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Long-term Car Loan Is A Bad Idea #government #loans


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Long-term car loan is a bad idea

Americans are taking on car loans longer than six years more than in the past, according to Experian Automotive, and that’s not the wisest financial choice for many people.

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Longer-term car loans are attractive because monthly payments are smaller than on a shorter-term car loan. And, because they allow a car buyer to buy a more expensive car while still making the payment affordable, they can actually make things worse financially.

When it comes to buying a new car, the longer the car loan, the longer the owner will be ” upside-down” in the loan — where he owes more than the car is worth — unless there’s been a significant down payment. This is because a larger portion of the monthly payments early on in the loan is going toward interest. Being upside-down is dangerous, because if the car owner has a car accident where the car is considered a total loss, he could end up still having to pay off a loan on a car that he can no longer drive.

In addition, the longer an owner is upside-down in the car loan, the harder it is to have equity in the car, which means that when it is traded in, it may not count for much of a down payment on another car.

Finally, the longer the car loan, the more interest will be paid over the life of the loan, making the car cost more than a shorter car loan in the long run.

Even though depreciation is less of an issue with used cars, since a car depreciates the most in its first few years, long-term car loans on used cars aren’t a good idea, either. A used car already has a significant number of miles on it and a longer-term car loan would mean that the car will have higher mileage when it is finally paid off.

For example, assume that you buy a 3-year-old car with 36,000 miles on it, which is what the average American would drive in that length of time. If you take out a six-year loan and you drive 12,000 miles annually, the average in America, you would add 72,000 miles. This would mean your car would have 108,000 miles on it and would be approaching 10 years old by the time it’s paid off. If you choose to trade it in sooner, you may find it’s not worth much, or worse, that you have no equity at all.

While the lower monthly payment on a long-term car loan may be appealing at first, it is better for most car buyers to save up some additional cash to increase the down payment or to select a less expensive car so the monthly payment is affordable for a loan that is shorter.

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Long-Term Debt (ADBE) #student #loan #calculator


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Long-Term Debt

DEFINITION of ‘Long-Term Debt’

Long-term debt consists of loans and financial obligations lasting over one year. Long-term debt for a company would include any financing or leasing  obligations that are to come due in a greater than 12-month period. Long-term debt also applies to governments: nations can also have long-term debt.

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BREAKING DOWN ‘Long-Term Debt’

Financial and leasing obligations, also called long-term liabilities. or fixed liabilities, would include company bond issues or long-term leases that have been capitalized on a firm’s balance sheet. Often, a portion of these long-term liabilities must be paid within the year; these are categorized as current liabilities. and are also documented on the balance sheet. The balance sheet can be used to track the company’s debt and profitability .

On a balance sheet, the company’s debts are categorized as either financial liabilities or operating liabilities. Financial liabilities refer to debts owed to investors or stockholders; these include bonds and notes payable. Operating liabilities refer to the leases or unsettled payments incurred in order to maintain facilities and services for the company. These include everything from rented building spaces and equipment to employee pension plans. For more on how a company uses its debt, see Financial Statements: Long-Term Liabilities .

Bonds are one of the most common types of long-term debt.  Companies may issuing bonds to raise funds for a variety of reasons. Bond sales bring in immediate income, but the company ends up paying for the use of investors’ capital due to interest payments.

Why Incur Long-Term Debt?

A company takes on long-term debt in order to acquire immediate capital. For example, startup ventures require substantial funds to get off the ground and pay for basic expenses, such as research expenses, Insurance, License and Permit Fees,  Equipment and Supplies and  Advertising and Promotion . All businesses need to generate income, and long-term debt is an effective way to get immediate funds to finance and operations.

Aside from need, there are many factors that go into a company’s decision to take on more or less long-term debt. During the Great Recession. many companies learned the dangers of relying too heavily on long-term debt. In addition, stricter regulations have been imposed to prevent businesses from falling victim to economic volatility. This trend affected not only businesses, but also individuals, such as homeowners.

Long-Term Debt: Helpful or Harmful?

Since debt sums tend to be large, these loans take many years to pay off. Companies with too much long-term debt will find it hard to pay off these debts and continue to thrive, as much of their capital is devoted to interest payments and it can be difficult to allocate money to other areas. A company can determine whether it has accrued too much long-term debt by examining its debt to equity ratio .

