransUnion, Experian) which all operate independently. Make sure you check your credit report from all three because they may each have different information.

2. Destroy Credit Card Mail Offers and Old Financial Documents - If you receive direct or pre-approved solicitations in the mail for new credit cards and do not use them make sure you shred or tear them up before throwing them away. In addition, shred all financial papers including cancelled checks, old bank account statements, or any document with your identity.

3. Watch Out For E-mail or Telephone Fraudsters - Never give your personal or financial information out on the internet or phone unless you initiated the contact. This is especially true with giving out your social security or credit card number. Watch out for e-mails from fraudsters that state they need your account information or credit card number to update your account with your bank or an online company like e-bay. Never give out personal information over e-mail! Many times these e-mails will have links for you to click on that take you to a website that looks authentic. However more times than not, it is a scam to get your personal and financial information.

4. Social Security Number - Keep your social security number in a safe place with other financial documents. DO NOT carry your social security card in your wallet and remember to shred your old social security statements. It is also recommended to not store your social security number on your computer as hackers may have access to it. Never print your social security number on your checks, credit card or drivers licenses.

5. Incoming / Outgoing Mail - Pick up incoming mail promptly and do not send outgoing mail in your residential mail box. Make every effort to keep your mail as securely as possible when it leaves your house.

6. Monthly Bills - If your monthly bills stop arriving, take action quickly. Notify the company right away. Also, review your monthly statements promptly and if you see charges or items on your bills that you do not recognize get them resolved immediately.

7. Credit Cards / ATMs - Report lost or stolen credit cards and ATM cards immediately. Be sure to carry the 1-800 numbers of your bank and credit card company in your wallet.

8. Age Matters - If you are over the age of 50 you are more likely to be targeted for financial fraud. Therefore, keep this in the back of your mind as you handle your daily tasks and personal information.

Finding a Loan With Bad Credit

2006-06-19T20:43:00.000-07:00

No matter what your credit history is the simple fact is that at some point in your life you will need a loan. If you have a few black marks on your credit report and you are feeling that your bad credit will not enable you to qualify for loans, do not feel despair because there are banks that will lend to people in your situation.

If you are seeking a bad credit personal loan there are a few things to consider. Since you are looking for a loan and you do have poor credit you should make sure that your loan will be reported to the major credit bureaus. It is important to check that your loan reports to the credit bureaus because this is your chance to improve your credit rating. I mention checking that your loan will be reported because many people will obtain something like a prepaid credit card thinking that this will help build their credit rating when this is actually not a loan, it is actually a debit card that carries a credit card logo.

Finding a lender that offers bad credit personal loans is not a problem because there are millions of people in the same situation as you who have had credit problems in the past but now have a different situation possibly because of a better job and can now afford to make their loan payments but that bad credit rating is still haunting them. Bad credit personal loans are becoming more and more competitive because of the fact that we are living in turbulent times and people have run into credit problems. While this industry is quite competitive and you will find better deals than a few years ago, you will still pay a higher interest rate than somebody with good credit because bad credit personal loans are still viewed as high risk to financial institutions.

Before you apply for a loan you will want to make sure that you can comfortably cover the payment, this is your opportunity to get your credit back on track - don't turn this into a situation where your credit will end up worse than it was. It is important that you pull out your pay stubs and review all your living expenses such as rent, car (gas, maintenance, insurance, etc), food, utilities, clothing and all other living expenses and make sure that you are not going to over-extend yourself. It's too easy to put yourself on the road to financial ruin, always remember to be responsible with your debt load and that banks will lend you money to the point where you will be dependant on loans of the rest of your life - after all that's the banks business is to make money from loans.

I personally have never taken out a loan to the maximum of what a bank will lend as it is almost always too much because they usually calculate your loan on before tax dollars and the fact is you need to live off of after tax dollars.

How to Get a Business Loan in Five Steps

2006-06-18T19:58:00.000-07:00

Need funds to startup or expand your business? Follow these steps:

A lender looks at a loan request in three sections known as the "three C's". They are:

* Credit. Did you pay previous lenders back as contracted?

* Capacity: Can you afford to pay back this loan?

* Collateral: If you don't pay back the loan from what asset can the lender recover their principal?

Step one is:

1. Identify your strength and weaknesses in the "3 C's". Do this as would a lender - with a very critical eye. Identify your loan to value ratio and your debt service coverage ratio. If you have reason to believe that you credit is less than sterling, get a copy of your credit report including your credit score

Each lender has different criteria with the cost of the loan being higher as your strength in the "3 C's" is lower. Step two is:

2. Identify lenders who lend to your level of borrower and to your industry type. Call lenders to get their criteria. Learn about the SBA 504 program and 7A loan guarantees. Find who others in your industry have used for financing.

If there is a gap (not a canyon, just a gap) between your borrowing ability and lenders criteria, a loan broker may be able to help. They spend their working hours finding second and third tier (more aggressive and more expensive) lenders and establishing relationships with them. They can act as a salesperson for your project in ways that you as a principal cannot. Step three:

3. If you cannot find lenders on your own, consider hiring a commercial mortgage broker. Be careful - in many areas there is little or no protection under the law for commercial transactions. While a small upfront fee for out of pocket expenses is reasonable, shy away from any that want large upfront payments. If they can do the deal they will be paid very well at settlement. If they can't do the deal they shouldn't be taking your business at all.

Once you identify a list of potential lenders or hire a broker, get prepared. Do not think that the business loan process is merely a matter or forms and paperwork. While there is more paperwork than you'd ever want to see, it is more of an inquisition. Step four:

4. Be an expert salesperson for your project. Obviously, we think that your should use FundablePlans.com to build a written proposal. Whatever method you use, know your numbers and be able to defend them. Understand your market and be able to speak competently about it. Know your competition. Most importantly, (from step one) know your strengths and weaknesses as a borrower and be able to maximize the strengths and minimize the weaknesses.

If you are successful with steps one through four, you will expect to "hit a home run". You may, but most likely you won't. Step five:

5. Don't give up. Where one lender might have too many loans of your type in her portfolio, the next may need exactly your loan to meet his goals (loan officers are paid to lend). This is not to say that you should "beat a dead horse", but if you have a viable project, a good presentation and good "C's", you will be able to get financing.

How to Spot and Avoid Predatory Lending

2006-06-17T22:43:00.000-07:00

Predatory lenders promise loans that are "too good to be true" and pressure borrowers to take them on the spot. Here's a few things you or your family and friends should know about spotting and avoid predatory loans:

How to Spot a Predatory Loan

*Balloon payments.

*High interest rates.

*Monthly payments you can't afford.

*Penalties for early pay-off of the loan.

*Unauthorized refinancing of your loan.

Abusive Practices: 7 Signs of Predatory Lending

1. Single Premium Credit Insurance

Credit insurance premiums should not be financed into the loan up-front in a lump-sum payment. One type of credit insurance, credit life, is paid by the borrower to repay the lender should the borrower die. The product can be useful when paid for on a monthly basis. When it is paid for up-front, however, it does nothing more than strip equity from homeowners.

2. High Fees

The borrower should not be charged fees greater than 3% of the loan amount (4% for FHA or VA loans). Points and fees (as defined by HOEPA) that exceed this amount (not including third party fees like appraisals or attorney fees) take more equity from borrowers than the cost or risk of subprime lending can justify.

3. Prepayment Penalties

Subprime loans should not include prepayment penalties, for the following reasons:

Prepayment Penalties Haunt Many Refinancers

Prepayment penalties trap borrowers in high-rate loans, which too often leads to foreclosure. The subprime sector should provide borrowers a bridge to conventional financing as soon as the borrower is ready to make the transition, though prepayment penalties are designed to prevent this from happening.

Prepayment penalties are hidden, deferred fees that strip significant equity from over half of subprime borrowers. Prepayment penalties of 5% are common. For a $150,000 loan, this fee is $7,500, more than the total net wealth built up over a lifetime for the median African American family.

Only 2% of borrowers accept prepayment penalties in the competitive conventional market, while, according to Duff and Phelps, 80% in subprime do.

4. Yield-Spread Premiums

Brokers originate over half of all mortgage loans, and a relatively small number of brokers are responsible for a large percentage of predatory loans. Lenders should identify -- and avoid -- these brokers and refuse to pay yield-spread premiums -- fees lenders rebate to brokers in exchange for placing a borrower in a higher interest rate than the borrower qualifies for.

5. Steering

Lenders should make sure that borrowers get the lowest-cost loan they qualify for. As Fannie Mae and Freddie Mac have shown, subprime lenders charge prime borrowers who meet conventional underwriting standards higher rates than necessary. HUD found that steering has a racial impact since borrowers in African-American neighborhoods are five times more likely to get a loan from a subprime lender -- and therefore pay extra -- than borrowers in white neighborhoods.

6. Mandatory Arbitration

Increasingly, lenders are placing pre-dispute, mandatory binding arbitration clauses in their loan contracts. These clauses insulate unfair and deceptive practices from effective review and relegate consumers to a forum where they cannot obtain injunctive relief against wrongful practices, proceed on behalf of a class, or obtain punitive damages. Arbitration can also involve costly fees, be required to take place at a distant site, or designate a pro-lender arbitrator.

7. Flipping

Flipping of borrowers occurs through repeated fee-loaded refinancings. One of the worst practices is for lenders to refinance subprime loans over and over, taking out home equity wealth in the form of high fees each time, without providing the borrower with a net tangible benefit.

How to Avoid a Predatory Loan

*Always shop around.

*Ask questions.

*If you don't understand the loan terms, talk to someone you trust to look at the documents for you.

*Don't trust ads promising "No Credit? No Problem!"

*Ignore high-pressure sales tactics.

*Don't take the first loan you are offered.

*Remember that a low monthly payment isn't always a 'deal.' Look at the TOTAL cost of the loan.

*Be wary of promises to refinance the loan to a better rate in the future.

*Never sign a blank document or anything the lender promised to fill in later.

To get help, contact one of these national organizations. National Organizations for Predatory Lending Issues

-ACORN (Association of Community Org's for Reform Now)

-AARP

-Better Business Bureau

-Consumer Federation of America

-Consumer.gov (US Consumer Gateway)

-Consumers Union

-Credit Union National Association (CUNA)

-Federal Reserve Board Consumer Information

-Federal Trade Commision, Consumer Protection

-Habitat for Humanity International

-National Association of Attorneys General

-National Association of Consumer Advocates

-National Consumer Law Center

-US Public Interest Research Group (PIRG)

http://www.educationcenter2000.com/national_organizations

Mr. Kenneth M. DeLashmutt is a recognized authority on the subject of predatory lending practices and is a Predatory Lending Defense Specialist. He has more than 10 years experience in the area of consumer protection related to predatory mortgage lending practices and debt resolution.

Mr. DeLashmutt has provided financial, operations and regulatory consulting services nationwide to financial institutions, and regulatory agencies as well as real-estate and financial services organizations for over ten years.

Areas of Expertise include: Banking Operations & Administration; Lending Policies, Custom & Practice; Credit Administration; Bankruptcy and Foreclosures; Trust & Fiduciary Issues / Operations; Insurance Coverage's / Claims Disputes; Insurance Bad Faith; Real Estate Transactions; Consumer Protection Litigation; Foreclosure Defense

Cash Advance Payday Loans

2006-06-15T20:47:00.000-07:00

The ads are on the radio, television, the Internet, even in the mail. They refer to payday loans - which come at a very high price.

Check cashers, finance companies and others are making small, short-term, high-rate loans that go by a variety of names: payday loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans.

Usually, a borrower writes a personal check payable to the lender for the amount he or she wishes to borrow plus a fee. The company gives the borrower the amount of the check minus the fee. Fees charged for payday loans are usually a percentage of the face value of the check or a fee charged per amount borrowed - say, for every $50 or $100 loaned. And, if you extend or "roll-over" the loan - say for another two weeks - you will pay the fees for each extension.

Under the Truth in Lending Act, the cost of payday loans - like other types of credit - must be disclosed. Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis).

A cash advance loan secured by a personal check - such as a payday loan - is very expensive credit. Let's say you write a personal check for $115 to borrow $100 for up to 14 days. The check casher or payday lender agrees to hold the check until your next payday. At that time, depending on the particular plan, the lender deposits the check, you redeem the check by paying the $115 in cash, or you roll-over the check by paying a fee to extend the loan for another two weeks.

In this example, the cost of the initial loan is a $15 finance charge and 391 percent APR. If you roll-over the loan three times, the finance charge would climb to $60 to borrow $100.

