All About Finances » Loans

Instant Decision Loans

Charley — Sat, 27 Feb 2010 13:08:28 +0000

If you are looking into instant decision loans, or just wondering what they are, then you have come to the right place. This guide will explain what an instant decision loan is, how to use it properly and what pitfalls to watch out for.

Have you ever applied for a mortgage on a home? The process can be very frustrating as it involves several departments within a bank or credit union, starting with the loan officer who is the commissioned sales representative for generating the loan, to a processor who assists with the vast amounts of paperwork, the underwriter who inputs the income ratios, the loan-to-value ratios and other financial data together, and then the loan committee who ultimately makes the final decision.

Once the application is submitted, it seems like you can’t submit enough paperwork and it is never ending. You almost feel violated personally. Then there is the credit report whereby you are not judged by the other excellent factors you have, such as a long term solid relationship with your lender, or a good solid job where you are valued as an employee. It seems the credit bureau throws you in a box where you are simply judged and the loan decision is made upon your credit score? This is simply confusing.

Well, the instant loan decisions process and the companies behind them look at you completely differently. You can even apply if your credit is bad, you have a default situation on another loan, late payments or even a bankruptcy. How is this possible you might ask? The instant decision loan process is actually a short term advance on your paycheck. You only need to have an active checking account, and be 18 years of age.

There are a few pitfalls to watch out for however. The rates are higher because it is an unsecured debt. If you feel you cannot pay the instant loan with your next paycheck, run fast as you will have far more financial difficulty than when you requested one. There are contracts to sign. Make sure you read all the “small print.” If you don’t understand it, seek out someone who can. This is a legally binding document so proceed with caution and make sure you understand everything you are obligated for.

Another area is pricing. Because there are so many of these instant decision loans available by many different companies the interest rate can vary drastically. So if you are comfortable with this type of financing, make sure you shop around for the best rate. The companies that are making instant decision loans are everywhere: online, in shopping centers and strip malls. Do your homework and proceed with caution, but as long as you proceed with your eyes open wide, you should be fine.

Personal Loans For People With Bad Credit

Charley — Tue, 22 Sep 2009 11:02:24 +0000

Personal loans are becoming an increasingly rare type of loan, particularly as banks have been running into trouble with their more profitable standbys like credit cards and mortgages. Even for people with very high credit, banks have been extremely hesitant to issue unsecured personal loans, and personal loans for people with bad credit can seem impossible to obtain. To understand why, simply put yourself in the place of a bank: would you rather make mortgage and auto loans, which are tied to collateral, or personal loans which are all but unrecoverable in the event of a default? Even credit cards are infinitely preferable to banks, as they are able to make money on card fees, higher standard interest rates, do not have to issue money up front, and are able to track the spending habits of customers.

Since this is the case, it is, to be frank, unlikely that you will be able to get a personal loan if you have poor credit or insufficient income. However, there are a few things you can do to significantly increase the chances of receiving one:

Bank locally

It is something of a well hidden secret in the world of personal finance, but you should always get checking and savings accounts and credit cards from local banks or credit unions rather than large multi-national organizations. Not only will you get much better customer service (at the cost of things like 24 hour call centers based in India), but you will be able to build a relationship with the people who make up the organization, who are ultimately the people that decide whether you receive a loan. You are astronomically more likely to receive an irregular loan such as a personal loan through a local bank with whom you have a relationship than a national bank. A local bank will still check your credit, but they are much more willing to overlook a poor credit report or let you explain some of the factors leading to your poor credit score.

Offer up collateral

If you’re seeking a personal loan, you significantly increase your chances of receiving it if you can put down a deposit. This is another advantage to banking locally. While your local bank isn’t in the pawn shop business, they are much more likely to accept irregular forms of collateral like valuable musical instruments or jewelry than a national bank. Some amount of money, counter-intuitive as it may seem, can also act as collateral for your loan.

Always work on improving your credit

Secured credit cards and secured personal loans are amazing ways to boost your credit score. You can use the proceeds from one secured loan to fund another secured loan. You will have to pay a small amount of interest on these loans, but they are reported to the credit bureaus as if they are real loans. If you have some spare cash lying around, it would behoove you to get started improving your credit today. Having a positive credit history significantly increases the chances you will receive a bad credit personal loan.

One last mention: Debt consolidation loans are one example of personal loans that are issued more freely than others. If you have bad credit and are seeking to consolidate your debt, you may wish to go through a consolidation firm rather than seek a plain personal loan.

Getting Mortgages – For People With Bad Credit

Charley — Mon, 07 Sep 2009 10:16:37 +0000

When you apply for a mortgage, you should know that the lender has two things in mind: your ability to pay, and your willingness to pay. Your ability to pay is simply a measurement of your current savings, income, and expenses. If you do not display at least a rudimentary ability to pay your mortgage, most lenders will not even look at you, particularly in a tough credit environment. Your willingness to pay is determined by your credit rating and nothing else. A low credit rating signals to a prospective lender that you may be less than willing to pay off your obligations. Still, if you have an ability to pay, it is still possible to receive a mortgage. There are a number of measures you can take to improve your chance of receiving a mortgage right now.

Firstly, the process of receiving a mortgage takes several months. What this means is that you can act today to increase your credit score. To do this is as simple as taking out modest secured loans. This ‘trick’ has been around for a long time, but it entails taking out a secured loan with one bank, then using the proceeds to take out a secured loan with another bank. You then make modest interest payments on these loans. In return, the banks will report to the credit bureaus that you are current on your debts. Although this seems unrelated to getting a mortgage, this is in fact one of the very best things you can to do help yourself if you have bad credit. Boosting your credit score in this manner significantly improves the chance that you will receive a mortgage, but also will lower the interest rate you will end up paying and improve the terms of the loan you will receive. Even a small boost in your credit score will save you literally thousands of tens of thousands of dollars over the life of your mortgage.

Another thing that can help with mortgages for people with bad credit history is to look into receiving a government guarantee or government insurance on your mortgage. Most countries have a housing or urban development administrative bureau that provides these services. Most people do not understand that getting a government guarantee or federal insurance can be the difference between receiving a high-interest short-term adjustable rate mortgage and a steady, low-interest thirty year fixed rate mortgage. Without getting into the specific math, all that you need to know is that a standard mortgage is much, much cheaper than any form of adjustable rate mortgage.

With all of that said, it is still possible to receive a mortgage (however poor the terms) if you have bad credit. Here’s how:

First, approach a bank you have a relationship with, particularly if it is local to your area. Banks that you have done business with for a while are much more likely to issue a loan to you, regardless of your credit history.

If you do not have this, it’s time to do some research. Find banks in your local area that have a history of issuing adjustable-rate or otherwise subprime style mortgages. Since applying for a loan damages your credit score, it is important that you only apply to banks which you know are actually making the types of loans you are seeking.

If there are no local banks that offer subprime mortgages, then it is better not to apply locally and try national banks. Note that it can be difficult to receive a bad credit mortgage from a national bank unless the bank is on a campaign to make these sort of loans.

Finally, a word of advice: Even if you do receive a mortgage while you have bad credit, it is important that you work at improving your credit while you are paying down your mortgage. It will behoove you to refinance a subprime mortgage as a fixed rate mortgage as soon as possible, and you will be unable to do this unless you improve your credit score. Additionally, governments will commonly sponsor refinancing programs for specifically this purpose. You should always be on the lookout for such programs.