A high debt to equity ratio means the company is funding most of its ventures with debt. If this ratio is too high, the company is at risk of bankruptcy  if it becomes unable to finance its debt due to decreased income  or cash flow problems. A high debt to equity ratio also tends to put a company at a disadvantage against its competitors who may have more cash. Many industries discourage companies from taking on too much long-term debt in order to reduce the risks and costs closely associated with unstable forms of income, and they even pass regulations that restrict the amount of long-term debt a company can acquire.

For example, since the Great Recession, banks have begun to scrutinize companies’ balance sheets more closely. and a high level of debt now can prevent a company from getting further debt financing. Consequently, many companies are adapting to this rule to avoid being penalized, such as taking steps to reduce their long-term debt and rely more heavily on stable sources of income.

A low debt to equity ratio is a sign that the company is growing or thriving, as it is no longer relying on its debt and is making payments to lower it. It consequently has more leverage with other companies and a better position in the current financial environment. However, the company must also compare its ratio to those of its competitors, as this context helps determines economic leverage.

For example, Adobe Systems Inc. (ADBE ) reported a higher amount of long-term debt in Q2 of 2015 than it had in the previous seven years. This debt is still low compared with many of its competitors, such as Microsoft Corp. (MSFT ) and Apple Inc. (AAPL ), so Adobe retains relatively the same place in the market. However, comparisons fluctuate with competitors such as Symantec Corp. (SYMC ) and Quintiles Transnational (Q ), who carry a similar amount of long-term debt as Adobe.

A company’s long-term debt may also put bond investors at risk in an illiquid bond market. The question of the liquidity of the bond market has become an issue since the Great Recession, as banks that used to make markets for bond traders have been constrained by greater regulatory oversight.

Long-term debt is not all bad, though, and in moderation, it is necessary for any company. Think of it as a credit card for a business: in the short-term, it allows the company to invest in the tools it needs to advance and thrive while it is still young, with the goal of paying off the debt when the company is established and in the financial position to do so. Without incurring long-term debt, most companies would never get off the ground. Long-term debt is a given variable for any company, but how much debt is acquired plays a large role in the company’s image and its future.

Bank loans and financing agreements, in addition to bonds and notes that have maturities greater than one year, would be considered long-term debt. Other securities such as repos and commercial papers would not be long-term debt, because their maturities are typically shorter than one year.


Long-Term and Intermediate-Term Business Loans #payday #loans #uk


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Long-Term and Intermediate-Term Business Loans

What are Long-Term Business Loans?

Bank term loans usually carry fixed maturities and interest rates as well as a monthly or quarterly repayment schedule. The long-term loan usually has a maturity of 3-10 years although long-term bank loans can stretch out as far as 20 years depending on its purpose.

Long-term bank loans are always supported by a company s collateral. usually in the form of the company s assets. The loan contracts usually contain restrictive covenants detailing what the company can and cannot do financially during the term of the loan.

For example, the bank may specify that the company cannot take on more debt during the life of the long-term loan. Long-term loans are usually repaid by the company s cash flow over the life of the loan or by a certain percentage of profits that are set aside for this purpose.

The Purpose of Long-Term Loans

Businesses should generally follow the rule of tying the length of their financing to the life of the asset they are financing. So, if a business needs to make a major capital improvement, such as purchasing a piece of equipment for their manufacturing process that will last 10 years, a long-term business loan would be the appropriate type of financing.

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A short-term business loan would not be appropriate in this case.

If a business needs to buy capital equipment, buildings, other businesses, or undertake construction projects, a long-term loan is the way to go.

Obtaining a Long-Term Business Loan

Long-term business loans are difficult for start-up businesses to obtain. Usually, only established businesses with some years of financial success are approved for long-term bank loans. The business has to produce their business plan and several years of historical financial statements in order to secure a long-term loan. In addition, it has to prepare forecasted financial statements to prove to it can repay the loan.

Before a small business seeks a long-term loan, they should always compare the cost of the loan with the cost of leasing the asset they are looking to finance.

The interest rates on a long-term loan are usually a few points lower than the interest rates on a short-term loan in a normal economy. If you are aware of the prime rate of interest. you can add a few points to that and come up with something close to the interest rate the bank will charge on your loan. Those few points will reflect how risky they feel your company is. The riskier your company, the more points they will add to the prime rate of interest. In assessing the risk of your company, banks will look at the 5C s of creditworthiness of your company.

How Easy is it to Obtain a Long-Term Loan?

The ease of acquisition of a long-term loan depends on many factors including the bank you have chosen to do business with, the financial strength of your company, and the health of the economy. During the Great Recession, credit has been very tight and loans have not been easy to come by.