Top 10 Ways to Avoid Loan Fraud

2006-06-13T22:44:00.000-07:00

Every year, misinformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud. Below you'll find the top ten ways to avoid becoming a victim yourself.

1. Take your time and shop around. You should be able to compare prices and houses. If a lender or broker tells you they are your only chance to get a loan or owning a home, don't do business with them.

2. Do not sign a sales contract or loan documents that are blank or that contain information which is not true.

3. Be certain that the costs and loan terms at closing are what you originally agreed to.

4. Do not be talked into lying about lie about your income, expenses, or cash available for downpayments in order to get a loan.

5. Watch out for higher-risk loans such as balloon loans, interest only payments, and steep pre-payment penalties.

6. Be careful about disclosing things like your need of cash due to medical, unemployment or debt problems. You are very vulnerable in these cases.

7. Don't strip your home's equity by refinancing again and again when there is no benefit to you.

8. Beware of false appraisals.

9. Do not let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.

10. Get several quotes from multiple brokers or lenders so you know you're being charged a fair interest rate based on your credit history, not your race or national origin.

8 Point Checklist: Evaluating Online Vendors

2006-06-11T04:32:00.000-07:00

Here are 8 things to consider, when evaluating lenders online:

# Website Design

# Privacy Policy

# About Us

# Popularity

# Reputation

# Short Form

# Points, Fees, Terms and Rates

# Communication

1. Website Design:

The webpage is, in fact, the storefront of the internet. In the real world, your first impressions make all the difference. Well, it's no different on the internet.

# Does the site seem forth-right? Can you glean valuable information immediately, or does it appear that you are being pushed to click here, click there?

# Does the page load fast, indicative of a reliable server, or does it seem to take forever for everything to be displayed (or worse, are you receiving various error messages).

# Are there a ridiculous amount of pop-ups, pop-unders, and other in-your-face ad campaigns, or, does the lender simply put it all out there for you to decide?

Examine the website design, and trust your first impressions.

2. Privacy Policy:

You will likely be sharing some personal information, in exchange for loan offers. You shouldn't be so concerned about this that it limits your ability to reach out to possible lenders. However, use your common sense.

# Does the website post its privacy policy? If so, take a quick peak at it.

# Does it seem to make sense, and is it reasonable?

Virtually all trustworthy online businesses now have posted privacy policies to both assure you of their intent, and to comply with current laws and regulations.

3. About Us:

Does the lender post an "about us" page?

# If not, this could be a red flag. In other words, the lender should take pride in its history, its vision, and its mission statement. An "about us" page is an opportunity for your lender to tell you a little bit about themselves. If you don't see it, then what are they hiding?

# On the other hand, if you do see an "about us" page, go check it out. How long have they been in business? Where are they located? Do they post a phone number, and do they provide contact information? What are their policies and philosophies?

Reading the "about us" page can tell you tremendous information about the lender.

4. Popularity:

Take your lender's website address, and plug it into Alexa.Com. Alexa is a tool, created by the folks at Amazon, to evaluate traffic on the internet, and to provide a venue for visitors to post critiques of websites.

# Popularity is gauged by the Alexa rating, and the lower the number, the higher the rating. For example, our site, http://loanresources.net , as of today's date, has a 3 month average Alexa Rating of 86,517. This means that we are one of the top 100,000 websites in terms of traffic (and popularity). If we get down to let's say 50,000, then our traffic and popularity has increased.

# You can use this tool to evaluate the traffic of your prospective lenders.

# Our advice is this: Don't be blinded by popularity alone. There are plenty of competitive lenders and mortgage brokers out there with the highest integrity, which may not, necessarily, have a favorable Alexa rating. It doesn't mean that they shouldn't be considered. It is simply a measurement of traffic, and that's it. Don't miss out on what they have to offer.

Just use popularity as one of the many tools at your disposal, when evaluating online lenders.

5. Reputation:

There are a number of ways to evaluate a lender's reputation. Talking to friends, family, and associates, of course, is one way. Another method is to see whether or not the prospective lender is a member of the Better Business Bureau (BBB at BBB.Com), and if there are any complaints on record filed against them.

# The BBB produces what's called a "Reliability Report", and this report will provide you with corporate information (such as name, address, phone number), BBB membership information, whether or not the lender is a participant of the "BBB Online" program, along with a complaint history, and each complaints final resolution.

# The report also states the overall rating that they give the lender. Remember we discussed earlier, that popularity is not everything? Here's a prime example. You'd be surprised how many "popular" lenders, may in fact carry a rather lengthy BBB Reliability report filled with a variety of complaints.

# Again, just use your good, common sense, and consider reputation alongside all other factors.

Also, if you see something on the reliability report that may be concerning you, talk to your prospective lender, and see if they can give you a reasonable explanation for what happened.

6. Short-Form:

Complete an online "short form" application, and within minutes, several competitive loan offers could be making their way to you.

# Consider the short form application, when evaluating the lender. Is it short indeed, or are they asking you for way too much information?

# Be expected to share some basic information about yourself, such as name, phone number, salary information, etc., but never disclose what you feel is too personal or compromising, such as a social security number, credit card numbers, etc.

# Does the short-form make sense, is it well organized, and is it simple for you to follow and understand? This is important, because if the form is easy to complete, the lender may be saying that their whole loan process is simple and easy. On the other hand, if the form is arduous and complex, what does that tell you?

So, evaluate your comfort level with the context of each lender's short form application online.

7. Points, Fees, Terms, and Rates:

After you complete the online short-form, prospective loan offers will almost instantly be making their way to you.

# These preliminary loan offers will present you with important information about the points, fees, terms, and rates being offered.

# This, of course, is the nuts and bolts of what you are evaluating?This is the dollars and cents of your preliminary loan offers.

# Obtain several offers, and compare them to each other.

# Who offers the best savings? Who seems too low to believe? Who is way too high to consider?

# Check the current rates and see how these offers compare. We've got a RateWatch set up at our website, or, you can find other resources from any search engine.

8. Communication:

After you've obtained several loan offers, it will be time to talk to your prospective lenders over the phone.

# Do not fear this process. Remember, you are the buyer of this product, and you are in the driver's seat. Think of it as an interview, and you are in charge. Ask some good questions, and see if you are comfortable with the relationship forming.

# How does the lender strike you over the phone? Is it someone that you feel you could do business with, or, does the conversation seem forced and uncomfortable?

# Use the phone call to evaluate the relationship, and to obtain useful information.

# Do not make an immediate decision. Talk to 3 or 4 lenders, and then take a pause, and evaluate what you've learned.

Use your instincts to gauge who you worked well with, and who might present challenges down the road.

We've enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, and never turn your back on your own common sense.

Publisher's Directions:

This article may be freely distributed so long as the copyright, author's information, disclaimer, and an active link (where possible) are included.

Payday Loans: How They Really Work!

2006-06-09T19:41:00.000-07:00

Payday loan companies gives the borrower the amount of the check minus their fee (They get their money up front).

Fees charged for payday loans are usually a percentage of the face value of the check or a fee charged per amount borrowed for every $50 or $100 loaned.

A cash advance loan secured by a personal check - such as a payday loan - is very expensive credit.

Let's say you write a personal check for $115 to borrow $100 for up to 14 days. The check casher or a payday loan lender agrees to hold the check until your next payday.

And, if you extend or roll-over the loan - say for another two to four weeks - you will pay A Fee Each Time you get a extension.

Under the Truth in Lending Act, the cost of payday loans - like other types of credit - must be disclosed.

Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis) which when you do the math can be very high.

Top 10 Alternatives to Payday Loans!

1. There are other options. Consider these possibilities before choosing a payday loan:

2. When you need credit, shop carefully. Compare offers. Look for the credit offer with the lowest APR - consider a small loan from your credit union or small loan company, an advance on pay from your employer, or a loan from family or friends.

3. A cash advance on a credit card also may be a possibility, but it may have a higher interest rate than your other sources of funds: find out the terms before you decide. Also, a local community- based organization may make small business loans to individuals.

4. Compare the APR and the finance charge (which includes loan fees, interest and other types of credit costs) of credit offers to get the lowest cost.

5. Ask your creditors for more time to pay your bills. Find out what they will charge for that service - as a late charge, an additional finance charge or a higher interest rate.

6. Make a realistic budget, and figure your monthly and daily expenditures. Avoid unnecessary purchases - even small daily items. Their costs add up.

7. Also, build some savings - even small deposits can help - to avoid borrowing for emergencies, unexpected expenses or other items. For example, by putting the amount of the fee that would be paid on a typical $300 payday loan in a savings account for six months, you would have extra dollars available. This can give you a buffer against financial emergencies.

8. Find out if you have, or can get, overdraft protection on your checking account. If you are regularly using most or all of the funds in your account and if you make a mistake in your checking (or savings) account ledger or records, overdraft protection can help protect you from further credit problems. Find out the terms of overdraft protection.

9. If you need help working out a debt repayment plan with creditors or developing a budget. There are non-profit groups in every state that offer credit guidance to consumers. These services are available at little or no cost. Also,

10. Check with your employer, credit union or housing authority for no or low-cost credit counseling programs.

If you decide you must use a payday loan, borrow only as much as you can afford to pay with your next paycheck and still have enough to make it to the next payday.

Parent Loans or Student Loans - What is Going to be Best for My Child ?

2006-06-08T18:43:00.000-07:00

Parent Loans or Student Loans - what is going to be best for my child?

At least 20% of college students need some type of loan to help pay for their college education. Such a statistic can lead to students graduating with an unmanageable debt load. An alternative is for parents to help out by taking out loans themselves. But which is the better option - student loans or parent loans? Each has distinct advantages and uses.

Federal student loans

Federal student loans have the lowest interest rates and best repayment options. If you need to take out loans and you qualify for federal loans, this is your best choice. Just be sure to accept only the funds you need, even if you are offered much more. Parents can always help their children pay off these loans once repayment begins after graduation.

Federal parent loans

PLUS Loans (Parent Loan for Undergraduate Students) are another loan option that comes with low interest rates. If you are a parent with dependent students attending college at least part-time and you have a good credit history, you are eligible to receive a PLUS Loan. These loans are not needs-based. You can borrow up to the total cost of undergraduate education expenses, minus other financial aid already received. Unlike federal student loans, payment is not deferred until after graduation; instead, your first loan payment will be due about 60 days after the loan is disbursed. Also unlike federal student loans, PLUS Loans require an application fee.

Private loans

Both students and parents can take out private loans to cover funding gaps. Terms are basically the same for these loans, although students may be able to have their repayment deferred until after graduation. Another consideration is that students may wish to take out small loans to begin to establish a credit history. You may need to cosign for private student loans.

Other options

Parents do have some additional options for college funding, such as home equity loans. These often have rates as good as private loans.

So which type of loan should I get?

This really comes down to a personal decision. Ask yourself these questions as you are trying to decide:

- What level of debt do you feel is manageable for your child to graduate with?

- How important is it to you that your child takes responsibility for paying student loans?

- Will you and your child work out a repayment plan to repay PLUS Loans and other parent loans?

This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about Parent Loans or Student Loans at http://www.NextStudent.com.

My goal is to help every student succeed - education is one of hte most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.

Financial Aid for College Students - Grants

2006-06-07T18:53:00.000-07:00

The bad news about attending college is that it costs more than ever to attend. The College Board estimates the average four-year public college costs almost $5,000 per year to attend and a two-year public college is almost $2000. And that's not counting the skyrocketing cost of textbooks or other class fees. The good news is there is more than $105 billion dollars available in student financial aid. Some of this money is available for free?in the form of college grants.

While there are many options to consider financing your college education, this article will discuss specifically grants for college.

The most common form of Federal grant money is the Pell Grant. The amount awarded is based on your financial need and it is for undergraduate study only. Pell Grants can be awarded to part-time students. The maximum amount of a Pell Grant is $3000 per year and it can be combined with other grants or financial aid.

Another common federal grant is the Federal Supplemental Educational Opportunity Grant or SEOG. Like the Pell Grant, the SEOG is awarded based on financial need and is for undergraduate study. This grant can be combined with other school grants or financial aid, but the cap is $1000 per year.

Colleges and Universities often provide their own grants for students. The amount of the school grant varies, but they do take into consideration a number of factors in issuing these types of grants including: financial need, grades, merit or program of study. Please check with the college you've been accepted to for more information.

To be considered for any of these types of grants for college, you must complete a financial aid form known as the FAFSA. Your college will help you with this process and you can get information online. There are time deadlines in completing this application, so be sure to take that into consideration when planning your education.

