ADVICE FOR FIRST TIME CASH BORROWERS
When in the market for a personal loan, determining how much to
borrow and for how long is not easy. Most people do not realize
that they can actually save money by borrowing more! It is
typical for lenders to impose higher interest rates for loans of
small amounts. Therefore, it makes sense to apply for more if
you are financially responsible and think that you can avoid the
temptation of spending the extra money. You can use the surplus
cash and invest into an attractable
high interest CD or money market bank
account. Another option, if possible, it to
borrow from a family member.
**First time borrowers should also educate themselves about
loan shopping and
get the best rates.
One of the wisest things you can do when determining how much to
borrow and for how long is to use a
loan calculator. These types of calculators will allow you
to input different loan amounts, interest rates and terms so
that you can see what you can expect in regards to your
payments. Also, first time borrowers may want to consider
How much can I afford?
If applying for more than you necessitate frightens you, we
recommend considering the following advice to determine exactly
how much to borrow. First, write-up a
budget of all of your
expenses. Your budget should include all of your monthly bills
and daily living costs. Then, subtract the sum of all of your
expenses from your net monthly income. Do not assume that the
amount left over is what you can afford as a monthly payment for
your loan. You should never leave yourself with no money in the
event that an unforeseen crisis arises. A rule of thumb is that
75% of this left-over amount can be contributed towards a
monthly loan payment.
developing a budget.
How much should I borrow?
Now that you have determine what your budget is, you will
need to decide how much to borrow. Analyzing the purpose of your
loan is very important. For example, if you are interested in
applying for an unsecured loan for going on vacation, you
need to factor in the cost of renting a car, sight seeing,
eating, etc.. If you are
planning a wedding, determine the cost of the reception
hall, flowers, entertainment, etc.. **We offer info on
an affordable wedding.
If the intent of your financing is for making repairs or
improvements to your home, you need to consider unexpected
issues that often arise during the construction process. For
example, the cost for materials often exceeds the estimated
price. Also, it is very possible that more materials are going
to be needed than initially thought.
** It is important to note that if you are interested in a
loan for consolidating debt, you will no longer have to pay
the interest rates associated with the credit cards. Therefore,
when determining how much you can afford, do not include credit
card interest costs
How long should I borrow for?
The term of your loan is the length of time that you borrow
money for. Most unsecured loan terms range from 12 – 72 months.
It is important to understand that the longer the term of your
loan, the more money you are going to pay over the life of the
loan. The longer the loan, the less your monthly payments are,
but the more you are going to pay interest costs.
Depending on what you are going to use the loan for and what
your financial situation is, it may make more sense to utilize a
longer term. For example, suppose the electrical wiring in your
home goes bad and it needs to be repaired ASAP! But, you just
moved into the residency and you have no equity for a second
mortgage. Even worse, you are having a hard time paying your
current bills. For this scenario, it would make sense to apply
for a longer term loan instead of stressing to pay a higher
monthly premium associated with shorter term loan just so you
can save some money. It is always good to save money, but
keeping your sanity is more important!
One you figure out how much you need to finance, you can submit
your request for a
personal loan and get the cash you need!
First time borrowers should also examine the section on getting a
personal loan to learn what they can do to ensure that they
get the best loan.
Being a Wise Borrower
Personal Loan Scams
Applying for Financing with Bad Credit - Bad Credit
Online Loans - Are They Safe?
Requirements for Borrowing with No Collateral
Understanding Loan Interest Rates
a Loan Makes Sense
Are Unsecured Loans for Consolidating Debt a Good Idea?
Dangers of Debt Consolidation Loans
Credit Unsecured Personal Loans for Getting Rid of Bad
Are Personal Loans a Bad Idea?
Loan Aspects to Avoid
What Happens If I Default?
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How It Works -
Approval Requirements -
Credit Help Info -
Types of Personal Financing
Unsecured Personal Loans -
Bad Credit Personal Loans
Consolidating Debt with Personal Loans
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