Bad Credit Loans Blog

Great Tips and Advice for Managing Your Money

credit score picCredit score is one of the most important aspects of an American’s life today. Individuals who have good credit scores qualify for the best interest rates, thereby paying less finance charges on loans and credit cards. People can save a lot of money with low markup rates and that money can be used to pay off debts faster and invest elsewhere. Credit scores primarily depend on five factors:

  • Credit usage
  • Payment history
  • New credit inquiries
  • Age of credit accounts
  • Credit mix

People who file for bankruptcy observe a significant drop in their credit scores for obvious reasons. Similarly, paying your bills past the due date and maxing out your credit cards produces a similar effect. If your credit score is below 500, then applying for a loan is certainly a bad idea. Allow your score to surpass 700 before thinking about leasing a car or mortgaging a property. Here are five steps to help you improve your score efficiently:

1.   Start Paying your Bills on Time

Perhaps the sole reason for your dwindling scores is a habit of issuing late payments. Most late payments are subject to a surcharge, which means you are also losing more cash. You will have to establish a budget for your regular expenses, such as utility bills, internet, and T.V subscriptions. You must always keep enough money aside for paying your bills, so you are not fumbling for pennies when the time arrives. If you forget to submit your bills on time, set up reminders on your phone’s calendar. It may seem like too much extra work in the beginning, though you will eventually get the hang of it.

2.   Decrease your Credit Utilization

Credit cards are not your best friends, but merely an emergency fund. Do not consider them as a ticket to unlimited shopping sprees. Remember that it is not free money; you have to pay back every cent with interest later on. Primarily rely on your debit cards, and only turn to credit cards as a last resort. Your credit utilization must fall within 30% of your card’s spending limit.

3.   Do not Open or Close Credit Accounts

When your credit score is down in the dumps, do not close unused credit cards. This will increase your credit utilization ratio, thereby further deceasing your credit score. Do not apply for new credit either, as enquires too have a negative impact on the score. Managing existing credit cards shall be the only priority.

4.   Organize a Payment Plan to pay off Debt

credit repair with calculatorIf you are struggling with debt owed to multiple creditors, organize a reasonable payment plan to get out of the situation. Start by talking and negotiating with your creditors to set up an installment schedule that works well with your current income. Paying off secured and unsecured debts like utility fees, medical bills, student loans, mortgage, and pending credit card payments will readily improve your score.

5.   Always check your Credit Report for Errors

Sometimes a low credit score may seem unexpected, so you must go through your credit report to make sure. If you spot errors in your credit history, report them immediately. The entity in charge will make the requested corrections and recalculate your score.

Author Bio

John Adams is a paralegal who writes about widespread legal and social issues. He helps readers overcome challenges and solve many personal problems the smart way, rather than the hard way. He aims to reach out to individuals who are unaware of their legal rights, and make the world a better place.

Financial planning is difficult when you’re single, but matters tend to get more complicated when you need to account for your partner, your kids, or both. Budgeting and making a savings plan isn’t always fun or easy, but it is necessary. Below, learn about a few steps you can take now to pave a smooth path for your family’s future.

Outline Your Goals

Everyone has life goals, so you’ll want to start by defining what these are for you as soon as possible. Perhaps you dream of owning a home, becoming debt-free, or retiring early. All of these dreams are attainable if you have a solid plan in place.

It’s easy to form a vague idea of your goals, but making them concrete is sometimes a challenge. If you don’t know where to start, Zen Habits suggests writing down ideas to help define what’s most important to you. This simple practice can be incredibly effective.  woman holding toddler

Learn How to Tackle Debt

For many families, debt is a major stumbling block on the path to success. If you’re dealing with student loans, credit card debt, personal loans, or a car loan, it can sometimes feel impossible to get out from under your payments.

There are numerous strategies for paying off debt, but the right one for you will depend on your individual situation. Forbes explains that the popular “snowball method,” which involves paying the smallest debts first regardless of interest, works great for some people.

However, you should always weigh other options to find the best one for you. Depending on the type of debt you have, it may make more sense to chip away at each debt equally or focus your attention on accounts with the highest interest rates first.

Seeking credit counseling from a reputable organization might be a good step if you don’t know where to start. In dire situations, you may also consider debt relief. However, this option can have major implications for your financial future. 

Start Saving for Specific Goals

A savings plan is just as important as your plan for handling debt. One of the easiest ways to start saving is to schedule recurring deposits to your savings account from your checking account. However, you might make more progress if you set specific goals.

Setting a savings goal starts with determining how much you need and knowing when you need it. For example, you may want to have $10,000 saved up for a down payment on a home within the next five years. With this basic information, you can determine how much of your income you need to save each month.

