The deadline is approaching for college graduates to consolidate their student loans in order to take advantage of some special deals.
If students do not consolidate now, they'll be missing out on discounts that will end when the month of October begins. However, it is possible that graduates could secure even lower interest rates if they wait until July to consolidate.
Counselors are urging graduates to check out loan programs fully before signing on the dotted line. It's important that grads know exactly what benefits they'll miss out on if they don't consolidate before the end of September.Congress has approved legislation that will eliminate close to $21 billion in federal subsidies to student loan companies on new loans in October. As a result, lenders plan to cut out discounts for graduates when September ends.
For example, Sallie Mae has stated that it will no longer offer this incentive: a 1-point cut in the interest rate for borrowers who pay their student loan bills on time for a period of 3 years. The lender has sent notices to 43,000 borrowers, more than half of whom have decided on consolidation by the end of September.
Recently, the Federal Reserve reduced a benchmark interest rate which affects the rate for variable-rate student loans. Additional rate cuts may be on the way, which would mean that borrowers can obtain an even lower rate if they wait until the summer months to consolidate their student loans. In fact, some experts say that graduates may be much better off if they wait before consolidating.
Borrowers should also keep in mind that if you extend your loan through consolidation, you may end up paying more in interest over time. Therefore, while you may experience a short-term gain, you may ultimately face a long-term loss.
Sunday, December 2, 2007
Personal loans
First of all, it’s important to understand the nature of a personal loan. Unlike a home loan or a car loan, a personal loan is unsecured, meaning that you are offering no collateral to secure the loan. That makes the loan inherently risky for a bank or other lending institution.
In order to determine whether you can qualify for bad credit loans, it’s first necessary to fill out an application. A typical personal loan application requests your full name, Social Security number, income, and other pertinent financial information. A loan officer must determine your credit worthiness, even in the face of your bad credit history.
With a personal loan, you may not have to undergo a credit check. The money may be deposited within 24 hours into your checking account. You can use the cash for virtually anything—but especially for emergency situations. However, the amount you can borrow may be limited to no more than $1,500.
A loan officer may assist you in making your application more appealing by encouraging you to borrow a smaller amount of money or make payments over a longer span of time. In this way, your monthly payments can be lowered, increasing your chances of getting a loan.
The loan officer must also determine whether you have a steady income. If you have held the same job for a number of years, for instance, you’re more likely to obtain the loan. However, if you’ve changed jobs several times over the past few years, you may be less likely to get the loan you want.
The application process for a personal loan is usually relatively quick. Another advantage is that it does not require a formal closing. The application process consists of a written application, a promissory note, and a payment schedule. As a result, there is less paperwork and hassle involved in obtaining a personal loan than in obtaining a secured loan.
At times, it may be possible to obtain a personal loan from a professional organization to which you belong. The main advantage to such a loan is that the annual percentage rate, or APR, may be much lower than the rate you would get at a traditional finance company. For instance, you may be able to get an APR for as low as 7.99 percent, which would be considered a real bargain for a personal loan. You also may be able to borrow a great deal more money from a professional organization than you would be able to borrow otherwise—the amount you can borrow may be as much as $25,000.
With such a loan, you may be able to defer payments for a period of a few months. You also may face no penalty for early repayment. The terms of the loan may also be quite generous, allowing you to make payments over a period as long as 84 months. You can use such a loan to consolidate debt, pay education expenses, or pay home improvement costs
In order to determine whether you can qualify for bad credit loans, it’s first necessary to fill out an application. A typical personal loan application requests your full name, Social Security number, income, and other pertinent financial information. A loan officer must determine your credit worthiness, even in the face of your bad credit history.
With a personal loan, you may not have to undergo a credit check. The money may be deposited within 24 hours into your checking account. You can use the cash for virtually anything—but especially for emergency situations. However, the amount you can borrow may be limited to no more than $1,500.
A loan officer may assist you in making your application more appealing by encouraging you to borrow a smaller amount of money or make payments over a longer span of time. In this way, your monthly payments can be lowered, increasing your chances of getting a loan.
The loan officer must also determine whether you have a steady income. If you have held the same job for a number of years, for instance, you’re more likely to obtain the loan. However, if you’ve changed jobs several times over the past few years, you may be less likely to get the loan you want.