Even though college costs are trending upward, there are many financial aid options for students. College grants are one of the best options since they don't need to be repaid, however, not everyone qualifies for them. Complete a FAFSA application to determine whether you can qualify for a college grant.

How To Save Money On Car Loans

2006-06-06T00:38:00.000-07:00

Have you noticed that everyone seems to have a newer car than you? There's good news. You can find a way to upgrade your old clunker to a newer model. There are many ways to save money on your car loan. Lenders are competing for your business, and more and more car loans are approved to allow more people than ever to buy a car.

So now that you've decided to buy a newer car, the question on how to pay for it arises. If you're like most people, you don't have the cash needed to buy a new car. The other option is to borrow the money. There are certain guidelines to follow which could help you save money on a car loan. Careful planning, comparison-shopping and persistence are necessary to find the best deals.

If your credit rating is good, you should have no problem in negotiating a low interest rate. However, there are still basic principles, which apply during your search to find ways to save money on car loans. If you have a pile of credit card bills to pay and have made recent large purchases such as another car or a home, it is likely that your loan will have a higher interest rate. The object is to save money while negotiating your car loan.

Having a good credit report is an important asset and one of the basic requirements for saving money on car loans. You should always keep your payments current to avoid those nasty little "late" notices that appear on your credit report. It is especially important that your debts be paid on time for a few months prior to applying for a car loan. You will be asked to list financial institutions in which you have accounts, and it's nice to be able to show some savings, too. Your credit score may be reduced which could prevent you from saving money on your car loan. Your credit score also dictates the interest rate on your loan.

Another way to save money on a car loan is to have a sizable down payment or trade-in. The less money you borrow the lower your total interest will be. To save yourself from a hassle while negotiating arrangements for a car loan, it is helpful to be pre-approved for the amount of money you need to finance your car.

There are many financial institutions more than willing to finance a car for you. A reputable lender is obviously going to make some profit or they wouldn't be in the business of lending money. You can use a traditional lender such as banks, credit unions, etc., but you should also compare their interest rates with the online lenders as well.

Most car dealerships are very happy to arrange a loan for you. First, you choose the vehicle you want, test drive it and make the decision to buy it. The majority of car dealerships is honest and will gladly help you find a way to save money on a car loan. Be sure the dealer you select has a reputation for placing customer satisfaction first.

Naturally, a salesperson may want to sell you the more expensive models, but you should stay focused on your goal of getting the most for your money and saving money on your car loan.

Online Loans Made Easy

2006-06-04T22:06:00.000-07:00

What will it take for you to get a low interest, low payment loan? The answer to that question could be an online loan from one of the many companies that specializes in granting online loans, or e-loans.

Some analysts forecast that as more and more customers expect better interest rates, and as competition for their business intensifies, loan institutions will focus even more on their efforts to lure as many customers as possible to use their services, and online loan institutions are no exception.

Both traditional lenders from financial institutions such as banks, mortgage lenders and credit unions as well as on-line lenders compete fiercely for the privilege of lending money. Incentives such as zero percent or low-interest-rate financing, giveaways, and cash rebates are just some of the ways to gain your business. All this appears to be great for consumers, but the wise person must discern between true incentives and come-ons by deciding whether a rebate or a super-low interest rate is most beneficial. A rebate is not a bargain if the interest rate makes the pay-off on the loan higher.

Online loans are quick, convenient and easy. Just fill out an application from your computer. You are usually approved or disapproved within a matter of minutes. But before you begin the application process, there are basic matters that you should be aware of.

Your credit rating can affect the amount of the loan and the interest rate of your online loan. Check your credit score before you start looking for a loan. Having a high credit score will result in a better interest rate than a poor score. If you are considered a credit risk, many lenders will work with you, but your loans may have a much higher interest rate. It's important to clear up your credit problems before you apply for an online loan to help you negotiate for the best loan possible. Not knowing your credit score may hinder your efforts.

As with traditional loans, you should always comparison shop when searching for an online loan. If you are making a high-dollar purchase such as a home or a car, it is advantageous to be pre-approved for your loan to keep your financial arrangements out of negotiations on the price. Online loan institutions may be of tremendous help in this area.

You should focus on the overall amount of the online loan as well as the interest rate. There are several online sites where prevailing interest rates can be viewed to help you decide which online loan institution to use. The overall length of the loan is another factor to keep in mind, as the length of the loan decides what your monthly payment is going to be. Obtaining a short-term loan could save many dollars in interest.

Online loans are relatively easy to get if you have a good credit rating. The usual purpose of an online loan is to finance a home or automobile. Online lending institutions realize that the loan is backed by collateral, and they are not likely to lose money if you fail to pay the loan.

Online loans are just one more way to make your search for money to finance your purchase easy and convenient. Online institutions will make every possible effort to approve your loan because doing so benefits the lender as well.

How To Easily Find A Military Loan

2006-05-31T19:02:00.000-07:00

Military members the price for serving your country and defending freedom is difficult, fortunately finding the right loan to fit your situation doesn't have to be when you know where to look. Finding a loan provider that understands the pressures and time constraints that many military members are currently going through can be difficult and downright depressing. Lets be honest, after working upwards of 15 or more hours a day who has the time or energy to go seek out loan providers in person. Fortunately the Internet has easily resolved that problem.

Using the Internet to find a military loan provider has leveled the playing field. Never again will you have to worry about talking to a loan lender during your short lunch hour or feel pressured to take the first loan that you qualify for. Now you can simply do an online search for military loan providers and find a loan provider for free in the comfort of your own home.

Most online loan lenders allow you the opportunity to compare numerous quotes for free and you're never under any obligation to accept any loan that is offered to you unless it meets your specific needs, wants or desires. In most cases you can find out if you're approved for a loan within 24 hours. Some providers even have the capability to tell you within minutes if you qualify for a loan. The only requirement is for you to fill out a simple form on their website that usually takes less then 5 minutes. Don't worry; they also keep any information you provide secure and confidential. Best of all you can search for your loan at any time day or night - even in your pajamas if you so desire.

Stop searching for a military loan the hard way. Instead use your computer and find the loan you need online without any time constraints or hassles.

A Brief Look At Various Types of Loans Available

2006-05-29T19:51:00.000-07:00

A Brief Look At Loans
"Innovative financial packaging" is how it is sometime known. Essentially what this means is that financial institutions look for more and more ways to lend to their customers - after all, charging interest on a debt is the main way that they make their money. But, with more and more loans now available, it can sometimes be difficult to know exactly which loan to apply for. The following explanations try to clear this issue up a little for you:
Personal Loan
Probably the mainstay of financial institutions is the personal loan. As the name suggests, personal loans are money borrowed from a financial institution for personal use. In nearly all cases, a personal loan is going to be unsecured, which means you'll likely be paying a premium on interest. Once the personal loan is given, you repay it by making monthly repayments to the lender. In effect, this is the multi-purpose loan.
Auto Loans
Auto loans are where you borrow money from a financial institution in order to buy a car or vehicle. In most cases auto loans are done by the car dealer, but there is no reason why you cannot make arrangements with your bank before buying the car to borrow the money from them. As with a personal loan, most auto loans need to be repaid by monthly installments. Sometimes, although not always, the financial institution will secure your loan with the vehicle, which means if you cannot repay the loan they'll repossess your car. One additional expense with an auto loan is that most lenders insist that you take out fully comprehensive insurance during the period that the auto loan is outstanding.
Home Improvement Loans
As the name suggests, home improvement loans are where you ask a lender to lend you money so you can improve your home. In most cases a home improvement loan is granted on the condition that you give the lender a second rank mortgage on your home. As such, the loan amount can rarely exceed the valuation price of your home - including the increased value after the improvements have been made. Again, home improvement loans usually need to be paid by monthly installments; however, balloon (or bullet as they're also know), one-off, payments are also sometimes accepted.
Education Loans
Education loans are where you borrow money to further your studies. One big difference between an education loan and any other type of loan is that most education loans, although given by a financial institution, are underwritten by the government. Consequently, the interest rate on education loans (also known as "student loans") is usually very low.
Holiday Loans
These days it is even possible to go to your bank and ask them to borrow money so that you can go away on holiday! As you'll be using the money to go on holiday, this type of loan is unsecured. Consequently, interest rates are high. Not really a recommended way of paying for your holiday, but nice to know it's out there if you need it!
Debt Consolidation Loans
Unfortunately debt consolidation loans are becoming more and more popular these days. A debt consolidation loan is where you have too much debt on store cards and credit cards and you need to borrow money to pay these all off and consolidate them into one big debt. The advantages of doing this are two-fold: (i) hopefully you'll lower the borrowing interest rate; and (ii) you only have to deal with one creditor.
Having decided upon the type of loan you want, all you need to do now is to ask your financial institution to approve the loan - Good Luck!

What is a Secured Loan ?

2006-05-28T19:41:00.000-07:00

A secured loan is simply a loan that uses your home as security against the loan. Secured loans are suitable for when you are trying to raise a large amount; are having difficulty getting an unsecured loan; or, have a poor credit history. Lenders can be more flexible when it comes to secured loans, making a secured loan possible when you may have been turned down for an unsecured loan. Secured loans are also worth considering if you need a new car, or need to make home improvements, or take that luxury holiday of a lifetime.

Benefits of secured loans include:

Lower monthly repayments than unsecured loans

The ability to borrow more money

Spread repayments over a longer period of time

More detailed information??

A secured loan is a type of loan available to people with securable assets. Usually these assets take the form of property, such as a home; this is why secured loans are often referred to as 'homeowner loans', "home loans", "secured personal loans" or "second charge loans".

You do not have to own your own home outright to be able to take out a secured loan; if you have a mortgage you can put the proportion of the home that you own up as security.

Because a secured loan is secured on property, most lenders will approve your loan even if you have a history of adverse credit such as county court judgements (C.C.J's), defaults and arrears.This make secured loans very attractive to people who would otherwise not qualify for a loan from their local bank.

You can borrow any amount from £5,000 to £75,000 and repay it over any period from 5 to 25 years. You simply select a monthly payment that fits in your current circumstances. Generally, secured loans tend to be cheaper than unsecured loans and other forms of borrowing.

The interest rate for a secured loan depends upon various factors such as the amount of money you borrow, the length of time and personal details. You can also insure your payments for peace of mind, so you do not have to worry if you lose your job or are unable to work because of accident or sickness.

Secured loans are arranged through leading financial institutions so you can be assured of a professional and responsible service such as, National Banks and Finance Houses like First National Bank, Black Horse Finance, Welcome Finance, iGroup amongst others.

Once your secured loan application has been processed and accepted you will be made a no obligation offer. It usually takes around 14 days for a secured personal loan to be completed and you can cancel any time within this period with no penalties.

What is an Unsecured Loan ?

2006-05-25T17:33:00.000-07:00

An unsecured loan is a personal loan where the lender has no claim on a homeowner's property should they fail to repay. Instead, the lender is relying solely on the ability of a borrower to meet their loan borrowing repayments.

The amount you are able to borrow can start from as little as £500 and go up to £25,000. Because you not securing the money you are borrowing, lenders tend to limit the value of unsecured loans to £25,000. The repayment period will range from anywhere between six months and ten years. Unsecured loans are offered by traditional financial institutions like building societies and banks but also recently by the larger supermarkets chains.

An unsecured loan can be used for almost anything - a luxury holiday, a new car, a wedding, or home improvements.

An unsecured loan is good for people who are not homeowners and cannot obtain a secured loan for example; a tenant living in rented accommodation. There are a few things to consider before applying for an unsecured loan: Unsecured loans are invariably more expensive than secured loans, and the repayment periods demanded by lenders are shorter too. This is because they have no guarantee that you can repay the loan, and therefore charge you more in interest to cover the cost of insurance policies that they need to take out to protect them should you default on repayments. In the event that a borrower does not pay up, the lender will invoke the terms of the legally-binding credit agreement and pursue the borrower through the legal system.

Lenders are obliged by law to tell you how much they charge for this type of finance and this is worked out as an annual percentage rate (APR). Ask whether the APR figure quoted is 'typical' or is what every applicant is charged. You should also investigate whether the interest rate charged is fixed for the lifetime of the loan repayment period, or whether it varies with the base rate. Check too on whether there are early repayment penalties.

Unsecured loans vary from lender to lender, so it pays to shop around before making a final decision.

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What is a Bridging Loan ?

2006-05-24T19:17:00.000-07:00

A bridging loan as the name implies is a loan used to "bridge" the financial gap between monies required for your new property completion prior to your existing property having been sold.

