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The Difference Between Secured Debts and Unsecured Debts #loan #calculator #personal


#unsecured loans
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The Difference Between Secured and Unsecured Debts

By LaToya Irby. Credit/Debt Management Expert

Welcome to About.com s Credit/Debt Management site, led by your guide, LaToya Irby. LaToya has been the credit and debt management guide since 2007. Read more

When it comes to debt, there are two major types: secured debt and unsecured debt. Knowing the difference is important for borrowing money and for prioritizing your debts during payoff.

Secured Debts

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If the selling price for the asset doesn t completely cover the debt, the lender may pursue you for the difference.

A mortgage and auto loan are both examples of secured debt. Your mortgage loan is secured by your home. Similarly, your auto loan is secured by your vehicle. If you become delinquent on these loan payments, the lender can foreclose or repossess the property.

Unsecured Debts

With unsecured debts. lenders don t have rights to any collateral for the debt. If you fall behind on your payments, they don t have the right to take any of your assets.

However, the lender may take other actions to get you to pay. For example, they will hire a debt collector to coax you to pay the debt. If that doesn t work, the lender may sue you and ask the court to garnish your wages. take an asset, or put a lien on another your assets until you ve paid your debt. They ll also report the delinquent status to the credit bureaus so it can be reflected on your credit report .

Credit card debt is the most widely-held unsecured debt. Other unsecured debts include student loans. payday loans. medical bills. and court-ordered child support.

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Prioritizing Secured and Unsecured Debts



Central Finance for financial advice and personal assistance all over New Zealand, from Cape Reinga to the Bluff and everywhere in between. #12 #month #loans


#easy loans
#

Looking for a loan at a competitive interest rate with minimal fuss?

We offer loans from 12.95%, and we specialize in getting you the finance you require.

Every day, we arrange finance for our customers, from Cape Reinga, all the way down to the Bluff, and everywhere in between. We’re proud to say that we have helped over 20,000 kiwis get the finance they needed, when they needed it.

Our loans start from $1,000, and go all the way up to $500,000, with repayments starting from just $25 per week. We provide Personal Loans, secured or unsecured, Car Loans, Bridging Finance, Mortgages and Debt Consolidation Loans. We can also provide tailored finance packages offering you deferred payments, interest only payments and residual payments to fit your lifestyle.

YOU MAY NOT KNOW: Applying for loans with various companies not only wastes your time, wastes your money, and most importantly adversely affects your credit score. Your credit score drops with each application you do! We only perform 1 credit check and 1 PPSR, and we send this to a range of accredited finance providers to get the best deal for you.

At Central Finance and Loans we understand that every loan application is as unique as the client that sends it, so we assess each application individually based on its merits. Utilizing our long standing experience in the finance market, we handle the process from start to finish making the application process easy, so all you have to do is relax while we do all the work on your behalf.

With the backing of numerous underwriters leading the New Zealand finance industry, we can offer you finance for almost anything you need.

Our aim is to provide you with a friendly, professional, helpful service so you can achieve your goals and financial rewards faster and easier.

It’s not just about getting finance, it’s about getting the “right” finance for you.

Feel free to give us a call on 0800 100 630 to speak to an experienced consultant, or simply complete our 5 minute online application



What is the difference between loan and advance #debt #management


#advance loans
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What is the difference between loan and advance?

Ashik 2012

Answered Last

The main difference between Loan and Advance. the interest component.

2. Both Loan and Advance are to be repaid in installments for example: monthly installments of equal amounts.

3. In case of Loan, interest is calculated ( Simple or Compound type interest) and the interest amount is recovered at the end.

4. Example for Advance: Mr. X working in an organisation. He took $10,000 as advance to be repaid in 10 monthly installments. Monthly recovery from salary is $1,000. After 10 months, hi repays entire amount.

5. Example for Loan: Mr. Y took a Loan of $10,000 with a a simple interest rate of of 12% per year. Monthly installment is $1,000. Accrued Interest is calculated every month on balance principal amount. The recovery chart is as below.

Installment Balance Interest Accrued interest 10000 0 1 1000 9000 100 100 2 1000 8000 90 190 3 1000 7000 80 270 4 1000 6000 70 340 5 1000 5000 60 400 6 1000 4000 50 450 7 1000 3000 40 490 8 1000 2000 30 520 9 1000 1000 20 540 10 1000 0 10 550

After 10 monthly installments. the interest portion $550 is remaining. This may be repaid at a time. In case of huge loans, the interest amount is recovered in equal installments.

The main difference between Loan and Advance. the interest component.

2. Both Loan and Advance are to be repaid in installments for example: monthly installments of equal amounts.

3. In case of Loan, interest is calculated ( Simple or Compound type interest) and the interest amount is recovered at the end.

4. Example for Advance: Mr. X working in an organisation. He took $10,000 as advance to be repaid in 10 monthly installments. Monthly recovery from salary is $1,000. After 10 months, hi repays entire amount.

5. Example for Loan: Mr. Y took a Loan of $10,000 with a a simple interest rate of of 12% per year. Monthly installment is $1,000. Accrued Interest is calculated every month on balance principal amount. The recovery chart is as below.

Installment Balance Interest Accrued interest 10000 0 1 1000 9000 100 100 2 1000 8000 90 190 3 1000 7000 80 270 4 1000 6000 70 340 5 1000 5000 60 400 6 1000 4000 50 450 7 1000 3000 40 490 8 1000 2000 30 520 9 1000 1000 20 540 10 1000 0 10 550

After 10 monthly installments. the interest portion $550 is remaining. This may be repaid at a time. In case of huge loans, the interest amount is recovered in equal installments.

The main difference between Loan and Advance. the interest component.

2. Both Loan and Advance are to be repaid in installments for example: monthly installments of equal amounts.

3. In case of Loan, interest is calculated ( Simple or Compound type interest) and the interest amount is recovered at the end.

4. Example for Advance: Mr. X working in an organisation. He took $10,000 as advance to be repaid in 10 monthly installments. Monthly recovery from salary is $1,000. After 10 months, hi repays entire amount.

5. Example for Loan: Mr. Y took a Loan of $10,000 with a a simple interest rate of of 12% per year. Monthly installment is $1,000. Accrued Interest is calculated every month on balance principal amount. The recovery chart is as below.

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Difference Between Dietician and Nutritionist #difference #between #dietician #and #nutritionist


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Difference Between Dietician and Nutritionist

We often hear people using the terms dietician and nutritionist interchangeably. Though it is used interchangeably in many places, there are many differences in the designations, roles, and responsibilities of these professionals.

A nutritionist is a person who holds a degree in the discipline of nutrition. It can also be a doctorate degree. A dietician is a person who will have completed the concerned examination as well as an internship. These people are licensed to work and are known more as Registered Dieticians. They usually need a degree and post-graduate degree in the program. For the license, they must specifically pass the licensing exam.

Nutritionists are not professionals who are licensed by the state board. This does not mean that they work illegally. If they hold a bachelors degree, licensing is not required. But in the case of dieticians, the professionals cannot work without the licenses. If they do so, their practise is illegal. Non-licensed professionals usually use the designations of Dietary Educator or Diet Specialist.

A nutritionist is a person who can advise you on your balanced meals and health. This professional helps you in figuring out what diets are good for your body nature. A dietician helps you with your obesity problems. This professional is capable of giving you tips on how to lose weight and instruct diets specifically for the purpose.

Usually nutritionists work in the government health sectors like the health departments. Dieticians usually work in private and other hospitals and are usually better paid than nutritionists. They also work in the public health and community spheres, research, and academic domains as well. Those who practice privately offer one-to-one counselling as well.

Dieticians meeting the national standards specified for training and education can use titles like RD, RDt, or PDt. These professionals are held accountable by the law for the conduct and care provided by them to their patients. On the other hand, nutritionist is not protected by law everywhere. But the accredited nutritionists can have designations like Associate Nutritionists, Registered Nutritionist, and Associate Public Health Nutritionists.

In medical scenarios, dieticians provide the artificial nutritional requirements to the patients who are not able to consume the foods in the normal way. Dietary modification is a major section of the study and application of dietetics. These professionals usually prepare and serve the proper foods to the patients. A nutritionist elicits, disseminates, and promotes the knowledge on the effects of nutrition to people.

While seeking the professional advice of a dietician or nutritionist, you must check for the credibility of the profession. Self proclaimed dieticians and nutritionists can do harm to your body.

Summary:
1.Dietician is protected by law but nutritionist is not protected by law in all countries.
2.Dietician deals majorly with the problems of obesity and diets for weight loss. Nutritionists work by spreading the knowledge of the healthy foods and diets for healthy bodies.
3.Nutritionists usually work in the government sectors while dieticians concentrate more on the private sectors.



What Is the Difference Between a Cash Advance – a Payday Loan? #debt #consolidation #loans #bad #credit


#advance payday loans
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Credit Score Required

A payday loan typically does not require any type of credit check to authorize the loan. You only need to have a checking account so you can write a post-dated check to secure the loan. On the other hand, if you want to get a credit card cash advance, you need to have a credit card first. You can either use a card you already have or apply for a new one. All credit card companies check your credit score when you apply and only issue credit cards to people who meet their credit standards, which vary from one company to another.

Costs

The fee to get a payday loan is usually about $15 per every $100 you borrow for two weeks. If you roll over the loan, you have to pay the fee all over again. Therefore, if you keep rolling over the payday loan for a year, you will pay the equivalent of more than 300 percent interest. A credit card cash advance usually charges a fee of 1 to 4 percent of the amount advanced. Sometimes there might be a flat minimum fee. If the cash advance is through an ATM, there is likely an ATM fee of a few dollars. In addition, the borrower pays interest on the balance each month, usually at a rate a few percent higher than regular credit card purchases. According to Smart Money, most credit card cash advances charge 20 to 25 percent interest annually.

Repayment Schedule

When you take out a payday loan, you must repay it in full very soon, usually within two weeks. If you cannot repay it, you must pay the charges again to roll over the loan for another two weeks. Some states have laws that require payday lenders to work out an installment schedule to stretch out the repayment. With a credit card cash advance, on the other hand, you only have to pay the minimum credit card payment, which factors in the amount of the cash advance and any other draw on the line of credit. You can pay more than the minimum if you would like to pay it back sooner, but in general it is much easier to meet the repayment schedule for a credit card cash advance than a payday loan.