The application process for a personal loan is usually relatively quick. Another advantage is that it does not require a formal closing. The application process consists of a written application, a promissory note, and a payment schedule. As a result, there is less paperwork and hassle involved in obtaining a personal loan than in obtaining a secured loan.
At times, it may be possible to obtain a personal loan from a professional organization to which you belong. The main advantage to such a loan is that the annual percentage rate, or APR, may be much lower than the rate you would get at a traditional finance company. For instance, you may be able to get an APR for as low as 7.99 percent, which would be considered a real bargain for a personal loan. You also may be able to borrow a great deal more money from a professional organization than you would be able to borrow otherwise—the amount you can borrow may be as much as $25,000.
With such a loan, you may be able to defer payments for a period of a few months. You also may face no penalty for early repayment. The terms of the loan may also be quite generous, allowing you to make payments over a period as long as 84 months. You can use such a loan to consolidate debt, pay education expenses, or pay home improvement costs
Sunday, November 25, 2007
Quality of Loan Portfolio
A high quality loan portfolio means that the bank?s loan loss experience is at or above levels set by regulatory agencies. One can infer that the bank therefore takes fewer risks. Bankers are not supposed to be entrepreneurial or take risk. A banker has never been rewarded for taking risk! The banking system rewards those who can decline any borrowing request outside of the underwriting parameters. Loan portfolio quality that?s high = low loan accessibility to business owners. It stands to reason that banks are not risk takers based upon the low returns they are willing to accept.
Banks with four star excellence ratings seek out commercial customers who are stable and have limited need to borrow. The other 72% of business customers are left outside the circle of these banks. Where do these businesses turn to Cash Flow the Working Capital needs of their business? Where do they go to fund opportunities for growth and development of new market niches? More often than not they turn to the widely accepted world of non-traditional funding sources - preferred SBA lending companies for real estate and fixed asset needs, leasing companies for equipment needs, and Factoring companies for Working Capital needs. These non-traditional funding sources evaluate opportunities to participate by lending funds to small & medium sized businesses. Non-traditional lenders rates on borrowed funds may be higher than traditional bank rates, but their mission is to employ funds to obtain a return, not to let cash sit idle on the sideline in order to obtain a four star excellence rating. Their pricing reflects the perceived risk. And, they are not restricted by regulatory bureaucracy or fear of losing their four star rating as banks are.
In this ever changing world, business owners are advised to explore opportunities outside of the traditional financing channels. Before a need arises a business should be familiar with alternative funding sources. And perhaps, when your bank informs you that they continue to achieve a four-star excellence rating?it would be wise to investigate your options pertaining to Working Capital and Cash Flow solutions
Banks with four star excellence ratings seek out commercial customers who are stable and have limited need to borrow. The other 72% of business customers are left outside the circle of these banks. Where do these businesses turn to Cash Flow the Working Capital needs of their business? Where do they go to fund opportunities for growth and development of new market niches? More often than not they turn to the widely accepted world of non-traditional funding sources - preferred SBA lending companies for real estate and fixed asset needs, leasing companies for equipment needs, and Factoring companies for Working Capital needs. These non-traditional funding sources evaluate opportunities to participate by lending funds to small & medium sized businesses. Non-traditional lenders rates on borrowed funds may be higher than traditional bank rates, but their mission is to employ funds to obtain a return, not to let cash sit idle on the sideline in order to obtain a four star excellence rating. Their pricing reflects the perceived risk. And, they are not restricted by regulatory bureaucracy or fear of losing their four star rating as banks are.
In this ever changing world, business owners are advised to explore opportunities outside of the traditional financing channels. Before a need arises a business should be familiar with alternative funding sources. And perhaps, when your bank informs you that they continue to achieve a four-star excellence rating?it would be wise to investigate your options pertaining to Working Capital and Cash Flow solutions
Working capital and cash flow: Capital Safety Level, Quality of Loan Portofolio
Recently, my newspaper reported that a local bank ?...earned a four star excellence rating for the sixty-fourth consecutive quarter.? That?s sixteen years of four star excellence! The article went on to say that the ?rating is based on a complex formula that includes ?capital safety levels, quality of loan portfolio, and the ability to meet obligations?? The press release was designed to showcase the value of this bank and demonstrate its prominent position in the economy.
