• 10Feb
    Personal Loan

    A financial emergency is one such part of our life that can arise anytime, anywhere. While credit cards turn out to be of utmost help during such emergencies, yet most of us feel ashamed and even avoid using our credit cards.

     

    Read “To Buy or Not to Buy: Why We Overshop and How to Stop.”

     

    One of the most common barriers between you and your dreams is the lack of financial supports that help you overcome and deal with the financial crunch you may have to face during an emergency.

     

    However, thanks to a new form of debt (personal loan), which has within the past few years grounded itself as the best solution for those who need emergency financial backing. This new form of funding has not only helped the startups and the needy, but has also turned out to be a boon for those who may have to feel the need of instant cash when trapped in any emergency.

     

    Today, 27.34 million consumers in America are opting for personal loans more than any other type of funding options. And within the last several years, a total of 18% 27.34 % rise has been noticed.

     

    Now let’s find  out why this increasing trend is gaining momentum each passing day:

     

    1) Most of the people who are opting for personal loans often don’t hold any personal savings of their own. In times of emergency, they have no funds backing them as such.

    “As soon as one of those life events comes up, whether it’s a medical emergency, fixing a car, getting a new car, or fixing up your house, all of a sudden that can be a trigger that puts somebody over the edge,” said Todd Albery, the chief executive of Quizzle, a Bankrate company that offers services, including free credit reports.

    2)  Earlier, personal loans were considered to be something that involved too much effort and time. However, ever since the process of  getting personal loan has been made hassle-free and online, increasing number of borrowers are now getting increasingly inclined toward getting it.

    3) Another behavioral aspect that was discovered is the fact that most consumers choose to make one payment each month. They are also further tempted by the idea of not causing damage to their credit scores just in case they miss any payments. A personal loan caters to this need of the consumers.

    4)  Besides, the personal loans also allow consumers to use less of their borrowing limits as compared to the offers provided by the credit card loan service providers. For instance, using more than a certain amount of your credit – card utilization ratio will automatically impact your overall credit score, while under personal loan, it isn’t so.

     

    However, apart from the above mentioned  positive points, there are a few risks involved in opting for a personal loan, as well.

     

    For instance, in order to qualify as a rightful borrower of such type of loan, one should have a high credit score. They also need to establish a budget to ensure that their monthly payments fit perfectly along with the loan repayment.

     

    Ultimately, as the wealth management expert of Northwestern Mutual, Chantel Bonneau rightly said, “Most of those things would be prevented if people took the time to do financial planning.”

     

    At the end, you must consider all the risks as well as possibilities before taking any significant decision with regard to this.

     

  • 21Jan
    Summer woman driving a convertible car

    Have you had to take a long journey away from home and you just don’t want to add mileage to your own vehicle and now decided to rent a car instead? There are many people like you who have made that choice. Does it really save you though? If you were to hire a car during your vacation or hire one to travel to another city to do business, you may find it very costly, unless you check out the advantages first.

    Seeking Solutions

    When you are seeking solutions for an affordable rental car, there are essential factors to consider. The first thing you should pay attention to is the hidden fees associated with renting a vehicle. Yes, there are hidden fees that many car rental companies charge. In addition, there are many times when you are not aware of the fees because they don’t tell you. You would be shocked if you spent some time to ask questions and thoroughly assess your final invoice.  

    The Mileage

    One way that the rental car company can get you to pay more is not to offer unlimited mileage option. Some rental car companies will even charge you additional for each mile you travelled. That means you have to pay for fuel and for the time that you drive. Before you book a rental car, be sure to question their fees and request a final dollar amount. You don’t want any surprises when your trip ends.

    Advance Booking

    Sometimes, when you book the vehicle in advance, you will be offered a discount. This can add to your savings. Once you know the date of travel, go on the Internet and begin the search for the right rental vehicle for hire. You have a better chance of getting it at a discounted price with advance booking. If you wait until the day of your travel, it will cost you more since vehicles are always in high demand.

    Vehicle Size

    The size of the vehicle also dictates the price. Try to choose hybrid vehicles or economy or compact vehicles. You will be able to drive for longer distances on the fuel that you have to pay for. In other words, smaller vehicles save more on gas.