Which is Better?

The better type of borrowing depends on your situation. If you already have a credit card with available credit, a credit card cash advance offers a lower long-term interest rate and low monthly payments. If you do not have a credit card and do not think you will be able to get one fast enough, a payday loan offers a quick solution and moderate fees if you pay it back right away. However, if you do not expect to be able to pay back a payday loan in two weeks, carrying it over can be far more expensive than paying interest on a credit card cash advance.



What Is the Difference Between a Signature Loan and a Short-term Loan? #auto #loan #calculator


#signature loans
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What Is the Difference Between a Signature Loan and a Short-term Loan?

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It’s normal to obtain a loan to buy a house or vehicle. When you take out a loan for a house or car, the lender lets you repay the loan over several years. But what if you need a quick, short loan? In this case, you can apply for either a signature loan or a short-term loan. Signature loans and short-term loans carry certain similar characteristics; neither type of loan requires collateral and they both feature short repayment terms. However, there are key differences between the two.

Obtaining a Loan

Financial institutions, such as banks and credit unions, issue signature loans. You can apply for a loan in-person or submit an application via your bank’s online website. If approved for a signature loan, visit the bank to sign your documents and obtain your funds. Short-term loans, also known as payday loans or cash advances, aren’t issued by banks and credit unions. These loans are available from private loan companies. You can apply for a short-term loan with a local company or submit an online application. Loan companies operate differently from banks. If you submit an online application for a short-term loan, the loan company conducts the entire transaction via the Internet and fax. You supply your information, such as copies of your most recent paycheck stub, bank statement and driver’s license. After verifying your information and receiving your electronic signature, the loan company deposits funds into your bank account.



The difference between water and flood damage – 21st Century Insurance #21st #century, #21st #century #insurance, #insurance #information, #i #need #flood #insurance, #flood #insurance, #difference #between #flood #and #water #damage, #what #to #do #with #water #damage, #am #i #covered #flood #insurance, #march #2014 #newsletter


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In Touch With 21st – March 2014

The difference between water and flood damage

You return home to find your living room flooded. Will your insurance policy cover this loss? That depends on the type of insurance you chose to purchase, and how the water entered your house.

Types of insurance that can help

There are two types of policies that cover losses caused by water, homeowners insurance and flood insurance. These policies provide two different types of coverage that complement each other, but may not overlap.

Homeowners insurance. Most homeowner policies cover damage to your home caused by a sudden and accidental water event, such as a burst pipe, wind- or storm-driven rain or melting snow. Water damage caused by poor home maintenance such as overfilled gutters, a poorly maintained roof, and condensation buildup due to inadequate ventilation or unrepaired leaks will generally not be covered. Also, a homeowners policy doesn t protect against flood damage.

Flood insurance. While flood damage to your home and its contents is not covered under your homeowners policy, it could be covered by a separate flood insurance policy, available through the National Flood Insurance Program from the Federal Emergency Management Agency (FEMA) if you purchase this type of policy. A flood is defined as a rising and overflowing of a body of water onto normally dry land. For insurance purposes, the word “rising” in this definition is the key to distinguishing flood damage from water damage.

Flood insurance is available to homeowners and renters, for both personal and commercial properties. The cost of this insurance will vary depending on the amount of insurance purchased, what is covered and a property s flood risk. Note that it typically takes 30 days for flood insurance to take effect from the date of purchase.

What to do when water damage occurs

If water damage occurs to your property, such as with a storm, it is important to dry all wet areas and provide air circulation to aid in the drying process. Also, cover any exposed areas of the dwelling with a tarp to prevent further water damage. Covering exposed areas along with drying and dehumidifying wet areas can help minimize the possibility that mold will form due to the water damage. Always contact your insurance agent immediately to start the home owners insurance claims process.

Please note: This information is of a general nature for educational purposes only. It must not be taken as advice and does not signify an endorsement. 21st Century Insurance is not responsible for any injuries or loss incurred.



Basics of Private Party Loans – Payment Between Individuals #what #is #fha #loan


#private loans
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Private Party Loans

By Justin Pritchard. Banking/Loans Expert

Justin Pritchard helps consumers navigate the world of banking.

Private party loans can refer to a few different things. The traditional (and most common) type of loan is an auto loan used to purchase a used vehicle. Instead of buying from a dealer. you re buying from a private party. so getting a loan is a little bit different.

Some of these loans are a great deal for all involved.

Private Party Auto Loans

In the age of Craigslist and similar sites, finding a used car is easy. But finding funding isn t as simple. If you buy from a dealership, they ll offer (or push ) financing, which they ve arranged with local or national lenders, and it s hard not to walk out without getting a loan.

When you re dealing with a private seller, lenders are more hesitant. They don t know anything about the vehicle — it s your responsibility to figure out what it s worth.

However, banks and credit unions know that there is money to be made in lending money, so they offer private party loans.

Private party auto loans are similar to standard auto loans, but they tend to come with a slightly higher interest rate, and they generally won t last as long (banks are taking more risk with a used vehicle, so they want to limit their risk).

Where to Get One

To get a private party auto loan, you ll need to apply, and approval will be based on the same factors that affect every loan: mainly your credit scores and your debt to income ratios ; the lender wants to see that you ve got enough income to repay the loan, and that you re familiar with borrowing money.

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If you can t qualify, you can always try using a co-signer .

Numerous banks and credit unions offer these loans. A quick search will show you some of the big banks in the market, but you should also shop smaller institutions. If you aren t having any luck with a big bank, try a small local bank or credit union. which might be more accommodating.

Other Types of Private Loans

Sometimes loans between individuals create a win-win situation: great for lenders (who earn more than they can at the bank) and borrowers (who pay less interest than they would at the bank). When borrowers have poor credit, private loans may be the only option available, although they generally come with higher rates.

Where to Borrow

There are basically two ways to find private party loans: peer to peer lending services and people you know. To borrow from strangers, visit a peer to peer lending site and apply for a loan. Even if you set up a private party loan with somebody you know, these sites may help with loan documentation and servicing.

Documentation

Documentation is a key to any private party loan. Make sure everything is spelled out in writing, and everybody understands and agrees. While it may seem overly formal, documentation can prevent headaches and heartbreaks in the future.

To document your private loan, write an agreement or use somebody else’s. For larger loans, it’s probably best to use a professionally prepared agreement — a lot can go wrong, and good loan agreements anticipate pitfalls.

For private party loan documents, search the web, work with a local attorney, or use a peer to peer lending service that specializes in these loans. For example, LoanKin sells agreements and even processes payments on mortgages and other loans.



Difference between Short Term and Long Term Loans #loans #with #bad #credit


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Wealth Creation and Saving Strategies | OnMoneyMaking

Difference between Short Term and Long Term Loans

by: admin – March 27th, 2013 1 Comment

The thought of a loan seems to have crossed everyone s mind at some point in life. Generally it s not carefully thought out though. A loan is a specified amount of money someone borrows with the intention of paying it back. Generally it s over a said period of time and is paid back with interest. There are different types of loans falling into two major categories: short term and long term. A person may find themselves needing a loan for many different purposes.

Short Term Loans

Short term loans are generally up to about three years. A popular short term loan is a payday loan. Someone may take a payday loan out in the event of an emergency such as car repairs, taking a vacation, or other unexpected bills. Payday loans are like a cash advance in which the payment comes from your bank account on your next pay date. These are very popular because of the few requirements needed to be approved for the loan. Unlike a long term loan, you can get cash within 48 hours from companies like Online Payday Loans.net and there are no credit checks. These loans are generally up to $2000.

Another popular short term loan is a flexible loan. This is generally a credit based loan, but up to $25,000. The term is generally 12 months. Short term loans are at a higher interest rate than a long term loan, capitalizing on the length of your loan. A lender will use the situation that you do not have credit in order to offer the higher interest rate.

Long Term Loans

Long term loans can be taken over an extended amount of time. Most common long term loans are mortgages, student loans, wedding loans, start-up business loans, and home improvement loans. A long term loan is credit based. The better your credit score the better your interest rates will be. A long term loan can be in the form of a secure or an unsecured loan. A secure loan requires a form of collateral or asset, such as a title to your car or your home. An unsecured loan does not require any assets and has a higher interest rate as the lender has more at stake. You can think of this as a line of credit with your bank or a credit card.

Taking a long term loan is generally through a bank or credit union, unlike a short term loan. The amount of the loan will be based on your credit history and current income. With long term loans, you have greater flexibility with payment options. For instance, mortgage loans offer a fixed interest mortgage loan, in which the rate is the same over the term of the loan and the payments are split equally. An adjustable rate mortgage loan s rate can adjust every year. There is also an interest only loan, of which a person can pay only the interest of the loan for a set amount of years, and then start paying on the principal. Unlike short term loans, long term loans can help establish credit.

When making the decision to take a loan, it s important to think about a few things. Think if you really need the loan and weigh other options. Shop around for the best interest rates. Consider the consequences. Make sure you are able to afford paying the loan back. For instance, a payday loan will take so much of your next paycheck. Make sure it doesn t dig you further into debt on other bills.



Your Credit Rating Score Between 600 and 650 #discovery #student #loans


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Start saving money in

The unique thing about a credit score that falls between 600 and 650 is that it can put you in one of two major credit brackets. Your credit can either be considered bad or fair, which means you may be limited on what types of loans you qualify for or whether or not you can take out a home loan .

There are two major factors to consider what kind of interest rate you can expect for lines of credit, and whether or not you actually qualify for a home, car, or any other type of loan. A score that is below 630 is considered bad credit, while scores between 630 to 689 are considered fair credit.

Do you qualify for a car loan?

You should have no major problem finding an auto loan as long as you have steady income. The interest rate you qualify for depends on a variety of factors such as how much of a down payment you provide, the amount you wish to take out, the length of your loan, and the lender.

If your credit is fair,  you should be able to find an auto loan that offers five to ten percent interest throughout the term of your loan. If you have a bad credit score, on the other hand, you will most likely have an interest rate of 10 percent or more. The best way to avoid paying higher interest when you have bad credit is to have a big down payment. Lenders like to see more money being put towards the vehicle, and will reward you by lowering your interest rate. This move will reduce your monthly car loan payments.

Do you qualify for a home loan?

Home loans are still possible with a credit score that falls between 600 and 650, but you may need to receive government assistance in order to qualify for a loan. Find lenders that specialize in FHA loans and learn what type of home loan you can qualify for.