A bridging loan is in simple terms a short-term mortgage that is secured against the property that you are selling, with the money that is lent being used to complete the purchase of the new property. Because of the nature of their use, bridging loans can be arranged in a very short period of time, usually around seven to ten days, which is important when you need to complete on the purchase or risk loosing the property.

Bridging loans are short term loans arranged when you need to purchase a house but are unable to arrange the mortgage for some reason, such as there is a delay in selling your existing property. Timing is of the essence when selling one property and buying another. Sometimes if you are looking for a new home and the right property becomes available, it is not always possible to wait until your current home is sold.

The beauty of bridging loans is that a bridging loan can be used to cover the financial gap when buying one property before the existing one is sold. For example, if you are in a chain, where you are buying a property at the same time as selling a property, it's possible that you'll be put in the situation where you need to complete your purchase, but the funds from your buyer are not available. You are now under pressure to complete on a particular date but do not have the funds available. This is where bridging loans come in. They are looked on as short term lending to cover a specific short term need.

Bridging loans can be arranged for any sum between £25000 to a few million pounds and can be borrowed for periods from a week to up to six months. Because of the nature of bridging loans they can usually be arranged at short notice and within a few days. Bridging loans are widely available and can usually be arranged by your existing mortgage provider.

A bridging loan is similar to a mortgage where the amount borrowed is secured on your home but the advantage of a mortgage is that it attracts a much lower interest rate. While bridging loans are convenient the interest rates can be very high. When considering a bridging loan please remember that you may be paying not only for the bridging loan but also for the mortgage on your existing property. Although bridging loans are convenient, you need to consider the pitfalls too, like the high interest rates.

The downside to the fast nature of these types of loan is that the interest rates charged on them are relatively high, this is because not only are they short-term and for large amounts, but the risks to the lenders of non-payment are higher than for other circumstances and this is taken into account when the loan rates are calculated. Although the rates are high when compared to other loans available on the market, when you take into account the short amount of time over which this interest is charged, and the benefits that a bridging loan can bring, the costs are reasonable.

Bridging loans are designed to provide you with the equity from your current home in order to make your new purchase, before you are able to sell your own property. The loan is secured against the home that you are selling in the form of a mortgage or second mortgage, and will allow you in general to release around 65% of the property's value. With these funds you are then in a position to complete the purchase of the new property, and once your old property sells you can clear the bridging loan. If you are considering such a loan, you should be confident of a sale, and that you will be able to clear the debt within six months, as the high interest rates are something that you do not want to be paying long-term.

Bridging loans are available to the people that have found it more difficult to get mortgages, such as those with an adverse credit rating. This enables these people to build a track record before applying for the traditional mortgage. Bridging loans can take from 48 hours at the shortest to around ten days if the circumstances are more complex.

Despite the costs, bridging loans are very popular, after all if you have spent a lot of time searching for the perfect property you will not want to miss out on it because of a relatively short delay in the sale of your current property. It is in these cases where bridging loans can prove invaluable, enabling you to secure the sale of the home that you want, and concentrate on the sale of your property at a later date.

Bridging loans can be provided for:

Residential property

Commercial property

Land

New build

Renovations or refurbishment

Speculative properties

Conversions

Overseas property

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Useful Tips On Buying A New Or Used Car

2006-05-22T01:14:00.000-07:00

Buying A New Car: A new car is second only to a home as the most expensive purchase many consumers make. That's why it's important to know how to make a smart deal. Think about what car model and options you want and how much you're willing to spend. Do some research. You'll be less likely to feel pressured into making a hasty or expensive decision at the showroom and more likely to get a better deal.

Consider these suggestions:

Check publications at a library or bookshop, or on the Internet that discuss new car features and prices. These may provide information on the dealer's costs for specific models and options.

Shop around to get the best possible price by comparing models and prices in ads and at dealer showrooms. You also may want to contact car-buying services and broker-buying services to make comparisons.

Plan to negotiate on price. Dealers may be willing to bargain on their profit margin. Usually, this is the difference between the manufacturer's suggested retail price (MSRP) and the invoice price. Because the price is a factor in the dealer's calculations regardless of whether you pay cash or finance your car - and also affects your monthly payments - negotiating the price can save you money.

Consider ordering your new car if you don't see what you want on the dealer's lot. This may involve a delay, but cars on the lot may have options you don't want - and that can raise the price. However, dealers often want to sell their current inventory quickly, so you may be able to negotiate a good deal if an in-stock car meets your needs.

Trading in Your Old Car: Discuss the possibility of a trade-in only after you've negotiated the best possible price for your new car and after you've researched the value of your old car. Check the library for reference books or magazines that can tell you how much it is worth. This information may help you get a better price from the dealer. Though it may take longer to sell your car yourself, you generally will get more money than if you trade it in.

Buying A Used Car: Before you start shopping for a used car, do some homework. It may save you serious money. Consider driving habits, what the car will be used for, and your budget. Research models, options, costs, repair records, safety tests, and mileage through libraries, book stores, and web sites.

Before you buy a used car whether from a dealer or an individual: Examine the car using an inspection checklist. You can find checklists in magazines and books and on Internet sites that deal with used cars; Test drive the car under varied road conditions-on hills, highways, and in stop-and-go-traffic; Ask for the car's maintenance record from the owner, dealer, or repair shop; Hire a mechanic to inspect the car. Paying for the car: Most people do not realise that they have capital locked up in their property which could be used for buying that special car of their dreams.

Release the capital tied up in your home with a home owner loan. The loan can be used for any purpose, and is available to anyone who owns their home. Home loans can be used for any purpose such as, new car, home improvements, pay of store card or credit card debt and debt consolidation.

Home owner loans are available for practically any reason. One of the most common types of home owner loans on offer are debt consolidation loans where the objective is to reduce monthly outgoings to a more manageable amount. A UK Home Owner Loan is great if you want to raise a large amount; are having problems getting an unsecured loan; or have a poor credit history. Many lenders look more favourably on people who are home owners as this demonstrates a commitment to repay a large amount of money over a long period.

A UK Home Owner Loan is a cheap, low cost, loan secured on your UK home. It frees up the equity in your home for you to use on whatever you want.

You may freely reprint this article provided the author's biography remains intact:

Benefits of a Secured Loan

2006-05-20T18:32:00.000-07:00

The secured loan is favoured by many UK residents seeking credit for a number of reasons:

- A secured loan is far easier to obtain than unsecured loans. The added security that this type of loan gives the lender means that even those with a less than perfect credit history can get hold of a secured loan with relative ease.

- A secured loan is often offered with more favourable terms than other types of loans. With secured loans it is also far more likely that you will be able to borrow a larger amount of money and pay it back over a longer period of time.

- A secured loan can help you to free up equity that would otherwise remain dormant in your property, letting you make use of capital that would otherwise remain unobtainable.

- The interest rates on secured loans are often considerably lower than those offered on unsecured loans.

- A secured loan will enable you to get your hands on money that would otherwise take a long time to save up, allowing you the freedom to spend it on whatever you want.

- A secured loan can be used for any purpose such as; paying off debts, making home improvements, buying a new car, luxury holiday or anything you choose!

What is a Commercial Business Loan ?

2006-05-18T18:47:00.000-07:00

A commercial business loan is designed for a wide range of UK small, medium and startup business needs including the purchase, refinance, expansion of a business, development loans or any type of commercial investment.

Finance is the lifeblood of a business. Without it you cannot grow.

Commercial business loans are generally available from £50,000 to £50,000,000 at highly competitive interest rates from leading commercial loan lenders.

A commercial business loan can be secured by all types of UK business property, commercial and residential properties.

Commercial Business Loans can offer up to 79% LTV (Loan to Valuation) with variable rates, depending on status and length of term.

Commercial business loans are normally offered on Freehold and long Leasehold properties with Bricks and Mortar valuations required. Legal and valuation fees are payable by the client.

Commercial business loans are available for Self-Declaration with CCJ's & Mortgage Arrears.

Commercial Business Loans cover most types of UK property, including:

Development property, new & redevelopment
Country properties
Retail / offices / factories / warehouses
Investment & owner occupied
Leisure buildings (Hotels / Pubs)
Professional practice premises

What is a Home Owner Loan ?

2006-05-17T19:37:00.000-07:00

A UK Home Owner Loan Can Unlock Your Capital To Use Today.

Unlock the value tied up in your property with a great value secured Home Owner loan. The loan can be used for any purpose, and is available to anyone who owns their home. Home loans can be used for any purpose such as, home improvements, new car, luxury holiday, pay of store card or credit card debt and debt consolidation.

Home owner loans are available for practically any reason. One of the most common types of home owner loans on offer are debt consolidation loans where the objective is to reduce monthly outgoings to a more manageable amount.

Another good reason for a taking a home owner loan would be if you had a poor credit history. Many of the home owner loan companies will accept an adverse credit card loan application.

Many lenders look more favourably on people who are home owners as this demonstrates a commitment to repay a large amount of money over a long period.

A UK Home Owner Loan offers you low cost, low rate, cheap borrowing with low interest rates and low monthly repayments.

A UK Home Owner Loan is a cheap, low cost, low rate loan secured on your UK home. It frees up the spare capital (or equity) in your home for you to use on whatever you want.

With a Home Owner Loan you can borrow from £5,000 to £75,000. Unlock the value tied up in your property with our great value UK Home Owner Loan.

A UK Home Owner Loan is great if you want to raise a large amount; are having problems getting an unsecured loan; or have a poor credit history - you may be able to get a UK Home Owner Loan even when you have been turned down for an unsecured loan.

Home Owner Loan rates are variable, depending on status

Your monthly repayments will depend on the amount borrowed and term.

A UK Home Owner Loan can help you with:

Home improvements such as a new kitchen or bathroom

That once-in-a-lifetime holiday

Your dream car or boat

Repaying credit card or other debts to reduce your monthly outgoings to a more manageable amount

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Why Bank Overdrafts May Be a Bad Deal For You

2006-05-16T19:01:00.000-07:00

Many banks actively encourage their clients with low balances to overdraw their accounts. That means, if the customer writes a check or uses her debit card and has insufficient funds in the account, the bank clears the check by granting a temporary overdraft (a short-term loan), up to a specific limit. The customer is saved from the problems of bounced checks or interrupted shopping sprees.

Sounds like a good deal for the customers, right? That's what the banks say. They claim overdrafts are an added convenience to customers.

The truth is, they're often a very bad deal for the customers. Here's why.

When a bank grants a regular line of credit, the interest charged may be up to say, 20% or so. However, for overdrafts, banks don't charge interest -- they charge a flat fee on each transaction. This fee does not depend on the value of the transaction.

Let's see how that works. Overdraft plans fees may be as high as $35 per check. We'll assume a more conservative fee of $20 per check. If you have four checks totaling $200 that have insufficient funds against them and the bank automatically activates the overdraft and clears those checks, you will owe $80 in overdraft charges.

Unlike revolving lines of credit which you can repay at your convenience, an overdraft has to be settled in just a few days. Let's say the bank allows you to run the overdraft for 14 days.

A loan of $200 for 14 days incurring charges of $80 translates into an Annual Percentage Rate (APR) of 1043%!

A "convenience" for customers? Not at these rates.

What does this remind you of? It reminds me of payday loans and cash advances. Those are the other forms of lending which charge you such sky-high APRs. In fact, if you choose to repay a cash advance on due date and not roll it over, you'll likely be charged far less than what the banks charge you for an overdraft.

It gets even worse. Banks have software that ensures that your largest value checks and debits get processed first. There may be some logic to that. However, this arrangement also means that when there are insufficient funds in your account, instead of paying one overdraft charge on one large check, you pay several charges on several smaller checks!

Plus, most customers don't even realize that they are overdrawn until the bank notifies them about it.

Consumer advocates say that banks are perfectly aware that many people barely make it from payday to payday. These customers typically have very low balances. Rather than offer them a service that would be in their interests, banks extract high fees from them to cover bounced checks.

If you are caught short between paychecks, consider arranging funds from other sources rather than turn to overdraft protection. The best solution to the problem is to systematically build up cash balances so that you don't face such a situation in the first place.

Five Things To Check Out When You Apply For a Payday Loan

2006-05-15T16:43:00.000-07:00

Are you thinking of going in for a payday loan to meet an unexpected expense? If so, look into these five things before you finalize one. This checklist can help you make smarter choices. You might even end up saving some serious cash!

