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Instant Cash Advance Online Seems a Preferred Method of Borrowing, says CEO of One of the Lending Companies #student #loan #interest #rate


#instant cash loan
#

Instant online cash advance from http://instantcashadvanceglubos.com/ proves to be a good option for people who need cash in a hurry as they celebrate their first anniversary with great success.

(PRWEB) August 09, 2012

No one wants to incur long-term debt, but another option for borrowing money for emergencies is the instant approval cash advance online. This is a short-term loan for up to $1,000, depending upon the borrower s ability to repay.

The first step in getting instant cash advance loans is to fill out the payday representative s loan application and return it via e-mail. The representative then finds a lender that fits the borrower s needs and forwards the borrower s loan application to them. Approval takes just seconds and no credit check is done.

After the representative receives cash advance instant approval, the potential borrower is requested to submit his or her banking information. Then the money is transferred into the borrower s checking account.

A borrower can use the online instant cash advance for anything he or she chooses, whether it is for the deposit on an apartment, the down payment on a car, for medical expenses or for a much needed get-away with the family. Instant cash advance payday loans makes it possible.

After two weeks have elapsed, the instant cash advance no credit check lender then deducts the amount of the payday loan, plus the loan fees from the borrower s checking account. The loan fee on a payday loan is usually $15 for every $100 borrowed. If this seems a little bit high, it must be remembered that there is no credit report run on a cash advance instant payday loan. It takes seconds for approval and the loan funds are deposited into the borrower s bank account within a day. A person researching various loans and loan terms would never find the traditional lending market to be so user friendly and fast.

The requirements for getting a payday loan are few. The borrower must be at least 18 and be a U.S. citizen with a regular job for at least six months, earning at least $1,000 a month in gross income. The borrower may also be on a fixed income, such as Social Security or Workers Compensation, and receiving at least $800 per month in order to qualify for a payday loan. Once a borrower has paid off a payday loan, more loans can be taken out from the same lender in increasing dollar amounts.

Now people who need cash for an emergency or an unexpectedly high bill have a viable option for their borrowing needs with a cash advance payday loan .

Share article on socal media or email:


Best College Loan Advice: 9 Tips for Borrowing for College – CBS News #montel #williams #loans


#loans for college
#

Best College Loan Advice: 9 Tips for Borrowing for College

  • Lynn O’Shaughnessy
  • MoneyWatch

Last Updated Apr 13, 2010 4:15 PM EDT

College loans . Yes, that time has arrived when parents of returning and new college students start thinking about applying for college loans. It’s also crunch time for graduating college students, who must begin repaying their college loans .

Unfortunately, many families get into trouble when they start shopping for college loans . When the college admission process is over, many parents are so relieved that they fail to do their homework before choosing college loans. College graduates also don’t give much thought to how they will tackle their college debt.

To help out families, who must borrow to pay the college, I’ve assembled some of my past college blog posts on student loans. Some of the posts will help you pick the best college loans and others will help those who must soon begin repaying their student loans.

There is no one right answer, but you will find links in this post to calculators that can help parents determine what level of college debt they can handle.

Students should limit their borrowing to federal loans only, which are safer and offer more protections than private student loans.

Federal loans are your best bet, but unfortunately many families gravitate to private loans because they don’t understand the difference.

In the early 1990s, only one out of every three college students took out college loans, but now well over half do.

There are federal student loan repayment opportunities that can dramatically shrink the monthly tab of eligible borrowers.

Don’t attend a college that has a high student loan default rate. Here’s how to find those default rates.

If you are struggling as you attempt to repay your student loans, here are some options.

Be extra careful about repaying student loans on time. The penalties can be astronomical.


Instant Cash Advance Online Seems a Preferred Method of Borrowing, says CEO of One of the Lending Companies #no #credit #auto #loans


#instant cash loan
#

Instant online cash advance from http://instantcashadvanceglubos.com/ proves to be a good option for people who need cash in a hurry as they celebrate their first anniversary with great success.

(PRWEB) August 09, 2012

No one wants to incur long-term debt, but another option for borrowing money for emergencies is the instant approval cash advance online. This is a short-term loan for up to $1,000, depending upon the borrower s ability to repay.

The first step in getting instant cash advance loans is to fill out the payday representative s loan application and return it via e-mail. The representative then finds a lender that fits the borrower s needs and forwards the borrower s loan application to them. Approval takes just seconds and no credit check is done.

