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6 Advantages of Taking Out a Short-Term Personal Loan with Bad Credit

6 Advantages of Taking Out a Short-Term Personal Loan with Bad Credit

Believe it or not, there are ways that a short-term loan can help improve bad credit. Find out the advantages of taking out short-term personal loan here.

Over 43 million Americans have bad credit.

If you have bad credit, you might think you are stuck in a never-ending cycle. You need good credit to be approved for a loan, but you need to be approved for loans to build your credit.

If you can get approved for a loan, the terms are usually less than favorable.

Fortunately, there are ways to improve your credit quickly and easily. One option is to take out a short-term personal loan.

These types of loans come with many benefits and few disadvantages. They can help build your credit and don’t come with the tradeoffs that bad credit loans usually do.

Keep reading to learn more about the benefits of short-term personal loans.

1. They Improve Bad Credit

Short-term personal loans allow you to have your cake and eat it too.

Most loans that those with less than stellar credit are approved for aren’t worth taking. The cost is often too high to the borrower.

And that’s if you can even get improved.

So if your credit doesn’t qualify you for a loan, how do you build your credit? This is where short-term loans come into play.

Short-term loans are less risky for the lender and the lender can expect to be paid back more quickly than with long-term loans. Short-term personal loans are customizable by the borrower.

This means you can choose a loan that works for you. If you simply want to use this type of loan to improve your credit, you can take out a loan for a few months.

So long as you repay the loan within the agreed-upon time frame, your credit score will improve.

2. You’ll Save on Interest

For the most part, short-term loans will save you money.

When you have a long-term loan, you end up paying more interest. This is simply because you will be paying interest for such a long time.

With short-term loans, you pay back the loan in a much shorter amount of time. This means you’ll pay less interest.

Even if the interest rate for the short-term loan is higher because of your bad credit, the interest paid will be less in the big picture because of the shorter time paying interest.

The loan amount might also be smaller, meaning the interest paid will be less. Short-term personal loans usually have much lower interest rates than credit cards.

3. Ease of Access

If you need a loan quickly, a short-term personal loan is the loan for you.

They are similar to payday loans in the fact that they are usually approved within just hours. Waiting to find out whether you will qualify for a loan can be torture, especially if you aren’t sure if your credit score will measure up.

While it depends on your lender, in most cases you will receive your funds either the same day or the next business day. This offers a level of convenience that is unique to the type of loan.

Short-term personal loans offer convenience and flexibility to the borrower. As mentioned above, the loans can be customized to fit your individual needs.

Most lenders are online and you can access their website 24/7. This means you can apply for a loan at any time and from anywhere.

4. Reduced Stress

Short-term loans are significantly less stressful than long-term ones.

You will avoid the dread of viewing your statements and continuously accruing interest for years at a time. Instead, you’ll see your loan being paid off quickly, boosting your confidence and your credit score.

When you have a long-term loan, the end is often not in sight. It’s easy for the looming loan to cause emotional stress.

Watching the interest accrue month after month and year after year can be downright torture. Even if you are making the minimum payment each month, you are barely making a dent in the principle.

Short-term loans avoid this problem and instead offer satisfaction upon repayment.

5. Less Risk

With short-term personal loans, you’ll know exactly how much you owe each month and for how long you will need to make payments.

These loans are sometimes offered unsecured as well. This means that you won’t have to put up collateral.

Common forms of collateral include personal assets like your home or car. Instead, your credit history and credit score will be enough for your lender.

If you have bad credit, you might be required to put up collateral. However, short-term loans are much easier to manage.

There is less risk of things getting out of control and you not being able to pay back the loan. As mentioned above, it’s easier to keep interest in check with short-term loans.

Therefore, your assets are at less risk. If you do end up going with a secured loan, you will have access to more favorable terms and lower interest rates.

6. Flexibility

Short-term personal loans offer you more time to pay than other fast cash options.

Payday loans, for example, have much shorter payback time frames. With short-term loans, you can set the repayment time frame so that it works with your life’s schedule.

You will also have more flexibility when it comes to choosing the amount of the loan. Borrowing limits are often significantly higher than you could borrow using a credit card.

Apply for a Short-Term Personal Loan Today

If you are looking to secure a loan with bad credit or improve your credit score, considering applying for a short-term personal loan. Your loan will help you establish good financial habits.

Click here to start your application to see if you qualify.

