Credit News

How do Home Equity Loans Work #best #auto #loans

#home equity loan rates

Home Equity Loan

Why a Home Equity Loan?

Equity in your home brings you peace of mind and opportunity for growth. You can borrow money using the equity in your home as collateral. Upon acceptance, you receive a lump sum of money to use for these projects or debt payments. The loan is repayable over a fixed term. A home equity loan gives you a secure locked-in rate and a consistent monthly payment. The interest may even be tax deductible. Check with your tax advisor.

Money to make your life better.

Work with Mountain America for your Home Equity Loan.

How does a home equity loan work? In a word, well.

It s a rather simple premise. You have equity in your home. A home equity loan lets you borrow money, using that equity as collateral. You receive a lump sum of money that is repayable over a fixed term, giving you the security of a locked-in rate and a consistent monthly payment 3. Plus, unlike most types of consumer loans. the interest on a home equity loan may be tax deductible 2 .

Flexible Home Equity Line

How do used car loans work? carloan banks usedcars #cheap #loan

#used car loans

How do used car loans work?

I have some general questions about financing a used car

My current car, a 1995 Volvo 850 with around 200,000 miles, has been giving me some trouble. First, the A/C died, which for someone who likes to keep their surroundings as cold as possible is pretty annoying. It sounds like that may simply be a relay that needs to be replaced. Second, there was a good amount of white smoking blowing out of my tailpipe this afternoon. I’m worried that it may be a headgasket or a gasket on my turbo. I’m going to see the mechanic tomorrow morning.

Assuming that repairing my 15-year-old car will cost me many hundreds if not thousands of dollars, I’ve been looking into getting a replacement. I’ve tried my best to research various used car loans online. I’ve got $2000-$2500 to use a down payment. Ideally I’d replace this car with the same exact model, only with less miles. I love my Volvo.

It seems like many lenders limit the model year they will loan money for to newer (within the last 5 or so years) models. Is this true of most lenders? Will it be tough to get a $3000-$5000 loan for a late 90s model?

If I do get a loan, am I free to purchase the car wherever I want? Private seller? Dealership? Used car lot? How does this work? Does the bank give me a blank check with the stipulation that I can only spend up to $xxxx? Do I need to tell the seller/dealership to contact my lender to receive the money?

I currently do the majority of my banking online with ING Direct. They do not offer car loans. There are several banks near me, including PNC and my employers credit union. Generally, do you need to have an account at the bank to get a loan from them?

This is a tough situation for me, as I recently graduated from college and moved away from home. I don’t have any friends who can give me rides or help me look for a car. I’d like to be prepared if I need to start the process of finding a loan and then purchasing a car.

I bank at a local credit union in the metro NY area (and have commented about using credit unions here in the past ) and recommend that route.

My credit union will only give car loans for cars 10 years or younger. Why? Because the car is collateral in case you don’t pay back the loan. If the car stop working and you cannot afford to fix it, the credit union doesn’t want to repo a busted car.

Want a car loan? Need an account. The minimum for a savings account there is $5. Get pre-approved for the loan in the amount so you know that you’ll be able to finance it when you start shopping around. You’ll have to use a bank if you buy from an individual. If you buy from a business, they will attempt to loan you the money as well. There’s tons written about financing cars at dealerships and car negotiating for you to read. Commonly, it is recommended that you do not walk in and announce that you’ve been pre-approved elsewhere or for what amount.

Huh. I was not previously aware of the limitation on model years for car loans.

Well, the issue with car loans is that they will take a security interest in your car, so the car is collateral on the loan and therefore the lender has to care about the quality/upkeep of the car (FYI, there is typically a minimum amount of comprehensive and/or collision insurance coverage required when you take out an auto loan).

One potential alternative is a line of credit or personal loan. Discover has such a product, though I’m sure there are other, similar alternatives, possibly even one at your local credit union. This is different from a credit card in that 1) the interest rate tends to be lower, and 2) the monthly payment and payment term are fixed. For a small amount such as you are planning to borrow ($3-5K), it may be entirely feasible to get a personal loan.