After the representative receives cash advance instant approval, the potential borrower is requested to submit his or her banking information. Then the money is transferred into the borrower s checking account.

A borrower can use the online instant cash advance for anything he or she chooses, whether it is for the deposit on an apartment, the down payment on a car, for medical expenses or for a much needed get-away with the family. Instant cash advance payday loans makes it possible.

After two weeks have elapsed, the instant cash advance no credit check lender then deducts the amount of the payday loan, plus the loan fees from the borrower s checking account. The loan fee on a payday loan is usually $15 for every $100 borrowed. If this seems a little bit high, it must be remembered that there is no credit report run on a cash advance instant payday loan. It takes seconds for approval and the loan funds are deposited into the borrower s bank account within a day. A person researching various loans and loan terms would never find the traditional lending market to be so user friendly and fast.

The requirements for getting a payday loan are few. The borrower must be at least 18 and be a U.S. citizen with a regular job for at least six months, earning at least $1,000 a month in gross income. The borrower may also be on a fixed income, such as Social Security or Workers Compensation, and receiving at least $800 per month in order to qualify for a payday loan. Once a borrower has paid off a payday loan, more loans can be taken out from the same lender in increasing dollar amounts.

Now people who need cash for an emergency or an unexpectedly high bill have a viable option for their borrowing needs with a cash advance payday loan .

Share article on socal media or email:


How SMEs Can Use Property Loans to Lower Their Borrowing Costs #small #business #funding


#low interest rate personal loans
#

How SMEs Can Use Property Loans to Lower Their Borrowing Costs Propwise.sg Monday, 16 November, 2015

Aktive Learning

By Paul Ho (guest contributor)

Singapore’s SMEs makes up 99% of all enterprises, employ 66% of the workforce and account for 48% of the GDP. SMEs are defined as having revenues of less than $100m and with a staff of less than 200.

Singapore has narrowly averted a technical recession. But the PMI is below 50%, indicating a contraction in the manufacturing sector.

Figure 1: Purchasing Manager’s Index (PMI), Singapore Institute of Purchasing and Materials Management (SIPMM)

SMEs have limited access to loans during tough times

A drop off in demand means that companies are hardly growing their top lines and may go into the red. This is especially true for SMEs with less than $10m in revenues.

Figure 2: Singapore Quarterly GDP Growth rate (TradingEconomics, SingStats)

Singapore’s corporate default rate of Corporations listed on the SGX is below 2%. SMEs likely have a higher default rate of at least 3 to 4%.

Figure 3: Corporate NPL Ratio, Financial Stability Review 2014, MAS

During the Global Financial Crisis in 2008, Singapore’s SMEs experienced a limited access to capital and funding. This led the government to enhance the various schemes that are in place to help SMEs retain access to credit. Most of these schemes involve the government risk-sharing with the banks on loans to SMEs.

In short, this means that during tough times the banks cut back on SME lending exposure due to the potentially higher Non-Performing Loan risks. Hence funds will likely dry up during uncertain economic periods when SMEs need credit the most. Hence SMEs will be exposed to elevated funding disruption risks and increased cost of funding during recessionary periods, and need to take action now to secure funding.

Discerning future interest rate trends by looking at the bond yield curve

The bond yield curve gradient has become less steep, indicating slower growth. There is also higher mid and long term interest rate expectations, indicating inflation expectations or simply a higher interest rate environment. The 20 year Bond is currently at 2.9%.

Figure 4: Singapore Bond Yield Curve End 2014 versus Nov 2015, Asian Development Bank

Hierarchy of Borrowing Costs: Secured versus Unsecured Loans

The impending weakness in the economy poses greater risks to SMEs than to large corporations.

Secured lending refers to lending in which an asset is pledged. Secured lending presents less risk to the lender and hence they charge lower interest rates.

Unsecured lending does not require pledged assets. Hence this presents greater risk to lenders and are more expensive. Small businesses usually have fewer assets to collateralize against and hence use secure loans less frequently. Unsecured Business Term Loan rates for SMEs are usually in the 10+% range, depending on loan size as well as tenure.

The Micro Loan Program by Spring Singapore is also a good source of funding. However, not many companies qualify, and for those who qualify, they may not be able to obtain the maximum $100,000 loan. Interest costs start from 5.5% with up to a four year tenure.