# First thing to consider -- do you really need that cash advance? Sure, you need cash right away, but have you looked at other options? The fact is, a payday loan is an extremely expensive source of funds, with Annual Percentage Rates (APRs) ranging from 300% to 1000%. So before you take one, see if you can arrange money by taking an advance from your employer or from your credit union.

You could also consider borrowing money from friends or family. Depending on your situation, credit card funding might be an option too, because it's usually cheaper than a payday loan.

# Ask yourself how much you can really repay when the next payday rolls around. Work out an exact number you can commit to. Take a cash advance only for the amount you can repay, considering all charges as well. Obtain funds from other sources for any additional requirements you may have.

Here's why. If you choose to roll over all or part of the payday loan, you end up paying much more -- additional charges, late fees, etc. Your APRs start climbing rapidly and you may even find yourself trapped in a vicious cycle of payday loan debt. Stay clear of this trap.

# Apply only for one payday loan at a time. Your application gets reported to a consumer tracking database used by payday lenders and banks. If you apply for multiple loans, the lenders may see the multiple applications and you might end up being rejected by all of them.

# Go through the lender's approval criteria very carefully. Apply only to one where you can qualify. If you apply to a company that has stringent criteria and get rejected, that can actually hurt your chances of getting approved by another company with more relaxed criteria.

# If you're applying online, ask yourself if the lender's website seems professional and well-organized. Do they have clear information and guidelines on the site? A comprehensive FAQ?

Most important -- do they have an SSL certificate on the application page? This indicates data is being transmitted securely. Secure pages have web addresses that begin with "https:" instead of "http:" and in addition, you'll see a lock symbol displayed in your browser. If a lender is using a non-secure page to collect information about you, find another lender!

Acting on the above points will help you make better choices about payday loans. The best solution is, of course, to get your personal finances into excellent shape so that you never need to borrow in an emergency.

Facts You Should Know About Types of Loans

2006-05-14T03:51:00.000-07:00

When you set out to borrow, you often come across terms like unsecured loans, revolving loans, adjustable rate loans, etc. While these terms are more or less self-explanatory, it is still useful to be clear on their exact meanings and what they imply before you finalize a loan contract.

Unsecured versus secured loans

As the name implies, a secured loan is one where you offer some kind of collateral against the loan. The agreement is that if you default on the loan, the lender has the right (but not the obligation) to take possession of the asset you have pledged.

In most cases, this asset would be what the lender has financed. For example, when you take a home loan, you offer the home as collateral.

There may also be cases where you may need to offer additional collateral over and above the asset that is being financed. This happens, for example, when the lender is financing close to 100% of an asset that is prone to rapid reduction in market value. In such cases, the lender may insist on your putting up another asset so as to provide a reasonable margin of protection in case of default.

Unsecured loans are those where such collateral arrangements do not exist. These loans are granted based on your credit standing, ability to repay and other factors.

In cases where there's a choice available to the customer to take either a secured or an unsecured loan, the former may be offered at a somewhat lower rate. That is, assuming every other factor remains equal. This is because of the lower risk involved to the lender, who has recourse to a specific asset in case you default. However, this situation is comparatively rare in consumer financing, although it is more common in financing businesses.

Installment versus revolving loans

A revolving loan is one where you have access to a continuous source of credit, up to a pre-determined credit limit. If the limit is say, $10,000, you can borrow any amount up to $10,000. And typically, you can repay all or part of the amount you borrowed at a time of your choosing, within the overall tenor of the loan.

You pay interest only on the amount you borrow for the time you borrow it. Sometimes, banks may charge a commitment fee for making a revolving line of credit available to you. This fee is usually charged on the average unutilized amount of your limit.

You can also re-borrow the amount you have repaid. In effect, you have a loan that's always available to you on demand.

Unlike revolving loans, installment loans have a fixed repayment schedule. In most cases, the full amount of the loan is drawn down (i.e., borrowed) at once and both repayment schedule and amounts are fixed in advance. You do not have the option to re-borrow the amount that has been repaid.

Adjustable rate versus fixed rate loans

A fixed rate loan is one where the interest rate charged is fixed for the entire duration of the loan. The advantage is that you are immune to fluctuations in interest rates and can budget your cash outflows precisely. The disadvantage to you (the borrower) is that should interest rates fall, you lose in terms of opportunity costs. That is, you could have obtained a lower interest rate had you opted for an adjustable rate loan.

In practice, you can always choose to refinance the fixed rate loan at a lower rate if interest rates fall sharply enough to justify it. Bear in mind that your current lender may charge a pre-payment fee if you choose to repay before due date. So the difference in interest rates between your old fixed rate loan and the new loan should be large enough to justify a switch.

An adjustable rate loan is one where the interest charged fluctuates in line with a benchmark rate. This benchmark rate is usually the Prime Rate, which is what the US Treasury charges its prime (or best) borrowers. The advantage of an adjustable rate (or floating rate) loan is that what you are paying is more or less in line with the market. If interest rates decline, so do your costs and vice versa. The disadvantage is that your cash outflows for interest are unpredictable.

As a borrower, if you hold the view that interest rates are going to decline, it is best to opt for an adjustable rate loan. But arriving at the correct view consistently is easier said than done. Predicting interest rates is a game where even professional market participants and institutions frequently go wrong.

If it is important to you to be able to budget for your interest obligations in advance, a fixed rate loan may be the best choice. After all, you can refinance it should the interest rates fall significantly.

Keeping these basic facts in mind should help you make more informed borrowing decisions.

Should You Ever Take a Payday Loan ?

2006-05-12T23:08:00.000-07:00

Payday loans have many names -- cash advances, signature loans and paycheck loans, etc. Payday lenders provide quick and easy short-term cash to those who need money immediately. That's the big reason why they're so popular.

However, payday loans come at exorbitant costs. This can -- and often does -- lead borrowers into a downward spiral of rapidly escalating debt. Let's look at the issue from various angles to get a complete picture.

First, the pluses. Here's why cash advances may hold enormous appeal for you.

* You can have bad credit and still qualify for a payday loan. In most cases, no credit check is conducted.
* The process is fast -- it takes as little as 20 minutes to complete. You can even find lenders who target approvals in 30 seconds!
* There are no upfront costs -- so the buy-now-pay-later mentality can find full expression.
* You can apply in person at a local outlet, over the phone or over the Internet.
* You get funds deposited into your bank account in 24 hours.
* Compared to some other sources for cash, payday loans are discreet -- no one else needs to know about it.
* The transactions are secure -- your financial information remains private.

If you're faced with an emergency -- say, unexpected medical bills -- your only consideration might be to get money now. The speed and convenience of a cash advance comes in handy here.

So what are the disadvantages?

The most obvious one -- high costs. A payday loan can cost you say, $15 per two weeks. If you're borrowing only for two weeks, that doesn't sound like much. However, if you calculate the Annual Percentage Rate (APR), you'll see it comes to 391%!

If you don't think that's too much, let me ask you this question. If you invested money in the stock market, what would you consider a good annual rate of return? 20%? Maybe 30%? If you made a 20% return (on average) in stocks year after year, you'd be doing very well indeed. And this is for an investment that's generally considered high risk.

Now compare that with what the payday loan companies charge. You are providing them with a return on their money they likely won't get anywhere else on the planet!

There is another, less obvious reason why payday loans are dangerous. According to some estimates, over 60% of borrowers roll over a payday loan. Many take loans repeatedly, too.

Let's put in some numbers so that you can clearly see what rollovers imply.

Assume you borrow $400 for two weeks at a cost of $15 per $100 per two weeks. At the end of two weeks, you owe them a total of $460.

Let's say you don't repay the $400 at the end of two weeks. Instead, you request a rollover. So you pay them the lending fee of $60 and they agree to roll over the loan for another two weeks. The total cost of the loan at the end of 4 weeks may be as follows:

Original loan amount: $400
Fresh lending fees payable: $60
Late fees payable: $60 (assuming late fees apply at the same rate as lending fees)
Lending fees already paid: $60
Total: $580

At the end of this period (which is 4 weeks from the day you originally took the loan), you decide that you don't have $580 available and so request them to roll the loan over for another two weeks. Then this is what it can cost you in total at the end of 6 weeks:

Original loan amount: $400
Fresh lending fees payable: $60
Late fees payable: $60
Lending fees already paid: $120
Late fees already paid: $60
Total: $700

If you continue this process for six months (more specifically, for 24 weeks), this is what it may cost you in total:

Original loan amount: $400
Fresh lending fees payable: $60
Late fees payable: $60
Lending fees already paid: $660
Late fees already paid: $600
Total: $1780

For an original loan of $400, in a mere 6 months, the payday loan company will collect fees and charges of $1380 from you. That's 3.45 times the amount you borrowed. In APR terms that's 749.5%! If over 60% of borrowers roll over their loans, no wonder many payday loan companies are wildly profitable!

Snowballing costs can easily lead you into a debt trap if you get addicted to payday loans.

So what are the key points to keep in mind when dealing with payday loan companies? Two things:

First, avoid them if at all possible. The best way is, of course, to get your finances fully under control so that you always have cash and / or credit available to meet emergencies.

Second, if you do choose to borrow from payday loan companies, borrow only an amount you're 100% sure you can repay on the due date. If that amount is too low to meet your needs, get additional funding from other sources. Because rolling over cash advances is one of the worst things you can do to yourself.

5% Down Vs. 10% Down - A Comparison

2006-05-11T21:46:00.000-07:00

It has always been an issue for home buyers to save their down payment. Many people, on advice from various people wait to save 10%, rather than moving into the home sooner with 5% as a down payment This is not always a good idea. Let me explain;

We have 2 young couples, the Jones' and the Smiths. They both have the same amount of money to spend on housing and saving ($1000/month). From that $1000, they are paying their rent of $750/month, and saving the other $250 for their down payment. In fact they're identical people.

The Jones' and the Smiths are both looking to buy a $100,000 property. As such, they will need $5000 as a down payment if they purchase at 5% down, or $10,000 if they wish to have 10% as a down payment.

To date, they have both saved $5000 with which to purchase a property. The Jones' have decided to buy now and accept that they only have 5% as a down payment The Smiths' have decided to wait until they can raise 10%; thus saving themselves some CMHC costs.

What the Smiths' aren't realizing is that while they wait, the cost of the property is increasing... thus incrasing the amount of money they need as a downpayment.

They've also not taken into account that the money they are paying in rent is being thrown away, while they could have been putting that against their mortgage.

Sure, saving the CMHC fees is a good idea. But is it necessarily the right way to go? Not always.

If it takes the Smiths an extra 2 years to save up the extra money, the property could have increased by as much as $15,000 in that time.... meaning that they'd need more of a down payment, as well as having a larger mortgage than if they'd bought earlier.

If you'd like to read this article in full, including graphs showing the difference between the Smith's and the Jones' then go to our website at www.workingtogether.ca and review the article titled "5% Down Vs. 10% Down - A Comparison". You'll get the idea; and possibly save yourself a lot of money!

Getting Good Value Personal Loans

2006-05-10T16:46:00.000-07:00

Over recent years, personal loans have become a popular solution for many consumers looking to raise finance for a variety of purposes. You can get personal loans for all sorts of things, from debt consolidation to holidays, cars and other purchases. It is far easier these days to get a great deal on finance, with cheap personal loans available from a variety of competitive lenders.

When looking into personal loans, you should consider a number of factors. Comparing the interest rates and terms on a selection of deals will ensure that you get access to cheap personal loans so you can enjoy lower monthly repayments. And if you go online to browse deals and apply personal loans lenders can offer instant quotes as well as really competitive rates of interest.

It is always advisable to compare a number of quotes and deals on personal loans, as you can then make an informed decision with regards to which finance package offers the best rates and terms for your needs and your budget. This will help to ensure that you enjoy cheap personal loans and low repayments, and you could even find additional benefits such as payment breaks.

The Internet has fast become the leading source of cheap personal loans. Many financial consumers that are looking for personal loans for a variety of reasons tend to go online to get a great deal. Not only can you check out the various deals on personal loans online, but you can also apply for personal loans online as well. This can help to speed up the process and can result in an instant decision in principle in many cases.

Secrets & Benefits of Secured Loans

2006-05-08T20:10:00.000-07:00

Borrowing money has become more and more popular in the UK over recent years, and this is partly due to the fact that it has become far easier to borrow money. The rising popularity of consumer finance has also been aided by the wide variety of deals and the low interest rates available these days. Secured loans have become very popular with those that own property, and this type of finance deal offers affordability and excellent value for money. Secured loans are available from a wide pool of lenders, which means that consumers have plenty of choice when it comes to selecting and applying for secure loans.