The upside is that they do not care at all what you spend it on, or require any particular level of insurance on your car. The downside is that the interest rate may be a couple points worse than that of a car loan, and your repayment term may well be shorter (24-36 months is common), so the monthly payments will be higher.

posted by rkent at 8:00 PM on May 25, 2010

What the others said reflects my experience too, but I will add one bit of advice.

Last time I bought a car, I arranged for financing ahead of time with my credit union. I qualified for their very best rate, which turned out to be the lowest rate among about 10 banks and credit unions I checked. I wound up buying a very slightly used car from a dealer and the manufacturer had incentive financing which was about one percent lower than that. The finance guy at the dealership somehow wound up finding financing through the dealer services department at a major national bank which was even 1% lower than the manufacturer’s deal.

The point is that you should come prepared with your own financing in place, but be open to the possibility of a better deal. Also be aware that some dealers try to simulate a better deal by giving you a lower rate but a higher overall price. For that reason, you should negotiate on the price and all other details before you even begin talking to the dealer about financing. You should also make it clear that you’re totally indifferent about the car and prepared to walk at the first sign of nonsense.

How Do I Qualify for a Government Debt Consolidation Loan? mobile wiseGEEK #student #loan #consolidation #rates

#government debt consolidation loans

wiseGEEK: How Do I Qualify for a Government Debt Consolidation Loan?

To qualify for a government debt consolidation loan, you will typically have to meet the criteria of the lending program in question. Usually, these programs are offered for students who have more than one loan and want to make repayment easier. You can likely qualify if you are not in default or delinquent on your payments. Depending on where you are located and the type of loan in question, you may not have to submit to a credit check as you would if you were hoping to consolidate other types of loans. In fact, when participating in a government debt consolidation program for student loans, you may not even need a job to qualify.

Typically, you’ll need outstanding government loans to qualify for a consolidation loan. This means that, if you received a loan from a private institution and it was not backed by a government guarantee, it is unlikely that you will qualify. If you have two or more government-granted or -backed loans that are eligible for a loan consolidation program, however, you may qualify to consolidate your debts.

The first step in qualifying for a government debt consolidation loan is usually learning the criteria of the program in which you are interested. In many jurisdictions, the only type of debt consolidation program available is for people who have student loans. In such a case, qualifying is often very easy. For example, government debt consolidation for student loans is often available without regard to credit history or current income. Likewise, you will not typically need any collateral or a cosigner .

While your credit history and employment status may not figure in your ability to secure a loan, there is one factor that usually proves critical: payment history. Typically, you will be turned down for this type of loan if you are delinquent on your payments or in default on any of your government-granted or -backed loans. Often, however, government student loan programs have measures in place to allow you to catch up on payments and get out of default status. Once you’ve done so, you can typically apply for and receive a consolidation loan.

Hard Money: What is it and How do Hard Money Loans Work? #calculate #loan #payment

#hard money loans

Hard Money: What Is It and How Do Hard Money Loans Work?

Most real estate investors hear terms that they don t understand in the beginning. One of these terms, hard money. is little understood, and frequently asked about. Here is a great explanation of hard money.

What Does Everyone Mean by Hard Money? What is Hard Money

Hard money lenders (HMLs) are typically private individuals or small groups that lend money (Hard money) based on the property you are buying, and not on your credit score. Usually these loans cost (percentage-wise) much more then an average mortgage. often times up to twice what a regular mortgage does, plus high origination fees.

Who Needs Hard Money

Developers and house flippers, amongst others, will use it to fund deals because you can often borrow up to 100% of your purchase price! On the other hand, hard money lenders will frequently require you to back up your loan with real assets. If you know you can buy a property and turn it quickly at huge profit, and you can t get a standard mortgage, it might be one way to go. Some investors use hard money to get into the property, do some quick fixes to raise the property value, then get a new loan (based on the property s new, improved value) from a bank to pay off the hard money lender.

In Other Words.

Hard money loans are easily accessed and cut through the red tape. If you can develop a relationship with a LOCAL hard money lender, you can get funds within a couple days, and sometimes with no appraisal or other costs (except for origination fees of course).

