Applying for a Personal Loan
Whether you simply need to cover living expenses while unemployed or pay off debt, a personal loan is a viable option. When you need money fast, you may not ask too many questions when a lender approves your loan application, but you don’t want to make a mistake that will cost you big.
Choosing the Right Loan Lender
Before you start applying for a personal loan, you’ll want to review lenders because there are a few things to consider.
- Fees: Don’t be surprised to see various fees tacked onto your loan. Each additional fee charged by lenders for your personal loan increases the cost of the loan. Between application, origination and prepayment fees, personal loans can get to be expensive. However, not every lender charges fees, so it is possible to keep the cost of the loan affordable.
- Hard/soft inquiry: Applying for a personal loan can result in a hard inquiry, soft inquiry or both. Most lenders will want to see your credit report to determine how much of a risk it would be lending to you. When your credit report is pulled, you’ll see a hard inquiry on your report, which can negatively impact your score. On the other hand, you have some lenders who will perform a soft inquiry or not check your credit at all.
- Funding time: How quickly you need cash can affect which lender you select. Some lenders can get cash to borrowers in a matter of hours, while others will take a matter of days to send the funds. If you need money as soon as possible, some lenders are just not going to be an option.
- Borrowing limits: As you review lenders, you’ll see varying borrowing limits. The minimum and maximum amounts that you can borrow need to be considered when searching for a lender, especially if you don’t want to borrow more or less than you need. Keep in mind that just because you apply for a loan, the lender does not have to approve your application for the amount you requested. Since there are a number of factors that determine how much you can borrow, there is no guarantee that you’ll get approved for a loan or the amount you are requesting.
- Loan term: Lenders will give borrowers weeks, months and years to repay loans. You want to make sure you have enough time to repay your loan, so it is important to consider the loan terms offered by lenders. There will be a set amount that you will pay every month, which will be determined by the lender, but ultimately, only the borrower can decide if making these monthly payments and repaying the loan before the loan term lapses could be a challenge.
- Interest rate: Every lender will charge interest on its personal loans. This is the cost of borrowing money, so in addition to the principal amount that is borrowed, and any fees the lender charges, you’ll pay interest. As with fees, interest can drive up the cost of the loan. However, not only can interest rates vary from lender to lender, interest rates vary from borrower to borrower. The interest rate is determined using a number of factors, including credit score, income, and loan term, so one borrower can easily be charged a higher or lower interest rate than another borrower.
Many people turn to personal loans when they need financial assistance. With so many different lenders existing, you have a lot of choices, which can be overwhelming. You want to make the right decision when you secure a loan, and in order to do so, you need to ensure you know what to expect from lenders.
Having trouble getting approved for a loan due to a low credit score? Contact Credit Absolute for a free credit consultation.
How Much Should You Save for Retirement? Find Out Here
When you start saving for retirement, you may have a lot of questions. As you search for the answers to the unknown, the one thing you may really want to know is how much money you’ll need to live comfortably during this phase of your life.
Although it is suggested that every year people save between 10% and 15% of their annual income for retirement, you want to be sure that you have enough, and that can be done by examining certain factors.
Examine your current income and expenses
What is your current source of income? How much of that income do you spend every month? As you make your plan for retirement, it is important to know where your current finances stand.
Estimate your future income and expenses
Your current income and expenses can actually be used to estimate your future income and expenses. Yes, retirement is years away, but you should be able to determine your future income and expenses if you know what to expect. If you know your home and student loans will be repaid by the time you retire, then you’ll know that you won’t have to save enough to continue to make monthly payments on these debts during retirement.
Additionally, depending on your source of income at the time, you may be able to calculate how much money you’ll have coming in every month. For example, you can estimate your Social Security payments just to get an idea of all or a portion of your future income.
Consider the potential cost of the unexpected
Retirement does not mean you don’t have to be prepared for the unexpected. You can expect to pay a monthly bill when it arrives, but what about those little surprises that life will throw at you? At any point in time, your car could break down, your roof could need replacing or an accident can leave you with a high medical bill.
Your retirement fund should allow you to live comfortably, but it should also protect you from financial hits that are hard to come back from. If you don’t plan for the unexpected, a good portion of your retirement fund can be wiped out.
Consider your preferred lifestyle and spending habits
People’s lifestyles vary, so what one person may find necessary another may not. If you wish to maintain your current lifestyle and spending habits when you retire, it will be important to consider this fact when you are trying to determine how much to save.
For example, if your annual income of $70,000 allows you to take a few vacations every year, and that is something you would like to continue to do when you retire, then you’ll want to ensure you have the money necessary to afford these vacations.
Consider the amount you currently have in your retirement fund
Have you already started saving for retirement? Whether the answer is yes or no, the amount that you currently have saved should, of course, be factored into the amount you will need to save. However, not having anything in your retirement fund could be a problem because this means that you may have to put a larger amount away when you start to save.
Say you plan to retire in 30 years, if you do not have anything in your retirement fund, rather than saving $300 a month, you’ll have to save $500 a month to ensure you reach your goal.