An In-Depth Guide on How to Take out a Loan for a Car

An In-Depth Guide on How to Take out a Loan for a Car

An In-Depth Guide on How to Take out a Loan for a Car

Money and business concept car

Taking out a loan can be beneficial in many ways. We share our in-depth guide on how to take out a loan for a car and the benefits it has.

Did you know that 107 million people have taken out an auto loan to help pay for their car or truck in America?

Purchasing a car can be a costly expenditure. Most people don’t have the cash on hand to pay off the debt of a car immediately, which is where auto loans and personal loans come in handy.

Discover our guide on how to take out a loan for a car and familiarize yourself with the process of buying a car.

What Are the Different Types of Loans Available?

If you have never dealt with loans and credit scores, it can be a very difficult thing to navigate and understand.

There are many different types of loans available. Some of which are great for buying a car, and some that aren’t as good for this type of purchase.

For example, the best types of loans are auto loans, bank loans for a car, or alternatively, you can use a personal loan to buy a car.

Personal loans for car purchases sometimes have costly interest rates, so some people prefer not to use personal loans when they are purchasing their car.

Research has found that car loans are typically cheaper because they are secured by an asset (i.e. the car, which the lender can repossess to cover the costs if you can’t pay your loan).

Federal Reserve found that in May 2018, a 24-month personal loan from a commercial bank had an interest rate of 10.31%, whilst a 48-month new car loan from a commercial bank had an interest rate of 5.05%.

How to Take out a Loan for a Car

Unlike buying a car outright with cash in hand, like you might have done for your very first car, taking out a loan for a car needs to be thought through.

These are the key things you need to do when you want to take out a loan for a car.

Calculate Your Budget

The very first thing you need to do when you want to take out a loan for buying a car is to work out your budget. Calculate how much you can comfortably pay off each month.

According to the Federal Reserve Bank of New York, a record of 7 million Americans are at least three months behind on their car loan payments. It is critical that you work out how much money you have coming in each month, and how much you can pay off.

The best way to work out what you will actually be paying for your car is by calculating how much you will be paying each month and for how many months. This calculation needs to include interest rates, too.

Check Your Credit Score

Whether you want a personal loan for a car or an auto loan for a car, you need to check your credit score and history.

Poor credit history might mean that you pay higher interest rates than if you have a good credit history. If this is the case, you might want to hold off getting a loan and focus on improving your credit score.

If you have a good credit score, you might be able to negotiate a better deal with your loan lender.

Find out how you can secure an auto loan without having previous credit experience or a credit score.

Research Your Options

Once you have an idea of how much you have to spend and what your credit score is, you can research your options. There are a number of loan lenders available, however, not all of them will be right for you.

You can get car loans from banks or credit unions, dealerships, or online lenders. Compare the different types of deals and payment plans each of them offer and work out which one is best for you.

Car loans typically come with 3-, 4-, 5-, or 6-year terms. The longer the payment plan, the more interest you’ll end up paying, so make sure you work out which plan is the most cost effective for you.

Get Pre-Approved for a Loan

Once the lender has given you a quote for the loan, you will be pre-approved, which doesn’t mean that it’s guaranteed. Once you have been pre-approved, you the lender will then check your credit.

Once you are pre-approved for a loan, the lender will give you a letter that you can take when you go car shopping. This letter can help you see if you can get a better deal from the car dealership.

Even though you have been pre-approved, it doesn’t mean that you need to sign up for the loan. It is still your choice whether you pursue this loan or you can choose another one.

You also can adjust the terms of your loan, for example, if you find a cheaper car and don’t need an as bigger loan, you can apply for a smaller loan instead.

Find Your Car

The final step is the most enjoyable one. Once you know how much you can afford each month, and you know what kind of loans you can get, you can go car shopping.

Make sure you do your research and find a car that is the right price and has the right features that you need.

Car Loans

Applying for a car loan doesn’t have to be complicated or confusing. Just follow our guide on how to take out a loan for a car and you’ll soon be driving away with a new vehicle.

Apply for one of our auto loans now and see how we can help you.

Alternatively, if you need help with your loan process, get in touch with our team and discuss your loan requirements.

6 Savvy Ways of Paying off Credit Card Debt Without Feeling Stressed

6 Ways of Paying off Credit Card Debt Without Feeling Stressed

Credit card debt can seem like a heavy burden when you have other bills to pay as well. Here's your guide to paying off credit card debt without feeling stressed.