Now different HML s have different requirements and protocol. There is a local HML that only charges 12% interest and 1 point origination if you keep it over a year and 2 more points if you keep it less than a year. He only does 30 year notes, and obviously he wants you to keep it. He has over 1100 notes, so he doesn t want the hassle. He wants his money to stay loaned out. I have also worked with another local HML who doesn t charge any points, but he s extremely fickle and can be hard to work with.

Now the typical HML will charge somewhere right around the usury rate. In Texas its 18% annual, so most HML s will charge 5% origination and 13% interest on a 1 year note or no points upfront and 18% interest with a shorter call. Now they can get around usuary by shifting their origination fee into a commitment fee (little different protocol), but most HML s don t know this.

The beauty of HML s is that the loan is normally not based on your credit score (especially with local lenders) or at least not on your credit worthiness (assets and income), you can receive funding within a matter of days (normally about 7-14 days) rather than 30 days+, and you can get a loan on any piece of junk that you find. You also are not normally dealing with a processing team. You deal directly with an individual lender. If he or she says yes, then you have the loan. This is quite advantageous versus going through an entire loan committee process or underwriting process.

HML s on longer term investments are not a good idea, but for short term flips, rehabs, or for the initial purchase, they can be a very strong tool. I started my investing using HML s, and have made very good money using them. I now use mostly a line of credit from the bank, but it took me several years to work into that. I also now do some local hard money loans to other investors.

Thanks to Ryan Webber for his explanation in other words (from our forums )

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Do Student Loan Interest Rates Matter? #bill #consolidation #loans

#interest rates on student loans

Do Student Loan Interest Rates Matter?

Over the past several weeks student loan interest rates have been a hotly debated issue among politicians who are trying to pass legislation to prevent the increase in rates set to occur next week. Last month President Obama stood in the Rose Garden at the White House and warned that allowing interest rates to double on July 1 would be equivalent to a $1000 tax hike a frightening prospect for cash-strapped college students. Senator Durbin, a co-sponsor of the Democratic proposal in the Senate, argued that action is necessary in order to prevent the student loan market from falling into a crisis like the one seen in mortgage lending. The rhetoric surrounding this debate would have you believe that the stakes are incredibly high. Many have begun to worry that the consequences of inaction could be catastrophic. I m pleased to say, however, that this is quite far from the truth.

The most surprising aspect of this debate is the high degree of similarity between the possible outcomes. Recent analysis by Jason Delisle and Clare McCann at the New America Foundation made this point clear. They ran the numbers to show how various proposals would impact an average borrower s monthly payment. They concluded that the bipartisan Senate proposal currently in the works would create savings for borrowers compared to the other options on the table. Most striking, however, was how similar the existing proposals really are.

In order to illustrate this point, I built an Excel spreadsheet that calculates a borrower s monthly loan payments based on a variety of assumptions. To extend the work done by Delisle and McCann, the calculator has built in predictions of future treasury rates, which are based on the current yield curve. The calculator allows for changes to the borrower profile, including total borrowing and fraction of borrowing in subsidized loans. It also identifies each of the primary legislative proposals and allows the user to compute monthly payments using different parameters (i.e. the spread over treasury rates). The table below shows the monthly payments that an average borrower would face under different policy options. Download the spreadsheet to explore the policy options yourself.

%img src=”” /%

The undeniable conclusion from this exercise is that student loan interest rates don t matter at least when you are only considering the options that are currently on the table. For a borrower with $27,000 in federal student loan debt, the difference between the most and least generous proposals is $33 per month when borrowing the maximum allowable for both subsidized and unsubsidized loans over four years. Over the life of the loan, this amounts to $3,400 (discounted value). In terms of monthly payments, the differences between the proposals become even smaller when you take into account the possibility that many borrowers will participate in repayment plans that extend the term of the loan beyond ten years.

