Loans are used for a variety of different purposes, ranging from student loan to buying a new house. This article will discuss the different types of loans and what they are used for. Some of the most famous loans are:
Small Business Loans
Small business loans are generally given to start-ups or to-be-entrepreneurs after they have submitted their business plan to the bank that they are seeking the loan from. The Small Business Administration (SBA) seeks a guarantee of the loan, which means the seeker has to give their personal asset as collateral in case the business fails. The time to repay the loan ranges from five to twenty-five years. Usually, the level of interest being charged is negotiable.
Personal loans are generally unsecured and can range from hundreds to thousands of dollars. The lender usually requires a proof of asset that works as a guarantee. The only disadvantage of a personal loan is that interest rates are extremely high and can go up to 12%, and usually the loan is supposed to be paid back within a span of two years.
Cash advances are offered by credit card companies as a short term loan. The interest rate of these loans is very high and t loan amount is generally a few hundred dollars.
Credit cards are loans that are to be paid back at a later date. Since this is an acceptable form of payment, people generally obtain a credit card by filling out an application form. The process of obtaining a credit card is very easily, but there are certain disadvantages, the higher interest rates for one, going up to 20%.
Home equity is basically a loan that owners borrow against the value of their home. A home equity is generally obtained by finding out the difference between the value of the house in the market and the amount that one still owes to the mortgage. The interest on these loans is tax deductible and generally, people are expected to pay back within 15 to 20 years.
Student loans are obtained by individuals who want to pay the cost of their higher education. There are two types of student loans, private student loans and federal student loans. Federal student loans are preferred by most of the people as they have low interest rates.
Auto loans help people in purchasing the vehicle of their choice. However, there is a downside to this loan: if you miss a payment, then there are high chances that you will lose your vehicle.
Payday loans are short term loans that are taken by people who are waiting for their next paycheck. The interest loan of such loans is extremely high, which is the reason why the government discourages people to acquire payday loans.
Mortgages are basically loans given to people by banks to purchase homes that they can’t pay for in one go. These loans have low interest rates, but there is a high risk of foreclosure if one fails to make the scheduled payment.
In conclusion, these are the different kinds of loans that people borrow for different purposes.read more
Saving money is a rational and reasonable step, since it provides us with financial security and the peace of mind. Methods of saving are numerous, from the old-school habit of keeping money hidden somewhere at home, to modern versions of banks such as online banks and their savings accounts. However, most people decide to open a savings account in a traditional bank, and there are plenty of the account types to choose from, with different terms, conditions, interest rates and other features. One of the very convenient and simple methods of saving money is by creating an automatic savings plan. It works in a way that you set a percentage of your monthly paycheck to be transferred to a separate savings account, leaving you to deal with the rest of the monthly earnings as you like. This type of savings is very useful for those who find it difficult to save money by setting it on the side themselves.
This way, you do not have to think about the savings, because everything is done automatically and you can be sure that it will be done each time. It also allows you the opportunity to always know how much money you will save over a certain period of time, as well as how much money you have on the savings account.
Another advantage of this method of savings is that you do not need to make any effort after you have set up the plan. Once you open the savings account and arrange the monthly money transfer onto it, you are free from all other effort or responsibility of that account. This spares you from going to a bank regularly and saves a lot of time.
Savings plans are flexible, which means that you can determine the percentage of your paycheck to be placed into the savings account, or the fixed amount to be saved each month. Also, the transfer does not have to be performed monthly, but you can also choose the frequency of these transfers: once a week, once or twice a month, once in every three months etc.Creating an automatic savings plan helps you build good spending habits, preventing you from spending more that you have earned.
As a matter of fact, this is one of the common reasons people create such a plan, because they are unable to save the money themselves, and this is a good way to control and reduce the spending.
The fact that the checking account is separate from the savings account where your percentage of money is stored, it also gives you additional security against spending all the money you have earned from one paycheck, or simply from spending more than you have planned.
Not only are there so many banks, but they offer a large choice of bank accounts, and each bank has their own terms and offers in connection to those accounts. Therefore, it can be very difficult to choose the right bank and the type of the account for your specific needs, especially if you are new to this and if you are about to open your first bank account. In this article we will present some of the most common types of bank accounts, as well as the tips on how to choose the right one for you.
First of all, there are several types of bank accounts, used for different purposes. Current accounts are mostly used for daily transfer of money and if you need the access to your money at any time. There are savings accounts, which are used for depositing and saving usually a large amount of money, on which the interest is cumulated as the money sits on the account. There are also retirement accounts, used for saving the money for the retirement, and brokerage accounts, used for trading on the stock market.
I order to choose the ideal account for your needs and to make the most out of it, make sure to follow these steps:
Determine what you need the account for – since there are many different account types, it may all seem confusing at the beginning. This is why you need to determine the reason for opening a bank account even before you start browsing banks and the offers they give.
Decide which features you find the most important – when you have thought of the type of the account that may be the best for you, it is time to think of the features and what is the most important to you when opening the account. With a savings account it can be the amount of the interest rate, the period of withdrawal restriction or the maximum amount of money to deposit. With checking account, it can be whether it bears an interest or not, the accessibility of the money and the amount of fees that come with the account. Focusing on the most important features will also help you focus on the accounts that may be the most suitable for you.
Compare different banks and their offers – lastly, when you have decided what you need the account for and what type of the account you would like to use, make sure to compare the same type of the account in different banks. The fees, interests and terms and conditions differ largely from bank to bank. Therefore, do not hesitate to use your right to choose the best deal and the account out of which you will get the most.
