Using an online loan application? Consider safety first.
The convenience and ease of submitting an online loan application has to be weighed against the potential risks. Before you take advantage of the benefits of an online loan application, make sure you know how to protect yourself from disreputable loan companies and scam artists. Thoroughly researching the company’s record up front will help protect you from grave problems later.
- Always check with the Better Business Bureau (BBB) to confirm that the company you’re considering doing business with is a licensed lender that has achieved BBB accreditation.
- Every BBB-accredited business receives a “letter grade” ranking based on the company’s ethical performance, adherence to state and federal laws and satisfactory response to inevitable customer complaints. Never submit an online loan application to a company with less than an “A+ “ ranking.
- Read customer reviews. A company’s past performance is a good indication of what you can expect as your own experience with them.
The company should handle the information you submit in their online loan application with the utmost regard for your personal privacy and financial security. Before you provide the necessary information, you need to take just five seconds to complete a three-step security assessment.
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Travel loans can take you home for the holidays
It’s holiday time, and that means time for families and friends to gather from far flung locales. Unfortunately, the airlines just announced they’ll be charging an additional $30 per ticket for holiday travel on top of booking and luggage fees. If you’re worried that you might not have enough cash in the bank after you buy gifts for the kids, you should look into travel loans.
Travel loans are typically unsecured personal loans. Their interest rates are usually higher than secured loans, but lower than credit card interest rates. If you have good credit, you may be able to find travel loans with interest rates as low as 6%. Read more
A short-term loan may be your best bet
Are you just a little short of cash right now? Something’s come up, and you just don’t have the cash on hand to take care of it? Or maybe it’s an opportunity you won’t be able to take advantage of without a quick infusion of money that you’ll pay back quickly? You need a short-term loan.
There are some people who can spend their way through any emergency, and are perpetually in the right financial position to move quickly when doing so benefits them. But the rest of us need a little help sometimes. And sometimes the best kind of help is from a short-term loan.
A short-term loan isn’t appropriate for all purchases or situations, but for some it’s exactly right. For instance, if you’re a small business owner who needs to increase inventory before the holiday shopping season, a short-term loan that can be paid back in January will bridge the gap.
Broken equipment—at home or the office—has to be replaced immediately; coolers that conk out on February 13th can put a florist out of business, and a household without a functioning stove will quickly run up restaurant tabs that exceed the cost of appliance replacement. Again, a short-term load can make things right in a hurry.
Used wisely, credit cards are a lot like taking out a short-term loan. They allow consumers to buy airline tickets online, and pay off the card balance immediately.
A short-term loan shouldn’t be used for larger purchases like real estate, construction equipment or automobiles; in those scenarios it makes more sense to take out a lower-interest long-term loan that doesn’t have prepayment penalties.
The exception would be if the buyer has certificates of deposits or other financial assets that will mature soon, but aren’t immediately liquid. Or, a short-term loan makes sense for a homeowner who intends to replace furniture with a soon-to-arrive tax return. If the furniture goes on sale a week before the tax return is expected, it makes sense to take advantage of the savings by using a short-term loan if there are no prepayment penalties.
Is an unsecured personal loan right for you?
Personal loans come in two flavors: secured or unsecured. The difference between them is simple enough—you’ll put up collateral to secure a secured personal loan but not for an unsecured personal loan. The only question is which works best for you.
An unsecured personal loan presents a higher risk for the lender, so requires a higher credit score and income. That risk level also means that an unsecured personal loan comes with a higher interest rate than a secured loan.
So what are the benefits of an unsecured personal loan? Their broad accessibility, for starters. Millions of people—especially city dwellers—don’t own houses or cars, which are commonly used as collateral. And, if they don’t have financial assets like certificates of deposit or annuities to offer as security, an unsecured personal loan might be the only option.
And, now that home values have tanked, millions of homeowners no longer have enough equity in their houses to use them as collateral for an unsecured personal loan. And, frankly, in the new economy a credit score of 725 isn’t as shiny and promising as it used to be the eyes of many lenders.
There are other benefits to an unsecured personal loan, even for those who can offer acceptable collateral. The asset securing the loan will have to be forfeited if financial calamity strikes the borrower. A period of unemployment, a family member’s medical bills or any number of hardships could mean losing a family home or necessary transportation.
For help finding the best personal loans, contact American Unsecured, one of the nation’s largest loan-consulting firms.