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Personal Loans

Common Traps to Avoid when getting a Personal Loan

There are some common traps that you will want to avoid when going about getting a personal loan. Some of these traps can be quite troublesome for those who are looking to borrow money for something. The more you know about these traps, the better off you will be. Sometimes personal loan traps aren’t always obvious, which is why you need this article to help you out as much as possible. A surprising number of people do not know about these tricks.

Insurance Tricks

It is completely normal for you to want to protect your family from the unexpected, which is precisely what insurance is for. A lot of personal loan providers include an insurance sales pitch at the end of a loan closing. There are two main types of insurance are life insurance and unemployment insurance. You should definitely be aware of high-pressure sales tactics when getting a home loan. Usually these insurance plans are very poor and not comprehensive at all, which is where the “trap” part comes in.

Pre-Compute Interest

Pre-compute interest is a horrible deal and it is to be avoided altogether. It is essentially just an overly complicated way of calculating interest. The entire reason it exists is to ensure that you pay more interest on your loan early on. If you pay off your loan early, you will end up with a higher interest rate than what you were initially quoted. If you take out a loan with a three year term and you take full three years to pay it off, there is no difference between a normal loan and pre-compute one. If you pay the loan off early though, you will end up paying more interest. This has become somewhat of a common loan trap that you do not want to fall into.
Origination Fee

Origination fees have become fairly common with personal loans, so you really cannot avoid it. If you want to see whether or not you are really getting a good deal, it is important to compare the APR of the loan as opposed to just the interest rate. An APR will include the origination fee, and it assumes that you aren’t going to pay it off early. Some people get stuck with this fee when they don’t realize it is deducted from the loan amount. It is incredibly important that you make sure you are borrowing the right amount. You do not get a refund if you pre-pay. Even if you pay off your loan one day later, you are not going to get the fee refunded at all.

Prepayment Penalties

You can have a fixed interest rate, fixed payment and fixed term with a personal loan. If you take the time to compare APRs, you should be able to make the right decision. Just make sure that you do not simply jump into picking a personal loan and end up taking out a pre-compute loan. The last thing you want is to have three add-on insurance policies as well as a big origination fee, only to refinance the loan three months later.

Conclusion

The fact is that personal loans can be of great help, but you will need to make sure that you don’t fall for some of the more common traps and tricks that exist. Each year millions of people get personal loans, but not enough of them are aware of these traps. The more time you take to learn about these traps, the better off you are going to be overall. If you want to get the money you need without falling victim to a trap, this article’s information will certainly be of great help to you.

Unfortunately, many people who get a personal loan end up spending more than they needed to because of a clever trick or trap of some kind. There are numerous unscrupulous lenders out there, and you certainly don’t want to get taken advantage of by one of them. The more time you take to research these traps the better, because you simply cannot have enough information on your side. Those who get this information will be protected from serious consequences later on.

Credit Cards

Best Tips for choosing the right Credit Card for you

When you are trying to choose the right credit card to match your needs, there will be quite a few different things to keep in mind. The more time you take to look into these options the better, because you don’t want to rush into a final decision. With so many credit card options to explore, the best thing you can do is to take your time. In the end you will be glad you decided to do this research.

How is your Credit?

It is important to keep in mind that the best credit cards are reserved for people with excellent credit. Chances are you won’t be able to get some of the better credit cards out there if you have a very low credit score. Some people get declined for a credit card even when they have been making their payments on time every time. If you have less than five years of credit history, you might want to lower your expectations in terms of the rewards you are going to get.

Identify which type of card you need

You will definitely want to make a point of identifying which type of credit card you need, as there are numerous options available. Take the time to look for a card that has all the right features to match your needs perfectly. Since each credit card is going to have its own unique features, you will have to make a point of doing the necessary research before making a final decision.

Cards for Rebuilding Credit

If you have bad credit and want to start rebuilding it, you might want to look into student credit cards, which are unsecured credit cards that are intended for college students. Secured credit cards can be extremely effective at helping you rebuild your credit, but you need to make a security deposit of $200 or more. Getting one of these credit cards can be a very effective way to rebuild your credit quickly.