Unless you have a substantial down payment, anticipate a high interest rate on your home loan. Before you commit to a home loan, it’s wise to take steps to raise your credit score so that it is above 650.

The higher your credit score and the better your credit history, the lower your interest. Since a mortgage is such a long-term commitment, take the time to raise your score in order to obtain the lowest interest rate that is available to you.

If you decide to take out a home loan, you can expect an extremely high rate. Your rate may even be as high as 6.5 percent. Compare that to a someone with better credit who qualifies for a lower interest rate of 4.5 percent for a home loan valued at $300,000. At 6.5 percent, you will pay a total of $488,000 throughout the term of the loan, or $1,400 a month. Yet with an interest rate of 4.5 percent, you will pay a total of $397,000 for the entire loan, or $1,100 a month. That is a savings of $92,000 throughout the term of the loan, or $300 less if you had better credit. Find out what current mortgage rates are, below.

While you may be able to qualify for a home loan, it may be wiser to wait to until your credit score has improved before you commit to a loan. If it is absolutely necessary to purchase a home now, consider refinancing a few years down the line.

What kind of credit cards do you qualify for?

There are still a lot of valuable credit cards you can open with fair credit. Even though you probably don’t qualify for top tier cards with lucrative benefits and rewards, it might still be worth a shot to apply a credit cards such as the Barclaycard Rewards MasterCard. If you are a student, the Discover it can be a valuable card to add to your pocket since it can both earn you cash back, as well as provide you with a f ree FICO® Credit Score online and on monthly statements.

Remember, applying for any credit card means your credit will be pulled, which dings your score. Only apply for a new credit card when you feel it is absolutely necessary. Practice responsible credit habits and pay your bills on time.

What about interest?

Expect an interest rate upwards of 20 percent, the closer your credit score is to 600. You should avoid accumulating a massive amount of debt if you have bad credit. Try your best to pay at least double the minimum requirement this will reduce your overall debt as well as help improve your credit score faster.

Can you take out a personal loan?

As long as you have a steady source of income and do not max out your credit cards, you should be eligible for a personal loan. How much you are eligible for, the interest rate, and terms and conditions of the loan depend on how much you wish to take out, as well as your current monthly income.

Expect a higher-than-average interest rate if your credit score is below 630. You may want to wait before you apply for a personal loan if your score is on the cusp of 630 and you are working towards raising it. If you can afford it, consider paying off an existing credit card to raise your score.

What is necessary to improve your score?

You can improve your credit score above 650 by paying all of your bills on time, reducing your overall debt-to-credit limit ratio to 30 percent and below, and avoiding new lines of credit.

When your overall debt is 30 percent or lower, you re rewarded with an improved credit score. Maintaining a low debt-to-credit limit ratio shows lenders that you have proper money management skills. You are also less at risk for maxing out the overall amount of credit you have available, which helps puts lenders at ease when you apply for a new line of credit.

Maintaining various lines of credit is fine, and can be healthy for your credit, yet opening too many lines of credit can be a detriment to your overall score. Too many lines of credit, or credit inquiries (which is what appears on your credit score when you apply for a credit card, car loan, or another line of credit) can lower your credit score.

Work at building your credit and if you are consistent with your efforts, you will see your score slowly rise. This will happen over the course of several months and years, so be as patient as possible because your credit score definitely has a lot of potential to improve to good standing. Make the effort to improve your score to 700 or higher and more doors will open for you, financially.



Central Finance for financial advice and personal assistance all over New Zealand, from Cape Reinga to the Bluff and everywhere in between. #guaranteed #auto #loans


#easy loans
#

Looking for a loan at a competitive interest rate with minimal fuss?

We offer loans from 12.95%, and we specialize in getting you the finance you require.

Every day, we arrange finance for our customers, from Cape Reinga, all the way down to the Bluff, and everywhere in between. We’re proud to say that we have helped over 20,000 kiwis get the finance they needed, when they needed it.

Our loans start from $1,000, and go all the way up to $500,000, with repayments starting from just $25 per week. We provide Personal Loans, secured or unsecured, Car Loans, Bridging Finance, Mortgages and Debt Consolidation Loans. We can also provide tailored finance packages offering you deferred payments, interest only payments and residual payments to fit your lifestyle.

YOU MAY NOT KNOW: Applying for loans with various companies not only wastes your time, wastes your money, and most importantly adversely affects your credit score. Your credit score drops with each application you do! We only perform 1 credit check and 1 PPSR, and we send this to a range of accredited finance providers to get the best deal for you.

At Central Finance and Loans we understand that every loan application is as unique as the client that sends it, so we assess each application individually based on its merits. Utilizing our long standing experience in the finance market, we handle the process from start to finish making the application process easy, so all you have to do is relax while we do all the work on your behalf.

With the backing of numerous underwriters leading the New Zealand finance industry, we can offer you finance for almost anything you need.

Our aim is to provide you with a friendly, professional, helpful service so you can achieve your goals and financial rewards faster and easier.

It’s not just about getting finance, it’s about getting the “right” finance for you.

Feel free to give us a call on 0800 100 630 to speak to an experienced consultant, or simply complete our 5 minute online application



What Is the Difference Between a Signature Loan and a Short-term Loan? #debt #management


#signature loans
#

What Is the Difference Between a Signature Loan and a Short-term Loan?

More Articles

It’s normal to obtain a loan to buy a house or vehicle. When you take out a loan for a house or car, the lender lets you repay the loan over several years. But what if you need a quick, short loan? In this case, you can apply for either a signature loan or a short-term loan. Signature loans and short-term loans carry certain similar characteristics; neither type of loan requires collateral and they both feature short repayment terms. However, there are key differences between the two.

Obtaining a Loan

Financial institutions, such as banks and credit unions, issue signature loans. You can apply for a loan in-person or submit an application via your bank’s online website. If approved for a signature loan, visit the bank to sign your documents and obtain your funds. Short-term loans, also known as payday loans or cash advances, aren’t issued by banks and credit unions. These loans are available from private loan companies. You can apply for a short-term loan with a local company or submit an online application. Loan companies operate differently from banks. If you submit an online application for a short-term loan, the loan company conducts the entire transaction via the Internet and fax. You supply your information, such as copies of your most recent paycheck stub, bank statement and driver’s license. After verifying your information and receiving your electronic signature, the loan company deposits funds into your bank account.



How to Write a Loan Agreement Letter Between Friends #unsecured #business #loan


#loan agreement sample
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Sample Loan Agreement Letter Between Friends

Money can create a rift even in between blood relations; let alone friends. Hence, while lending money to or borrowing from a friend, think about the relationship first. For you can earn money anytime in your life, but once friendship is ruined, it will take years to start it again. Hence, you must deal with money matters with friends keeping aside your friendship and acting as a businessperson. If you don’t want to lose your friendship, draft an official loan agreement adding the money lent, rate of interest, fine, and payment dates.

Before writing the agreement, talk to your friend and ask him how he is going to repay the amount you are lending. This will help in drafting the agreement terms. Start the letter by mentioning the amount lent. Since you will be lending the money from your own personal account, you must use ‘I” and the borrower’s name. Avoid using a nickname of your friend. Check his social security number or a driving license for his correct and full name. You must also include your name in the letter at the beginning after “I”.

After that you have to mention how money will be repaid, will there be any interest on it or is it interest-free. If the money is lent for a number of periods, include the date of each period on which the installment of the borrowed money with interest or without interest must be paid. Besides the date, you must also include the mode of payment such as check, cash, demand draft, and traveler’s check. There should as well be mention about the fine in amount if the borrower fails to repay the money on due date.

The letter must clearly state “loan agreement” so that it can have legal significance. Using this formal term would also make the agreement serious. The borrower will also understand the seriousness of the agreement, and he will make efforts to stick to it. Lastly, ask your friend to sign the agreement and give a copy of it to him. The signature must be attested in front of a notary. You can also draft the agreement by including your full name and residence address like this sample.

Sample Loan Agreement Between Friends

This loan agreement is made on February 12, 2014, between:-

Steve, Son of Mark Resident of B/11Green Avenue Park LA, (hereinafter referred as the Lender) AND

Mike, Son of George Resident of V6, Lake street View LA, (hereinafter referred as the Borrower)

While the Borrower needs money and is in a friendly term with the Lender, the Lender has made a loan of $10000/- (Ten Thousand Dollars only) to the Borrower.

The money is lent for a six-month period. Both the Borrower and the Lender have agreed on the payment terms. According to which, the payment has to be made on 12 of every month for a six-month period. The first payment date will be March 12, 2014, and the last payment date will be August 12, 2014. The money is lent on an interest rate of 6%. As such, the monthly payment amount will be $1767.

The Borrower will have to pay $50 extra in case payment is not made on the due date. Payment is acceptable in cash, check, and demand draft.



The Difference Between Loans – Advances #interest #rates #on #student #loans


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Advances

An advance is an amount of money that is loaned from future earnings. For example, if you get a $500 advance on your salary, you next paycheck will be decreased by $500 to repay the money you borrowed from that paycheck.

Advantages of an Advance

Most companies that offer advances to their employees do not charge interest, so it can be a safe and cheaper alternative to a payday loan or short-term bank loan.

Loan

A loan is an amount borrowed from a bank or other institution that loans money. Borrowers sign a promissory note that states the terms of the loan and the length of time for repayment. Loans usually require an amount of interest to be paid back with the loan.

Advantages of Loans

A loan can be borrowed and paid back in increments over a period of time. Because it can be paid back in smaller amounts, paying back the loan is less than a hardship that losing a large amount from one paycheck.

Advance v. Loan

Advances are generally interest free, but must be paid back, usually from the next paycheck. Loans will have origination fees and interest, but can be repaid over a longer length of time.



Your Credit Rating Score Between 600 and 650 #business #loans #for #women


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Start saving money in

The unique thing about a credit score that falls between 600 and 650 is that it can put you in one of two major credit brackets. Your credit can either be considered bad or fair, which means you may be limited on what types of loans you qualify for or whether or not you can take out a home loan .

There are two major factors to consider what kind of interest rate you can expect for lines of credit, and whether or not you actually qualify for a home, car, or any other type of loan. A score that is below 630 is considered bad credit, while scores between 630 to 689 are considered fair credit.

Do you qualify for a car loan?