Problems faced by SMEs and their owners in obtaining credit

Many SMEs may not have the right financing or salary structure. SME bosses tend to under-declare their income and instead declare dividends. Whilst this reduces their taxable income, with the new Total Debt Servicing Ratio (TDSR) rule, this also impedes many SME bosses from borrowing more to buy their homes.

SMEs are suffering a margin squeeze. Faced with borrowing costs of around 10%, labour costs that are 5 to 10% of revenue, and other operating costs which could take up another 5 to 15% of revenue, these businesses need a gross margin in excess of 30% just to break even. Not many industries can offer gross margins in excess of 30%. Hence SMEs are especially sensitive to top line growth for those with 20+ to 40% gross margins.

With market uncertainty, access to funds for SMEs could be even more restricted in the coming one to two years.

How can SMEs overcome high cost of funding issues?

SME bosses should start to realize that under-declaration of income impedes borrowing and start to rectify this situation to reflect their true income. While it is important to have a tax efficient salary structure using a combination of Salary, Director Fees and Dividends, it is worthwhile to review this to be eligible for adequate funding.

SMEs, especially those whose directors who are currently in their late 30s and early 40s and who have bought their own residential homes, could be sitting on tied up equity in their properties. Residential home loan rates are around 2%. They could free up this capital by refinancing their homes and use the money to invest prudently in their own business. With this reduced cost of funding, the business owners could immediately save

10% off borrowing costs.

Case Study: SME owned by 2 Directors and 3 Shareholders

Does it make sense to borrow against your home for a company in which you’re only one of the many directors?

In this case I came across, the company had two directors and three shareholders. The two Directors owned 35% each of the business, while the rest of the shareholders held 10% each.

They needed $500,000 of funds for business expansion.

We advised the firm to structure a Director’s resolution to approve the company to request for a Shareholder Loan to the company at a 5% interest rate. The two major shareholders cum Directors held 70% of the shares, and hence were allotted $350,000 of the loan amount. Shareholders or Directors who did not wish to lend to the company at the approved 5% interest rate may give up their allotment. The unused allotment may be used by the other directors/shareholders equally.

These two major shareholders then refinanced their residential property loan with a cash out (equity term loan) of $400,000 at 1.8% interest. They then lent their company $400,000 at a 5% interest, making a decent return on their loan to their own company. Another two shareholders took up their allotment and lent the company $100,000 at the same 5% interest.

In this way, the company had access to cheaper capital, boosting its chances of survival and creating a fair debt offering for all directors and/or shareholders who wanted to participate. It’s similar to preferential bonds which only Directors and shareholders can participate in.

SUMMARY

SME owners should get their personal income structure right to optimize for both tax efficiency and borrowing capacity. They can then leverage on cheaper secured mortgages to free up equity from their house to lower their business borrowing costs by structuring a Director’s Loan to company.

In order to lock in low rates from the residential property equity loan (cash out), it might be safer for SME owners to consider a three to five year fixed rate structure to hedge against rising interest rates.

Investors with at least $300,000 of spare cash could also get in on the game to bridge the gap left behind by banks and lend to growing companies who can afford to pay 14 to 18% per annum in interest costs. But thorough risk assessment needs to be done to minimize default rates. Convertible loans can also be structured to give investors additional upside if there is a liquidity event (e.g. acquisition).

By Paul Ho, holder of an MBA from a reputable university and editor of www.iCompareLoan.com. Singapore’s first Cloud-based Home Loan reporting platform used by Property agents, financial advisors as well as Mortgage brokers. Posted courtesy of www.Propwise.sg. a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide .


Personal Unsecured Loans and Borrowing Money – Find Out How It Works at Zopa #bad #credit #loans #no #guarantor


#quick personal loans
#

Unsecured personal loans

Zopa’s personal loans offer great rates and no early repayment fees.

The application process is quick and simple and you have the added reassurance of knowing we have been voted ‘most trusted loan provider’ by our customers 6 years in a row.

You do not have to be a home owner to apply for an unsecured personal loan although to be eligible you need to have a good track record of repaying debt and a credit history that we can see.