There are many savings strategies, but for many people, following the 50/30/20 rule works well. With this approach, you spend 50 percent of your income on needs, such as food and housing, and 30 percent of your income on wants, such as entertainment or hobbies. The remaining 20 percent then goes towards savings. Don’t forget the importance of creating an emergency fund.

Achieving Your Goals

When trying to achieve a specific financial goal, it helps to research everything that’s involved in making it a reality. For example, if you want to buy a house at some point down the road, it is important to understand your financing options. Each type of mortgage has its own credit requirements, interest rates, and down payment standards.

Generally speaking, you can choose between conventional financing and federally-backed loans, such as FHA loans. Conventional loans are more flexible and offer fixed or adjustable rates, but also require you to have more money for a down payment and a better credit score. FHA loans are a good option if you have limited money for a down payment and have a poor credit score. But there are still long-term costs, like annual mortgage insurance premiums.

Financial planning is one of the best things you can do to provide for your family. Keep in mind it’s not as simple as sitting down once and making a plan for the rest of your lives. A good financial plan is revisited often to ensure it still aligns with your current and future goals.

 

Blog contributor: Emma Grace Brown

Deferring your loan payments doesn't have a direct impact on your credit scores—and it could be a good option if you're having trouble making payments.

Putting off your payments can impact your finances in other ways, though. Your loans may continue to accrue interest, and you might pay more in the long run or have larger monthly bills once you resume making payments. It still may be a worthwhile trade-off compared with missing a payment altogether, which could lead to late payment fees and hurt your credit.

How Does Deferring a Payment Work?

When you request a loan deferment and your lender agrees to the arrangement, you're allowed to temporarily stop making payments on the loan. You don't need to worry about late payment fees or your loan servicer reporting missed payments to the credit bureaus.

Generally, you'll need to apply if you want to put your loan into deferment. The process can vary depending on the type of loan you have and which creditor or loan servicer you send your payments to each month.

  • If you have a federal student loan, you can submit your request to your loan servicer. You can review the eligibility requirements for loan deferment or forbearance (a similar option that lets you temporarily stop making payments) on the Department of Education's website. Your loans may automatically be put into deferment if you enroll in an eligible school with at least a half-time course load.
  • With an auto loan, the lender may refer to the arrangement as a loan extension or postponement. Each lender will have different criteria you must meet before they grant an extension. For example, you may need to show that you're requesting the extension due to a temporary setback, such as a medical emergency.
  • If you're having trouble with mortgage payments, you can contact your mortgage servicer to discuss your options. One option may be able to place your loan into forbearance and temporarily stop making payments or make smaller payments. You can get free assistance from a Department of Housing and Urban Development (HUD) counselor who can help explain your options.

Whether it's called deferment, loan extension, postponement or forbearance, continue making your payments until you're certain that your lender or loan servicer has approved your application and is allowing you to stop making payments.

Also, remember that these arrangements are temporary and you may need to reapply if you want to keep postponing payments.

Can Deferred Payments Affect My Credit?

When a lender approves your deferment request, it should report that your payments are currently deferred to the credit bureaus. While this appears on your credit report, the deferment mark won't directly help or hurt your credit scores.

The accounts can continue to impact your credit scores, though. For example, your account will continue to age, which lengthens your credit history and could help your scores.

Also, keep in mind that if you apply for deferment and stop making payments, but your lender denies the deferment request or a payment is due before it's approved, the late payment could still get reported to the credit bureaus and hurt your scores.

If you missed payments before putting your loan into deferment, those late payments won't be removed from your credit history. However, if your account was past due when you entered deferment, their impact may temporarily be ignored while your loan is in deferment.

Will I Still Be Charged Interest During Deferment?

There are certain situations when you don't need to pay the interest that accrues during deferment. For example, if you have subsidized federal student loans, the government may make the interest payments during deferment (but not for student loan forbearance).

Subsidized student loans aside, you may be responsible for repaying the interest that accrues while you've postponed your payments. You may get a slight break if your interest rate only applies to your loan's principal balance during deferment—meaning you won't be charged interest on the interest that accrues.

However, even then, once you start making payments, the accrued interest could be capitalized—added to your principal balance—and your interest rate now applies to the larger principal balance. As a result, more interest may accrue each month after your deferment ends.

Depending on the arrangement, you may add additional loan payments to the end of your loan's term or your monthly payment amount may increase. In either case, you wind up paying more overall than if you hadn't deferred your payments.

For mortgages, you may have to make a large lump-sum payment for the entire amount past due that accrued during the forbearance. This can include the missed loan payments, interest and insurance.

