Friday, June 02, 2006

Shopping for a Personal Loan to Suit Your Finances

Holly Bentz

Just as one would shop around for the right automobile to suit your taste and financial style, the same is true in shopping for a personal loan. If you're thinking about taking out a personal loan, it's important to make sure it matches your paying and financial composite. For example, do any of the following apply to you?

  1. If you plan to take out a personal loan do you plan to repay the loan off fast?
  2. Would you prefer to stretch your repayment plan out for as long as possible?
  3. Do you have poor credit – therefore gaining a personal loan approval is important to you?
  4. Are you looking for the lowest interest rate possible on a personal loan?
  5. Because you require a large sum of money (over $10,000) you would like to put your home up for collateral?

As the above questions depict, personal loans come in all assortments with varying terms and payment guidelines. As we all know all men are created equally, but not all salaries and personal loans are right for all financial needs.

Did you know that the average American consumer (almost 60 percent) carries – an average debt of over $10,000? Moreover, almost 60 percent neglect to remit their monthly credit card and mortgage balances on a timely basis. The profile of the middle class family is generally cash-challenged and used credit cards for their basic necessities.

In the realm of personal loans, American consumers must take caution during the search for a personal loan. Financial desperation has a way of affecting a consumer's judgment. Banks, creditors and lending institutions are targeting the financially fraught consumer. The sector is referred to as a "sub-prime" market. The target audience is the working poor or impoverished who are in most cases unable to make payments.

The rampant growth of the industries has been evident in both mortgage lending and cash advance firms. Normally, sub-prime loans (home financing and payday) are accompanied by mammoth interest rates. In reality, it boils down to supply and demand.

After all, why should an organization dole out loans or credit to consumers who are unable to pay or have demonstrated a poor payment history.

Fact: Annually, creditors and financial institutions charge over $7 billion in late fees.

Despite the advantages and drawbacks of personal loans, here are a few ways to shop for a loan customized to your financial style:

Fast Repayment Plan

If you plan to take out a quick personal loan to hold you off until you receive a tax refund or even a salary bonus, look for a personal loan that does not have a prepayment penalty. Since many payday loans and other personal loan products are designed to make the company money over the life of the loan, many carry a pre-payment penalty clause. Read the fine print and thoroughly review the contract to avoid being pigeon-holed into a personal loan.

Extended Repayment Program

The unemployed consumer should look for the personal loan where the repayment plan can be stretched out overtime. Opting for this type of loan can circumvent the chance of biting off more personal loan than one can afford while they are looking for gainful employment.

High Interest Rate

Some consumers do not have the luxury of being choosy in pursuit of a loan. Particularly, for the indebted with a low credit rating, the chances of personal loan approval may be limited. Generally, financial institutions up the interest rate based on how risky they deem the loan to be. Also, if a person has shown a poor payment history, the only way for the lending company to protect their interest is by charging an excessive interest rate.

Lowest Rate

Although the lowest interest rate possible always sparkles with appeal, it can be tricky. Pay particular attention to any personal loan that sounds too good to be true. For example, certain fraudulent lending companies will detail ambiguous wording in a personal debt agreement to purposely defraud the consumer of property (house or car).

Secured Loan

For a lending institution's perspective, the secured personal loan is completely failsafe for the bank. In any case, if the borrower defaults on the loan, they have an expensive property to sell to even make a profit. Before selecting a secured personal loan evaluate if the risk of possibly losing one's home is worth the pay-off of any loan worth $10,000 or more.

Whatever you personal loan you decide to take out, remember to prioritize what is important and only select the loan tailored to your financial situation.

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About The Author

Holly Bentz is a finance writer and a contributor to About Personal Loans.

Wednesday, May 31, 2006

Short on cash? Finance the Mortgage Points

Syd Johnson

Once you get a quote for a home loan don't be tempted to take the entire amount if it looks like you overqualified. Most consumers fill out an application for a home loan and hope they can get enough money to buy their dream house.

A nice chunk of those consumers also overqualify for their home loans. If go to your local bank, credit union or mortgage broker and you are approved for a $500,000 home loan, they payments might be a bit more than you realistically afford.

Look at your entire budget
If you are not good with your money or would prefer to not stretch your finances to the limit to get a home, get your hands on a good mortgage calculator as soon as you get the figures on your home loan. You might think all will be fine as long as you can own your own property.

However, you must take into account all of the things that come along with owning a home. Sometimes you can get so caught up with the actual dollar amount of your home loan= that you forget the other pieces of your budget.

Check your budget to see if you still have money to enjoy things like going out, purchasing new furniture, a family vacation once per year and regular manicures and pedicures. Then add in your student loans, car payments, credit card bills, lunches at work and tickets to take your family to baseball games a couple of times every season.

Don't forget home maintenance costs
There are also the home maintenance issues that are not included when you qualify for a home loan. If you live in a part of the country that's particularly hot or cold, your heating and air conditioning bill could easily add up to a couple of hundred dollars per month.

Your home loan package does not include budgeting for lawnmowers, landscaping and fixing broken windows. Some of these expenses can be put off until a later day, but some of them will require your immediate attention once you move into your home.

Know your spending= habits
If you are used to living paycheck to paycheck and generally not taking care of your budget as a renter, you will probably carry over some of the same habits to your new home.

The best way to avoid a financial disaster is to make your home loan a part of your financial life instead of the centerpiece of your financial life. If you are stressed out about money issues from the very first move in, it is unlikely that you will enjoy your new home or anything else in your life for a long time.