Saving for retirement is not a priority for everyone. However, not saving for this phase of your life can negatively impact you. As you plan for your retirement, be sure you are considering the right things, so you don’t find yourself re-entering the workforce during a time when you should be relaxing.
5 Credit Card Facts From The Credit Repair Experts
But while it might require a college degree to get a job in the field of credit, you don’t need one to get insight into how the credit card system works. With a little research, you can quickly gain knowledge in credit that you can use to your advantage.
5 Quick Facts About Credit Cards
A rudimentary understanding of the credit card system can be gained with just the following 5 facts:
• Many people believe that if they close a 10-year-old credit card they will lose all of the positive history associated with it. That isn’t true. The age and history of the card will remain on your credit report as long as the bureaus themselves don’t remove it from your report. That history will continue to be considered even if the credit card is closed for the next 10 years.
• Another commonly believed myth is that a credit card will stop aging after it is closed. But if you close a credit card today that has a 10-year history behind it, at the end of the year it will have 11 years of history. So it will go until ten years after you have closed the card when it is finally deleted from your credit report with a 20-year history.
• Credit cards do not have to have a negative balance in order to build credit, as is commonly believed. As long as the credit card is open, acquiring charges, and being paid on, it is reporting to the credit bureaus. In fact, it is usually a better idea to keep the balance at zero, charging and paying in the same billing month to keep positive reports flowing.
• New store credit cards aren’t necessarily a bad idea, as many people think. In fact, store-specific credit cards usually have lower criteria for approval, making them much easier to qualify for. With a single store credit card, you can boost your credit score, raise your limit ceiling, and improve your overall standing. However, the temptation to over-use your store credit can quickly sneak up on you and build debt that could be bad for your credit report.
• Many people also believe that a good credit card history will automatically override other sources of credit. While a credit card is a good way to build and maintain credit, it is only a stone in the river combined with other lines of credit such as furniture payments, loans, or delinquent medical bills. A credit card alone won’t fix your credit, you must keep all of your lines of credit in check.
Congratulations! You now know more about credit cards and how they really affect your credit score than the majority of credit card-carrying Americans.
Get More From The Best Arizona Credit Repair Experts
For more information on how to build, repair, and maintain a healthy credit score with your credit cards and other lines of credit, contact Credit Absolute – the most trusted name in Arizona Credit Repair.
What is the “Mortgage Blind Spot”? Can it Jeopardize Your Chances of Closing a Loan?
What is the Mortgage Blind Spot?
It is the “quiet period” is the time between origination and closing when consumers can accrue undisclosed debt or new tradelines, increasing their debt-to-income ratio. Thus, the closing may be jeopardized.
We’ll explain why hidden debt is a major industry issue. Then we’ll discuss how to handle hidden debt in a digital origination strategy.
Why is this an issue for “3%” of lenders
Three percent of the undisclosed debt is significant. A 3% rise in a borrower’s DTI ratio can trigger costly loan repurchase demands. The 3% increase will hurt a lender’s GSE scorecard. Unable-to-pay guidelines can result in regulatory action.
Agencies are acutely aware of the risk. That’s why lenders must thoroughly check undisclosed liabilities as one of the big six areas before closing.
The data show that the risk exists. According to a recent Equifax analysis of 98 million+ mortgage originations between 2010 and 2018, 4.5 percent of borrowers applied for an auto loan in the same month. Among borrowers who opened only one new trade line during the quiet period, 36% increased their DTI ratio by at least 3%.
Aside from skewed DTI ratios, hidden debt can indicate increased fraud risk. According to Fannie Mae, misrepresented liabilities cause 23% of mortgage fraud findings.
On the other hand, it’s in Mortgage closings are hampered by undisclosed debt, which clogs underwriting resources and degrades This will delay or obstruct their path to homeownership. Unreported debt is a problem. It can harm loan pipelines and ultimately lender profits.
Digital monitoring removes the blind spot
With the rapid adoption of digital strategies, lenders now have a unique opportunity to reduce unreported debt risk. Automated undisclosed debt monitoring (UDM) tools can continuously monitor loan files for new tradelines and other credit changes. UDM sends daily alerts whenever new activity is detected. This gives lenders daily access to a borrower’s credit. Monitored activity includes new tradelines, inquiries, balance changes, late payments, public record bankruptcy, and more.
Identify hidden debt risks faster No more last-minute surprises. To resolve most issues, lenders can work with borrowers. This keeps their closings on time.
Lenders can intelligently prioritize using three categories: Low Risk – The majority of your pipeline is low risk/good. These borrowers can close quickly and confidently.
Unwanted new alerts – Consumers. Identify these loans earlier. Concentrate underwriting resources on borrowers who may need more documentation. The underwriter can then close quickly.
Highly alerted consumers allow you to escalate the review process, identify re-underwriting, fraud, or unintended liability. When an approval expires, the underwriter can stop the closing to avoid additional costs.
Instead of being surprised at closing, integrate undisclosed debt monitoring technology, for clear visibility into borrower credit files. Daily alerts can help streamline underwriting tasks and maximize resources. So lenders can close more loans faster and with less risk.
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