How Much Money can you Obtain Through a Long-Term Loan?

Long-term loans usually start at $25,000 and go up toward $200,000. The more money you need, the more rigorous the approval process becomes.

How Does an Intermediate Term Loan Differ From a Long-Term Loan?

Intermediate term loans usually have a term to maturity of 1 – 3 years. They are used to fund assets that aren t long-term in nature such as computer systems that may have an economic life of only around 3 years. Payments are made to the bank monthly or quarterly. The approval process for an intermediate term loan is almost as rigorous as it is for a long-term loan.


Deceptive Insurance Deals (STOLIs) #insurance #scam, #term #insurance #scam, #long-term #care, #long #term #care, #ltc, #long-term #care #insurance, #long #term #care #insurance, #greedy #insurance #investors, #transfer #policy, #transfer #insurance #ownership, #chronic #illness, #chronic #conditions, #long-term #care #expenses,, #long #term #care #costs, #stoli, #stoli #promoter, #older #women, #joint #insurance #policies, #insurance #taxes


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Deceptive Insurance Deals (STOLIs)

There’s an evil cousin of legitimate life settlements out there, says Jack Dolan, vice president for media relations with the American Council of Life Insurers. It’s called ‘Stranger-Originated Life Insurance,’ or ‘a STOLI arrangement,’ and it’s all about getting unsuspecting consumers to deceive the insurance industry, at great personal risk to the individuals.

Here’s how a STOLI works:

A STOLI promoter—generally a financially savvy person—approaches you about buying a hefty life insurance policy on yourself. Working independently of any insurance company, the third-party promoter promises you a big cash payment up front, will lend you money to pay the premiums for the first two years of the policy (the normal period in which an insurance company can contest a policy), and will then promise to forgive the loan.

In exchange, you’re enticed to inflate the value of your assets on the insurance application, perhaps stating that you want to guarantee your family’s security after your death. If the scheme plays out successfully, it results in a policy with a face value that can be worth several million dollars. At the outset, you must agree to transfer ownership of your policy at the end of the two-year period to the STOLI promoter and investors, who will receive those millions upon your death.

STOLI promoters typically target well-to-do, older adults who aren’t in the best of health, says Dolan. However, these peopleare healthy enough to pass a medical exam but probably don’t have more than five or so years to live. The speculators are essentially wagering on your dying soon.

The success of a STOLI depends on a seductive approach that causes you not to examine it closely enough. But there are serious consequences if you participate in this scheme, many of which you may not see immediately. The possible ramifications include the following:

Taxes, Taxes, and More Taxes: You’ll be taxed on the money the promoter gives you up front. And you could be taxed on the amount of the premium loan the promoter forgives. Some STOLI promoters pull out all the stops to court you into setting up a policy, even inviting you on all-expenses-paid luxury trips. But there is one vacation expense you’ll have to pay: taxes.

Say Goodbye to Privacy: The sooner you die, the sooner the STOLI promoter and investors get paid. They’ll all but knock on your door to check in on how you’re doing.

No More Insurance: By inflating your assets to increase the value of your insurance policy, you’ve become over-insured and are unlikely to be able to buy any more policies.

You Could Get Caught: If your policy is found to be deceptive, the insurance company will likely rescind it, refund your premiums, and leave it at that. But it may also refer the case to state law-enforcement authorities for a fraud investigation and file an action against the STOLI promoter.

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How to Get a Long-Term Personal Loan #idbi #home #loan


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Things You’ll Need

Supporting documentation of repayment ability (secure employment, monthly income statement)

Get a Long-Term Personal Loan

Identify your reason for seeking the loan. You’ll be asked by the loan officer when you head to the bank to request the loan, and you’ll need to present a compelling case as to why you need the long repayment term on an unsecured loan.

Ensure that your credit history is good to excellent. The better it is, the better your chances of having your loan application approved. If your credit rating is mediocre, spend some time rebuilding it before you try to get a long-term personal loan.

Keep in mind that, unlike other loan types, it is not practical to use a long-term personal loan to purchase a big-ticket item, like a new car, which could later be sold off to repay the loan. You’ll need to provide the loan officer with supporting documents that show that your employment situation is very stable going forward and that your monthly income is ample enough to support loan repayments when they come due.