You should have no major problem finding an auto loan as long as you have steady income. The interest rate you qualify for depends on a variety of factors such as how much of a down payment you provide, the amount you wish to take out, the length of your loan, and the lender.

If your credit is fair,  you should be able to find an auto loan that offers five to ten percent interest throughout the term of your loan. If you have a bad credit score, on the other hand, you will most likely have an interest rate of 10 percent or more. The best way to avoid paying higher interest when you have bad credit is to have a big down payment. Lenders like to see more money being put towards the vehicle, and will reward you by lowering your interest rate. This move will reduce your monthly car loan payments.

Do you qualify for a home loan?

Home loans are still possible with a credit score that falls between 600 and 650, but you may need to receive government assistance in order to qualify for a loan. Find lenders that specialize in FHA loans and learn what type of home loan you can qualify for.

Unless you have a substantial down payment, anticipate a high interest rate on your home loan. Before you commit to a home loan, it’s wise to take steps to raise your credit score so that it is above 650.

The higher your credit score and the better your credit history, the lower your interest. Since a mortgage is such a long-term commitment, take the time to raise your score in order to obtain the lowest interest rate that is available to you.

If you decide to take out a home loan, you can expect an extremely high rate. Your rate may even be as high as 6.5 percent. Compare that to a someone with better credit who qualifies for a lower interest rate of 4.5 percent for a home loan valued at $300,000. At 6.5 percent, you will pay a total of $488,000 throughout the term of the loan, or $1,400 a month. Yet with an interest rate of 4.5 percent, you will pay a total of $397,000 for the entire loan, or $1,100 a month. That is a savings of $92,000 throughout the term of the loan, or $300 less if you had better credit. Find out what current mortgage rates are, below.

While you may be able to qualify for a home loan, it may be wiser to wait to until your credit score has improved before you commit to a loan. If it is absolutely necessary to purchase a home now, consider refinancing a few years down the line.

What kind of credit cards do you qualify for?

There are still a lot of valuable credit cards you can open with fair credit. Even though you probably don’t qualify for top tier cards with lucrative benefits and rewards, it might still be worth a shot to apply a credit cards such as the Barclaycard Rewards MasterCard. If you are a student, the Discover it can be a valuable card to add to your pocket since it can both earn you cash back, as well as provide you with a f ree FICO® Credit Score online and on monthly statements.

Remember, applying for any credit card means your credit will be pulled, which dings your score. Only apply for a new credit card when you feel it is absolutely necessary. Practice responsible credit habits and pay your bills on time.

What about interest?

Expect an interest rate upwards of 20 percent, the closer your credit score is to 600. You should avoid accumulating a massive amount of debt if you have bad credit. Try your best to pay at least double the minimum requirement this will reduce your overall debt as well as help improve your credit score faster.

Can you take out a personal loan?

As long as you have a steady source of income and do not max out your credit cards, you should be eligible for a personal loan. How much you are eligible for, the interest rate, and terms and conditions of the loan depend on how much you wish to take out, as well as your current monthly income.

Expect a higher-than-average interest rate if your credit score is below 630. You may want to wait before you apply for a personal loan if your score is on the cusp of 630 and you are working towards raising it. If you can afford it, consider paying off an existing credit card to raise your score.

What is necessary to improve your score?

You can improve your credit score above 650 by paying all of your bills on time, reducing your overall debt-to-credit limit ratio to 30 percent and below, and avoiding new lines of credit.

When your overall debt is 30 percent or lower, you re rewarded with an improved credit score. Maintaining a low debt-to-credit limit ratio shows lenders that you have proper money management skills. You are also less at risk for maxing out the overall amount of credit you have available, which helps puts lenders at ease when you apply for a new line of credit.

Maintaining various lines of credit is fine, and can be healthy for your credit, yet opening too many lines of credit can be a detriment to your overall score. Too many lines of credit, or credit inquiries (which is what appears on your credit score when you apply for a credit card, car loan, or another line of credit) can lower your credit score.

Work at building your credit and if you are consistent with your efforts, you will see your score slowly rise. This will happen over the course of several months and years, so be as patient as possible because your credit score definitely has a lot of potential to improve to good standing. Make the effort to improve your score to 700 or higher and more doors will open for you, financially.



Personal Loans – Lines of Credit: The Difference Between Bank Loans – Lines – CIBC #compare #car #loans


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Comparing Personal Loans and Lines of Credit

There are a number of reasons why you may need to borrow money. Whether you’re looking to renovate your home, consolidate your debt or simply want to take that much deserved vacation, it’s important to find the right borrowing option.

What is a personal loan?

If you are interested in making a large, one-time purchase with the option of a fixed or variable interest rate, a personal loan may be the right option for you. Features of a personal loan include:

Type of disbursement. Lump sum

Interest rates. Fixed or variable

Loan amount. You have to borrow at least $3,000 with a personal loan. The maximum you can borrow will depend on your credit score and other factors.

Repayment options. Choose from weekly, bi-weekly, semi-monthly and monthly payments. Your payments will be a combination of principal and interest.

Secured or unsecured. Secured loans are backed by your collateral either by property or investments, resulting in a higher borrowing amount and lower interest rate, whereas with unsecured loans they typically have a faster approval process. Learn more about secured and unsecured personal loans .

What is a personal line of credit?

If your borrowing needs vary, and you want to make on-going purchases, a personal line of credit is probably a better fit. Features of a personal lines of credit include:

Type of disbursement. A personal line of credit is reusable. Once you are approved for it, you can access any portion of the credit line at any time.

Interest rates. Variable

Line of credit amount. Borrow as low as $5,000

Repayment Options. You pay interest on the amount you use, not the entire credit limit as you do with a personal loan. No matter how much you borrow, all of it plus interest must be repaid by the end of the term.

Secured or unsecured. Personal lines of credit can be secured or unsecured. Securing your line of credit by property or investments typically results in a lower interest rate and higher credit limit.

Where can I learn more about bank loans for specific purposes?

While this basic information holds true for most loans and lines of credit, there can be some variation depending on what the loan is used for. For example, there are special lending products for education, home and car needs. Learn more about these bank loans and lines of credit here:

Apply for a personal loan or line of credit with CIBC

After you’ve decided which option is right for you and your financial situation, contact CIBC to receive more information. You can call a CIBC advisor at 1-866-525-8622. or start your loan application online.



Fast Loans Of Between ВЈ50 And ВЈ1000 #no #credit #loans


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8 great reasons to use Loans In A Flash

Apply Now For Fast Loans Of Up To ВЈ1000 Today!

Lots of UK residents have had at least one situation that required a wee bit of cash to resolve. A car that decides to stop working in the middle of a trip is certainly an instance that requires cash. A need for some emergency dental care is another quick cash situation. Sometimes a UK resident will have the desire to just go away on a nice vacation. Not many vacations do not require cash, so this would be another time for a money fairy to come along. We can help you get a fast loans for UK residents who need it. We have a panel of lenders and brokers who will consider all credit scores!

Instant Cash When You Need It*

The best thing about payday loans is that you do not have to have impeccable credit to get them. Payday lenders and brokers hardly concern themselves with whether you have had trouble in the past. Instead, they focus on your current financial situation. Of course you must be careful with this type of short term finance, ensuring you are able to pay the loan back on the arranged date so as not to incur extra interest or fees.

Quick Approval Process

Our goal is for you to receive your funds as quickly as possible*. Therefore, we try our best to verify your information and get you approved for your advance within several hours. The funds will go into your bank account electronically, right after you complete the necessary application and legal paperwork. As long as you provide us with accurate personal, employment and banking information, you should have your funds to you in a flash. You will be able to tend to your financial needs much faster than if you were to go through a traditional lender.

Easy Repayment Process

The terms of your agreement will be stated in your contract. You will view your payment date, finance charges and other relevant information in this document. The lender or broker will remove the payment from your bank account on the repayment date, which provides less of a hassle for you. There is no need for you to mail anything or visit a website. The entire repayment process is so simple. If you repay your advance in a timely fashion, you will may be able to borrow from your lender or broker again should the need arise.

Get Your Fast Loans Now*

If you are in need of some quick cash to fix an emergency, just ask by completing our online form. As a broker we will then connect with our panel of lenders and brokers to get you in instant decision and get your funds to you within a few hours*. However, the speed of service does depend on the number of applicants, the accuracy of your input, and the length of the verification process.



Central Finance for financial advice and personal assistance all over New Zealand, from Cape Reinga to the Bluff and everywhere in between. #no #fee #loans


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Looking for a loan at a competitive interest rate with minimal fuss?

We offer loans from 12.95%, and we specialize in getting you the finance you require.

Every day, we arrange finance for our customers, from Cape Reinga, all the way down to the Bluff, and everywhere in between. We’re proud to say that we have helped over 20,000 kiwis get the finance they needed, when they needed it.

Our loans start from $1,000, and go all the way up to $500,000, with repayments starting from just $25 per week. We provide Personal Loans, secured or unsecured, Car Loans, Bridging Finance, Mortgages and Debt Consolidation Loans. We can also provide tailored finance packages offering you deferred payments, interest only payments and residual payments to fit your lifestyle.

YOU MAY NOT KNOW: Applying for loans with various companies not only wastes your time, wastes your money, and most importantly adversely affects your credit score. Your credit score drops with each application you do! We only perform 1 credit check and 1 PPSR, and we send this to a range of accredited finance providers to get the best deal for you.

At Central Finance and Loans we understand that every loan application is as unique as the client that sends it, so we assess each application individually based on its merits. Utilizing our long standing experience in the finance market, we handle the process from start to finish making the application process easy, so all you have to do is relax while we do all the work on your behalf.

With the backing of numerous underwriters leading the New Zealand finance industry, we can offer you finance for almost anything you need.

Our aim is to provide you with a friendly, professional, helpful service so you can achieve your goals and financial rewards faster and easier.

It’s not just about getting finance, it’s about getting the “right” finance for you.

Feel free to give us a call on 0800 100 630 to speak to an experienced consultant, or simply complete our 5 minute online application



What Is the Difference Between a Signature Loan and a Short-term Loan? #bank #personal #loans


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What Is the Difference Between a Signature Loan and a Short-term Loan?

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It’s normal to obtain a loan to buy a house or vehicle. When you take out a loan for a house or car, the lender lets you repay the loan over several years. But what if you need a quick, short loan? In this case, you can apply for either a signature loan or a short-term loan. Signature loans and short-term loans carry certain similar characteristics; neither type of loan requires collateral and they both feature short repayment terms. However, there are key differences between the two.