The average American carries approximately $6,375 in credit card debt. For many, the stress associated with trying to pay off this high level of debt is significant.

If you find yourself in the group of people stressed about how to go about paying off credit card debt, you will be happy to learn there are some tips and tricks you can use. While your debt may seem insurmountable now, with time, effort, and dedication, you can get out of debt for good.

If you’re ready to learn what steps to begin taking, keep reading.

1. Focus on One Debt At a Time

Are you carrying a balance on more than one credit card? If so, you need to make sure you are always paying the minimum required on each.

However, don’t stop there. Once the minimums are paid, you need to concentrate on paying down the balance on each card. Be sure you choose one card to focus on at a time.

You can choose the card with the highest interest rate to pay off first, or the one with the smallest balance. Both of these strategies are effective but choose the one that works for you, and then stick with it.

2. Get Rid of the Cards – For Good

If you want to get out of credit card debt and stay out of it – for good – you have to take some drastic steps. One of these is to destroy the cards.

Regardless of what you think, there is no such thing as responsible credit card use. There is no good reason to keep these cards around, especially the department store cards that would not even be helpful in an emergency situation.

While this step may sound somewhat drastic, it’s the only surefire way you won’t get right back into credit card debt once you have paid everything off.

3. Combine and Conquer

Another option is to consolidate your debt. You can combine several of the higher-interest balances into a single payment. In most cases, the transfer fee is going to be three to five percent, but you can compensate for this with the savings you are going to see from the transfer.

If you have any equity in your home, you may be able to use that to pay down your credit card debt, as well. Home equity lines of credit often provide a lower interest rate than what the typical credit card charges.

It’s important to understand that closing costs will apply. However, the benefit is that the equity interest payments are usually tax-deductible.

If you choose the consolidation path, remember, you need to control your spending. This can help you avoid accumulating new debt, along with the debt that’s just been consolidated.

4. Build Your Emergency Fund

If you are planning to pay off and destroy your credit cards, then you still need to ensure you have some type of safety net for emergency situations. This is where an emergency fund comes in.

Building an emergency fund can take some time, but it will also be valuable if you encounter an unexpected expense or some type of income disruption. All you have to do to create an emergency fund is put a little back from each of your paychecks. By doing this, you can avoid missed payments and the need to use a credit card in the future.

5. Rearrange and Reprioritize Your Budget

You need to get a handle on your budget and make sure you fully understand what it is and how you can make the most of it. For example, top priorities should be transportation, groceries, housing costs, and entertainment.

A great way to begin this reorganization process is by looking at your credit card statements, as most issuers categorize your spending.

Be sure you scrutinize this information closely. Find areas where you can cut back how much you are spending. Then take the money that you have “found” and put it toward paying down the debt you have.

6. Don’t Give Up

If you are like most people, you didn’t get into credit card debt overnight. As a result, you are aren’t going to be able to get out of it that quickly either (unless you find a windfall of some sort).

Be patient and continue on the path to living a debt free life. While this is bound to take some time, in the end, it will be well worth it, and you will be in a position to take charge of your finances and finally achieve the financial freedom that you want and need.

Paying Off Credit Card Debt: It Is Possible

There’s no question that paying off credit card debt is something that takes time. However, it’s possible when you use the right tactics and rely on the right information.

Be sure to use the tips and information found here, as they’re going to help you on your journey to financial freedom. You may also want to reach out to a financial advisor, who can provide you even more information on how to best manage your finances to remain debt free.

If you are ready to take control of your finances, rather than letting them control you, we can help. Our team can provide the information you need on any finance related topic. For example, we have a recent blog on how to take the pain out of monitoring your finances.

Stay tuned to our blog for more insights.

How Does Debt Consolidation Work and Other Facts About Consolidation

How Does Debt Consolidation Work and Other Facts About Debt Consolidation

When it comes to trying to pay of your debt it can be hard when you have multiple accounts open. Read on to learn how does debt consolidation work.

Did you know that Americans now have more debt than ever?

In fact, this debt amounts to a hefty $13 trillion–and this number is likely on the rise.

Debt can sneak up on all of us, especially given life’s range of expenses. Student loans, vehicle financing, and mortgages may grant education, mobility, and home ownership, but they still all equate to debt.

Luckily, if you are struggling with debt management, there are options. One of these is debt consolidation.

How does debt consolidation work, and is it right for you? In this post, we answer these questions and more.