The amount available to borrow with secured loans is dependant upon the amount of equity available in your property, which means the amount of the market value minus any loans or mortgage outstanding on it. There are many benefits available with secured loans, and you will find that this type of finance is one of the most cost effective options available. With secured loans you can look forward to far lower interest rates than most standard, unsecured loans, and this is because there is less of a risk to the lender since the loan is secured against an asset.

Secured loans also offer far high borrowing levels than unsecured loans, although the amount available to borrow will depend in your equity. However, you could find yourself eligible to borrow tens of thousands of pounds with secured loans, which could prove invaluable if you are looking to raise a large amount of finance for just about any purpose. The repayment period with secured loans is also far longer than with unsecured loans, which means that your monthly repayments will be far lower.

The other great thing about secured loans is that they are far more easily accessible to those with poor credit than a standard, unsecured loan. This is because the lender has to take less of a risk with secured loans, as they are secured against an asset, and the lender is therefore usually more willing to consider those with bad credit for this type of finance. Bad credit secured loans are available at really reasonable rates, which means that you can enjoy lower repayment terms even if your have a tarnished credit history.

One of the most common reasons for taking out secured loans is to consolidate other loans and credit. Many people pay out a fortune each month on a selection of high credit loans and cards. With secure loans you can wrap up all of that expensive credit in to one convenient loan, and you can then pay just one lot of interest and make just one repayment each month. You can use bad credit secured loans to wrap up your other more costly credit, and even to pay of some debts, and this can go some way toward improving and repairing your credit.

Secure loans are widely available online, and by browsing and booking via the Internet you can quickly ascertain which of these secured loans best suits you in terms of conditions and interest rates. It is always wise to compare the various deals available on secured loans in order to check that you are getting a competitive deal and rate.

Whatever you are looking to fund or purchase, secured loans make it more affordable and more achievable. If you are using a secure loan in order to consolidate your other loans and credit, you can look forward to far lower repayments each month as well as an overall reduction in the amount of interest you pay. Finding, comparing and applying for secured loans is simple when you harness the power of the Internet, and you can rally speed up the process as well as benefit from total convenience and ease. You are also more likely to find really competitive deals on secured loans when you look online, giving you an even better chance of getting great value on your borrowing.

If you find yourself in need of a fairly large sum of money and you have equity in your property, it makes sense to look into the range of secured loans available. With secured loans you don't have to worry about unmanageable repayments, because the lower interest rates and longer repayment periods on offer mean that your monthly repayments will be far lower than those of an unsecured loan. Most secured loans can be processed quite quickly these days, and when you apply online you can complete your secured loan application from the comfort of your own home.

With such great deals on offer when it comes to secured loans, this is by far the most cost effective option open to property owners. With many people sitting on large sums of money that is tied up in their property, paying extortionate fees on some unsecured loans makes little sense when you could enjoy far better rates with secured loans, which simply enable you to unlock the money that would otherwise be tied up in your property.

Free Money Saving Auto and Home Loan Tips

2006-05-06T23:07:00.000-07:00

Free Auto Loan Tips

The following tips should help increase your chances of getting a car loan at a better rate.

Tip #1 - If you just started a job (recently graduated from college) then wait 6 months to apply for your car loan.

Tip #2 - If you have currently have bad credit then repair it before applying for an auto loan.

Tip #3 - If you've recently moved then wait until you have lived at your new address for 6 months before applying for a loan.

Tips #4 - If you have had a previous auto loan or home mortgage on your credit report then your chances for a new loan improve greatly.

Tip #5 - Try and pay off all of your credit card balances or at least lower them. You may want to consider finding the best debt consolidation loans to erase all of your credit card bills. The bottom line is don't keep a high debt load or credit card balances.

Tip #6 - You must have a stable job or occupation.

Tip #7 - Other examples of credit extended to you should appear on your credit report. Verify this with a quick and easy online credit report. Also avoid charge off's on your credit report.

Tip #8 - If you've filed bankruptcy before then you should wait 3-4 years before trying to get an auto loan.

Free Home Loan Tips

Tip #1 - Make Bi-Monthly Payments: Instead of paying your mortgage with one monthly payment switch to paying half of your loan payment every 2 weeks. The savings comes from the 26 half payments you make which add up to 13 monthly payments versus the regular 12 payments you would normally make in a year. The end result is you save a large sum of money on the interest owed and you'll own your home a lot sooner!

Tip #2 - Choose a 15 year mortgage instead of a 30 year mortgage: You'll end up with a higher monthly payment but in the long run you also save tens of thousands of dollars in interest charges, especially if you shop for the best home loans you can afford.

Tip #3 - Mortgage Refinancing: Currently this is the most popular trend. You refinance your mortgage if you can get a rate that is at least one percentage point lower than your existing mortgage rate and plan to keep the new mortgage for several years or more.

Tip #4 - Buy down the rate: The seller or builder, or through innovative pricing, can help you buy down your mortgage rate for one, two, or three years.

Tip #5 - Consider an adjustable-rate mortgage (ARM): If you think you will be in your house for less then 5 years then perhaps you should consider an ARM. An adjustable-rate mortgage (ARM) starts with a considerably lower interest rate, but then adjusts every year. This type of loan moves a little bit of the risk away from the lender, and the lender rewards you with a lower rate. Usually these mortgages are capped to rise not more than two percent in any year, and not more than five or six percent for the life of the loan for your protection.

Why Student Loans are Better Than Credit Cards

2006-05-04T23:34:00.000-07:00

You need some more money for college expenses this semester. Do you whip out a credit card to pay for your books, or do you apply for a federal or private loan? Well, consider the options -

-With a federal loan, your interest rate will be low (around 5%) and your payments will be deferred until 6-9 months after graduation.

-With a private loan, the interest rate will be slightly higher than with a federal loan but will still be lower than average. In addition, you will only need to make interest payments until after graduation.

-With a credit card, on the other hand, the interest rate can be as high as 21%. Interest begins accruing almost immediately, and you need to begin paying off the bill the next month.

This is not to say that credit cards do not have a place in your college life. It is good to have one national card (Visa, MasterCard, Discover) on hand to help you build a positive credit history and to provide security in emergencies. When you decide to apply for a card, compare annual fees, interest rates, and introductory offers. And to keep yourself out of debt, try to-

-Pay your balance each month to avoid interest charges

-Pay your bill on time to avoid late charges

-Avoid cash advances, which come with large finance charges and interest that begins accruing immediately.

What You Should Know About Home Equity Loans

2006-05-04T19:23:00.000-07:00

A home equity loan is essentially a type of second mortgage. You'll be borrowing money against the value of your home. This carries risk, but can be worth it in the end if you know what you're doing.

The most common type of home equity loan is a "closed end" home equity loan. This type of loan essentially allows you to borrow a certain amount of money against the value of your home. You cannot borrow more money on the same equity loan, so if you need more money later, you'll have to try and take out another loan.

Most people find that getting a home equity loan can go a long way toward helping them to get out of debt. Since you're borrowing money against your house, there is a greater chance that you'll end up with a lower interest rate than you're used to. This will probably result in a much lower monthly payment than most other loans.

One reason to get a home equity loan is if you are in a lot of debt and have several high interest payments to make each month. If you can get enough money in an equity loan to pay off your other debts, you'll be able to effectively consolidate all of your debt into one low monthly payment.

It is essential, however, that you make sure that you're able to meet your monthly payments after you get a home equity loan. After all, if you start missing payments, you might lose your house. Therefore, you should make a very careful assessment of your financial situation before you apply for the home equity loan. If you do not think that you'll be able to pay even the low monthly payments on this loan, then don't take the loan. If you're considering the laon for debt consolidation purposes, you might be better off looking at one of the many other debt consolidation options that are available to you.

The closed end home equity loan is not the only loan of its type. If you are looking for something that's a little more flexible, then you might want to go with a home equity line of credit instead.

A home equity line of credit works very similarly to a loan, and can definitely help you reduce your interest rates and monthly payments. The major difference, however, is that a line of credit will allow you to borrow more money against your house when needed - in some cases, up to 125% of your home's value.

While a home equity loan is better in most cases, the line of credit is a good idea if you're not sure how much money you need to borrow right away. With the line of credit, you can increase the amount of money you've borrowed against your house easily.

You will more than likely also want a home equity loan if you have a lot of credit card debt. While credit card interest rates are traditionally very high, home equity interest rates are fairly low. Since it's likely that you've ended up with several credit cards, you will probably have a lot of debt that you can easily consolidate with one home equity loan.

A home equity loan may be right for you if you need to consolidate debts quickly, and you're sure that you'll be able to pay off the home equity loan without missing any of your payments. If you are taking the loan for debt consolidation, be sure you have the discipline to use all of the loan for that exact purpose!

No Credit? - You Will Need a Bad Credit Loan

2006-05-03T16:39:00.000-07:00

So you have never taken out a loan? You don't have a credit card and you don't have a mortgage? You always pay cash? You're a student, a recent widow, a divorcee or from an ethnic minority group who have a tendency not to have any lines of credit? If you are any of the above then your credit score will not necessarily reflect your ability to pay as you have little or no credit history whatsoever. This will make it difficult to obtain any form of loan and in these circumstances you may have to take out a bad credit loan.

How prevalent is this?

Fair Isaac estimate that 50 million consumers do not have enough credit information on file to generate a credit score. This means that they are being turned away by lenders for things such as a personal loan.

Why does this happen?

Lenders will conduct a credit check. As there is little or no historic data available to measure the risk in loaning the individual money they will not meet their credit score criteria. More and more often, such consumers have to take out a bad credit loan to finance any large ticket purchases like cars as their credit score limits their financing options.

Is this fair?

It seems ludicrous that this is the case, but you have to look at it from the perspective of the lender. If someone walks into your bank or applies online to a lender for a loan, and their credit score is so low or does not exist, the automatic decision you would make is to reject the client. They appear to be too much of a risk.

Establish your credit history

The only way to remedy this is to start establishing a credit history. There are many specialist lenders who offer bad credit loans and bad credit car loans. They accept clients with little or no credit history far more readily. The bad credit loan will have higher interest rates than a standard consumer loan, but if clients make sure they pay on time and in full this will improve their credit score dramatically. They should just make sure that the lender does file credit reports, as not all of them do! In time, a credit score will be established and they can move on to apply for loans with much more favourable interest rates.

Bank Auto Loans - Best Loans for Stretch Commuters ?

2006-05-02T17:01:00.000-07:00

People have to work to survive. The desire to maintain increasingly indulgent lifestyles drives 13% of workers to travel over 100 miles a day to get to and from work. These so called "stretch commuters" make the majority of these trips by personal vehicle, but when it comes to trading in their tired automobiles for newer models should they just settle for a bank auto loan?

Stretch commuters do not have a lot of time on their hands. They spend most of their working week either at work, or travelling to and from it. When they get home exhausted the last thing they want to do is to look for the best deal for a car loan. Therefore, getting a bank auto loan is the easiest and most convenient option.

Let's quickly take a look at some of the advantages and disadvantages of this.

Advantages of bank auto loans

1. Convenience - Most consumers with checking accounts have held their account with one bank for a number of years. This may be due to inertia, but it is easier to manage finances if check accounts and a bank auto loan are held in one place.

2. You know your own bank - banks have strong brands and financial strength. They have spent years building a good reputation in society. This engenders trust from their customers who may find it daunting to take out a car loan from an unknown finance source.

3. Lower rates than car dealers - Bank auto loans will probably be able to provide you with lower interest rates than dealer loans. Most banks will offer to pre-approve customers for their loans so that they will have better bargaining power on the car lot.

Disadvantages of bank auto loans

1. Not necessarily the best rates - Even though banks have financial strength they may not be able to offer the best car loan rates. In a recent study by bankrate.com, the average interest rate offered on a 48 month bank auto loan was almost 2% higher than those offered by Credit Unions!

2. Placing All your eggs in one basket - Everyone has heard that saying and although it may be convenient why should consumers place all their finance needs with one institution. There are so many other deals out there.

3. Perfect or excellent credit preferences - People that have car loan bad credit or a damaged credit score for any other reason may be turned away. They may have to finance their car by taking out a bad credit loan and may find that this is not offered by their bank.

Even though free time may be scarce for stretch commuters, and anyone who has a need to finance a car for that matter, researching all relevant products with banks, credit unions and auto finance specialists is worthwhile. Go online as rates, terms and product benefits can all be researched from the comfort of home. Investing a little time, rather than opting for the ease of taking out a bank auto loan could save consumers money.