Loan Deferment Alternatives

In the cases where you may have trouble affording your loan payments but don't want to put your loans into deferment, your deferment request is denied or you've reached the maximum amount of time your loans can be in deferment, you'll need to consider other alternatives.

Your options will depend on the type of loan you have, your lender or loan servicer, and the reasons you're having trouble affording payments. They may include:

  • Your lender could offer alternative hardship options, such as temporarily lowering your interest rate or monthly payment amount.
  • You may be able to switch to a different repayment plan with a lower monthly payment.
  • You might be able to permanently modify your loan agreement and lower your monthly payments.
  • You could refinance your loan and your new loan could have a longer term or lower interest rate, which can lead to a lower monthly payment. However, this may require good credit and a higher income.

Having Trouble? Act Quickly

If you're currently faced with a bill that you can't afford, or foresee being unable to afford bills due to losing a job, a medical emergency or another crisis, reach out to your lender or loan servicer right away. They may be able to explain your options and figure out an arrangement (deferment or otherwise) that can keep your account in good standing and help you avoid late fees and hurting your credit.

Blog Author: 

Growing a family can throw a wrench in your finances, no matter how well you budget. But planning for the future is a crucial part of protecting your loved ones and ensuring you can reach your goals. Here are three smart ways to begin planning for your finances and future, plus how you can start today.

money to pay debtsTake Small Steps Toward Saving for a Down Payment

If one of your financial goals isn’t to save for a home, you might want to reconsider. Buying a home is often the best decision for couples and families who hope to one day live rent-free. That said, it’s not always a simple financial path toward homeownership. The first hurdle is coming up with a down payment.

It’s possible to purchase property without a down payment, such as by using a USDA or VA loan, if you qualify. But by putting at least five percent of the purchase price down, you may be eligible for a better rate. That means increased savings over the life of the loan—and a more manageable monthly payment.

Plus, as Bankrate highlights, the average down payment in 2019 was 12 percent. So, you don’t need 20 percent down to buy a home these days. What you do need is a plan—and a family budget—for putting away funds so that you can stop renting and start owning.

Invest in Your Retirement from Day One

Though you may have good intentions, neglecting your retirement account to pad your children’s college fund isn’t wise. Focus on your retirement first, and budget for college savings second. After all, your child could always take out student loans or receive grants for college expenses.

In contrast, you have no safety net if you skip diverting cash for retirement. Most Americans receive Social Security after retirement age, but in an ideal scenario, the maximum potential payment would equal $3,790. That said, not every worker waits until age 70 to claim their benefits, which is only one part of the equation when it comes to receiving the highest disbursement possible.

The good news is that it’s not too late to begin building a retirement fund, especially if you start now. Less than half of Americans start saving for retirement in their 20s, while the average age hovers around 31. There’s still time to begin contributing to a 401(k) or IRA, and both involve significant tax benefits. 

Think About (And Beyond) College Funding

Most parents want their children to be able to attend college, and a financial boost is often helpful. But there is more than one way to pay for college, and not every path is right for every family.

The most common college savings option—a 529 plan—offers tax benefits if your child uses the funds for their education. They can choose to use the money elsewhere, but taxes will apply at that point. But you don’t have to have thousands of dollars in a savings account for college. NPR’s expert recommends that parents start small, if necessary, saving an amount each month automatically. Any balance you accrue will help your child pay for expenses—even if it’s for gas money to get to campus or the cost of their books.

If money is tight right now—or continues to be as your child grows—consider alternatives. For example, many students receive financial aid packages in the form of grants. As CNN explains, you can even “haggle” for a better financial aid offering from the college your child is admitted to. Private scholarships and work-study programs are also options that can ease the financial burden from parents’ shoulders.

It can be challenging to know what to plan for when growing your family. When it comes to finances, though, saving anything is better than not saving at all. Plus, increasing your savings now can help your family buy a home, give your kids an education, and allow you to enjoy a comfortable retirement when the time comes.

Blog contribtor: Emma G. Brown

Photo via Rawpixel

7 Advantages of Installment Loans Online

There are times that you badly need some cash to cover unplanned expenses or emergency needs. But what if your savings can’t shoulder the amount it requires.  In this case, taking out an installment loan is a good idea.

Installment loans are perfect for anyone who needs instant cash because you can get the money within the day of your application, and the repayment term is advantageous on your part as well. The amount of the loan plus interest rate is broken down into smaller portions that you need to pay on a regular basis over the lifespan of the loan.

You can even apply for an installment loan online to make the application process more convenient. If you have some doubts about this type of loan and its online application process, you better read these advantages of availing online installment loans.