Obtaining a Loan

Financial institutions, such as banks and credit unions, issue signature loans. You can apply for a loan in-person or submit an application via your bank’s online website. If approved for a signature loan, visit the bank to sign your documents and obtain your funds. Short-term loans, also known as payday loans or cash advances, aren’t issued by banks and credit unions. These loans are available from private loan companies. You can apply for a short-term loan with a local company or submit an online application. Loan companies operate differently from banks. If you submit an online application for a short-term loan, the loan company conducts the entire transaction via the Internet and fax. You supply your information, such as copies of your most recent paycheck stub, bank statement and driver’s license. After verifying your information and receiving your electronic signature, the loan company deposits funds into your bank account.



What Is the Difference Between a USDA Loan – a FHA Loan? #house #loan


#usda loan
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What Is the Difference Between a USDA Loan a FHA Loan?

USDA home loans usually are restricted to rural areas.

USDA Loans

Under USDA rural home loans, very low- and low-income rural Americans can qualify for several loan, grant and loan-guarantee programs. USDA home-loan terms run from 30 to 38 years. Additionally, USDA home loans can be guaranteed and can feature 100-percent financing. Income and credit qualification standards under USDA loan programs vary but are geared toward low-income buyers. Homes bought using USDA loans must be modest in design, size and cost.

FHA Loans

There are no geographic area restrictions when it comes to FHA-insured home loans. FHA loan limits vary depending on region and location in the country, and FHA offers only insured, not guaranteed, loans. FHA income and credit qualification standards can be slightly higher than their USDA counterparts. Minimum down payment requirements of at least 3.5 percent apply to FHA-insured home loans; however, down payments can be a gift from parents, for example.

USDA Programs

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  • What is the difference between an interest rate and an annual percentage rate (APR)? #student #loans #federal


    #interest rate on car loan
    #

    What is the difference between an interest rate and an annual percentage rate (APR)?

    When evaluating the cost of a loan or line of credit, it’s important to understand the difference between the advertised interest rate and the annual percentage rate. or APR. The advertised rate, or nominal interest rate, is used when calculating the interest expense on your loan. For example, if you were considering a mortgage loan for $200,000 with a 6% interest rate, your annual interest expense would amount to $12,000, or a monthly payment of $1,000. The APR, however, is the more effective rate to consider when comparing loans. Expressed as a percentage, the APR includes not only the interest expense on the loan but also all fees and other costs involved in procuring the loan.

    The APR should always be greater than or equal to the nominal interest rate. except in the case of a specialized deal where a lender is offering a rebate on a portion of your interest expense. Returning to the example above, consider the fact that your home purchase also requires closing costs, mortgage insurance and loan origination fees in the amount of $5,000. In order to determine your mortgage loan’s APR, these fees are added to the original loan amount to create a new loan amount of $205,000. The 6% interest rate is then used to calculate a new annual payment of $12,300. To calculate the APR, simply divide the annual payment of $12,300 by the original loan amount of $200,000 to get 6.15%.

    When comparing two loans, the lender offering the lowest nominal rate is likely to offer the best value, since the bulk of the loan amount is financed at a lower rate. The scenario most confusing to borrowers is when two lenders are offering the same nominal rate and monthly payments but different APRs. In a case like this, the lender with the lower APR is requiring fewer upfront fees and offering the better deal.

    The use of the APR comes with a few caveats. Since the lender servicing costs included in the APR are spread out across the entire life of the loan, sometimes as long as 30 years, refinancing or selling your home may make your mortgage more expensive than originally suggested by the APR. Another limitation is the APR’s lack of effectiveness in capturing the true costs of an adjustable rate mortgage, since it’s impossible to predict the future direction of interest rates.

    The Federal Truth in Lending Act requires that every consumer loan agreement list the APR along with the nominal interest rate. The fact that all lenders must follow the same rules to ensure the accuracy of the APR creates a more level playing field for borrowers and a much more effective means of determining the true cost of a loan.



    What is the difference between unsecured and secured personal loans? #bad #credit #unsecured #loans


    #unsecured personal loans
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    What is the difference between unsecured and secured personal loans?

    For individuals in need of cash fast, personal loans can be a quick short-term solution. There are two different types of short-term personal loans, secured and unsecured.

    If a personal loan is secured, the borrower has put up an asset, such as property, as collateral if he or she fails to make payments, in which case the lender can possess that asset as replacement payment. Most commonly, the asset is the borrower’s home or car, but it can be anything that he or she owns that is of a high enough value.

    This financial insurance usually allows the lender to grant a loan with a greater amount and a lower interest rate. This option is also beneficial for borrowers with poor credit, as the asset provides a concrete guarantee that the lender will receive payment. It may also provide enough insurance to allow you to pay off the amount over a longer period of time.

    An unsecured loan is an option when the borrower does not have or does not want to risk their property to pose as collateral. Because the lender does not have the financial security of collateral, they often will set higher interest rates and may also charge fees and penalties. The amount the lender grants will also most likely be lower and to be paid back over a shorter period of time.



    Differences Between Hard Money Loans and Purchase Money #loan #calculator #uk


    #hard money loans
    #

    What is a Hard Money Loan?

    By Elizabeth Weintraub. Home Buying/Selling Expert

    Elizabeth Weintraub has an extensive background in real estate spanning more than 30 years, including experience in related industries such as title and escrow. She is a full-time broker-associate at Lyon Real Estate’s midtown Sacramento office and is recognized as a top producer. She is also a Life Member of the Master’s Club, an honor bestowed by the Sacramento Board of REALTORS , and ranks in the top 1% of all the agents at Lyon Real Estate.

    CA BRE License #00697006

    Back in the pioneer days, hard money loans were virtually non-existent. The most commonly used form of money among settlers in early America was gold coins. American Indians, on the other hand, traded goods such as beads and pelts.

    To provide shelter, settlers chopped down a few trees and built their own cabins. Today, we expect to either buy an existing home or we pay a builder to build a new home for us.

    For the most part, buying a home in the 21st Century involves some type of financing. There are generally three parts of the purchase price:

    Hard Money Loans Versus Purchase Money Loans

    That home can be almost any type of structure, from a single-family residence, multiple units, a condominium, townhome, or stock cooperative to a modular or manufactured home .

    Purchase money makes up part of the purchase price. The loan is secured by the property, meaning if the buyer stops making the payments. the lender may have the right to seize the home and sell that home to get its money back.

    A hard money loan secured to real estate is a loan that is not purchase money. It is money loaned to a borrower, which is not used to buy a home.

    Continue Reading Below

    You can get a hard money loan without owning a home at all — without any security for that loan — providing the lender feels you are a good credit risk. A credit card cash advance is a hard money loan. Or you can get a hard money loan that is secured to equity in the home but was not part of the original purchase price. Hard money lenders usually want the borrower and the security to qualify for a hard money loan.

    Loan Sharks Are Hard Money Lenders

    People who borrow money from loan sharks generally cannot get a loan from any other source. These borrowers might have bad credit. no assets or questionable occupations. Some borrowers are simply naive and fell on hard times.

    If you have an asset that can be used as security for the loan, you might go to a pawn shop. If you have no item of value to trade for the money, a hard money lender such as a loan shark is the lender of choice. Loan sharks make their money by charging very high interest rates. which are often against usury laws. Loan sharks might use threats of violence to encourage borrowers to repay the debt.

    All loan sharks are hard money lenders but, fortunately, not all hard money lenders are loan sharks. It is not advisable to borrow money from a loan shark.

    Types of Hard Money Loans

    Most hard money lenders prefer securitizing collateral to make a loan. That collateral, such as a home, reverts to the hard money lender if the borrower defaults and the home eventually goes to foreclosure. Real estate is an excellent vehicle to secure a hard money loan, providing the property in question has equity. One of the reasons for the mortgage meltdown in 2007 was the value of homes had fallen, which left many lenders holding the bag without any security.

    Here are common types of hard money loans:

    A refinance pays off one or more loans secured to the property, which results in a new loan, generally with a bigger principal balance. A homeowner can refinance without receiving any of the proceeds by either rolling the costs of the new loan into the principal balance or paying the costs of the loan out of the borrower s pocket.

    In a cash-out refinance, the buyer takes out a new loan that is larger than the amount of the old loans plus the costs to obtain the money. The money above those two items is referred to as cash to the borrower. It is the net proceeds of the refinance. Many cash-out refinances are subject to deficiency judgments .

    Home equity loans fund fairly quickly and are subordinate to an existing first mortgage. In other words, an equity loan falls into second or third position. Borrowers cannot obtain a home equity loan in all 50 states.

    Bridge loans are used by sellers who want to buy a new home before selling an existing home but need the cash from the existing home. You will see bridge loans used more often in seller s markets than in buyer s markets.

    At the time of writing, Elizabeth Weintraub, CalBRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.



    The Difference Between Loans – Advances #ez #loan


    #advance loans
    #

    Other People Are Reading

    Advances

    An advance is an amount of money that is loaned from future earnings. For example, if you get a $500 advance on your salary, you next paycheck will be decreased by $500 to repay the money you borrowed from that paycheck.

    Advantages of an Advance

    Most companies that offer advances to their employees do not charge interest, so it can be a safe and cheaper alternative to a payday loan or short-term bank loan.

    Loan

    A loan is an amount borrowed from a bank or other institution that loans money. Borrowers sign a promissory note that states the terms of the loan and the length of time for repayment. Loans usually require an amount of interest to be paid back with the loan.

    Advantages of Loans

    A loan can be borrowed and paid back in increments over a period of time. Because it can be paid back in smaller amounts, paying back the loan is less than a hardship that losing a large amount from one paycheck.

    Advance v. Loan

    Advances are generally interest free, but must be paid back, usually from the next paycheck. Loans will have origination fees and interest, but can be repaid over a longer length of time.



    What Is the Difference Between a USDA Loan – a FHA Loan? #loan #contract


    #usda loan
    #

    What Is the Difference Between a USDA Loan a FHA Loan?

    USDA home loans usually are restricted to rural areas.

    USDA Loans

    Under USDA rural home loans, very low- and low-income rural Americans can qualify for several loan, grant and loan-guarantee programs. USDA home-loan terms run from 30 to 38 years. Additionally, USDA home loans can be guaranteed and can feature 100-percent financing. Income and credit qualification standards under USDA loan programs vary but are geared toward low-income buyers. Homes bought using USDA loans must be modest in design, size and cost.

