Comments off · Posted by NFS in Financial Goods & Services
Many people think that personal loans and payday loans are one and the same thing. This is not true. In fact, there are some big differences between the two types of loans and these are discussed below.
Differences Between Payday and Personal Loans
A payday loan is a cash advance that is meant to bridge the gap between the current financial situation and the next pay day. Payday loans are generally short term and are usually secured against your next paycheck. Lenders are always ready and willing to offer cash advance to people since these loans attract high interest rates. Still, payday loans are usually given out in small amounts.
Personal loans, also referred to as unsecured loans, are usually given out in big amounts of money. This type of loan can offer a solution to many of your current financial problems. Personal loans are paid back in installments over a longer period of time.
Aside from the main differences between payday loans and personal loans, there are also others that set the two aside:
- Payday loans are usually processed quickly, while personal loans can take a couple of days or even weeks for them to get processed.
- Personal loans carry repayment periods that range from several months to even years, but the repayment period for a payday loan can be as short as one or two weeks.
- Personal loans do not ask for any collateral. But some lenders may ask people with poor credit score to obtain creditworthy co-signer. Payday loans do not require co-signers.
The Top Benefits of Payday Loans
If it is in middle of a month and you are facing some financial difficulties, a payday loan is the way to go. Below are some of the benefits you will accrue if you apply for a cash advance.
- Easy to apply and qualify. It is easy to apply and qualify for a payday advance. This is because the only qualification is having sufficient income to repay the cash advance, and you have never defaulted on another cash advance in the past.
- Your information is secure. When applying for payday loans, your personal and banking information is very usually very secure. This is because the payday loan lenders do not disclose the information to third parties.
- Quick loan application and approval. Actually, filling out the loan application form only takes a few minutes. Approval is also quick and you are likely to get cash in your bank account in less than 24 hours.
- Flexibility. Note that payday loans are short term. This means you can pay back easily after you get your next check.
- Convenient. Unlike other types of loan lenders, payday loan lenders are open outside of the regular banking hours. This allows you to obtain emergency cash loans at any time. Also, online payday loan lenders make the whole process much easier.
Benefits of Obtaining Personal Loans
Personal loans do offer a myriad of benefits to borrowers. Below are some of the most important ones:
- Flexibility of use. Actually, personal loans can be used for various types of purposes. For example, you can use the money to cater for medical bills, fund your wedding, pay school fees, remodel your home, and do many other things.
- Quick availability. In fact, obtaining a personal loan is quite easy. In most cases, you can get the loan even within 24 hours. So, if you are looking for emergency funds then a personal loan is the way to go.
- Minimal documentation needed. In normal circumstances, personal loans do not need much documentation as compared to home or car loans. Thus, the processing time is quicker.
- No collateral needed. No security needed to obtain this type of loan. That is why the loan is referred to as unsecured. Thus, your assets are safer.
The decision of whether to apply for a payday loan or personal loan is solely yours. If you go through the pros for both types of loans, then you will get enlightened and know which one suit you best.
Comments off · Posted by NFS in Debt Reduction
According to MSN Money, an average home in the US has a debt of close to $8,000 on their credit cards. The report elaborates that approximately 43 % of American homes spend more than what they actually earn each year. If this is true, it means that many homes have more financial problems than they can handle. However, it is possible to reduce debt in spite of the critical financial crisis that you live in. Here are four high-end benefits that can motivate you take the initiative of learning how to reduce debt:
- Less Stress
You are likely to agree that with a number of financial lenders knocking at your door demanding their money or with numerous credit cards, you will be stressed up. This will really affect any family. In fact, the Associated Press once said that when people are faced with debts as high as a mountain, they are likely to seek medical attention more often. These people are faced with ulcers, depression, and several other cardiovascular complications. On the other hand, when you do not have any debt, you are not overly worried thus such stress hard to come by.
- Freedom To Spend
Suppose nothing is holding you from how to spend your money, don’t you think you will be free in the manner you will spend it? That is exactly what happens when you are aware that nobody is demanding a refund of their money. You can buy whatever you want as long as it is within your budget. You are free to go for a vacation, visit a five-star restaurant in town or even purchase new furniture for your home. Simply put, without the stress of a debt, you can use your money as you wish.
- Reduced Debt-Income Ratio
The third benefit of why you should reduce debt has something to do with your way of life. In order to evaluate your financial health, MSNBC suggests that the relationship between your debt and income should be keenly looked at and kept at bay. For instance, if, in your spending, it emerges that the ratio over 36%, this shows some danger. In fact, lenders are likely to turn down your request for any loan since statistics indicates that you will not be in a position to repay based on the ratio. Endeavor to reduce the debt-income ratio for better financial management.
- Freedom To Save
Who does not like the idea of saving for something good especially if there are prospects of changing one’s life? Interestingly, this is what many people desire in life. It is possible to save for whatever you need in life as long as you are debt-free. You are able to buy a home, have an overseas vacation or even purchase your dream car. Instead of burdening yourself with debts, strive to save in order to find what you will use when you are retired. All these will be a reality if you reduce debt.
Going to the point of retirement living is a milestone in a person’s life, and a lot of individuals are not prepared for it. They find themselves struggling for that continual income they have become used to benefiting from in their working days. A great deal of individuals primary issue is not having enough income to pay for their basic expenditures.
We see the present days’ retirees working with several things: a mixture of retirement benefits, Social Security, as well as other savings vehicles, and they ordinarily only take out the required amount of money from their 401k’s and also other individual retirement accounts. That is going to transform over the next few years, though; many more people will likely be retiring with no retirement benefits and will have to rely solely on their savings to be able to cover all the things Social Security doesn’t. There exists an obvious problem with this however; their savings will later on be used up, and then what? How will you get these funds and turn it into the regular monthly income you’ll need not just to repay what you owe, but to also live in comfort and not have to make changes to lifestyle? Well, there are a few answers to this inquiry.
Folks in the financial world are providing solutions to the table that are meant to make this much easier, and as baby boomers start retiring and learning exactly what does and doesn’t give good results, far more variations will more than likely emerge. Here are a few of your options and a little bit of details you need to understand as you head into saving for retirement:
Consider longevity: Individuals are living longer nowadays, so the likelihood of running out of cash is much more realistic now. One option you have is to purchase longevity insurance, in which you would make a lump-sum payment today, and, in exchange, get regular monthly profits that starts in your mid-80’s which lasts until you pass. So, naturally, if you pass away before your mid-80’s, you won’t get anything. The advantage to this, however, is the cost; it is less expensive than some other insurance income options, especially if obtained in your 40’s or 50’s, but you can’t get that earnings until your 80’s.
One other alternative you could have is to build it yourself. A number of people taking this option take a risk and set off of the 4% rule, which, you may already know, is quite dangerous; in case you have good timing with the stock market and it will provide you with the cabability to grow your nest egg, that is fantastic. There is, however, the other side of the coin– the part we have unfortunately been more informed about the past couple of years– where the stock market could do badly and leave you with far less than expected, and, to be honest, the state of the stock market has not been a promising circumstance for quite some time now.
We are really not opposed to you buying the stock market; we’re just skeptical on you spending your retirement funds in the stock market, because if you lost that, then what? You don’t wish to wake up one day and have to cancel that family trip you have organized because the stock market is coming along badly.