What Are Personal Loans and When Are They a Good Idea?
There are many different loans out there intended for specific purposes. You could be taking out a mortgage to buy a home, using an auto loan to purchase a car, or taking out a small business loan for your startup.
A personal loan, however, can be for any of these things—or something completely different. Sometimes they’re a great idea, and sometimes not so much. Let’s dive in to what personal loans are, and how they are most commonly used.
What are Personal Loans?
Unlike an auto loan or a mortgage, which are secured by the asset being financed, a personal loan is typically unsecured. Its approval is based mostly on the creditworthiness of the borrower.
Do You Know How to Get Rid of Debt? – 10 Helpful Tips
Do you know anyone who is living a debt free life? Do you want to live without the stress of meeting loan obligations every month? Read on and see how to get rid of debt once and for all.
Debt-free individuals usually share the following ten similar characteristics that enables them to live below their means. There’s nothing here that is so highly technical that prevents anyone else from copying.
Start paying attention to details – As an example, if you don’t review your monthly credit card statement closely, there may be charges on there that shouldn’t be. Debt free individuals monitor their personal finances very carefully.
Each month, when all of those dreaded statements come in for your charges to those plastic cards in your wallet, your card issuer usually lets you know that you don’t need to payoff the balance. “Just pay this minimum payment”, they tell you, and before you know it, you have a high outstanding balance. Now you begin to wonder how to get rid of credit card debt.
Unfortunately, now it’s not so easy. For some individuals, there may have been a good reason why they only paid the minimum payment each month. Problems such as unforeseen medical cost, or the family car passed away, or even loss of a job.
But for many others, it was just poor cash management. They didn’t have View full post…
Should I Pay Off Debt With All of My Emergency Fund?
You can ask several financial planners this same question and you will get different responses. Some will advise you to get rid of all credit card debt. Some will say to setup an emergency fund first to cover such expenses as a major car repair or some large expenditure in your home.
What are you supposed to do, however, if you have an emergency fund and the balance in it is just enough to repay all of your credit card debt? Wouldn’t the credit card debt with very high interest rates be considered an emergency expenditure?
Don’t deplete the emergency fund to repay debt
The general consensus here is no, don’t use the entire balance of the emergency fund to repay your credit cards. Instead, just use some of the cash savings to repay some of the debt. Keep some of the savings available for a bona fide emergency.
3 Reasons Why You Should Be Using Money Management Software
We’ve found that many individuals have financial problems due to a lack of understanding in the best way to manage their money. Quite often, they make mistakes that prove to be quite costly, especially when it involves an increase in debt. Money management software can be a big help in many cases.
There are several reasons that these individuals get into financial distress.
Some don’t know how to control their spending due to credit card mis-use. They see items they want and charge it to a credit card. Before too long, the credit cards are maxed out and just paying the minimum balance is very difficult.
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