    Added Services

    Be sure you understand and establish any added services that the rental car company wants to put on your bill. This could include theft insurance, car insurance or risk insurance. The company may offer unlimited mileage or a GPS feature, which cost more. Yes, you want the perfect deal, but at the lowest price.

    Leverage the Internet

    If you don’t already know, most rental car companies have “Internet Only” deals. So before you call, conduct an online search to see what is available. Afterwards, you can call the rental car company to compare the price. You will be surprised with the difference in savings.

    Prior to choosing a specific rental car company, it is best to make sure that you are doing business with a reputable company that offers reliable and trustworthy service. You should be able to choose the vehicle you want and the amount that you are willing to pay.

  • 14Jan
    saving money

    Everyone knows that it’s important to save money and to do so regularly. However, for many people, that’s something that is easier said than done. If you’re like so many others who find the prospect of saving money to be a little (or a lot) daunting, don’t worry. There are many super simple but effective strategies you can use to save money quickly…almost without noticing you’re doing it!

    A Dollar a Day

    Most people like the idea of having a lot of money saved up. What they don’t like, however, is the idea of having to part with a lot of money all at once. To solve this conundrum, just save a little bit every day.

    A dollar a day is an excellent way to give yourself thirty extra dollars per month (plus interest). If you’re not ready to commit to that much, though, every little bit, even if it’s just a quarter or fifty cents per day counts for something. You can stash the money in a jar and then deposit it in the bank once per month or so.

    No matter how you do it, you’ll get into the habit of saving, which is the most important thing of all!

    Stick to a Budget

    If you really want to get serious about saving, go ahead and draw up a monthly or weekly budget based on your income. Plan the budget to include all the things you have to pay, like bills and basic necessities. When you’re done, you’ll know exactly how much disposal income you have to work with, and you can aim to save half of that disposable income (or whatever amount works for you) per month.

    Ditch a Bad Habit

    There are very few perfect people in the world, so there’s a pretty good chance that you have some kind of bad or unhealthy habit. There’s also a good chance that, whatever your bad habit is, it’s also a costly one.

    A smart thing you can do, though, is to ditch the bad habit, whether it’s smoking, drinking soda, or anything in between and to put all the money you save directly into savings. So, if you quit smoking and you smoked a pack a day, you’d figure out the cost of a pack per day and then deposit that amount in your savings.

    You’ll get rid of a bad habit and save money too; what could be better?

    Profit from a Hobby

    Finally, if you have a potentially profitable hobby, why not turn it into a money-making venture? You could sell your arts and crafts or go into professional cake making, for example. It doesn’t matter what the hobby is. If you can turn it into a way to make a profit, you can stash that money straight into your savings account.

    As you can see, saving doesn’t have to be super difficult, not if you’re creative and willing to find simple but effective ways to save that work for you.

     

  • 18Dec

    businessman looking to graph

    Do you have a lot of debt? Have you borrowed a lot of money and are now having a hard time paying it back? If you answered yes to those questions, then know that you are not alone. Millions of Americans struggle with debt, but fortunately, there are ways to gain control over debt and to get back on the right track.

    One option that you have is to consolidate all of your loans so that you’re just making one payment instead of trying to juggle several at once. There are many advantages to going this route, and, while it may not be for everybody, it is a great choice for many people.

    Save Money

    To begin with, it’s important to understand how loan consolidation works. Basically, you take out a single loan, use it to pay off all your other loans, and then just focus on paying back the remaining loan.

    As long as you get a good interest rate on your consolidation loan, this strategy can end up saving you a lot of money, especially since most of the debts you were trying to pay off likely had high interest rates. When you’re just paying on a single low-interest loan instead of paying on several high-interest loans, you’ll save yourself a lot of money each month and in general as well, which can help you to get your credit back on track more quickly.

    Just Make One Payment

    When you have a lot of debt that you’re struggling to pay off, it’s easy to get overwhelmed. There are multiple due-dates to remember, multiple addresses to send the payments, and so many other details that it all gets confusing, and when people get confused, they often make costly mistakes or miss payments altogether.