Regardless of whether you think that $33 is a large sum, it is clear that we don t need to worry if the outcome of this political battle will leave future borrowers in dire straits. Instead, let s focus on what is important in federal student loan policy. First of all, we need to get congress out of the business of setting interest rates. Thankfully most policy makers are in agreement on this and have endorsed legislation that pegs student rates to the market. Second, we need to ensure that the federal lending program is fiscally responsible. Lending to students at cost, as proposed by Senators Reed and Durbin[i]. is the best way to achieve this. Since the government has the ability to borrow at low rates through the treasury, loans that are costless to the government will have rates that are well below what private lenders can charge. Constructing a budget neutral lending program will ensure that loans will be available for future generations of students. While it is easy to understand why many will favor the interest rate proposals that provide savings to the borrower over the life of the loan, we need to consider the benefit of delivering those same dollars to students through Pell grants instead. A cash transfer at the time of enrollment will likely have a greater impact on enrollment than an equally costly subsidy delivered through interest rates after a student has graduated. This is especially true for low income students who may have an aversion from borrowing that discourages them from enrolling in college.

Revisiting this debate year after year provokes a fear of borrowing among prospective college students, which may discourage some from pursuing degrees at all, and wastes the valuable time of our policy makers. Given that all of our options are in the same ball park, it s time to quit bickering over a few percentage points and pass legislation that will provide a long term solution.

%img src=”” /% Click here to download the student loan interest rate calculator (Excel)

[i] Estimates of monthly payments are not available for this proposal because the spread over market rates is based on administrative costs to be calculated by the Department of Education.

FHA Loan Requirements- Do You Qualify For an FHA Loan? #jumbo #loan #rates

#fha loan requirements


In today’s housing market crisis, getting a traditional mortgage approved is not an easy task. There are strict requirements that you must meet, which makes it almost impossible for the average American to get a loan. For this reason, FHA loans may be your easiest and only solution to getting approved.

You must meet most of the following requirements to get an FHA Loan approval:

  • You do not have to be a US citizen, but you must be a permanent resident who is permitted to work in the United States.
  • You must have a valid Social Security Number.
  • Steady employment for the past 2 years (preferably but not limited to same employer).
  • No minimum or maximum income restrictions, but you must have an unchanged or increasing income for the past 2 years.
  • You have less than two 30-day late payments on your credit report listing.
  • If you have any bankruptcy filings, they must be more than 2 years old and you must have a perfect credit since the filing.
  • If you have any foreclosures, they must be more than 3 years old and you must have a perfect credit score since the filing.
  • Your current mortgage payments must be approximately 30% of your income before taxes.
  • You do not have any student loans currently in default.

If you meet all or most of the above requirements, apply now to gain freedom from mortgage stress.

Many people are intimidated by a loan process and are too overwhelmed to ask questions. Lenders count on this fact to benefit themselves, not always using the most ethical practices. For this reason, you must understand the requirements, and also be familiar with the steps that must be followed to ensure that your loan is approved and finalized in your favor.

Here at FHA Lending Requirements, we have made a quick list below of the FHA loan process to help you understand and make this daunting process a bit easier. We are here to help you through every step of this loaning process to get you approved quickly and conveniently.

  • The documents you need will include a list of personal paperwork required to proceed with an FHA application. These documents are vital to successfully completing your loan process.
  • Displaying your income and earnings will also be necessary. Through this, you will be able to demonstrate that you are capable of managing a mortgage payment, which is one of the requirements for your loan.
  • FHA will need to know your history of debt management, though they are certainly not as strict about this history as you would find with other conventional lenders. Your credit will be a large factor which determines this capability to manage money and debt.
  • If you have any kind of savings or money set aside. this will tremendously help to display your ability to create seasoned funds. This will push the process along more smoothly.
  • Closing costs are required by all lenders, and include a transaction and documentation service fee. However, FHA works hard to regulate their costs, and keep them much lower for you.
  • Using debt to income ratios. FHA can determine if you will be able to handle the loan given to you. This will help to make your budgeting job easier, and will also help to establish the loan amount that would be best for you.
  • You will encounter a standard loan processing phase. while FHA goes through your paperwork and checks all of the information. If any problems do arise, this is the time when these issues can be quickly modified and resolved.
  • Your paperwork will then be sent to an underwriter. who will carefully review all of your documents and conclude if they meet the FHA requirements. At this point, if all goes as it should, your loan will be approved!
  • As with any kind of lending, delays can spring up now and then. However, 30 days is usually the standard for closing a loan.
  • Once you have decided on the home you want, a licensed professional who is certified by the FHA must appraise your house. This is a crucial part of the process, and will determine the final amount of your loan.
  • After one more review and your approval. the money can be transferred to you, and you can move forward with your home purchasing plans.
  • During escrow, you will set up an account which you will make monthly payments to. It is separate from your mortgage payment. Through this account, FHA can directly pay the property taxes and insurance which your home requires.
  • Once you have reached the recording phase. you are in the final step! Your documents will be signed and notarized, and sent to your future county to become public record.

