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How To Get A Personal Loan Even With A Low Credit Score
It is important that you understand the role that credit score plays in your ability to obtain finance. It will not only determine whether you get approved or not, but also the interest rate you are going to pay, the loan amount you will be able to get and the length of the loan too.
Credit score is a number that determines your credit situation; it ranges from 450 to 850. The higher the number is, the better your financial situation. If your credit score is below 600 you will probably find it difficult to obtain a loan. However, there are some lenders willing to take the risk and offering options for people with bad credit.
Different Types
There are basically two kinds of personal loans: Secured and Unsecured personal loans. Secured loans imply that the applicant offers some kind of asset as collateral; it may be a house, apartment, car, van, etc. This kind of loans have lower interests since the risk involved for the lender is also lower as he can collect the money obtained from the sell of the asset if the client fails to pay off the loan.
Unsecured personal loans, on the other hand, do not require any collateral, thus, the risk involved for the lender is higher and so is the interest rate. However this kind of loans are the right option for those that are not homeowners and do not have other assets to secure the loan. It needs to be pointed out that though the lender has no direct legal claim over a particular asset when it comes to unsecured loans, he is still entitled to recover his money by taking legal action against the debtor and all of his properties if he stops paying the loans monthly installments. This damages claim usually takes a lot longer than the repossession action associated with secured loans and thats the main reason why secured loans are cheaper. In the event of lack of payment, the creditor will be able to recover his money sooner.
Lately, unsecured personal loans have also become a common choice for home owners. Since the loan industry has become increasingly competitive, the interest rate charged for unsecured loans has been reduced and there is not such a big difference between secured loans and unsecured loans anymore. Those homeowners who are not willing to risk their property are now opting for unsecured personal loans instead of home equity loans which used to be the common financial choice for homeowners in the past.
Online Lenders
There are more and more lenders offering this type of loans, especially online lenders who are particularly fond of the high demand of personal loans. The proliferation of online lenders dealing with personal loans has reduced the interest rate that they are charging to minimums never seen before.
So if youre in need of money, do not hesitate, a personal loan is the right option for you. See in which category of applicant you fit in; and taking that into account make yourself ready for online shopping in search for a lender. You will find out thats the easiest and more comfortable way of obtaining a loan that suits your needs.
Home Loan Programs For Military Personnel
The Unites States Veteran’s Administration has made available a series of lending opportunities to military personnel who have served in active duty in the Marines, Navy, Air Force, Army and Coast Guard, and have not received a dishonorable discharge. Generous VA purchase, refinance and streamline loans can save the U.S. veteran significant money over the life of the loan with lenders eager to compete with lower interest rates and the “no down payment” policy applied to some purchase agreements.
Some of the benefits from a VA purchase loan for the veteran’s primary residence include restrictions on the amount of closing costs applied to the mortgage, no penalty for early loan balance pay off, and offers an assumable mortgage to qualified candidates who wish to assume.
The VA refinancing program resembles the private sector loans that enable the home owner to pull cash from the property’s equity and refinance even when the payments are in delinquency. However, the new terms and conditions will be regulated by the private lender.
The streamline refinance option, or IRRRL, allows the veteran to change a short-term ARM to a long-term fixed mortgage, with no cash out of pocket. In some cases, the lender may require a property appraisal and check the applicant’s credit score.
The VA lending procedure is similar to a traditional mortgage loan in that the VA recipient is entitled to a property appraisal. The approximate market value of the home is estimated on the CRV, or certificate of reasonable value and the paperwork is sent to the lending institution for approval. In most cases, the VA will accept appraisal certificates from appraisal companies that have been in business for at least five years.
The veteran may purchase a home at any market price, however, the VA lending system does not grant a loan balance to exceed the CVR findings. The over-budget difference in cost may be paid in cash or carried by a private lending institution. In situations where the CVR price is higher than the asking price, the veteran does not have to make a down payment on the property.
The qualified veteran may select a long-term fixed rate loan to extend to a maximum of 30 years and 37, or choose a an ARM. Applicants for the short-term ARM must adhere to VA regulations that require the loan to have a limited up or down interest rate of 1 percent, a final interest rate cap not to exceed five points above the initial interest rate at signing, and ensure the monthly payments will adjust on the annual date if signature.
To apply for a VA housing loan, the applicant must fill out a “certificate of eligibility” or complete the VA Form 26-1880 along with papers verifying active duty since September 16, 1940. In addition, you must include copies of your military separation papers. Select a real estate agent to help you with the house hunting and sign the purchase agreement. Call your local VA lending office and apply to the mortgage agency of your choice. The VA will take it from there, and you’re ready to move into your new home.