Keep reading for insight!

What is Debt Consolidation?

Most people accrue debt from a variety of sources. You may, for example, have credit card debt in addition to an auto loan or home mortgage.

This is very common, and it’s not necessarily a problem. It is possible to have “healthy debt” if you are a responsible borrower and if you can comfortably make your monthly payments.

Yet healthy debt can be hard to come by. Plenty of loans have high-interest rates, which can quickly get burdensome and keep you from saving what you need to be saving!

A lot of people also juggle multiple monthly payments. It can be tough to meet these, especially if you’re living paycheck to paycheck. (In fact, most Americans do!)

Unexpected situations such as family emergencies or medical expenses can be an additional challenge. These can add more to your debt and stress levels.

If you find yourself missing payments on any of your loans, you may face late payment fees. Credit card balances are also subject to potentially high-interest rates.

Debt consolidation strives to alleviate the stress of these potential situations. When you consolidate your debt, you lump your debt into one, single loan. This results in just one monthly payment and–in most cases–less interest due.

How Does Debt Consolidation Work?

Debt consolidation sometimes sounds too good to be true. How does it work?

First, it’s important to note that there are, in general, two ways to consolidate debt: with a credit card balance transfer or a debt consolidation loan.

Both of these have the same goal, which is to get all of your debt into one monthly payment. Plus, they also strive to reduce interest and fees.

Credit Card Balance Transfer

For people with a lot of credit card debt, this is a great means of consolidating. Users simply transfer all of their debt to one credit card. They must then pay off this balance within a given time frame.

Most people will seek out new cards that offer a 0% balance transfer APR and/or a $0 balance transfer fee. Plenty of credit cards offer these terms!

These terms mean that balance transfers won’t be subject to any fees. Once you transfer a balance, you won’t have to pay interest on that balance for a given period of time (sometimes up to a year).

If you aren’t eligible for such offers for any reason, have no fear. You can always transfer your credit card balances. These, however, will be subject to APR and/or transfer fees according to your card’s terms.

For this reason, identify your card’s balance transfer terms before you make a decision.

Debt Consolidation Loan

Another way to consolidate your debt is to take out a debt consolidation loan.

With this, borrowers take out a loan valued at their total debt. Generally, this loan is fixed-rate, meaning that its balance will have the same interest rate for the entire repayment period.

With this debt consolidation loan, borrowers pay off all of their existing debt. They will then work on repaying that loan in a given amount of time, generally at a lower interest rate.

Debt consolidation loans are ideal only if they do offer lower interest rates and fees than a borrower is paying on other loans.

You can get debt consolidation loans from a variety of sources. What’s more, they don’t have to be called a “debt consolidation loan” to count. Low-interest personal loans can also suffice.

Is Debt Consolidation Right for You?

Debt consolidation can be a relief for most borrowers, especially when it comes to reducing payments, interest, and fees. But is it right for you?

In general, debt consolidation is ideal for people who could benefit from a single monthly payment (rather than several).

It’s also the right choice for individuals who aren’t 100% drowning in debt. In general, your debt shouldn’t be more than half of your current income. If it is, it will be really tough to pay off that debt, even after it is consolidated!

Credit score can also play a role. In general, people with good to excellent credit are more eligible for 0% balance transfer terms on credit cards and low-interest consolidation loans.

If you have a lower credit score, you may struggle to find a consolidation method that actually saves you money.

It’s also important to have a plan in place once you do consolidate your debt. This plan should incorporate income sources and repayment terms.

Remember: debt consolidation doesn’t get rid of your debt. It only reorganizes it, in an attempt to reduce interest paid.

Next Steps

If you’ve decided that debt consolidation is right for you, begin by choosing how you wish to consolidate your debt. Is credit card consolidation right for you, or is a debt consolidation loan the way to go?

Next, start researching. Take your time to identify the best balance transfer terms and/or low-interest consolidation loan.

If you do intend to take out a loan for debt consolidation, browse lenders wisely. There are a lot of scams out there when it comes to debt consolidation, so look only for reputable lenders.

We also recommend inspecting your credit score before you hunt for offers. Remember: the higher your score, the better for securing terms likely to make debt consolidation worth it.

Final Thoughts

How does debt consolidation work? Debt consolidation involves lumping all of your debt into one loan to reduce payments and interest.

In general, debt consolidation can be a useful tool for individuals with debt that doesn’t surpass half of their income.