How do I defer a car loan? #boat #loans #calculator

#car loan payment

How do I defer a car loan?

There are a few steps that borrowers must follow in order to defer payments on their car loans.

Deferments allow borrowers to hold off on payments for a temporary period of time without facing penalties such as costly fees. Car loan deferments can be especially useful for borrowers that need to prioritize their money for another payment.

Lenders are accustomed to receiving calls and inquiries about deferment options in light of the financial challenges that many Americans face. News concerning car loans already mentions how pressured cash-strapped borrowers feel, so it is not uncommon for lenders to be asked about deferment options amid the difficult economy.

Step One

First, borrowers should contact their lender. Car loan lenders are a diverse bunch ranging from auto dealership financers to banks and credit unions. As a result, they will each have different deferment qualifications. Some may even require proof that the borrower is in a desperate financial situation, which warrants the need to defer payment. Many lenders stipulate that borrowers must have made a set number of payments already—in effect proving with past payments that the borrower is earnestly trying to repay their debt.

Borrowers need to explain their financial situation to their lender. This can be a sensitive subject for some, but being upfront and truthful with a lender can help prove how necessary a deferment is to a borrower’s financial stability. While lending is a business, lenders are people too.

Additionally, they want the most money they can get. If that means waiting a few months while a borrow finds his or her footing again, many will be more than accommodating.

Step Two

If borrowers are approved for a deferment then they must sign and complete the necessary forms. Making a mistake at this point of the process could cause a delay in the deferment approval, or, worse, it could result in rejection.

Keep in mind, a processing fee is sometimes required. Many lenders will check the credit score of a deferment applicant just to make sure the applicant truly is in dire financial straits.

Step Three

Once borrowers are approved for their deferment, they must do all in their power to use this time wisely and prepare themselves for the eventual return of a regular payment schedule.

If a deferment period does not help a borrower very much, then speaking with a lender about lowering monthly payments should be pursued. Defaulting after a deferment will likely prompt a car loan lender to repossess the vehicle.

What Do I Do When the Bank Says I Need a Cosigner? #refinance #loan

#i need a loan

The Bank Says I Need a Cosigner

By Justin Pritchard. Banking/Loans Expert

Justin Pritchard helps consumers navigate the world of banking.

Question: I’m applying for a loan but my credit is not great. The bank tells me I need a cosigner. What do I do?

Answer: There are two ways you can approach this: find a cosigner, or work on getting a loan on your own — without any cosigner.

The lender needs a cosigner with good credit and adequate income to apply with you. If you can’t find a cosigner that meets their needs, you’ll have to go it alone.

  • How Cosigning Works
  • Credit Score Basics

The best places to look when you need a cosigner are family and friends. Is anybody willing to help you qualify for the loan? In addition to being nice, you’ll need a cosigner on solid financial ground. As you consider potential cosigners, remember that they’ll become responsible for your loan if something happens to you.

The bank can make them repay your debt, so you need a cosigner who can handle that risk and who understands it.

Don’t be surprised if you have a hard time finding a cosigner. They take on 100% of the risk for your loan and not everybody can afford to take that risk. They may like you and believe you can repay, but they can’t predict the future — and any number of surprises can take away your ability to repay.

Go it Alone

If you can’t find the cosigner you need, you may not be helpless. Work on building credit. and search for ways to qualify for a loan.