    FHA Loans

    There are no geographic area restrictions when it comes to FHA-insured home loans. FHA loan limits vary depending on region and location in the country, and FHA offers only insured, not guaranteed, loans. FHA income and credit qualification standards can be slightly higher than their USDA counterparts. Minimum down payment requirements of at least 3.5 percent apply to FHA-insured home loans; however, down payments can be a gift from parents, for example.

    USDA Programs

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  • What is the difference between a conventional, FHA, and VA loan? #loan #calculation


    #what is an fha loan
    #

    What is the difference between a conventional, FHA, and VA loan?

    If you are looking for a home mortgage, be sure to understand the difference between a conventional, FHA, and VA loan.

    Conventional, FHA, and VA loans are similar in that they are all issued by banks and other approved lenders, but there are some major differences between these types of loans. Read on to learn more about the different characteristics of conventional, FHA, and VA loans, and find out which one might be right for you.

    Conventional Loans

    When you apply for a home loan, you can apply for a government-backed loan (such as a FHA or VA loan) or a conventional loan, which is not insured or guaranteed by the federal government. This means that, unlike federally insured loans, conventional loans carry no guarantees for the lender if you fail to repay the loan.

    For this reason, if you make less than a 20% down payment on the property, you’ll have to pay for private mortgage insurance (PMI) when you get a conventional loan. (If you default on the loan, the mortgage insurance company makes sure the lender is paid in full. Learn more about private mortgage insurance .)

    Conventional mortgage loans must adhere to guidelines set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and are available to everyone, but they are more difficult to qualify for than VA and FHA loans. (Since there is no government insurance, conventional loans pose a higher risk for lenders so credit and income requirements are stricter than for FHA and VA mortgages).

    Generally, you can get a conventional loan if you:

    • have good credit
    • have a steady income, and
    • can afford the down payment.

    FHA Loans

    A FHA loan is a loan insured by the Federal Housing Administration (FHA). If you default on the loan, the FHA will repay the bank’s loss.

    Since the loan is insured, the lender can offer you good terms including:

    • a low down payment (as low as 3.5% of the purchase price)
    • the financing of some closing costs (which means they are included in the loan amount), and
    • low closing costs.

    This type of loan is often easier to qualify for than a conventional mortgage and anyone can apply. However, FHA loans have a maximum loan limit that varies depending on the average cost of housing in a given region. (Learn more about FHA loan limits at www.fha.com. Click on “2014 FHA Limits.”)

    Also, you’ll have to pay MIP (mortgage insurance premium) as part of an FHA loan. (Conventional mortgages have PMI and FHA loans have MIP.) The premiums that borrowers pay contribute to the Mutual Mortgage Insurance Fund. FHA draws from this fund to pay lenders’ claims when borrowers default.

    VA Loans

    A VA loan is a loan guaranteed by the Veterans Administration (VA). This type of loan is only available to certain borrowers through VA-approved lenders. (The guarantee means that the lender is protected against loss if the borrower fails to repay the loan.)

    To get a VA loan, you must be:

    • a current member of the U.S. armed forces
    • a veteran
    • a reservist/national guard member, or
    • an eligible surviving spouse. (To learn the specific eligibility requirements for a VA loan, go to www.benefits.va.gov  and click on “Home Loans,” then “Home Loans Home,” and “Eligibility.” Then click on “Learn more” under “Purchase Loans and Cash-Out Refinance.”)

    VA mortgage loans can be guaranteed with no money down and there is no private mortgage insurance requirement. (Learn more about VA loans in Nolo’s article Veterans Home Loan Guaranty Program .)



    What is the difference between unsecured and secured personal loans? #unsecured #debt


    #unsecured personal loans
    #

    What is the difference between unsecured and secured personal loans?

    For individuals in need of cash fast, personal loans can be a quick short-term solution. There are two different types of short-term personal loans, secured and unsecured.

    If a personal loan is secured, the borrower has put up an asset, such as property, as collateral if he or she fails to make payments, in which case the lender can possess that asset as replacement payment. Most commonly, the asset is the borrower’s home or car, but it can be anything that he or she owns that is of a high enough value.

    This financial insurance usually allows the lender to grant a loan with a greater amount and a lower interest rate. This option is also beneficial for borrowers with poor credit, as the asset provides a concrete guarantee that the lender will receive payment. It may also provide enough insurance to allow you to pay off the amount over a longer period of time.

    An unsecured loan is an option when the borrower does not have or does not want to risk their property to pose as collateral. Because the lender does not have the financial security of collateral, they often will set higher interest rates and may also charge fees and penalties. The amount the lender grants will also most likely be lower and to be paid back over a shorter period of time.



    Personal Loans – Lines of Credit: The Difference Between Bank Loans – Lines – CIBC #financial #loans


    #loans on line
    #

    Comparing Personal Loans and Lines of Credit

    There are a number of reasons why you may need to borrow money. Whether you’re looking to renovate your home, consolidate your debt or simply want to take that much deserved vacation, it’s important to find the right borrowing option.

    What is a personal loan?

    If you are interested in making a large, one-time purchase with the option of a fixed or variable interest rate, a personal loan may be the right option for you. Features of a personal loan include:

    Type of disbursement. Lump sum

    Interest rates. Fixed or variable

    Loan amount. You have to borrow at least $3,000 with a personal loan. The maximum you can borrow will depend on your credit score and other factors.

    Repayment options. Choose from weekly, bi-weekly, semi-monthly and monthly payments. Your payments will be a combination of principal and interest.

    Secured or unsecured. Secured loans are backed by your collateral either by property or investments, resulting in a higher borrowing amount and lower interest rate, whereas with unsecured loans they typically have a faster approval process. Learn more about secured and unsecured personal loans .

    What is a personal line of credit?

    If your borrowing needs vary, and you want to make on-going purchases, a personal line of credit is probably a better fit. Features of a personal lines of credit include:

    Type of disbursement. A personal line of credit is reusable. Once you are approved for it, you can access any portion of the credit line at any time.

    Interest rates. Variable

    Line of credit amount. Borrow as low as $5,000

    Repayment Options. You pay interest on the amount you use, not the entire credit limit as you do with a personal loan. No matter how much you borrow, all of it plus interest must be repaid by the end of the term.

    Secured or unsecured. Personal lines of credit can be secured or unsecured. Securing your line of credit by property or investments typically results in a lower interest rate and higher credit limit.

    Where can I learn more about bank loans for specific purposes?

    While this basic information holds true for most loans and lines of credit, there can be some variation depending on what the loan is used for. For example, there are special lending products for education, home and car needs. Learn more about these bank loans and lines of credit here:

    Apply for a personal loan or line of credit with CIBC

    After you’ve decided which option is right for you and your financial situation, contact CIBC to receive more information. You can call a CIBC advisor at 1-866-525-8622. or start your loan application online.



    Mortgages: Bridge loans ease the transition between homes – at a cost #payday #loans #for #people #on #benefits


    #bridging loans
    #

    Bridge loans ease the transition from one home to another — at a cost

    They can save the day for home buyers in a pinch, but people looking for a “bridge loan ” to span the gap between the sale of an old home and the purchase of a new one should ask if the cost is worth it.

    Experts say it almost never is, and people would be better off staying put until they’ve unloaded their first residence. If that’s impossible, they warn, be prepared to shoulder a heavy burden.

    “There are many sad stories about homeowners who took bridge loans, and our best advice would be, ‘Don’t do it,’ ” says Richard Roll, president of the American Homeowners Association in Stamford, Conn. “You can find yourself in a totally untenable position, and you can lose your first house.”

    Terms can vary widely

    A tool used by movers in a bind, bridge loans vary widely in their terms, costs and conditions. Some are structured so they completely pay off the old home’s first mortgage at the bridge loan’s closing, while others pile the new debt on top of the old. Borrowers also may encounter loans that deal differently with interest. Some carry monthly payments, while others require either up-front or end-of-the-term lump-sum interest payments.

    Most share a handful of general characteristics though. They usually run for six month terms and are secured by the borrower’s old home. A lender also seldom extends a bridge loan unless the borrower agrees to finance the new home’s mortgage with the same institution. As for rates, they accrue interest at anywhere from the prime rate to prime plus 2 percent.

    One Norwest Corp. bridge loan, for example, would total $70,000 on a customer’s old $100,000 home with $50,000 in mortgage debt outstanding, says Patty Stubbs, branch operations supervisor for the company’s Des Moines, Iowa mortgage division. Of that, $50,000 would go toward the old house’s lien and a few thousand would cover the bridge loan’s closing costs, origination charges and fees, leaving the customer with about $16,000 for the new home’s down payment, closing costs and fees.

    This example helps to show how the high fees associated with bridge loans can cause problems. Norwest’s customer, for example, would end up paying between $2,000 and $3,000 for closing on the bridge loan, 1.5 percent to 2 percent of its value for an origination fee, and another couple thousand dollars for closing on the new home’s mortgage.

    What if the sale goes sour?

    Real estate market risks can exacerbate the danger, Roll says. For example, Norwest and others are usually willing to extend bridge loans slightly beyond the standard six months. But what happens to a homeowner who gets the financing and extension, so the old home’s buyer can have a little more time, only to see the transaction fall through?

    “Let’s say they need some of that money to buy their new house, so it’s predicated on selling their old house,” Roll says. “What happens if they don’t sell that house, or if the buyer doesn’t get financing?”

    In such a case, the lender could go as far as to foreclose on the old property after the bridge loan extensions expired, Stubbs says, or a customer could deed the property to the bank, which would sell it and apply the proceeds toward paying off the loan.

    Consider other options

    For those trying to stay away from bridge financing, borrowing against a 401(k) plan or taking out loans secured by stocks, bonds or other assets are options, says Kevin Hughes, a mortgage loan specialist at Cambridgeport Bank, based in Cambridge, Mass. Some lenders also offer hybrid mortgage products that behave similarly to bridge loans.

    For example, a Cambridgeport customer with $50,000 equity on a $100,000 home, for example, could obtain a combination first and second mortgage on a second $100,000 home, Hughes says. Only one set of closing costs of about $1,300 would be required, with about $184 in additional costs for the second mortgage.