A Renter in Debt? Take Out a Bad Credit Personal Loan

2006-05-01T17:03:00.000-07:00

On average, homeowner households earn 95% more than renting households per year. With 26% of a rental households disposable income being spent on renting, in comparison to 15% of homeowners on their houses (not including maintenance), it is unsurprising that people who rent find it harder to manage and turn to bad credit personal loans for help.

It's easy to fall into the rent trap. As monthly rents take over ¼ of their income, debts for renters can easily pile up. It is very difficult to make any savings towards a deposit for a home and very easy to get bad credit if you skip payments on things like credit cards to try and make ends meet. Fortunately, renters with bad credit can still apply for a bad credit personal loan.

A bad credit personal loan is an unsecured loan. This means that unlike a home equity loan you do not have to pledge a valuable item such as a home or a car to guarantee repayment. If you rent this makes perfect sense as you do not have a home to pledge anyway!

A really useful thing to know is that a bad credit personal loan can be used for just about everything including:

? Buying Christmas presents

? Furnishing a rented home

? Paying off credit card bills

? A new car

Most companies that offer bad credit personal loans are not interested in what the money will be used for, they are merely interested in whether the person taking out the loan will be able to make the repayments or not. If you have bad credit then you will need to seek appropriate lenders who offer a personal loan for people with bad credit, but there are an abundance of specialist lenders available.

The main advantage to using such a loan is that unlike a credit card, the credit is non-revolving. This means that the interest rate and the term of the bad credit personal loan are fixed at the outset. The monthly repayments are always the same and this makes it far easier to allow for in a monthly budget.

As these loans are unsecured and for bad creditors, they do carry a higher interest rate than a home equity loan, but if you do not have a home then this narrows your choices substantially.

How to Make Sure You Become a Profitable Trader

2006-04-30T21:50:00.000-07:00

Regardless of your trading style; day trading, swing trading, or position trading there is a simple step by step plan you can use to improve your odds for success.

1. Start by paper trading until you can be consistently profitable on paper.

2. Regardless of how much money you have, start trading with a small amount of money and work up over time.

3. If you are a day trader, avoid the very small time-frames like 1 or 2 minute as you get a lot of signals which can lead to overtrading.

4. Make sure that all your entry criteria are met for the trade setup. Don't jump the gun until everything is in place.

5. If there are no clear signals in the market, then do nothing. Forcing trades alsmost always ends up with losses.

6. Always place your protective stop immediately after entering the trade!

7. In your studies you will be exposed to many techniques. You will improve your results by concentrating on only one or two strategies. Get real good and consistently profitable with them first.

8. Don't watch too many markets or stocks at one time. This leads to too much confusion and indecision about which trade to take.

9. Win, lose or draw don't deviate from your strategies or change things.

What is a Home Improvement Loan ?

2006-04-29T00:38:00.000-07:00

A UK Home Improvement Loan Can Give You The Home You Want.

Looking to increase the value of your property? A Home improvement Loan could be the easiest and cheapest way to make improvements to your home.

Are you planning an extension to your home, would you like to have double glazing, a new conservatory, patio, or a new heating system, or are you undertaking the general up keep of your home but finding it hard to pay for?

A home improvement loan may well provide your solution. The loan can be repaid over any term between 5 and 25 years, depending on your available income and the amount of equity in the property that is to provide the security for the loan. With competitive rates and a quick decision a home improvement loan could well be just what you need to enable you to finance your dream improvements.

A UK Home Improvement Loan is a low cost, low rate, cheap, low interest loan secured on your UK property. As the home owner, it frees you up to do whatever improvements you want on your property.

With a UK Home Improvement Loan you can borrow from £5,000 to £75,000 with low monthly repayments.

A UK Home Improvement Loan is great if you want to raise a large amount; are having problems getting an unsecured loan; or have a bad credit history - you may be able to get a UK Home Improvement Loan even when you have been turned down for an unsecured loan.

Get the home of your dreams without moving house with a UK Home Improvement Loan.

Moving property is expensive - solicitors, estate agents, stamp duty, new soft furnishings - the list seems to go on and on. And most of this is money down the drain. Why move home when you can get a UK Home Improvement Loan and save money?

With a low cost, low rate, cheap, low interest UK Home Improvement Loan, you can afford the extension, new kitchen or bathroom, conservatory, landscaped garden, redecoration you want right where you are, in your own home. You can add value to your property and save all those moving costs too.

A UK Home Improvement Loan can help you with:

A new kitchen or bathroom

An extension or loft conversion

A conservatory

Landscaping your garden

New furniture

You can even use it on non-house expenditure like a new car or repaying credit card or other debts.

Home Improvement Loan rates are variable, depending on status.

Your monthly repayments will depend on the amount borrowed and term.

You may freely reprint this article provided the author's biography remains intact:

What is a Bad Credit Personal Loan ?

2006-04-28T16:58:00.000-07:00

A UK Bad Credit Personal Loan is a loan designed for the many people with a bad credit rating. A bad credit rating can make your life a misery.

However created, your past record of CCJ's (County Court Judgements), mortgage or other loan arrears can live on to deny you access to finance that other people regard as normal.

If you are a UK home owner with equity in your property, a UK Bad Credit Personal Loan can bring that normality back to your life. Secured on your home, a UK Bad Credit Personal Loan can give you the freedom, for example, to do the home improvements or buy the new car you really wanted.

With a UK Bad Credit Personal Loan you can borrow from £5,000 to £75,000 and up to 125% of your property value in some cases. . A UK Bad Credit Personal Loan is a low cost loan secured on your UK home. It frees up the spare capital (or equity) in your home for you to use on whatever you want.

A UK Bad Credit Personal Loan is ideal if you want to raise a large amount and have a poor credit history - you may be able to get a UK Bad Credit Personal Loan even when you have been turned down for an unsecured loan. There are loan plans for applicants who have CCJ's and mortgage arrears, it doesn't matter how many months arrears you have or how many CCJ's you have registered against you, if you have the equity in your property the chances are that a loan plan can be tailored to suit your needs. Whether or not you've missed a few payments on your current credit payments, there are loan plans that will allow you to re-establish your credit rating. So if you've been turned down for credit elsewhere don't despair.

More detailed information????

County Court Judgement (CCJ)

A county court judgement is a judgement for debt in the county court. If a judgement is settled in full within 30 days of the date of the judgement it will not appear in the credit register. A judgement may be set aside, varied and suspended on application to the court. Judgements are registered publicly with Registry Trust and held for six years. In the event of a payment after that date the judgement will appear in the register but will be shown as being satisfied. However a satisfied judgement will, in most cases, show on your credit history and will treated as adverse credit history. If you have experienced a county court judgement and it has had a negative affect on your credit history you may still be able to obtain a loan via specialist lenders.

Arrears

Arrears are mortgage payments that have not been made by the due date or are not to the correct amount in accordance with the mortgage deed agreed by the policy holder and the lender.

Borrowers with arrears in their credit history may find lenders are less willing to provide them with a loan. Fortunately some high street lenders will consider providing credit impaired borrowers with a loan.

A UK Bad Credit Personal Loan can help you with:

Home improvements such as a new kitchen or bathroom

That once-in-a-lifetime holiday

Your dream car or boat

Repaying credit card or other debts to reduce your monthly outgoings to a more manageable amount

A UK Bad Credit Personal Loan rates are variable, depending on status. Your monthly repayments will depend on the amount borrowed and term.

You may freely reprint this article provided the author's biography remains intact:

No Money Down Real Estate - Fund All Your Deals With Private Lending!!

2006-04-27T17:21:00.000-07:00

If you invest in real estate, you need cash to buy houses. Even if you have a full bank account and great credit, you'll eventually run short on funds - or short on time to obtain a loan - for the next deal. Private lending is the answer. It is a bottomless pool of readily accessible funds: whether you have great credit or poor; whether you have cash reserves or not.

"Private Lending" refers to the process of borrowing real estate investment funds from private individuals at rates higher than these lenders can normally achieve in the marketplace. The attraction of private lending is the speed and ease of funding a deal.

Here's how it works?first you find or do marketing to find individuals interested in earning 10-12% interest (or whatever you deem affordable for you and attractive to others) on investments secured with real estate. You'll find these prospects everywhere. They belong to your local investors association, your church, your civic club, they're your friends and family, your neighbor next door. You'll be surprised how easily you'll locate them, and soon, they'll be searching you out. Just let everyone know that you pay high interest for their loans on your real estate projects.

As prospects express interest explain that the investments are secured by real estate and do not exceed 75% loan-to-value (LTV) of the after repaired value of the home. Each investment is based on a specific property, and they can decline any property with which they are not comfortable. All you require is that they approve quickly (within 48 hours), and can fund within 7-10 days or less.

Once they have approved the investment, the funds are wired to the closing attorney to be held in escrow. After the closing, the lender will receive a Promissory Note from you (either personally, from your business entity, or both), a Deed To Secure Debt (mortgage) on the property, lenders' title insurance, and listed as a mortgagee on the hazard insurance policy.

If no single investor can fund the entire investment, then piece several loans together by providing the largest investor with a first position mortgage, and each smaller investor a progressively subordinate (2nd, 3rd, etc.) mortgage. Typically, we pay an additional percentage on the interest rate to entice investors who accept subordinate positions.

The advantages of private lending are that there is a minimal approval process, and so availability of funds is quick. You pay interest only, instead of also incurring a loan origination fee commonly known as "points". You are never constrained by arbitrary rules as to how many mortgages you can have in your name. In fact, none of these mortgages ever show up on your credit report. In turn, the private lendor receives a higher interest rate with a very secure investment. Everyone wins!

Now you may be wondering how many people you know really have $75k -$100k -$150,000 just lying around ready to invest. More than you think - and most of them don't even realize it! That's because the money is tied up in their IRA's which they believe can't be accessed until retirement. That's only half true. They can't personally withdraw the money without suffering penalties; but they can invest their funds (and receive your interest tax-fr ee! if it's a ROTH IRA) if they rollover into a self-directing IRA.

A self-directed IRA is administered by a third party institution (we recommend Equity Trust Company in Ohio www.trustetc.com ) and allows the IRA owner to make decisions relative to the investment of the funds. In other words, the IRA owner can decide to use his IRA funds to make a real estate investment in your property. Most people do not even realize this as a possibility. They believe their money must stay tied up in an IRA until retirement earning nominal interest. Imagine how thrilled they are when you provide this alternative! Imagine how much money is currently sitting in traditional IRA's that you could tap into. There are more funds available than you can use. Isn't that a nice problem to have?

Since Equity Trust Company has all of the forms on their website, I ensure that making a loan is as simple as possible for my private lenders. I prepare all of the required documents so all they have to do is sign and fax to Equity Trust. From that point on, the private lender has nothing else to do. Simple. Easy. Their next task is approving the payoff when the loan is re-paid. Because the loan process is so simple, and the interest rate so favorable, investors are always begging to re-invest. This truly is a bottomless pool of investment cash.

Don't forget that if you have cash in an IRA, you can also increase the interest you're earning by becoming a private lender. You can not invest in any property or company in which you or your family have a vested interest, but you can invest in the projects of other investors which you know and trust. It's a great way to leap frog your IRA.

Have a rich week,

Secured Loans - UK Overview

2006-04-23T03:11:00.000-07:00

Borrowing money has become more and more popular in the UK over recent years, and this is partly due to the fact that it has become far easier to borrow money. The rising popularity of consumer finance has also been aided by the wide variety of deals and the low interest rates available these days. Secured loans have become very popular with those that own property, and this type of finance deal offers affordability and excellent value for money. Secured loans are available from a wide pool of lenders, which means that consumers have plenty of choice when it comes to selecting and applying for secure loans.

The amount available to borrow with secured loans is dependant upon the amount of equity available in your property, which means the amount of the market value minus any loans or mortgage outstanding on it. There are many benefits available with secured loans, and you will find that this type of finance is one of the most cost effective options available. With secured loans you can look forward to far lower interest rates than most standard, unsecured loans, and this is because there is less of a risk to the lender since the loan is secured against an asset.

Secured loans also offer far high borrowing levels than unsecured loans, although the amount available to borrow will depend in your equity. However, you could find yourself eligible to borrow tens of thousands of pounds with secured loans, which could prove invaluable if you are looking to raise a large amount of finance for just about any purpose. The repayment period with secured loans is also far longer than with unsecured loans, which means that your monthly repayments will be far lower.