    You can put an end to the madness (and the stress that goes along with it!) by consolidating your debt. Once you do that, you’ll only have one payment and one due date to keep track of, and that’s a WHOLE lot easier!

    Get Help for the Future

    If you go with the right debt consolidation firm, you may be provided with free credit counseling as part of your agreement. This counseling can be infinitely helpful for those who struggle with money, debt, and all things financial. With the right counselor, you could end up learning better habits that will help you in the future and creating detailed plans for how to get and stay out of debt for good. Imagine having that kind of financial freedom for good!

    Of course, not all loan consolidation firms offer this option, so check to be sure that yours does and that it’s just a good, reputable company in general. The firm you choose can make all the difference, but if you do choose carefully, you can enjoy all of the advantages discussed here and many more.

  • 14Dec

    Usually, a company will seek financing help in order to grow and maintain their business. These business owners will usually try to find financing from traditional sources such as unsecured bank loans. Why? This type of financing is thought to be less costly when it comes to borrowing a loan.

    Financing Issues

    However, for a lot of small business owners, financing is an issue because they may:

    •       Not have a long business track record
    •       Not have the credit rating required

    For this reason, many small business owners’ loan application from a traditional bank may be rejected. This has been the case in the most recent years after the economic crisis in the United States. Lenders were and still are cautious about approving these types of loans.

    Lines of Credit

    Oftentimes, there are some small businesses with lines of credit from traditional financial institutions, but still are unable to acquire additional funds since the extension of funds beyond the credit limit is a concern. For that reason and in such situations, the future growth of the business could not be based on a traditional bank loan.

    Based on Assets

    In this case, what should a business owner do when there are outstanding account receivables and because of this, the business is at a shortfall as it relates to working capital? In a situation like this, the business can look at a different form of financing such as asset-based lending. Now, what are some of the differences with traditional financing and asset-based financing? What are the advantages one has over the other? Let’s explore.

     

    1. The Differences

    Asset based lending allows the business owners additional flexibility for financing the existing operations and the business needs for further growth. In comparison, traditional lending from a bank requires the financial institution to lend on the premise that the business will have to be first assessed. It also involves a projection of the business’s future cash flow. Asset based lending is based on the company’s collateral and not on the success of the company’s operation.

     

    1. Accounts Receivables

    The typical asset based loan is made against the accounts receivables. In this case, the lender will advance a specific amount of money to the business in lieu of how much value is placed on the receivables provided to the lender. The rate of advance is usually between seventy percent and ninety percent. Instead of sending accounts receivable payments to the borrowing company, the creditors will send payment directly to the lender. The lender, in turn, will provide the appropriate balance to the borrowing business, subtracting any fees charged on the loan and any potential fee for the management of the collection process.

     

    1. Revolving Credit

    Asset based loans are considered revolving lines of credit, which means that when the accounts receivable balance goes down, it provides additional source of funds for the business owner. Even though lenders of asset based loans also consider other assets such as equipment, inventory and real estate, accounts receivables are usually the most frequently used collateral and this is largely due to the fact that it carries a significant amount of liquidity.

     

    1. The Loan Process

    Lenders of asset based loans place more emphasis on the quality of the business’s collateral and not necessarily on the credit rating or cash flow of the borrowing business. The borrowing business’s ability to repay the loan is what is evaluated. The business’s track record of how previous payments have been made will establish their worthiness in being considered for additional credit. In the case of a traditional bank, the internal lending standards leave the lender to be more restrictive in the loan process.

     

    1. The Restrictions

    For instance, traditional financial institutions like banks won’t approve a loan for a company that has a debt-to-capital ratio of more than 4:1 or 5:1. In comparison, an independent lender of asset based loans will not be subject to these restrictions. For that reason asset based lenders are free to finance small businesses with low capital or those that have not met the internal lending standards of a traditional bank. Instead, the asset based lender looks at the long term prospect of the business.

    Conclusion

    Because the asset-based lender does not use the borrowing company’s performance as it relates to operation, but looks more at the quality of the accounts receivables, the business does not require as much financial covenants as a traditional loan requires.