2. Get a quote

3. Accept the quote and apply for a loan

What the press says

Repay your loan early at no extra cost

There is no charge if you want to repay your loan early in full. You can also make smaller overpayments over the course of your loan at no extra cost.

Zopa calculates the interest on your loan on a daily basis. This means you can save money by repaying early.

You can choose which day of the month you want to make your loan repayments. Your first repayment will be taken at least one month after you take out your loan.

About Zopa

Zopa has been providing low rate loans since 2005. We have lent more than £1169 million to over 150,000 borrowers.


Best College Loan Advice: 9 Tips for Borrowing for College – CBS News #interest #rates #on #car #loans


#loans for college
#

Best College Loan Advice: 9 Tips for Borrowing for College

  • Lynn O’Shaughnessy
  • MoneyWatch

Last Updated Apr 13, 2010 4:15 PM EDT

College loans . Yes, that time has arrived when parents of returning and new college students start thinking about applying for college loans. It’s also crunch time for graduating college students, who must begin repaying their college loans .

Unfortunately, many families get into trouble when they start shopping for college loans . When the college admission process is over, many parents are so relieved that they fail to do their homework before choosing college loans. College graduates also don’t give much thought to how they will tackle their college debt.

To help out families, who must borrow to pay the college, I’ve assembled some of my past college blog posts on student loans. Some of the posts will help you pick the best college loans and others will help those who must soon begin repaying their student loans.

There is no one right answer, but you will find links in this post to calculators that can help parents determine what level of college debt they can handle.

Students should limit their borrowing to federal loans only, which are safer and offer more protections than private student loans.

Federal loans are your best bet, but unfortunately many families gravitate to private loans because they don’t understand the difference.

In the early 1990s, only one out of every three college students took out college loans, but now well over half do.

There are federal student loan repayment opportunities that can dramatically shrink the monthly tab of eligible borrowers.

Don’t attend a college that has a high student loan default rate. Here’s how to find those default rates.

If you are struggling as you attempt to repay your student loans, here are some options.

Be extra careful about repaying student loans on time. The penalties can be astronomical.


Personal Loan Calculator: Explore Bank Loans – Options for Borrowing Money #standard #bank #loans


#business loan calculator
#

Try Our Other Tools

Personal loans can be the answer to many financial conundrums. See if bank loans are right for you with our calculators. You can gain insight into borrowing money as well as the types of loans that may be right for you.

This calculator will add a file, known as a local shared object or a Flash cookie, to your computer. This file contains configuration information, as well as information you enter and the calculator results you are presented. CIBC does not use the information in local shared objects for analytical or other purposes. You can remove all local shared objects created by CIBC Flash tools from your computer using instructions found here .

1 The calculation is based on the information you provide and is for illustrative and general information purposes only and should not be relied upon as specific financial or other advice. Actual results and loan or line of credit payment amounts and repayment schedules may vary. Calculator assumes a constant rate of interest.

For the purposes of this tool, collateral refers to “real property.”

Applicants must meet CIBC’s lending criteria; all personal lending products are subject to credit approval. Conditions and restrictions apply. Products and their interest rates may change at any time without notice. Ask for details.

* The CIBC Home Power Line of Credit interest rate shown is variable and based on CIBC prime plus 1%. The interest rate on your line of credit will change whenever CIBC Prime varies.


The Borrowing Process Explained #montel #williams #loans


#easy payday loans
#

Use These Strategies to Get Money Before Your Next Paycheck

When you need money before your next paycheck, few solutions offer the simplicity and efficiency of a payday loan. We have established a network of reputable lenders that are committed to helping consumers take control of their financial situations. These companies offer convenient lending services that meet the needs of consumers everywhere. If you have a need for a short-term financial solution, chances are we can pair you with a lender that can help. In order to help you get the money you require quickly, we have created this guide that explains the borrowing process from the initial application to repayment strategies.

Step 1: Select a Product and Apply Using Our Simple Form

You have decided to take out a short-term advance, so where do you begin? We understand your time is precious; therefore we set out to simplify the application process. All you have to do is select the amount you want to borrow and supply us with some basic information. We will use this information to pair you with a company in our network that is best suited to meet your specific needs. You won’t find a more personalized approach to borrowing anywhere! Furthermore, the entire process can be completed online in the vast majority of cases, so you’ll never have to leave your home in order to get access to cash. You’ll never have to use personal items or property as collateral since your paycheck is used to validate the advance. When you are ready to begin, simply begin the form located on this site. Make sure you enter the information accurately so there will be no delays in approval.