Low interest balance transfer cards

There are low interest as well as 0% APR credit cards that you will need to explore. If you plan to use your credit card for emergencies, a no-interest credit card could be an excellent overall choice. If you have irregular income or carry a balance from time to time, zero percent APR cards are really the best option for you. A balance transfer offer could potentially help you pay off a high-interest debt interest-free. You will need to remember that these offers may be harder to get if you have average to poor credit.

Earning Rewards

You should also explore some of the credit cards that are best for earning rewards. A rewards credit card can be incredibly beneficial in a number of ways, so it is certainly worth taking the time to look into. While it’s true that these cards typically come with higher APR, they do offer sign-up bonuses and give you points, miles or cash back for every single dollar you spend. A rewards credit card can provide you with some huge benefits over time.

Responsibility is key

No matter what kind of credit card you decide to get, it is imperative that you are completely responsible with it. The last thing you want is to get a credit card and use it irresponsibly, because you will likely end up hundreds or even thousands of dollars in debt. There are a lot of people across the country who are struggling with credit card debt, simply because they didn’t take the cards or their responsibilities seriously.

Conclusion

When you are trying to find the right credit card to match your needs, it is important that you explore some of your different options before making a final decision. There are lots of these cards that you can get, but you don’t want to choose just any of them. Use the internet to your advantage when you are going about doing this research so you can increase your chances of getting exactly what you need without any issues. Those who take the time to do this research are usually glad they did, because they end up with the right credit card.

Unsecured Credit

A Consumer’s Guide to Unsecured Credit

There are so many different things to learn when it comes to getting unsecured credit, and it’s important that you are fully aware of them. The more you learn about this type of credit, the better prepared you will be for it. A lot of people get lines of credit without learning all they can first, and as a result they suffer serious consequences later on. This article will help you to get exactly what you need when it comes to unsecured credit without any issues whatsoever.

What is unsecured credit?

Unsecured credit is a type of transaction where the lender does not require any sort of collateral to ensure the balance of the account is paid. Collateral can be anything of equal or greater value to that of the loan, such as a house or car. This means that you won’t have to worry about risking one of your more valuable possessions to get the loan you need. Unsecured credit can be applied to banks but also private lenders, as well as personal loans from friends and family.

Types of Unsecured Credit

You will quickly discover that there are many different types of unsecured credit that you will want to look into before making a final decision.
Credit cards are a common form of unsecured credit, and they allow you to borrow money from the credit card company, provided you pay them back at a later date with interest. There is quite a bit of risk involved in using credit cards, but they can be very helpful if you use them wisely.

Payday loans are another type of unsecured credit, as they do not require any sort of collateral to be put down. These are short term loans that people typically take out to cover some sort of emergency expense, such as a car or home repair as well as medical bills. And while no collateral is required for a payday loan, the interest
rates can be fairly high on them.

Signature Loans do not require any collateral either, and you just need to sign to secure yourself a loan, hence the name. This type of loan is issued in instalments, and because of their lower interest rates, they can be particularly attractive for first time borrowers. If you have never gotten a loan before, you might want to look into this option.

A cash advance is yet another type of unsecured credit that you might want to look into. It is a short term loan that can be issued by a bank. This type of advance is usually used to credit card holders, enabling them to get short term cash advances without much trouble.

Benefits of Unsecured Credit

Perhaps the best thing about unsecured credit is that you don’t need to put up any collateral to get approved. If you want to get a line of credit but don’t want to put your home or car at risk, this is probably the best option for you. There are quite a few different credit options to explore, but this is one of the best for those who don’t have any real collateral or cannot afford to put it up.

Drawbacks of Unsecured Credit

One of the primary drawbacks of unsecured credit is the fact that you might have to pay a high interest rate due to the fact that you do not have to put up any collateral whatsoever. It can also be a little bit more difficult for those with bad credit to get one of these loans.

Conclusion

Unsecured credit has a lot to offer, especially for first time borrowers. If you need to borrow money for whatever reason, it is highly recommended that you keep this option in mind. There are lots of different types of unsecured credit available, and it’s important that you know what your options are like. The more information you get on unsecured credit, the better prepared you are going to be overall. The last thing you want is to take out any line of credit without getting the necessary information first. In the end you will be glad you used this information to your advantage.