As a former banker with over seventeen years of commercial experience, I chuckle at this information being tossed around by the bank and its regulatory agencies for self promotion and marketing purposes. I suppose that if you are a blue-hair whose purpose is to find somewhere other than under the mattress to keep your retirement funds, this article was good news. But what does it mean to the business owner or entrepreneur looking for a Funding partner to participate in an opportunity to grow, increase jobs and profit? In a nutshell this type of information should be a wake up call to find another bank-here?s why.
Let?s explore the underlying meaning to business customers behind a portion of this ?complex formula.
As a former banker with over seventeen years of commercial experience, I chuckle at this information being tossed around by the bank and its regulatory agencies for self promotion and marketing purposes. I suppose that if you are a blue-hair whose purpose is to find somewhere other than under the mattress to keep your retirement funds, this article was good news. But what does it mean to the business owner or entrepreneur looking for a Funding partner to participate in an opportunity to grow, increase jobs and profit? In a nutshell this type of information should be a wake up call to find another bank-here?s why.
Let?s explore the underlying meaning to business customers behind a portion of this ?complex formula.
Secured loans are a popular way of raising funds for homeowners
Secured loans are a popular way of raising funds for homeowners, and there's no denying that taking one out can be a great way of organizing your finances. Debt consolidation, financing home improvements, even paying for a new car - secured loans can be used for all of this. However, as with any financial agreement, it's only sensible to take your time when deciding whether to proceed. After all, with a secured loan, you could be betting your home on a successful outcome. So what things do you need to consider before finalizing your application?Firstly, as just alluded to, it's an inescapable fact that taking out a loan that's secured on your home could potentially put your home at risk. Should you fall behind on your repayments, the lender can apply to seize your property, evict you from it, and then sell it at less than market value to clear the debt. Scary, huh?This is, of course, a fairly rare outcome, and most lenders are happy to work with you if you do get into trouble, using repossession as a last resort, but you should consider this carefully before taking out a loan, especially if you'll be converting existing unsecured debt into secured though debt consolidation.The second problem with secured loans is that they tend to be for fairly high amounts, and repaid over a fairly long term. This means that the amount of interest you'll pay over the entire term may be substantially higher than you might think. Even with a low APR, secured loans aren't necessarily a cheap option.Thirdly, if you use a secured loan to wipe out some existing unsecured debt, you may get the illusion that your debt levels have lessened. There's then always the temptation to use your credit cards etcetera to build up fresh debts, so you now have secured AND unsecured debt hanging over your head, and you'll be in a worse position than ever before.A fourth problem with a secured loan is that you'll by its very nature be removing equity from your home. In other words, the value of your home and the amount of debt secured on it will be much closer. Considering that today's property prices are at record highs, and that many experts are predicting a fall in the near future, you could then be left in the unenviable situation of owing more than your home is worth - that is, you could fall into negative equity.The fifth problem we'll cover is also related to the removal of equity from your home. Should you in the future wish to take advantage of a refinancing offer to reduce your mortgage costs, it helps to have as much equity available as possible in order to secure the best deal. A secured loan now could harm your remortgage prospects in the future.So has all this put you off the idea of getting a secured loan? It shouldn't do, as you may still benefit greatly from the financial restructuring one will allow you to do. However, it's a big decision, and this is why you need to be aware of the possible problems first, so that your decision can be as informed as possible
F.H.A. and V.A. Loans
If you find it difficult to qualify for a conventional loan, U.S. government loan programs from the Federal Housing Authority (F.H.A.) or the Department of Veterans Affairs (V.A.) may be helpful. Designed to promote home ownership by offering lower qualifying ratios and reduced down payments, F.H.A. and V.A. loans are not issued by the government, but instead are made by private lenders who are protected by government insurance in case the borrower defaults. Unlike conventional loans, both F.H.A. and V.A. loans have maximum allowable amounts and may require additional paperwork and inspections before the loan can be approved.
Using Time Wisely
The length of time you plan to live in a house should be an important factor in your choice of financing. If you plan to stay for 10 years or longer, a traditional fixed-rate mortgage may be your best bet. But if you plan on owning a home for less than 5 years, then the low introductory rate of an adjustable-rate mortgage or hybrid loan might make the most financial sense. In general, ARMs have the lowest introductory interest rates, followed by hybrid loans, and then traditional fixed-rate mortgages
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