Step 2: Get Approved and Receive Your Funds

Once you have submitted the application, the hardest part (which is actually very easy) is over. What happens at this stage may vary among providers, but most companies will offer you a borrowing decision within hours. In the vast majority of cases, there is no faxing of documents required. You will receive an electronic consumer loan agreement containing the terms and conditions of the service. It is crucial that you review this contract carefully, as many consumers are anxious to sign it and get the cash they requested. The amount you are approved for, along with the fee(s) will be presented in a clear, easy-to-read manner so there will be no surprises down the road.

It is important to remember that there is no obligation to go through with the service until you have signed and submitted the agreement. If you have any questions or concerns about the conditions or approved balance, now is the time to contact the company directly. They can answer questions or address your concerns so you can feel comfortable throughout the entire process. When you are ready, complete the agreement and submit it. It is important to note that we are not a lending company or the issuer of cash advances, so any inquires must be directed to your specific lender.

You are now ready to receive the funds, which are directly deposited into the checking or savings account you specified when applying. This is far more safe and convenient than carrying large sums of cash or even a check. It could take anywhere from several hours to a couple days to receive the funds, so be sure to monitor your account. Once you have received the money, it is yours to do with as you wish!

Step 3: Repay the Lender

When it comes time to repay the amount you requested plus any applicable fee, you don’t have to do anything! The balance will be debited from the same account you specified when applying. Simply ensure you have sufficient funds in the account by this date to avoid any unnecessary overdraft fees or charges. Some borrowers find they require more time to repay what they owe for whatever reason. If you fall into this category, it is important to contact the provider as soon as possible. Some companies offer extensions or will roll your balance into another loan. Doing so will incur a larger fee, so carefully consider this option. If you simply don’t have the money for repayment, it may be wise to take advantage of an extension or rollover if possible. Keep in mind you will likely be unable to take out another short-term advance until you have repaid the initial one, so it is prudent to pay off these debts as quickly as possible. Once you have done so, we encourage you to use our free matching service to get funds quickly whenever the need arises.

www.personalcashadvance.com

*Most lenders fund the next business day


How SMEs Can Use Property Loans to Lower Their Borrowing Costs #usda #home #loans


#low interest rate personal loans
#

How SMEs Can Use Property Loans to Lower Their Borrowing Costs Propwise.sg Monday, 16 November, 2015

Aktive Learning

By Paul Ho (guest contributor)

Singapore’s SMEs makes up 99% of all enterprises, employ 66% of the workforce and account for 48% of the GDP. SMEs are defined as having revenues of less than $100m and with a staff of less than 200.

Singapore has narrowly averted a technical recession. But the PMI is below 50%, indicating a contraction in the manufacturing sector.

Figure 1: Purchasing Manager’s Index (PMI), Singapore Institute of Purchasing and Materials Management (SIPMM)

SMEs have limited access to loans during tough times

A drop off in demand means that companies are hardly growing their top lines and may go into the red. This is especially true for SMEs with less than $10m in revenues.

Figure 2: Singapore Quarterly GDP Growth rate (TradingEconomics, SingStats)

Singapore’s corporate default rate of Corporations listed on the SGX is below 2%. SMEs likely have a higher default rate of at least 3 to 4%.

Figure 3: Corporate NPL Ratio, Financial Stability Review 2014, MAS

During the Global Financial Crisis in 2008, Singapore’s SMEs experienced a limited access to capital and funding. This led the government to enhance the various schemes that are in place to help SMEs retain access to credit. Most of these schemes involve the government risk-sharing with the banks on loans to SMEs.

In short, this means that during tough times the banks cut back on SME lending exposure due to the potentially higher Non-Performing Loan risks. Hence funds will likely dry up during uncertain economic periods when SMEs need credit the most. Hence SMEs will be exposed to elevated funding disruption risks and increased cost of funding during recessionary periods, and need to take action now to secure funding.

Discerning future interest rate trends by looking at the bond yield curve

The bond yield curve gradient has become less steep, indicating slower growth. There is also higher mid and long term interest rate expectations, indicating inflation expectations or simply a higher interest rate environment. The 20 year Bond is currently at 2.9%.