About the Author

This article may be freely distributed as long as there's an active link to
Syd Johnson

Tuesday, May 30, 2006

Reducing Stress through Time Management

Studies have shown that those who have poor time management skills suffer more stress, depression, and anxiety then those who manage their time wisely and work efficiently at meeting their personal and business goals.

The root of time management is order and organization. For those who have little order or structure in their lives, they are often running around confused, and wasting valuable time. This confusion and lack of completing goals leads to depression and stress.

Scientific research has now found a direct correlation between stress and a lowered Immune System. This means that for those whose lives are disorganized and stressful that they are actually putting their health in jeopardy.

By taking certain steps to bring order into the daily work and personal life, stress is reduced and the Immune System is strengthened, this brings about a new outlook on life, one that is characterized by health, happiness, and peace; not strife, stress, and sickness.

Some of the signs and symptoms of stress caused by a lack of time management include running around to finish errands; constantly working to meet urgent deadlines; non stop focus on work and work activities; continuously “taking” work home with you.

This will also have a detrimental effect on family relationships (including spouses and children); friends will suffer because eventually there will be no time to nurture those relationships; and work will suffer because of the lack of organization.

Not only will this have a negative impact on those around you, but remember, your health is at risk as well. Many people are familiar that heart attacks, high blood pressure, and strokes may all be related to too much stress. You owe it to your health to reduce stress.

Many people never make the correlation between stress and their lack of time management and never make the changes necessary for their health or for their quality of life. They never realize how important balance and time management is for their life.

You may have heard the saying, “They are working me to death”, and this may very well be the truth. If you are working in a disorganized and chaotic manner, your stress level is undoubtedly high. You must take the necessary steps to work in a calm manner.

Some professions are naturally more “high pressure” then others. For these employees stress is accepted as part of the territory. Time management for these workers is an essential if they are going to remain at their peak and keep their health as well.

By setting goals, a plan, and removing stress factors, you can create a plan that will bring your life and work into harmony and balance. Once your work life is in order, you will have more time for rest, relaxation, and family.

To begin your time management overhaul, you will first need to take a good look at your life. If you are already suffering from too much stress, then you will most likely need to cut out some activities in your life.

Employers have many burdens resting upon their shoulders, and a lack of time management can lead to unnecessary stress and anxiety. Employers should look for ways to manage their time more effectively and eliminate unnecessary tasks that others can do.

If you find an area where someone else can handle the job, by all means delegate the task. This is one of the best ways to successfully manage your own time, and find more free time as well. Through delegation you can remove a lot of stress and tension.

Continually assess your plans and your goals. Make yearly, monthly, weekly, and daily goals and plan to meet them daily. Live a life of habitually assessing your goals and create the plan that will help you achieve them.

Another very important fact to look at is the area of “time wasters”. What is it that is wasting your time, or distracting you from the task at hand? If you have a set work schedule and are continually rushing to meet deadlines, then something is wrong.

Find out what is distracting you then take steps to prevent the distraction. Is it the television, the telephone, unannounced visitors? Find out the cause of the distraction then address it. Preventing these time wasters will help you use your time wisely.

By setting goals, preventing distractions, and delegating tasks, you can begin to effectively manage your time and reduce stress. Find new ways to relax throughout your day as well. You may still work hard, but make sure there is plenty of downtime too.

Your health depends on your ability to manage your time wisely, whether it is your work life, personal life, or family time.

About the author::

Peter Dobler is a 20+ year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner. Collect more free software and bonus content for your own web site at

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Monday, May 29, 2006

Should I Refinance?

Barrett Niehus

Should I Refinance?

By Barrett Niehus

Interest rates are at an all time low. Lower in fact than they have been in forty years. With this low rate comes huge opportunity for home owners to lower their payments and take some equity out of their home. The question about weather refinancing is necessary is dependent on your current financial situation, and what you will save versus how much the refinance will cost. The analysis is a simple one, but one must understand the process in order to benefit from the refinance activity.

When weighing the decision to refinance, one must simply look at your current monthly payment and your remaining payoff period. Then compare this to the monthly payments and required payoff after the refinancing activity. If the benefit of refinancing outweighs the cost of the process, then the refinance makes sense.

The easiest way to evaluate if a refinance makes sense from a quantitative sense is to list= your current monthly payment the amount left on your mortgage, and the number of payments that you have left. Multiply the number of remaining payments by your current monthly mortgage payment and list this under all of the numbers.

Next to these numbers write down the amount that you are refinancing, the refinance period, and the estimated monthly payment. The payment amount can be calculated using a spreadsheet, or possibly a mortgage calculator like the one found at Within the amount that you are refinancing, be sure to include the cost of the refinance, origination fees, appraisal fees and transfer and escrow costs. Once again, multiply the monthly payment by the total number of payments and record this number.

If you are refinancing your current mortgage and not taking out any equity, the refinance makes the most sense if you can reduce your monthly payment, and if the total amount paid (number of payments multiplied by= the monthly payment) after the refinance is less than the total amount to be paid on your current mortgage. If the monthly payment is less than your current payment, but the overall amount is greater, you must decide if paying less monthly outweighs the increased amount you will need to pay. The opposite decision is required if your payment goes up but the total amount due decreases. If in either of these situations, care must be taken and the returns evaluated carefully to make the best decision.

A caveat to the above analysis is that the amount refinanced must be equal to the existing mortgage. If the refinance amount exceeds the amount currently due on the mortgage then a much more complex analysis is needed. For this type of analysis, you will require a spread sheet with present value and amortization calculations. If you are not comfortable with these type of calculations, consult a financial advisor or accountant to assist with quantifying your= decision.


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About the Author

Barrett Niehus is the Managing Director or IP Ware Real Estate Investment Analysis Software,