Are you ready to consolidate your debt? Apply for a loan now!

Is it Possible to Buy a Car With Bad Credit?

Is it Possible to Buy a Car With Bad Credit?

Buy a car with bad credit.

The average credit score in the United States in 675. This would be considered a ‘good’ credit score.

However, any score lower than that could be considered ‘fair’ and then plummet to poor or exceptionally poor. Sometimes it’s qualified as ‘bad’ depending on the company.

A poor or bad credit score can make life a little more challenging. It’s harder to acquire a loan, buy a home, or even a car with bad credit. Is it even possible to buy a car with bad credit?

The short answer is, yes! But what are the details of that yes? Let’s dive in a see how you can get a car with bad credit.

Buy A Car With Bad Credit: Hard, But Not Impossible

Purchasing a car, even with low credit is doable, though no doubt challenging. Here are a few key ideas to keep in mind.

1. Comb Through Your Credit Score

Before you visit any dealers, you need to have a solid grasp on your credit score and also your credit report. You can acquire your credit report for free and overlook it to make sure there’s no fraudulent activity and better gage reasons where you could improve your credit. If you spot inaccuracies on your report, it could be contributing to your low score.

2. Clean Up Your Credit

Some people need a car right away, but if you don’t, use this time to address those red marks on your credit report. For example, paying your bills on time has a significant impact on your credit score. Making on-time payments can boost your credit score and signals to lenders that you’re trustworthy.

If you’re not in a hurry to buy a car, take some time to evaluate your score and report. It could pay off especially when it comes to ease of securing a loan and the loan rate.

3. Budget, Budget, Budget

Often, low credit scores are a result of a chain reaction in your financial life. Not sticking to a budget, racking up debt, and the inability to pay it affects your score dramatically.

It can be tempting to buy the fanciest car possible but doing so could leave you with a large monthly payment. As a result, if the car payment is out of your budget, your payments could be late. This further destroys your credit.

Go over your monthly budget and bills to determine how much you can comfortably afford before you go car shopping. Researching current loan rates could help you negotiate when it comes time to buy.

4. Research Lenders

Some lenders are very restrictive about who they lend to. It’s recommended that you shop around and research lenders before applying for any loan, especially with bad credit.

Reaching out to your local credit union to pre-apply can make the application process smoother, as credit unions are more friendly to people with bad credit. Take into consideration lenders who work solely with those who have bad credit.

Avoid applying to several different lenders as this creates a hard inquiry on your credit report. A hard inquiry lets lenders know you’re interested in acquiring debt and can lower your score. Knowing this is one reason why researching lenders first are vital.

5. Inspect Your Terms

If you’re approved for a loan, pay attention to more than just the monthly payment, even though that’s the deciding factor for most buyers. A monthly payment amount is one part of your agreement, yet you could be paying more over the life of the loan if your payment is small. You might think you’re getting a good deal (at first), but over time you’re paying more than you want.

5. Save for A Down payment

Stock away as much money as you can to use as a down payment if you have plenty of time before you need a vehicle. A down payment shows lenders or dealers that you’re serious about purchasing a car and making the payments. In some cases, it can even lower your interest rate and also your monthly payments.

If you’re the overachieving type, save up your money and pay for the car in cash. Doing this avoids having to work with lenders, and you don’t want to worry about a monthly payment.

6. Think About A Co-Signer

A co-signer is a person with good credit who signs the loan with you. This seems less risky to lenders because they have someone who will pay the loan if you cannot. Bringing along a co-signer increases your chances of getting loan approval.

There are some risks that accompany having a co-signer. This debt also shows up on their credit report, and their score takes a hit if you cannot make payments on time. The relationship between you and your co-signer could be severed or damaged if you default on your payment.s

7. Shop Where You Can Finance

Some dealerships offer their financing which could work in your favor. In this case, you avoid having to apply to a third-party lender. Certain dealerships work primarily with those that have low credit.

It’s important to note that it’s possible these dealer-lenders offer interest rates that are sky high and could include repossession in their terms if you cannot make the payments. Usually, they do not report to the credit bureau, so using these loans to build your credit is out of the question.

Don’t Let Bad Credit Stop You

If you have to buy a car with bad credit, don’t stress. Even though it might be hard, there are ways to own your car and rebuild your credit.

Are you looking for more information on auto loans? We’re here to help! Here’s some answer to questions you may have.


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