Perhaps it is impossible nowadays to find a person who has not applied for this or that type of loan. Consumers find it more and more convenient to pay by plastic rather than cash. Cash is simply getting out of fashion, isn’t it?
But how much do we know about loans, if anything at all?
No doubt, loans are convenient in many cases. Really, why pay the whole amount of money for a new home, if you can pay a relatively small amount of money every month? Moreover, you can make your money work, investing it in other projects and earn even more. Make your money make extra income for you!
Unfortunately, there are times when the money is scarce. We do have to make both ends meet. Incidental expenses can occur and you can find yourself in dire straits. It should be said that there are plenty of loans you can apply for in such situations. They can both be secured and unsecured.
Where can you use the money obtained from these types of loans? In fact, wherever you have to. It might be your college fees, or the holiday of your dream, or home repairs. In this case, you have to pay off the loan on your next payday. Such online payday loans are very popular and you can find the companies that provide short-term payday loans on the Internet. As a rule, they work very quickly and you can get your cash within the same business day. The amount you can count on is up to $1,500.
Speaking about the most popular loans one cannot fail to mention small business loans, home loans, personal loans, student loans, bad credit loans. In fact, there is a loan for each and every need and each and every occasion.
The only question is how not to borrow beyond your means and how much it will cost to pay off the loan. Well, a lot depends on your credit history.
How do we usually open a credit? We do it with a credit card. When there is no credit history, you have to apply for secured credit card, or line of credit. The procedure looks like this: you put down a definite amount of money, say for example, from $500 to $1,000, and start borrowing against it.
There might be some pitfalls, so first of all, see to it that the lending company you have applied to reports to the main credit bureaus. Next, all you have to do is to use your credit line and not to have overdue bills. This way you create the right credit history.
Do not be afraid of carrying forward a balance. If it is just a minimum, creditors will be happy to earn some money on you!
Now we come to the question of lenders’ requirements. In most cases their requirements are rather typical, although they differ in some issues. Let us examine the typical requirements. First, they need to know how creditworthy you are. Mind you, that is a crucial moment, because it is where they make their living and their profits.
What if your credit history is far from being ideal? Does that mean that you can’t get a loan. – By no means! The only condition is to pay more for it.
We have found out the lenders’ terms and conditions. Once they received your application, lenders have to get a credit report from the main credit bureaus. (That is Trans Union, Equifax, or Experian).
What are the main points they usually pay attention to? As a rule, it is your income, your savings account or checking account balances, your current employment and residence. There are some more questions they have to take into account. That is, how responsible you are in terms of paying your bills, whether you owe anything to other creditors, whether you own any assets.
All things considered, your potential lender makes a conclusion whether you are entitled to a loan or not and how much the company will charge.
What are the factors that do not speak well for you? – No doubt, it is bankruptcy, frequent overdue payments, facts of repossessions, mortgage liens, etc.
Although these factors can be considered as beneficial, most lenders do understand that life is much more complicated than their rules and requirements and in most cases, they are supportive.
But, sometimes it happens so that things do change for the worse. Either an unexpected illness, or a disaster, anything can knock you out. Then you should go to your loan officer and talk the situation over. In most cases, lenders do make some rearrangement of the loans and make the process of payments easier. Make no mistake, that being a lender, they want to get their money back. They do not want you to go into bankruptcy.