    As part of the bank’s program, that person would make a $10,000 down payment on the new property, which would have both a first mortgage for $50,000 and a second for $40,000. Upon selling the old home, the borrower could use the $50,000 worth of equity to simultaneously pay off the new home’s second mortgage and recoup the money that covered the down payment.

    Total debt climbs

    Whether a homeowner takes a bridge loan or a hybrid stand-in, however, a significant amount of new debt will end up being added to the pile. The Cambridgeport borrower, for instance, would have to make three payments each month in order to cover the old home’s mortgage, and the first and second mortgages on the new house.

    But even though they aren’t the best deal, bridge loans or other short-term mortgage financing products may be necessary when home buyers land in tight spots, lenders say. There will always be people relocating for work without much advance notice, trying to keep others from beating them to the punch on a property, or needing help with the expensive up-front costs of buying a new home before their old one sells.

    “It’s a way for the customer to get into that home without having to go through all the gyrations of trying to get cash for a down payment,” says John Bollman, a mortgage product manager with National City Corp. in Dayton, Ohio. “The Realtors tend to use it as a tool to help buyers buy their home.”

    Bridge loans nevertheless remain relatively obscure in a lending landscape dominated by more widely publicized home equity loans and lines of credit. A fast-churning real estate market also eases the demand because it shortens the amount of time it takes for people to sell their homes, Hughes says.

    Norwest, for instance, said only 140 of the 240,122 mortgage loans it extended last year were bridge loans, while Continental Savings Bank, based in Seattle, closes just four bridge loans a month on average out of 775 total mortgages.



    Fast Loans Of Between ВЈ50 And ВЈ1000 #apply #for #personal #loan


    #instant payday loans uk
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    8 great reasons to use Loans In A Flash

    Apply Now For Fast Loans Of Up To ВЈ1000 Today!

    Lots of UK residents have had at least one situation that required a wee bit of cash to resolve. A car that decides to stop working in the middle of a trip is certainly an instance that requires cash. A need for some emergency dental care is another quick cash situation. Sometimes a UK resident will have the desire to just go away on a nice vacation. Not many vacations do not require cash, so this would be another time for a money fairy to come along. We can help you get a fast loans for UK residents who need it. We have a panel of lenders and brokers who will consider all credit scores!

    Instant Cash When You Need It*

    The best thing about payday loans is that you do not have to have impeccable credit to get them. Payday lenders and brokers hardly concern themselves with whether you have had trouble in the past. Instead, they focus on your current financial situation. Of course you must be careful with this type of short term finance, ensuring you are able to pay the loan back on the arranged date so as not to incur extra interest or fees.

    Quick Approval Process

    Our goal is for you to receive your funds as quickly as possible*. Therefore, we try our best to verify your information and get you approved for your advance within several hours. The funds will go into your bank account electronically, right after you complete the necessary application and legal paperwork. As long as you provide us with accurate personal, employment and banking information, you should have your funds to you in a flash. You will be able to tend to your financial needs much faster than if you were to go through a traditional lender.

    Easy Repayment Process

    The terms of your agreement will be stated in your contract. You will view your payment date, finance charges and other relevant information in this document. The lender or broker will remove the payment from your bank account on the repayment date, which provides less of a hassle for you. There is no need for you to mail anything or visit a website. The entire repayment process is so simple. If you repay your advance in a timely fashion, you will may be able to borrow from your lender or broker again should the need arise.

    Get Your Fast Loans Now*

    If you are in need of some quick cash to fix an emergency, just ask by completing our online form. As a broker we will then connect with our panel of lenders and brokers to get you in instant decision and get your funds to you within a few hours*. However, the speed of service does depend on the number of applicants, the accuracy of your input, and the length of the verification process.



    Basics of Private Party Loans – Payment Between Individuals #low #doc #home #loans


    #private loans
    #

    Private Party Loans

    By Justin Pritchard. Banking/Loans Expert

    Justin Pritchard helps consumers navigate the world of banking.

    Private party loans can refer to a few different things. The traditional (and most common) type of loan is an auto loan used to purchase a used vehicle. Instead of buying from a dealer. you re buying from a private party. so getting a loan is a little bit different.

    Some of these loans are a great deal for all involved.

    Private Party Auto Loans

    In the age of Craigslist and similar sites, finding a used car is easy. But finding funding isn t as simple. If you buy from a dealership, they ll offer (or push ) financing, which they ve arranged with local or national lenders, and it s hard not to walk out without getting a loan.

    When you re dealing with a private seller, lenders are more hesitant. They don t know anything about the vehicle — it s your responsibility to figure out what it s worth.

    However, banks and credit unions know that there is money to be made in lending money, so they offer private party loans.

    Private party auto loans are similar to standard auto loans, but they tend to come with a slightly higher interest rate, and they generally won t last as long (banks are taking more risk with a used vehicle, so they want to limit their risk).

    Where to Get One

    To get a private party auto loan, you ll need to apply, and approval will be based on the same factors that affect every loan: mainly your credit scores and your debt to income ratios ; the lender wants to see that you ve got enough income to repay the loan, and that you re familiar with borrowing money.

    Continue Reading Below

    If you can t qualify, you can always try using a co-signer .

    Numerous banks and credit unions offer these loans. A quick search will show you some of the big banks in the market, but you should also shop smaller institutions. If you aren t having any luck with a big bank, try a small local bank or credit union. which might be more accommodating.

    Other Types of Private Loans

    Sometimes loans between individuals create a win-win situation: great for lenders (who earn more than they can at the bank) and borrowers (who pay less interest than they would at the bank). When borrowers have poor credit, private loans may be the only option available, although they generally come with higher rates.

    Where to Borrow

    There are basically two ways to find private party loans: peer to peer lending services and people you know. To borrow from strangers, visit a peer to peer lending site and apply for a loan. Even if you set up a private party loan with somebody you know, these sites may help with loan documentation and servicing.

    Documentation

    Documentation is a key to any private party loan. Make sure everything is spelled out in writing, and everybody understands and agrees. While it may seem overly formal, documentation can prevent headaches and heartbreaks in the future.

    To document your private loan, write an agreement or use somebody else’s. For larger loans, it’s probably best to use a professionally prepared agreement — a lot can go wrong, and good loan agreements anticipate pitfalls.

    For private party loan documents, search the web, work with a local attorney, or use a peer to peer lending service that specializes in these loans. For example, LoanKin sells agreements and even processes payments on mortgages and other loans.



    Central Finance for financial advice and personal assistance all over New Zealand, from Cape Reinga to the Bluff and everywhere in between.


    #easy loans
    #

    Looking for a loan at a competitive interest rate with minimal fuss?

    We offer loans from 12.95%, and we specialize in getting you the finance you require.

    Every day, we arrange finance for our customers, from Cape Reinga, all the way down to the Bluff, and everywhere in between. We’re proud to say that we have helped over 20,000 kiwis get the finance they needed, when they needed it.

    Our loans start from $1,000, and go all the way up to $500,000, with repayments starting from just $25 per week. We provide Personal Loans, secured or unsecured, Car Loans, Bridging Finance, Mortgages and Debt Consolidation Loans. We can also provide tailored finance packages offering you deferred payments, interest only payments and residual payments to fit your lifestyle.

    YOU MAY NOT KNOW: Applying for loans with various companies not only wastes your time, wastes your money, and most importantly adversely affects your credit score. Your credit score drops with each application you do! We only perform 1 credit check and 1 PPSR, and we send this to a range of accredited finance providers to get the best deal for you.

    At Central Finance and Loans we understand that every loan application is as unique as the client that sends it, so we assess each application individually based on its merits. Utilizing our long standing experience in the finance market, we handle the process from start to finish making the application process easy, so all you have to do is relax while we do all the work on your behalf.

    With the backing of numerous underwriters leading the New Zealand finance industry, we can offer you finance for almost anything you need.

    Our aim is to provide you with a friendly, professional, helpful service so you can achieve your goals and financial rewards faster and easier.

    It’s not just about getting finance, it’s about getting the “right” finance for you.

    Feel free to give us a call on 0800 100 630 to speak to an experienced consultant, or simply complete our 5 minute online application



    What Is the Difference Between a Cash Advance – a Payday Loan?


    #advance payday loans
    #

    Other People Are Reading

    Credit Score Required

    A payday loan typically does not require any type of credit check to authorize the loan. You only need to have a checking account so you can write a post-dated check to secure the loan. On the other hand, if you want to get a credit card cash advance, you need to have a credit card first. You can either use a card you already have or apply for a new one. All credit card companies check your credit score when you apply and only issue credit cards to people who meet their credit standards, which vary from one company to another.

    Costs

    The fee to get a payday loan is usually about $15 per every $100 you borrow for two weeks. If you roll over the loan, you have to pay the fee all over again. Therefore, if you keep rolling over the payday loan for a year, you will pay the equivalent of more than 300 percent interest. A credit card cash advance usually charges a fee of 1 to 4 percent of the amount advanced. Sometimes there might be a flat minimum fee. If the cash advance is through an ATM, there is likely an ATM fee of a few dollars. In addition, the borrower pays interest on the balance each month, usually at a rate a few percent higher than regular credit card purchases. According to Smart Money, most credit card cash advances charge 20 to 25 percent interest annually.

    Repayment Schedule

    When you take out a payday loan, you must repay it in full very soon, usually within two weeks. If you cannot repay it, you must pay the charges again to roll over the loan for another two weeks. Some states have laws that require payday lenders to work out an installment schedule to stretch out the repayment. With a credit card cash advance, on the other hand, you only have to pay the minimum credit card payment, which factors in the amount of the cash advance and any other draw on the line of credit. You can pay more than the minimum if you would like to pay it back sooner, but in general it is much easier to meet the repayment schedule for a credit card cash advance than a payday loan.

    Which is Better?

    The better type of borrowing depends on your situation. If you already have a credit card with available credit, a credit card cash advance offers a lower long-term interest rate and low monthly payments. If you do not have a credit card and do not think you will be able to get one fast enough, a payday loan offers a quick solution and moderate fees if you pay it back right away. However, if you do not expect to be able to pay back a payday loan in two weeks, carrying it over can be far more expensive than paying interest on a credit card cash advance.



    What Is the Difference Between a USDA Loan – a FHA Loan?


    #usda loan
    #

    What Is the Difference Between a USDA Loan a FHA Loan?

    USDA home loans usually are restricted to rural areas.