Figure 4: Singapore Bond Yield Curve End 2014 versus Nov 2015, Asian Development Bank

Hierarchy of Borrowing Costs: Secured versus Unsecured Loans

The impending weakness in the economy poses greater risks to SMEs than to large corporations.

Secured lending refers to lending in which an asset is pledged. Secured lending presents less risk to the lender and hence they charge lower interest rates.

Unsecured lending does not require pledged assets. Hence this presents greater risk to lenders and are more expensive. Small businesses usually have fewer assets to collateralize against and hence use secure loans less frequently. Unsecured Business Term Loan rates for SMEs are usually in the 10+% range, depending on loan size as well as tenure.

The Micro Loan Program by Spring Singapore is also a good source of funding. However, not many companies qualify, and for those who qualify, they may not be able to obtain the maximum $100,000 loan. Interest costs start from 5.5% with up to a four year tenure.

Problems faced by SMEs and their owners in obtaining credit

Many SMEs may not have the right financing or salary structure. SME bosses tend to under-declare their income and instead declare dividends. Whilst this reduces their taxable income, with the new Total Debt Servicing Ratio (TDSR) rule, this also impedes many SME bosses from borrowing more to buy their homes.

SMEs are suffering a margin squeeze. Faced with borrowing costs of around 10%, labour costs that are 5 to 10% of revenue, and other operating costs which could take up another 5 to 15% of revenue, these businesses need a gross margin in excess of 30% just to break even. Not many industries can offer gross margins in excess of 30%. Hence SMEs are especially sensitive to top line growth for those with 20+ to 40% gross margins.

With market uncertainty, access to funds for SMEs could be even more restricted in the coming one to two years.

How can SMEs overcome high cost of funding issues?

SME bosses should start to realize that under-declaration of income impedes borrowing and start to rectify this situation to reflect their true income. While it is important to have a tax efficient salary structure using a combination of Salary, Director Fees and Dividends, it is worthwhile to review this to be eligible for adequate funding.

SMEs, especially those whose directors who are currently in their late 30s and early 40s and who have bought their own residential homes, could be sitting on tied up equity in their properties. Residential home loan rates are around 2%. They could free up this capital by refinancing their homes and use the money to invest prudently in their own business. With this reduced cost of funding, the business owners could immediately save

10% off borrowing costs.

Case Study: SME owned by 2 Directors and 3 Shareholders

Does it make sense to borrow against your home for a company in which you’re only one of the many directors?

In this case I came across, the company had two directors and three shareholders. The two Directors owned 35% each of the business, while the rest of the shareholders held 10% each.

They needed $500,000 of funds for business expansion.

We advised the firm to structure a Director’s resolution to approve the company to request for a Shareholder Loan to the company at a 5% interest rate. The two major shareholders cum Directors held 70% of the shares, and hence were allotted $350,000 of the loan amount. Shareholders or Directors who did not wish to lend to the company at the approved 5% interest rate may give up their allotment. The unused allotment may be used by the other directors/shareholders equally.

These two major shareholders then refinanced their residential property loan with a cash out (equity term loan) of $400,000 at 1.8% interest. They then lent their company $400,000 at a 5% interest, making a decent return on their loan to their own company. Another two shareholders took up their allotment and lent the company $100,000 at the same 5% interest.

In this way, the company had access to cheaper capital, boosting its chances of survival and creating a fair debt offering for all directors and/or shareholders who wanted to participate. It’s similar to preferential bonds which only Directors and shareholders can participate in.

SUMMARY

SME owners should get their personal income structure right to optimize for both tax efficiency and borrowing capacity. They can then leverage on cheaper secured mortgages to free up equity from their house to lower their business borrowing costs by structuring a Director’s Loan to company.

In order to lock in low rates from the residential property equity loan (cash out), it might be safer for SME owners to consider a three to five year fixed rate structure to hedge against rising interest rates.

Investors with at least $300,000 of spare cash could also get in on the game to bridge the gap left behind by banks and lend to growing companies who can afford to pay 14 to 18% per annum in interest costs. But thorough risk assessment needs to be done to minimize default rates. Convertible loans can also be structured to give investors additional upside if there is a liquidity event (e.g. acquisition).

