Abuse By Lenders  

Posted by Kisstya

Loans

There are a variety of different loans in the world for people to secure money with. Each one has its own aspects of acquiring, paying back, and use. Whatever type of loan a person may need, there are always things that a borrower must look out for, and they must always protect their credit rating. In this article, we will take a look at the different types of loans and their idiosyncrasies, talk about repayment and delinquency, and how individuals can protect themselves and their credits as they move closer to paying off their loans.

What Is A Loan?

Before moving into the types of loans that are available, the definition of a loan should first be examined. A loan of any form, be it material or monetary, is a form of debt where the borrower is required to give back or repay what they borrowed. This article focuses on monetary loans, how they work, and how they are repaid.

Obtaining a loan requires the borrower to apply for one from a reputable and stable lender. Once they are approved, they receive an amount of money from the lender to use for whatever purpose the borrower deemed necessary. The lender charges interest on the loan, and the borrower pays the lender back the principal (the actual amount they borrowed) and the interest on a monthly basis as set forth by a legal and binding agreement between the two.

Types Of Loans

Depending on a borrower’s specific need determines what type of loan they should try to obtain. Loans range from personal to business to just about everything in between and knowing what some of the most common loans are available will help potential borrower’s make an informed decision about the type to choose. There are basically two types of loans, secured and unsecured.

Secured loans are any loans in which the borrower provides something they own, such as a car or property, as collateral on the loan. What this means is if the borrower defaults on the loan, the lender has the right to come and take the collateral away in exchange for payment. The length of the loan depends on the life of the collateral used to secure the loan.

Most borrowers would secure this type of loan in cases where their credit would not allow them to get an unsecured loan. These types of loans have good terms and interest rates and the repayment period is usually reasonable. It also gives the borrower the incentive to make sure their payments are made as timely as possible because if they are not, the lender has the right to take or ‘repossess’ the property. Two of the most well known types of secured loans that can be internationally found are mortgage loans and vehicle loans.

Unsecured loans, on the other hand, are monetary loans that are awarded the borrower without the borrower having to offer anything as collateral. Interest rates on these types of loans vary from the interest rates on secured loans. The repayment terms may also be for a shorter length of time. These types of loans are determined solely on the basis and merits of the borrower’s credit ratings. Personal loans, credit cards and lines of credit are all types of personal loans.

Best way to improve credit score  

Posted by Kisstya

If you have ever had a loan denied it was probably humiliating, embarrassing, and a harsh reality check. So much for that bright red Mustang convertible you wanted. Or maybe it was for an old, beat-up, rusty sedan you thought you could afford to drive back and forth to work. Sadly, that new five bedroom, brick home with the sun porch is out of reach. Or was it your last hope for a deposit to rent a simple one bedroom apartment for you and your family. Some people know before they ever apply for a loan that they will be denied due to a poor credit rating. Others are completely surprised to find out their credit history is hurting. How does this happen?

Sometimes it’s just a lack of discipline or good organizational skills. This leads to poor paying habits and late payments which can damage your credit. Sometimes it’s temporary circumstances beyond your control such as a job layoff, divorce, illness, etc. You are forced to choose between putting food on the table and making a credit card payment. That’s a tough one. Thankfully, there are ways to improve your credit rating with a little effort. The following five tips can help.

1. Often, a big part of your credit score depends on your debt to credit ratio. I’ll give you an example. If you have a credit card with a $1000 limit and you carry a $900 balance this would make the percentage you owe to the percentage available 90%. On paper it would look like you were in a credit-tight position. There are three ways to improve this.

A)Apply for another card. Whatever the limit is becomes part of the calculation. If it is $1700 you now have a total limit of $2700. This brings your ratio down to 33% ($1000 original credit + $1700 additional credit divided by $900 balance=33%). That’s a big difference.
B)You can do the same thing by asking your current credit card company to raise your limit.
C)Pay down your current balance. Make it a priority!

2.Always try to pay your bills on time. Chronic slow or late payments lead to denials or approvals with ridiculously high rates. If you just can’t seem to remember when to pay bills try using a personal planning calendar, PDA, or numbered folder. I use a folder that has multiple dividers numbered 1-31 for each day of the month and additional dividers for each month. You can get these at office supply stores. File your bills in the divider where you will see them the week before they are due. Check the folder daily.

3.Get a copy of your credit report and contact the credit bureaus if you find errors. Ask to have them removed.

4.If you have a credit card for every store you have ever entered….cancel some! No one needs fifty retail credit cards. Retail cards are sometimes viewed less positively than bank cards so get rid of them first.

5.Piggyback on the good credit of a friend or relative. Have them add you to their account (but don’t use it). Once you’re on, ask the creditor to report this account to the credit bureaus. Be careful with this one. Don’t abuse the goodwill of your friend or family member by using the account without asking first!

In our credit-driven society it’s way too easy to bite off more than you can chew. Throw in a couple of life’s little emergencies and you can quickly get into trouble. The tips here can be helpful, but I suggest you don’t just use them for temporary gain. If you go to the trouble to improve your credit, go to the trouble to keep it good. Look at your habits and try to change them if necessary. I know this is a tough one that we all have trouble with, including me. Hope this helps.
By: Robert Thomson

Bad Credit is EVIL  

Posted by Kisstya

Bad credit is one of the worst financial situations to be in. A bad credit can affect you in a lot of ways. With a bad credit you can have difficulty getting a loan. Anything like poor financial skills or bankruptcy can lead to bad credit. Your credit rating can go down with a bad credit. This can be hindrance in all the legalities. With a bad credit, you may get a loan but it comes with a high rate of interest. However, there are ways to improve your bad credit. Having a bad credit is not the end of the world. There are still some options that a person can think of. Before applying for a loan, you need to repair your credit.

There are various factors that can encourage you to repair your credit.
- You faced some financial problems in the past that have landed you in this situation
- You had faced a bad credit history but now you want to repair it
- It may be that you had error in your credit report card A good credit is necessary to get any further credit.

There are certain facilities for people with bad credit but these facilities have their darker side also (like a loan with a high rate of interest). Once you realize that you have a bad credit, you need to repair it as soon as possible. You will need a good credit for all kinds of loan - home loan, car loan and personal loan. Bad Credit loans Bad credit loans are tailor-made loans for people with bad credit. When in bad credit, no bank or lender will give you a loan as he will fear that you will not be able return the amount of loan due to your bad credit history.

However, some lenders do provide bad credit loans too. But these loans have a higher rate of interest than the loans that a person with a good credit would take. Fixing your bad credit If you have a bad credit, it becomes imperative for you to repair it immediately. You can improve this by paying off your pending bills quickly. If you are buried under multiple debts, you can take a debt consolidation loan that would help you pay off small loans. Moreover, take your report from the credit agencies and see the areas where you need to improve. If you can afford a consultant who will give you a sound advice, that would be a better option.