In the world of finance, scams and frauds of all kinds are unfortunately very common. They can be found in a range of areas: lottery, credit and debit cards, work-at-home, online shopping and even charity. The type of fraud we are going to deal with in this article is bank account fraud, which is also very common and everybody can be a victim of one.
Bank account fraud works as follows – it will typically be pulled off by someone you do not know, but it can even be done by some of your acquaintances and people you know, but you are not very close to. They will ask you to cash a check they give you and put the money into your personal bank account. After doing so, you should withdraw a part or all of that money from your bank account and use it for a specified purpose, which will seem reasonable and legitimate. However, the check is fraudulent, and since you have deposited it into your account, when the fraud is discovered, your account will be cleared for the amount you have previously withdrawn, and you will be considered responsible.
Scams such as this one are often used on the individuals looking for a job, no matter if it is an online or any other type of job. It is also common with people searching for dating opportunities, who sell different items or even people who work for a charity and who are generally willing to help someone in need.
Scammers who pull off this sort of scam usually require you to act quickly and leave you no time and space to think and use your common sense. Instead, they rush you into cashing in the check, because they know that some time should pass before the check is discovered as fraudulent, and they want to get their money before the check is proven as having no cover.
No matter how common this scam is, there are certainly ways of protecting yourself from it. First of all, feel free to be suspicious. Question every offer that seems unreasonable and suspicious, and always make sure to do some research and investigation before you accept anything that could get you involved in any kind of transactions. In this situation, be suspicious when you are asked to cash someone else’s check, especially if you are required to immediately give out the part of those funds to someone. Keep in mind that you are liable for every sum of money that goes through your bank account, so make sure to respect the terms determined by your bank and related to the type of the account you have.
If you get an offer like this, feel free to ask the offer giver to verify the legitimacy of the company or an individual he claims to stands behind. If you have any suspicions, you may contact your bank and report the issue, because they will be able to help you in these situations. Last, but not least, use your common sense, because if you get an offer that seems too good to be true, it most probably is.
Credit cards are a type of revolving credit. They are very simple and easy to use, but that simplicity has a high cost. The interest payable on a debt that is not repaid until the due date every month – usually higher than the interest on any other type of loan. In addition, often there are a number of hidden costs that significantly increase the cost of Use. Therefore, the ideal would be to use a credit card only when the whole debt can be repaid quickly. Otherwise, other types of loans may be more favorable.
If you decide to use a credit card, here are some tips on how to use it in the best way:
- Find a card with the lowest interest rate – keep in mind that the interest rate on cards of different banks may vary considerably, for example, from 1.4% to 3% on a monthly basis. This means that the annual interest rate is 16-36%!
- Find a card with the lowest fee – banks charge an annual fee for use of the card, and it can vary significantly.
- Make sure the allowed limit on the credit card you can afford – do not increase the limit just because your bank offers this option or because you know that you can spend it.
- Repayment of the entire credit card debt each month to avoid high interest. Never pay only the minimum amount – if you cannot repay the entire amount of the debt, pay more than the minimum each month. If you only pay the minimum amount, you will need years to repay its debt, assuming that no longer use the card.
- Do not use a credit card to withdraw cash – bank for this service charge very high fees, and you will be calculated high rate of interest on the amount that you raised from the moment of making money – not from the date when you spend it.
- Avoid using more than one credit card – even if you do not use all the cards in your possession, you will pay the annual fee for use.
- Avoid using credit cards – sometimes it is easier to leave the card at home, but resist the temptation to use it!
- Get familiar with your responsibilities in case of card loss or identity theft – This means that if someone misuses your credit card, you will be responsible for all costs incurred.
Although the obligation to repay only 5% of the debt on the credit card seems very tempting, it is a dangerous option. Because it can be responsible for ages! Minimum repayments of debt on a credit card are mathematically designed so long that lasts longer. The reason is that constantly repays 5% of the outstanding amount. Banks in this way very well earn given the very high interest rates they charge.
Repayment of debt on a credit card is confusing because of the war depends not only on interest. The whole trap “minimum repayment” is the fact that the required payment only of a certain percentage of the outstanding debt. For credit card payments, interest is calculated each month, so the interest is calculated on interest. It is therefore easily to happen that the largest part of the debt becomes just the interest.read more
How many times has happened to you that you were left with no money in your pocket? You went to the bank that has rejected to give you a loan, and your colleagues just shrugged with their shoulders because not even they could help you. There are online sites that will give you a payday loan. Much needed money that you could not get from the bank by taking a loan…because, according to them, you are incapable for taking a credit there; also, you do not have a contract for permanent, or your employer does not send the entire salary to your bank account… So, feel free to contact companies that provide payday loans that with will give you fast loans without the certification from the employer.
Why should you try payday loans without certification from the employer? Simply because, you sould just contact these kind of corporations and within 15 minutes they will approve and pay out money to you! Access is very easy and requires you only 2 minutes to fill out the application form and submit to them the necessary documents.
To withdraw payday loans without certification from the employer does not require standing and waiting in lines, wrinkling at the counters, a ton of paperwork and extra costs of public notaries.
Do not allow to yourself to miss any money anytime! Get rid of the accumulated debts, pay bills, close your old loans and give your family a nice gift. Payday loan companies do not look at whether you are employed for a definite or indefinite period so that there will be no problem to approve loans without certification from the employer even though it may seem unreal to you.