    USDA Loans

    Under USDA rural home loans, very low- and low-income rural Americans can qualify for several loan, grant and loan-guarantee programs. USDA home-loan terms run from 30 to 38 years. Additionally, USDA home loans can be guaranteed and can feature 100-percent financing. Income and credit qualification standards under USDA loan programs vary but are geared toward low-income buyers. Homes bought using USDA loans must be modest in design, size and cost.

    FHA Loans

    There are no geographic area restrictions when it comes to FHA-insured home loans. FHA loan limits vary depending on region and location in the country, and FHA offers only insured, not guaranteed, loans. FHA income and credit qualification standards can be slightly higher than their USDA counterparts. Minimum down payment requirements of at least 3.5 percent apply to FHA-insured home loans; however, down payments can be a gift from parents, for example.

    USDA Programs

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  • What is the difference between an interest rate and an annual percentage rate (APR)?


    #interest rate on car loan
    #

    What is the difference between an interest rate and an annual percentage rate (APR)?

    When evaluating the cost of a loan or line of credit, it’s important to understand the difference between the advertised interest rate and the annual percentage rate. or APR. The advertised rate, or nominal interest rate, is used when calculating the interest expense on your loan. For example, if you were considering a mortgage loan for $200,000 with a 6% interest rate, your annual interest expense would amount to $12,000, or a monthly payment of $1,000. The APR, however, is the more effective rate to consider when comparing loans. Expressed as a percentage, the APR includes not only the interest expense on the loan but also all fees and other costs involved in procuring the loan.

    The APR should always be greater than or equal to the nominal interest rate. except in the case of a specialized deal where a lender is offering a rebate on a portion of your interest expense. Returning to the example above, consider the fact that your home purchase also requires closing costs, mortgage insurance and loan origination fees in the amount of $5,000. In order to determine your mortgage loan’s APR, these fees are added to the original loan amount to create a new loan amount of $205,000. The 6% interest rate is then used to calculate a new annual payment of $12,300. To calculate the APR, simply divide the annual payment of $12,300 by the original loan amount of $200,000 to get 6.15%.

    When comparing two loans, the lender offering the lowest nominal rate is likely to offer the best value, since the bulk of the loan amount is financed at a lower rate. The scenario most confusing to borrowers is when two lenders are offering the same nominal rate and monthly payments but different APRs. In a case like this, the lender with the lower APR is requiring fewer upfront fees and offering the better deal.

    The use of the APR comes with a few caveats. Since the lender servicing costs included in the APR are spread out across the entire life of the loan, sometimes as long as 30 years, refinancing or selling your home may make your mortgage more expensive than originally suggested by the APR. Another limitation is the APR’s lack of effectiveness in capturing the true costs of an adjustable rate mortgage, since it’s impossible to predict the future direction of interest rates.

    The Federal Truth in Lending Act requires that every consumer loan agreement list the APR along with the nominal interest rate. The fact that all lenders must follow the same rules to ensure the accuracy of the APR creates a more level playing field for borrowers and a much more effective means of determining the true cost of a loan.



    What is the difference between a conventional, FHA, and VA loan?


    #what is an fha loan
    #

    What is the difference between a conventional, FHA, and VA loan?

    If you are looking for a home mortgage, be sure to understand the difference between a conventional, FHA, and VA loan.

    Conventional, FHA, and VA loans are similar in that they are all issued by banks and other approved lenders, but there are some major differences between these types of loans. Read on to learn more about the different characteristics of conventional, FHA, and VA loans, and find out which one might be right for you.

    Conventional Loans

    When you apply for a home loan, you can apply for a government-backed loan (such as a FHA or VA loan) or a conventional loan, which is not insured or guaranteed by the federal government. This means that, unlike federally insured loans, conventional loans carry no guarantees for the lender if you fail to repay the loan.

    For this reason, if you make less than a 20% down payment on the property, you’ll have to pay for private mortgage insurance (PMI) when you get a conventional loan. (If you default on the loan, the mortgage insurance company makes sure the lender is paid in full. Learn more about private mortgage insurance .)

    Conventional mortgage loans must adhere to guidelines set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and are available to everyone, but they are more difficult to qualify for than VA and FHA loans. (Since there is no government insurance, conventional loans pose a higher risk for lenders so credit and income requirements are stricter than for FHA and VA mortgages).

    Generally, you can get a conventional loan if you:

    • have good credit
    • have a steady income, and
    • can afford the down payment.

    FHA Loans

    A FHA loan is a loan insured by the Federal Housing Administration (FHA). If you default on the loan, the FHA will repay the bank’s loss.

    Since the loan is insured, the lender can offer you good terms including:

    • a low down payment (as low as 3.5% of the purchase price)
    • the financing of some closing costs (which means they are included in the loan amount), and
    • low closing costs.

    This type of loan is often easier to qualify for than a conventional mortgage and anyone can apply. However, FHA loans have a maximum loan limit that varies depending on the average cost of housing in a given region. (Learn more about FHA loan limits at www.fha.com. Click on “2014 FHA Limits.”)

    Also, you’ll have to pay MIP (mortgage insurance premium) as part of an FHA loan. (Conventional mortgages have PMI and FHA loans have MIP.) The premiums that borrowers pay contribute to the Mutual Mortgage Insurance Fund. FHA draws from this fund to pay lenders’ claims when borrowers default.

    VA Loans

    A VA loan is a loan guaranteed by the Veterans Administration (VA). This type of loan is only available to certain borrowers through VA-approved lenders. (The guarantee means that the lender is protected against loss if the borrower fails to repay the loan.)

    To get a VA loan, you must be:

    • a current member of the U.S. armed forces
    • a veteran
    • a reservist/national guard member, or
    • an eligible surviving spouse. (To learn the specific eligibility requirements for a VA loan, go to www.benefits.va.gov  and click on “Home Loans,” then “Home Loans Home,” and “Eligibility.” Then click on “Learn more” under “Purchase Loans and Cash-Out Refinance.”)

    VA mortgage loans can be guaranteed with no money down and there is no private mortgage insurance requirement. (Learn more about VA loans in Nolo’s article Veterans Home Loan Guaranty Program .)



    What – s the difference between a loan modification, forbearance agreement, and repayment plan?


    #mortgage loan modification
    #

    What s the difference between a loan modification, forbearance agreement, and repayment plan?

    Loan modifications, forbearance plans, and repayment plans can help you avoid foreclosure if you are struggling with your mortgage. Learn more.

    Loan modifications, forbearance agreements, and repayment plans are different ways that borrowers can avoid foreclosure. Read on to learn the difference between these options and how they can help you if you are having trouble making your mortgage payments.

    Loan Modifications

    A loan modification is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment. With a loan modification, the lender may agree to do one of more of the following to reduce your monthly payment:

    • reduce the interest rate
    • convert from a variable interest rate to a fixed interest rate, or
    • extend of the length of the term of the loan.

    Generally, to be eligible for a loan modification, you must:

    • show that you cannot make your current mortgage payment due to a financial hardship
    • complete a trial period to demonstrate you can afford the new monthly amount, and
    • provide all required documentation to the lender for evaluation.

    Required documentation will likely include:

    • a financial statement
    • proof of income
    • most recent tax returns
    • bank statements, and
    • a hardship letter.

    There are many different loan modification programs available, including proprietary (in-house) loan modifications, as well as the Home Affordable Modification Program (HAMP), which is part of the federal government’s Making Home Affordable initiative. HAMP assists borrowers by modifying their first lien mortgages so that the monthly payments are lower and more affordable. To learn more about HAMP, see The Home Affordable Modification Program (HAMP). (To find out about other government programs for struggling homeowners, see our Government Foreclosure Prevention Programs  topic area.)

    If you are currently unable to afford your mortgage payment, and won’t be able to in the near future, a loan modification may be the ideal option to help you avoid foreclosure.

    Forbearance Agreements

    While a loan modification agreement is a permanent solution to unaffordable monthly payments, a forbearance agreement provides short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period of time and not to initiate a foreclosure during the forbearance period. In exchange, the borrower must resume the full payment at the end of the forbearance period, plus pay an additional amount to get current on the missed payments, including principal, interest, taxes, and insurance. (The specific terms of a forbearance agreement will vary from lender to lender.)

    If a temporary hardship causes you to fall behind in your mortgage payments, a forbearance agreement may allow you to avoid foreclosure until your situation gets better. In some cases, the lender may be able to extend the forbearance period if your hardship is not resolved by the end of the forbearance period to accommodate your situation.

    In forbearance agreement, unlike a repayment plan, the lender agrees in advance for you to miss or reduce your payments for a set period of time.

    Repayment Plans

    If you’ve missed some of your mortgage payments due to a temporary hardship, a repayment plan may provide a way to catch up once your finances are back in order. A repayment plan is an agreement to spread the past due amount over a specific period of time.

    Here’s how a repayment plan works:

    • The lender spreads your overdue amount over a certain number of months.
    • During the repayment period, a portion of the overdue amount is added to each of your regular mortgage payments.
    • At the end of the repayment period, you will be current on your mortgage payments and resume paying your normal monthly payment amount.

    This option lets you pay off the delinquency over a period of time. The length of a repayment plan will vary depending on the amount past due and on how much you can afford to pay each month, among other things. A three- to six-month repayment period is typical.

    To get information about these and other options to avoid foreclosure, see our Alternatives to Foreclosure  area.



    What is the difference between unsecured and secured personal loans?


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    What is the difference between unsecured and secured personal loans?

    For individuals in need of cash fast, personal loans can be a quick short-term solution. There are two different types of short-term personal loans, secured and unsecured.

    If a personal loan is secured, the borrower has put up an asset, such as property, as collateral if he or she fails to make payments, in which case the lender can possess that asset as replacement payment. Most commonly, the asset is the borrower’s home or car, but it can be anything that he or she owns that is of a high enough value.

    This financial insurance usually allows the lender to grant a loan with a greater amount and a lower interest rate. This option is also beneficial for borrowers with poor credit, as the asset provides a concrete guarantee that the lender will receive payment. It may also provide enough insurance to allow you to pay off the amount over a longer period of time.

    An unsecured loan is an option when the borrower does not have or does not want to risk their property to pose as collateral. Because the lender does not have the financial security of collateral, they often will set higher interest rates and may also charge fees and penalties. The amount the lender grants will also most likely be lower and to be paid back over a shorter period of time.