What Do You Need to Get a Personal Loan? #short #term #loan

#need a loan

What Do You Need to Get a Personal Loan?

Banks aren’t the only place where you can get a personal loan.

Good Credit

In almost every case, you will need good credit to get a personal loan. Whether you choose to go through a bank or a peer-to-peer lending network, having good credit is the only way a lender can determine whether or not you will pay back the loan. Those with poor credit histories have not proven that they can or are willing to pay money back on time, or at all.


Collateral is often required in order to secure a personal loan. Collateral is something you own that has value that, essentially, a lender can take and sell if you can’t pay back the loan. Certificates of deposit, real estate, savings accounts, stocks, jewelry and other items are often used to secure a cash loan. In the case of someone looking to improve or clear up credit issues, often a bank will allow the applicant to put money in a savings account and then give a loan for an amount equal to or less than the amount in the savings account. The bank then automatically deducts payments, and the loan is listed as being paid on time on a credit report.

Proof of Income

When applying for a loan, whether secured or unsecured, the lender will need to see how much money you make. This helps the lender determine if the amount you requested for the loan is a reasonable amount to expect you to be able to pay back each month. You will need to provide your lender with several paycheck stubs, and possibly an income tax return. In some cases, the lender may call your Human Resources Department at your job to verify you work there. If you are self-employed, you may have to supply proof of your income.

Additional Information

You will also need to provide your lender with proof of your residence and proof of your age. No one under the age of 18 will be allowed to borrow money, except from family and friends. You will likely also need to provide your bank account information.

What to do when applying for Business Finance #money #loans #online

#how to get a business loan

Apply for finance

Before you approach a lender, broker or investor, make sure both you and your business are in the best position to seek finance. Below are things to consider before you apply to help you be more successful in your application.

Prepare your plan

Your business plan and its attachments should be well researched and concise, and need to include enough detail to motivate a lender or investor to finance your business. See our Prepare or update your business plan page for tips on preparing your plan.

It’s important to know your key financial figures even if you don’t prepare your own financial statements. These figures include your current income, net profit, expenditure and future projections. If you aren’t confident answering financial questions, its best to either practice answering these questions beforehand or bring along a business advisor or accountant who can help you answer them.

Know your limitations

Once you know what you want, you need to work out your limitations for finance and your ability to repay any money you borrow. Some questions to ask yourself about your financial situation

  • Do you need the money up-front or on a needs basis?
  • What is the maximum repayment you can afford?
  • What is your Loan to Value Ratio (LVR)?
  • If you need collateral, what assets do you have to offer?
  • If you need a guarantor, who will be willing to guarantee your loan?
  • How much equity do you have?
  • What is the maximum percentage share of your business you are willing to offer investors?

Shop around

Its best to shop around and find out what products are on offer when seeking finance from lenders. Although there can be discounts for existing customers, you may find a cheaper option with more flexible terms elsewhere.

Dress to impress

A professional first impression sets the tone and shows you mean business. The way you represent yourself and present your business plan can both help impress lenders and investors.


It’s best to practice your presentation before you attend your interview with a lender or investor. This will help you appear more efficient, alert and confident. Be concise and specific when practicing your answers and deliver them in a professional and persuasive manner. You can role play an interview with a business advisor or accountant to build your confidence in answering the hard questions.

Come prepared

Before your initial consultation, speak to your lender, broker or investor and find out what information you need to bring. Some of the required information includes your business plan, key financial statements for the last three years (if available), financial forecasts, ratio calculations and personal financial information for each business owner.

Check the finance details carefully

If you find a much cheaper finance option that sounds too good to be true, find out why it’s cheaper. Are the fees higher? Does the interest rate change at any point? Is it from a reputable finance provider? What happens if your LVR gets too high? It’s also a good idea to run your options past a business advisor or accountant before signing anything.

Managing refusal of finance

Seeking business finance may not always lead to successfully applying and obtaining the finance. Read Manage loan refusal for ways of seeking feedback, making changes and potentially overcoming this refusal in the future.