Try to negotiate the interest rate with the loan officer, if your application is pre-approved and you’re dealing with a bank you’ve conducted business with for a long time. Long-term loans are unsecured, meaning the bank does not collect collateral to hold against the loan, so you need to understand that the financial institution is assuming a certain degree of risk in granting the loan–risk they must recover through interest.

Review all terms of the loan before you agree to sign the loan documents. You’ll need to make sure you are thoroughly aware of any penalties the bank will impose on late or missed loan payments. Avoid these penalties at all costs as they’ll just drive your bottom line skywards.


Medium to Long-term Business Loans #payday #loans #for #people #on #benefits


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Medium to long-term business loans

Most businesses need a financial helping hand to either get them off the ground or expand and a medium to long-term business loan can be one of the best ways to get funding. It s not as easy as it once was to find business loans, but the major banks still all offer them and if your business plan, credit score and homework is all in place, it s certainly worth applying.

MoneySuperMarket doesn’t offer a comparison service for this type of product, but we have compiled a list of lenders below who can help.

Medium to long-term business loans

NatWest

Funding Circle

Description

UK s leading peer-to-peer business lender

Fast and simple business loans from 5k to 1 million – without the banks.

Borrow from a community of thousands of people together with the Government-backed British Business Bank, local councils and universities.

Quick convenient process:

Check your eligibility in 30 seconds

You’ll hear from Funding Circle within two working days of completing your application

Loan terms from six months to five years. No early repayment charge.

Flexible loans: borrow for working capital, expansion, property, asset purchase and one-off business expenses.

Now open for non-limited companies (sole traders and partnerships) to apply for a loan.

Business Funding Scheme – Local Government is lending millions through Funding Circle to support UK businesses.

Minimum criteria: Two years+ filed accounts at Companies House or formally prepared accounts for non-limited businesses, minimum turnover of 50k and a good credit score.

Ortus Business Finance


Long-term car loans skyrocket #loan #shop #online


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Long-term car loans skyrocket

vehicles on display at a Chevrolet dealership in San Jose, Calif. in a 2009 file photo (Photo: Paul Sakuma AP)

Those auto loans, they’re getting awfully long.

Experian Automotive says that in the first quarter of 2014, 24.9% of all new-car loans were 73 to 84 months long. Four years ago, less than 10% of loans were that long. In fact, such lengthy terms have pulled the average new-car loan to 66 months. That’s an all-time record.

As credit continues to open up — and, some argue, automakers try to maintain the past year’s sales growth — car loans continue to lengthen. But make sure you consider the terms carefully, because even if you can get a longer loan it doesn’t mean you should.

Such loans have helped fuel new-car sales, which are up 9.2% through July, 2014. But some have raised a warning flag. John Mendel, Honda’s top U.S. sales executive, told Automotive News that lengthy car loans are “a very, very short-term tactic” that’s “probably pulling people out of used cars into a new car that maybe they can’t afford.”

Ever-longer car loans can exacerbate the strain of keeping up with those payments, too. Experian said on Aug. 20 that one- or two-month delinquencies remain at historic lows. But they’re edging up.

That’s why you need to consider what you’re getting into.

“More so with any other product, when it comes to car loans, consumers payment shop,” Greg McBride, Bankrate.com’s chief financial analyst, told us. But as shoppers focus on the amount of a single monthly payment, lengthier loan terms can sweep some important details under the financial rug.

Consider two scenarios. Let’s say you found a four-cylinder 2014 Nissan Altima on a summer sell-down sale for $25,000 out the door, including sales tax and all fees. You planned to put $5,000 down and finance the rest over five years. At a rate of 4.03% — Bankrate.com’s national average for a 60-month new-car loan as of Aug. 21 — you’d have a monthly payment of $369 and pay $2,116 in total interest over the life of the loan. (We rounded all figures to the nearest dollar.)

But what if a lender offered an 84-month term on the same car? Bankrate.com only surveys loans up to 60 months, but lengthier terms typically carry incrementally higher interest, given average rates for 36- and 48-month loans are below 4%. Let’s say the 84-month loan carried 4.2% interest. That means your monthly payment would fall to $275, and you’d pocket roughly an extra Benjamin every month versus the 60-month loan.

It sounds great, but those monthly savings would saddle you with two extra years of car payments. In short, you’d be paying off your Altima well into the next decade, and your interest tab over the life of the loan would balloon to more than $3,100.

There’s another lurking issue. Nissan’s factory warranty, like most, stops covering the major systems in your Altima after five years. That means that if your car needed transmission or engine work in the sixth or seventh year, you’d have car payments and repair bills at the same time — a serious financial strain.