By Paul Ho, holder of an MBA from a reputable university and editor of www.iCompareLoan.com. Singapore’s first Cloud-based Home Loan reporting platform used by Property agents, financial advisors as well as Mortgage brokers. Posted courtesy of www.Propwise.sg. a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner’s and Buyer’s Guide .


9 Things to Know Before Borrowing from Your 401(k) #same #day #loan


#401k loans
#

9 Things You Should Know About Borrowing from Your 401(k)

By Michael Rubin. Retirement Planning Expert

Many employers allow their employees to borrow money from their 401(k) plans  through what is known as a 401(k) loan. Of those 401(k) participants whose plan offers a loan option, only 21% use it. Though many like the idea of borrowing from themselves over borrowing from a financial or banking institution, taking a loan out from your 401(k) is not as simple as it may appear.

Important 401(k) Loan Facts

Continue Reading Below

In fact, in most cases, taking a loan against your 401(k) in inadvisable. But if you are considering a 401(k) loan, make sure you know the rules and understand the relative advantages and disadvantages of a 401(k) loan before you sign on the dotted line. Before getting started, here are nine things (the good, the bad, and the neutral) to know about a 401(k) loan.

1. 401(k) Loans Have Borrowing Limits

In general, you can only borrow the lesser of $50,000 or one-half of your retirement plan balance.

To accept the loan, you must typically agree to begin paying back the loan as soon as your next pay period. Most often, this is done via an automatic deduction from your paycheck.

2. 401(k) Loans Have Length Restrictions

Unless you use the money to acquire a home, you must pay the loan back in five years or less. If you borrow the money so you can purchase a residence, the length of the loan may be significantly longer, but be sure to note the risk of termination below.

3. 401(k) Loans Don t Require a Credit Check 

No credit check will be performed if you request a 401(k) loan since you aren’t actually borrowing money .

Continue Reading Below

Instead, you are temporarily tapping into your retirement funds. Since no entity is loaning you money, there is no need to check your credit. But that doesn t mean you won t pay interest.

4. 401(k) Loans Have a Competitive Interest Rate

Regardless of your credit score. you’ll pay a competitive interest rate  on a 401(k). The rate is often in the neighborhood of the prime rate, which is consistent with typical consumer loans. Better yet, you’ll pay back the loan principal and the interest. to yourself, not to a bank or other financial institution. The entire amount of each loan repayment goes back to your 401(k) account.

5. 401(k) Loans Have Low or No Application Fees

Since a 401(k) loan isn’t a true loan, any application fees are usually minimal.

6. 401(k) Loans Result in Lost Investment Growth

Your borrowed 401(k) money will not be invested for your retirement for the entire time the money is outstanding from your 401(k) plan. Therefore, you forgo all potential investment gains from all borrowed funds for the duration of your 401(k) loan. But perhaps most impactful, you lose out on gains from compound interest. So remember, when you borrow from your 401(k), you are borrowing from your future self and even when you pay back the principal and interest, you likely still won t break even in terms of lost investment growth by the time you retire.

7. 401(k) Loans are Repaid with After-Tax Money

Unlike the initial 401(k) contributions which were likely tax deductible, when you pay back your 401(k) loan, you do so with post-tax (or after-tax) dollars. Consequently, a $100 loan repayment reduces your take-home pay by $100. Worse, when you take the money out of your 401(k) plan during retirement, you will pay tax on the same money again.

8. 401(k) Loan Terms are Dependent on Employment

There is a real risk with 401(k) loans that not many people know, which is the risk of job termination. The reason that termination poses such a risk is that the terms of 401(k) loans are generally tied to your employment status with that employer. No matter the cause, if you cease working with your current employer, the entire remaining balance of the loan is usually due within 60 days. If you are unable to pay back the loan balance during that quick time frame, the entire amount you are unable to pay is deemed a distribution, which is likely to be subject to significant federal income tax, state income tax. and early distribution penalties .

9. 401(k) Loans are Still Generally Better Than a Distribution

While a 401(k) loan has some benefits, its significant negatives ought to be avoided except during a genuine financial emergency. Most financial planners advise people to act as though their retirement funds are off limits. It is always better to be prepared for a financial emergency with emergency funds or proper insurance. Still, if your only other source of money in a true emergency is an outright distribution of your 401(k) money, a 401(k) loan is still the preferable option as unless you are terminated during the life of the loan, you can avoid paying income tax and penalties you would on a distribution.