Simple Loan Application Process

The number one advantage of online installment loans is that the application process is pretty straightforward. You can avail it wherever you are as long as loan approved handshakeyou have a smartphone, tablet, or laptop.

You just need to read the terms and conditions (read them carefully for your own sake) and fill out an online application form, and then you wait for the approval.

You Can Get Your Much-Needed Cash Fast

Aside from the simplicity of the application process of this type of loan, you can also take out your much-needed money fast. Once you submit your application form, there will be a notification of its status within several minutes.

If the lender approves your application, the amount will be deposited into your account just within a day. This speedy access to money enables you to cover important, immediate expenses timely.

Flexible Payments

Another good thing about taking out an online installment loan is the benefit of flexible fees. Depending on the lender or the locality where you apply for this type of loan, you can decide on the repayment schedule. For instance, you can choose to repay the amount of the loan monthly, quarterly, semi-annually, or annually.

The lender will also match your income volume/frequency so that you won’t find it financially difficult to repay the entire amount. You can also get great deals such as a low-interest rate, depending on the lender you choose.

Lenient Qualification Requirements

Nowadays, it’s challenging to take out a loan if you have a poor credit history. Traditional banks, for instance, impose strict qualification criteria before they approve your loan application, and one of the requirements is that you should have a good credit score.

That’s why online installment loans are advantageous to borrowers who have imperfect credit ratings. It’s because online installment loans offer a more lenient qualification requirement, and lenders who provide this type of loan don’t conduct stringent checks on your credit profile.

Some websites can connect you with various lenders who offer online installment loans. Once they see you fit to repay the entire amount of the loan over a period of time, they’re willing to approve your loan application despite you having a poor credit score.

You Can Pick The Lender That’s Best for You

Well, since there are many online lenders to choose from on the internet, this is an excellent opportunity for you to pick the best deal. You should look at factors, such as the speed of approval, interest rates, loan terms, and overhead fees when choosing a lender.

Moreover, you should make sure to choose a legit website when you’re going to apply for an online installment loan. Read the reviews on the site, whether they’re positive or negative. Read the terms and conditions and privacy policy of the website to ensure that your personal information won’t be compromised.

You Can Get a Higher Loan Amount

Lenders who offer online installment loans also allow borrowers to take out higher loan amounts for longer loan terms. This feature is beneficial if you have to cover costly immediate expenses. 

Higher loan amounts with manageable repayment terms also prevent you from getting multiple loans at the same time. So, if you need a significant amount of money in times of emergency needs or unplanned expenses, consider taking out an online installment loan that offers higher loan amounts.

Rollover Option

It’s an excellent idea to repay a loan on time. Still, circumstances may not be in your favor all the time. For instance, there are times that you’re not able to repay a loan according to the schedule because you use the money for more important matters. Indeed, you don’t know what life throws at you sometimes.

But there’s an option to roll over an installment loan in such a case when you fail to repay it on time. You can also take out another loan with favorable terms and pay off the original one. In this way, you can avoid paying for penalties or having a bad credit record.

Takeaway

Yes, there are several advantages when you get an online installment loan. Most installment loans have a simple application process and speedy loan approval. They also come with lenient qualification requirements, flexible repayments, higher loan amounts, and a rollover option.

Author Bio:

Bree Diaz is a blogger who writes about investing and loans. She often talks about installment loans online and what you should know about them, as well as tips on how to invest your money. Bree is also a musician and a traveler.

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Customer Notice: Personal loans, title loans, and car loans have terms 6 months or longer. There are no early payoff penalties. We currently report to one of the 3 major credit bureaus, TransUnion. However, many factors affect your credit score. Therefore, we can't promise that your credit score will improve while having a loan with us.

Requirements: We are able to service Ohio residents only. Approval depends upon meeting legal, regulatory and underwriting requirements. America's Loan Company may, at its discretion, verify application information by using national databases, including but not limited to Teletrack and any of the national credit bureaus. America's Loan Company may take this information into consideration in the approval process. Due to state and verification requirements, not all applicants for loans may be eligible for approval by America's Loan Company. You may be required to submit additional documents due to state law and qualification criteria.

Products & Services: Products and services offered to customers may vary based on customer eligibility and applicable state and federal law. Actual loan amounts vary. The availability of loans and extensions may vary. Auto loans and secured personal loans are subject to minimum auto value requirements.

Further Personal Loan Disclosures: For qualified customers, America’s Loan Company offers bad credit personal loans with terms of 6 months to 5 years, with APR under 35.9%. As an example, you may borrow $1,500.00 over a 24 month period, with a $10.00 credit investigation fee, $100.00 loan origination fee, and $452.32 in interest, for a total payment of $2062.32, with an APR of 32.6514%, and monthly payments of $85.93.

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