The other great thing about secured loans is that they are far more easily accessible to those with poor credit than a standard, unsecured loan. This is because the lender has to take less of a risk with secured loans, as they are secured against an asset, and the lender is therefore usually more willing to consider those with bad credit for this type of finance. Bad credit secured loans are available at really reasonable rates, which means that you can enjoy lower repayment terms even if your have a tarnished credit history.

One of the most common reasons for taking out secured loans is to consolidate other loans and credit. Many people pay out a fortune each month on a selection of high credit loans and cards. With secure loans you can wrap up all of that expensive credit in to one convenient loan, and you can then pay just one lot of interest and make just one repayment each month. You can use bad credit secured loans to wrap up your other more costly credit, and even to pay of some debts, and this can go some way toward improving and repairing your credit.

Secure loans are widely available online, and by browsing and booking via the Internet you can quickly ascertain which of these loans best suits you in terms of conditions and interest rates. It is always wise to compare the various deals available on secured loans in order to check that you are getting a competitive deal and rate.

Whatever you are looking to fund or purchase, secured loans make it more affordable and more achievable. If you are using a secure loan in order to consolidate your other loans and credit, you can look forward to far lower repayments each month as well as an overall reduction in the amount of interest you pay. Finding, comparing and applying for secured loans is simple when you harness the power of the Internet, and you can rally speed up the process as well as benefit from total convenience and ease. You are also more likely to find really competitive deals on secured loans when you look online, giving you an even better chance of getting great value on your borrowing.

If you find yourself in need of a fairly large sum of money and you have equity in your property, it makes sense to look into the range of secured loans available. With secured loans you don't have to worry about unmanageable repayments, because the lower interest rates and longer repayment periods on offer mean that your monthly repayments will be far lower than those of an unsecured loan. Most secured loans can be processed quite quickly these days, and when you apply online you can complete your secured loan application from the comfort of your own home.

With such great deals on offer when it comes to secured loans, this is by far the most cost effective option open to property owners. With many people sitting on large sums of money that is tied up in their property, paying extortionate fees on some unsecured loans makes little sense when you could enjoy far better rates with secured loans, which simply enable you to unlock the money that would otherwise be tied up in your property.

Payday Loans - The Legal Loan Sharking Industry

2006-04-21T23:57:00.000-07:00

Laws have been created to protect people against "Loan Shark" practices in which short-term loans are given out at excessive interest rates. There is an industry that has come of age the last couple of years that has circumvented these laws. Enter the Payday loan industry.

Payday loans is a some-what new multi-billion dollar industry in which people borrow money to tithe them over until their next payday. These loans also go by the names cash advance loans and paycheck loans. They prey on the lower class that find themselves short of money before a payday.

The one thing to consider when looking into a payday loan is the APR or Annual Percentage Rate that these loans carry. At first glance, you may think paying $240.00 for a loan of $200.00 for two weeks is ok. The A.P.R of this loan comes to a whopping 520%. That is the amount this loan would cost if played over a years time. Compare this with a high interest credit card of 29%. When you see it compared to these numbers, you can see they are not the bargain you first thought it was.

A representative from a payday loan company has agreed to be interviewed for this article on the condition his identity and that of his company be anonymous.

I asked him, how can they can justify such enormous interest charges. His reply was "Because we can. There are loopholes out there that allow us to do this. This is a high risk loan for most cases so we need to charge enough to cover bad loans and to make a profit."

When asked about if payday loans are ever a good idea, his response was "Sure. For example if you will be late on a credit card payment of $70.00 and will be charged a late fee of $30.00 then the APR of the payday loan justifies getting one. You will save points if you get a payday loan and not pay the higher interest rate of the late fee."

When you should get a payday loan:

There are times when payday loans are justified as discussed above. The primary example when your late fees are more expensive than the late fees paid to your creditors.

Another non-tangible justification is when you can avoid getting reported for a late payment. This can be far more expensive than any payday loan fee in that it could affect the cost you pay for future loans. This is especially true if it's your mortgage or car payments.

Yet another reason to get a payday loan is that you determine that the cost is worth it to you personally. If you are headed for the long awaited vacation and could use a few extra bucks to enjoy and can afford the fees then you should look into this.

A final thought on when you should get a payday loan is if you need that cash and it's free. That's right free. There are a many sites out there that charge ZERO interest to all first-time customers. One such site can be found at Low Cost Payday Loans.

What to look for when getting a payday loan:

The first thing to look for is the APR. Federal law has made it so that every lender must disclose the cost of any money borrow through a Truth in Lending Disclosure. This must break down the cost by APR (Annual Percentage Rate). This is the first thing to compare loans by.

Another thing to look for is the length of the term. If two companies charge the same rate for every hundred dollars borrowed but company A has a term of up to four weeks and company B has a term of two weeks, then go for Company A and take advantage of the extra four weeks. The APR of Company A is half of Company B. The reason this differs from the first item is that sometimes they base APR on a fixed amount of time (two-three weeks usually). When you read the fine print that the fee charge is fixed and may allow you to pay it back in a longer term such as four weeks.

The bottom line:

Do your homework when getting a payday loan and look for free to low cost payday loans if possible. The money you save can be substantial. Look for lower cost payday loans and No Fax Payday Loans. These faxless payday loans allow you to apply without needing to submit documentation via fax.

Second Mortgage Loans

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A second mortgage is a loan that is secured by the equity in your home. When you obtain a second mortgage loan the lender will place a lien on your house. This lien will be recorded in 2nd position after your primary or 1st mortgage lender's lien, hence the term second mortgage.

A second mortgage is also sometimes referred to as a home equity loan. There is no difference between a home equity loan and a second mortgage. These are just two different terms for the same subject.

A second mortgage can either be a fixed-rate loan or an adjustable-rate credit line. Interest rates and loan program terms will vary from lender to lender so it is important to shop around and compare before committing to any one offer.

Loan proceeds from a second mortgage loan can be used for just about anything. Many consumers take out 2nd mortgage loans to consolidate debt, do home improvements or pay for their kids college education. Whatever you decide to do with your loan proceeds it is important to remember that if you default on your payment you can lose your home so you will want to make sure that you are taking the loan out for a worthwhile purpose.

Another plus of a second mortgage loan is that the interest you pay back on the loan may be tax deductible. Consult your tax advisor regarding your personal situation but in most cases the interest is 100% fully deductible as long as the combined loan to value of your 1st and 2nd mortgage do not exceed the value of your home.

What Is A Second Mortgage ?

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125% Equity Home Loans

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If you are a homeowner in need of a home equity loan but you have not yet built up any equity in your home, don't despair. A 125 percent equity home loan may be the answer.

A 125 percent equity home loan is a second mortgage loan that allows you to borrow up to 25% more than the value of your home. For example, if your home is worth $100,000 and you owe $100,000 on the mortgage, this loan program would allow you to still borrow up to $25,000.

The 125 percent equity home loan is offered by various online lenders. Each lender has their own qualification and loan term guidelines but generally this is a credit score driven loan program. Credit score driven means that you have to have a certain credit score to qualify for the loan. In addition, your credit score usually determines the maximum loan amount you may qualify for and the maximum cash in hand you may receive. Also, some 125 percent equity home loan lenders may require seasoning on the length of time you have lived in your home. Three months is normally the minimum.

When it comes to a property appraisal, most 125 percent home equity loan lenders do not require you to obtain one. They generally will use the purchase price of your home as the value if you have lived in your residence for 12 months or less. If you have lived in your home over 12 months, a recent tax assessment, simple drive-by appraisal, or automated value model (avm) can be used. An avm is a computer generated assessment of your home's value which is based on recent home sales of comparable houses in your neighborhood.

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No Income Verification Home Equity Loan

A no income verification home equity loan is a second mortgage loan that does not require you to provide income documentation to qualify for the loan. This type of loan is great for homeowners who need a home equity loan but have hard to document income.

The majority of borrowers with hard to document income are either self-employed or commission based employees. Consumers who fall under these categories may have high income but have a lot of business related deductions that they write off on their taxes. This is good on the one hand as it reduces the taxable income and thus the amount of taxes owed, however, when it comes to getting a home loan it can hurt as most lenders use the average of your last 2 years taxable net income (the amount left after all of your deductions) to determine your income figure for qualifying purposes. This may cause you to have a debt to income ratio problem if you have a high debt load and thus keep you from qualifying for the loan. With a no income verification home equity loan, however, your gross income can be used for qualifying purposes as opposed to the net income.

In order to qualify for a no income verification home equity loan you will, in most cases, need good credit and a high credit score. Expect to pay a higher rate for this type of loan as opposed to a traditional loan in which you have to document your income. Also, even though a no income verification loan does not require you to document your income, some lenders may require that you have a certain dollar value of assets on hand which must be verified. Not all lenders have this requirement though - some lenders offer a program called NINA which stands for "no income no assets" meaning you do not have to document either. Loan guidelines and rates vary from lender to lender so it is a good idea to shop around to increase your chances of getting the best deal available to you.

2006-04-15T21:42:00.000-07:00

Interest rates have been at their lowest levels in over 40 years. U.S. consumers have been able to purchase previously unaffordable homes, cars and other toys. Many have used cheap home equity loans to remodel, take vacations and pay off credit cards. Students have taken advantage of the rock-bottom student loan rates.

But, interest rates look to be headed up. Recently, Alan Greenspan and the Federal Reserve escalated the Fed funds rate from 1% to 1.25%. So, what does that mean to you and me?

The increase in rates is important if you have variable (not fixed) loans. For example, if you have adjustable rate mortgage or home equity lines of credit, the interest rates will probably go up (as well as the payments) in the next few months. Each time the Fed increases the Fed funds rate, it will roll down onto your adjustable rate loans and your payments will go up. The speed of increase and the amount of the increase will depend on what index your loan is based on - check with your lending institution for more information on that.

If you have high credit card debt, the situation may be even more bleak because credit card rates remained high while other rates have been incredibly low. The Fed increases are a good excuse for your credit card company to hike your rates even higher.

So, what can you do if you're looking at rates and payments going up, up and away?

* Your payment increases may be fairly gradual. Depending on the economy, the Fed will continue to increase rates although they have signaled that the increases are likely to be very gradual. If the economic or political situation changes, they always have the ability to lower rates again. The Fed's rate-setting committee is scheduled to meet again Sept. 21, Nov. 10 and Dec. 14, and they may skip a rate increase at one of those meetings if inflation is subdued.

* Check with your student loan lenders to see about consolidating and locking in rates. Good news: interest rates on savings are also likely to increase! So, if you have CD's coming due, check with different financial institutions before automatically rolling them over. If you have money stashed in savings accounts, the rates are probably starting to creep up. I highly recommend ING savings for the highest rates around (www.ingdirect.com). They also give great service, have no fees or hidden costs and are FDIC insured. You can also name your accounts at ING to make it easy to identify what you're saving for.

* If you've been thinking about re-financing, there are still some good deals out there and there's no sense in procrastinating any longer. Contact me for some excellent resources for re-financing.

* What if a new house isn't in your plans for a couple of years? When rates go up, it often cools off real estate prices and balances out the higher rates. Continue to save money in the highest interest short-term accounts you can find (no stocks or other long-term investments). Rates will probably not take huge leaps in the short term.

* If you have an adjustable rate (home or home equity or car loans), you will see higher payments so call your lender to find out what the new payment is "likely" to be. They'll probably put all kinds of disclaimers out about not really knowing, but try to get a worst case scenario and then start pretending you really do have that new payment. Put the extra into a special savings account so you'll have a "slush" fund to cover if you run short one month. At the same time you are building up a cushion for the future, you'll have a good idea of whether or not you can handle the new payment. If not, now's the time to start looking at other alternatives like cutting back, increasing income or even refinancing.

Remember, if you refinance your existing term to a new 30 year term, you'll have lower payments, but you'll pay a lot more for your house because of the additional interest.

* Call your credit card companies and see if they are willing to lower your rates (not all are). Look for good, permanent credit card interest rates that you can transfer higher rate balances to. For example, if most of your cards are 18% or higher, find a good 12% card or lower and transfer as much as you can to that. Playing the 0% credit card shuffle is a dangerous game and can hurt your credit score.

* Reduce credit card debt now! Stop using your cards and pay more than the minimums. If you pay off one card, take that payment and put it on another card. If you receive a pay increase, put it on the cards. The sooner the cards are paid off, the more flexibility you'll have!

All in all, we're quite likely to enjoy reasonable interest rates for some time to come. However, make preparations now and you'll be able to handle whatever comes your way.

If you need help, I'm the one to call -- 541-387-2995!