Understanding the Difference Between Secured and Unsecured Loans

Deciding to take out a loan is not a decision that should be made lightly. There are so many factors to take into consideration and if you have poor credit, then the decision is even bigger than if you had a stellar credit report.
In all honesty, not everyone has the perfect credit report and many people go through some financial hardship at some point, a hardship that remains on their report for years restricting what they can and cannot do and whether or not they can apply for a loan and be successful in their application.
There are two main types of personal loans that you need to be aware of, both of which are possible with a bad credit report. The first is secured and the second is unsecured. Both offer advantages and disadvantages.
Secured loans are often preferred by lenders because they reduce the risk to the lender. These personal loans are usually offered for larger amounts, maybe you want to do some renovations to your home or build an extension on your existing property. They require security, this usually means putting your home up as collateral.
The advantages of a secured loan are that because your home is used as security, your interest rates tend to be lower. You pay the loan back in monthly repayments, which can be fixed or not. Be aware if you choose this loan and don't fix the repayment amount, the repayments could increase or there could be a lump sum payable at the end of the loan agreement.
The disadvantage to secured loans, whether you have a poor credit history or not, is that should you be unable to repay the loan for any reason, there is the possibility of losing your home, which will be sold to repay the amount you owe. This is not a situation anyone wants to find themselves in.
Bad credit unsecured loans are the leading choice which eliminates the risk of losing your home and reduces the risk to you, while increasing the risk to the lender. With unsecured loans you get offered a loan at an agreed repayment amount, you make regular monthly payments until the loan is paid back.
Bad credit unsecured loans don't require any security and are offered on smaller amounts, usually up to around $10,000. While these loans offer a higher interest rate, they do reduce the risk to you and the risk of losing your home should you miss a payment or two.
As with any loan, whether you choose secured or unsecured, you need to take some steps before applying. Often you choose a personal loan because you need urgent cash that you don't have available in the bank. Banking institutions these days make it exceptionally difficult to secure any loan, they expect you to have cash in the bank and a stellar credit report. There are lenders online that will help you get the funding you need even with a bad credit history.
Before deciding between the two types of loans available, it's a good idea to get your hands on your credit report and see if there is any way of improving it before you apply. If not, then consider how the repayments of a bad credit unsecured personal loan will affect your monthly budget and ensure that you can repay the amounts each month without going into default.
Going into default will only leave you with even more money you have to pay and more bad news on your credit report, which is the last thing you want.

Questions to Ask When Applying for Installment Loans for People With Bad Credit



Installment loans for people with bad credit are also known as unsecured loans. These are loans for smaller amounts of up to around $10,000 and don't require any security. They are available to those who have struggled with their finances in the past at slightly higher interest rates, enabling you to get the cash you need quickly and easily.
There are a number of factors you have to take into consideration when applying for installment loans for people with bad credit and the first is the interest rate. Each lender will offer you a different deal, some may offer longer terms, others may only offer a short term solution. They will all add interest to the owed amount. With bad credit comes an increase in risk to the lender, therefore you may find you will pay a slightly higher interest rate than if you had the perfect credit score.
Once you determine what interest you are being offered, you need to take a close look at the repayment amount. Installment loans for people with bad credit are offered over an agreed period of time, this can be anything from twelve to sixty months. The length of the terms combined with the amount borrowed will result in a monthly repayment amount which must be met.
It is imperative that you look closely at the agreed monthly repayment amount before signing the contract. Work out your budget and ensure that you can afford the repayments without going into default. Going into default will result in more interest and penalty fees being added to the amount you still owe, increasing the overall loan amount considerably.
Another question to ask when applying for installment loans for people with bad credit is that should your application be approved and you decide to go ahead with the loan, how long will it take before the money is available to you. This is an important question to ask, especially if you need the money for emergency vehicle or home repairs. You may have decided on a loan to fix your vehicle so you can get to and from work, this is an emergency, so the sooner the money is in your bank account, the sooner you can have the repairs done.
The lender's reputation is another very important factor to take into consideration. There are hundreds of lenders that are willing to take a chance on a person with a poor credit history. Unfortunately not all of them are reputable and many have bad online reviews. It's worthwhile to see who can offer you the installment loan and then do some research to learn as much as you can about the company before making your final decision. Things to look for is reputability, customer service and trustworthiness.
Take some time to sit down and work out how you are going to repay the loan and whether there is a chance you may be able to pay it back a little quicker. If you think you may want to add a few extra payments in each year, then find out from the lender if they allow faster payments and if so, do they charge if you pay the loan off faster than the agreed period. Remember by you paying off the loan faster, they are losing interest. Some lenders charge a fee if you want to pay up your loan in a faster period of time.
Check to see if the lender offering you the installment loan for people with bad credit enables you to take a payment holiday. A payment holiday can be a valuable tool which can help you take a break from repayments should you find yourself in further financial trouble, such as losing your job or being injured and unable to work for a certain period of time.

How to Quickly Set Up an Advertising Review Checklist for an Adjustable Rate Mortgage Loan



Every lender who is creating mortgage ads should have checklists available to use to confirm compliance with applicable rules and requirements. So what about a checklist for an adjustable rate mortgage advertisement? What should be in that check list? Here's some ideas about what should be covered in your ARM mortgage advertisement checklist.
First, note that the majority of these rules come from Regulation Z and are discussed in the section of the law that covers the advertisement of mortgage loans. The ARMS we are discussing here are covered in the closed end credit section of the advertising rules in Regulation Z.
Your checklist should include information about the start rate for the advertisement. For example, you should say the start rate is 3.75%. You should also immediately show the APR adjacent to the interest rate in same font color and same font size. So APR on this example will show at 3.99%. Next you should say how long the initial rate will stay in effect.? If it's a five year ARM, the answer is five years.
Next, you should state what the loan amount is and your checklist should identify the interest rate. So your checklist would show a Loan Amount of $200,000 and a lien position of "first". After the lien amount, you should consider showing the amount of the finance charges in dollars. Lets say its $2300. This is not required but is good to consider. Another thing to consider is to mention the number of discount points if any so the consumer knows a bit more of the costs to receive this advertised rate.
The other required disclosure is to describe the index. In this case, we are advertising a LIBOR Arm loan. What's left after that, use a rate available as of date (let's say May 1, 2016) and refer to the margin on the loan (3.25%). Also, don't forget to mention the term of the loan which in this case is 30 years.
So what else is needed? Regulation Z says you need to give the consumer more information about what the payment will be at the end of the initial fixed rate period. You can do this by describing the rate will be calculated using the margin plus the index subject to certain caps. There is a cap that limits the amount of the rate change at the first change, and a cap that limits subsequent rate changes. There is also a "life cap" that limits the maximum rate increase over the term of the loan.