Want to sell the car and get into something newer? Longer payments throw a wrench in those plans, too. Residuals calculator ALG pegs the market value of a four-cylinder 2014 Altima at around $9,000 to $11,000, depending on its features, after five years. Here’s the problem: At the five-year mark, your 84-month loan still has a principle balance of $6,100. Depending on the repairs needed to sell it at market value, you may not end up with a lot of net cash to buy something newer.

Unfortunately, some consumers don’t consider those implications.

“They’re looking at two things: What’s the monthly payment, and man, that car sure is shiny,” Bankrate.com’s McBride said. “Being blinded by the love for the vehicle can cloud your judgment on financing matters.”

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How to Get Long-Term Installment Loans for Bad Credit #buisness #loans


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How to Get Long-Term Installment Loans for Bad Credit

Finding a long-term installment loan for bad credit is a challenge, but possible, especially if you have verifiable income. There are a number of finance companies, banks and credit unions that will lend to people of all credit ratings. The key to finding a long-term installment loan for bad credit is patience. The older your bad credit is, the better; it is very difficult to convince a business to loan you money when you cannot keep up with your current credit cards and other debt obligations.

Other People Are Reading

Visit your bank or a local credit union. Explain to the loan officer your situation and ask to apply for a loan that meets your needs. Credit unions are the most likely choice for someone with credit problems, and they usually offer a number of secured and unsecured loan products.

Apply for loans on the Internet through popular bad credit installment loan finance companies if your bank or credit union is unable to meet your lending needs. For example, American General is one of the most popular bad credit lenders in the United States. It often approves people with credit problems at reasonable interest rates.

Apply for other bad credit installment loans if rejected by American General. For instance, sites such as DrCredit match applicants with lenders who are willing to work with their unique credit and/or income needs.

Visit Rebuild if rejected by DrCredit. Rebuild matches people with personal loans and many times does not require a credit check. Its loan terms can be as long as 48 months.

Talk to your employer about a loan, as some companies will offer loans to their employees. You may wish to find out if this is an option for you if you have worked at the business for a long time.


How to Get Long-Term Installment Loans for Bad Credit #pioneer #military #loans


#long term loans for bad credit
#

How to Get Long-Term Installment Loans for Bad Credit

Finding a long-term installment loan for bad credit is a challenge, but possible, especially if you have verifiable income. There are a number of finance companies, banks and credit unions that will lend to people of all credit ratings. The key to finding a long-term installment loan for bad credit is patience. The older your bad credit is, the better; it is very difficult to convince a business to loan you money when you cannot keep up with your current credit cards and other debt obligations.

Other People Are Reading

Visit your bank or a local credit union. Explain to the loan officer your situation and ask to apply for a loan that meets your needs. Credit unions are the most likely choice for someone with credit problems, and they usually offer a number of secured and unsecured loan products.

Apply for loans on the Internet through popular bad credit installment loan finance companies if your bank or credit union is unable to meet your lending needs. For example, American General is one of the most popular bad credit lenders in the United States. It often approves people with credit problems at reasonable interest rates.

Apply for other bad credit installment loans if rejected by American General. For instance, sites such as DrCredit match applicants with lenders who are willing to work with their unique credit and/or income needs.

Visit Rebuild if rejected by DrCredit. Rebuild matches people with personal loans and many times does not require a credit check. Its loan terms can be as long as 48 months.

Talk to your employer about a loan, as some companies will offer loans to their employees. You may wish to find out if this is an option for you if you have worked at the business for a long time.


Long-Term Loans #stated #income #loans


#long term loans
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Long-Term Loans

ASU offers several types of loans to students and their families.

Federal Loans

The following are made through the U.S. Department of Education:

Direct Subsidized Loans Are for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period and during deferment periods. ▶ Direct Unsubsidized Loans Are not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. ▶ Direct PLUS Loans Are unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods. ▶ Direct Consolidation Loans Eligible federal student loans can be combined into one Direct Consolidation Loan. ▶ Federal Perkins Loan The Federal Perkins Loan is a campus-based federal program, and funding is limited. Award amounts are limited to award year and aggregate maximums.

State Loans

The following are made through the Texas Higher Education Coordinating Board.

Long-Term Loan Information

Looking for more long-term loan information? Check out these pages:

Emergency Short-Term Loans

Students who have maintained a satisfactory repayment record are eligible to apply for emergency loans.