Archive for the ‘Finance’ Category
What is a Car Title Loan?
June 16th, 2010 | 
Author: 
A car title loan is a loan that a bank gives to a client, using the client’s car as collateral. The loan amount is almost equivalent to the market price of the car or vehicle. If the borrower fails to pay the loan, the bank confiscates the vehicle and resells it to cover the loan amount.
The process of getting a car title loan is considerably easy and quick. It is a short-term loan, in which the repayment period is 14 days to a month. As the repayment period is very short, the interest rate charged on this loan is very high. Banks demand a written title loan agreement from the borrower at the time that the loan is granted. Borrowers are expected to read the entire contract very carefully and understand all the clauses before signing. All the terms and conditions are deemed understood by the borrower after the agreement is signed.
These car title loans are available to almost anyone, who has a clear title of a paid off car. Documentary proof of income, identification and age are essential in order to take advantage of a title loan. Only individuals who are eighteen years of age are eligible for the loan. One of the most important factors of a car title loan is that a credit check is not done, so even borrowers with a bad credit history can take advantage of this type of loan. Thus car owners can easily apply for and receive a car title loan if they have fully paid for car at their disposal. These loans offer convenient ways of getting much-needed funds in an emergency situation.
By: Jimmy Sturo
Title Loan Companies
Title loan companies have gotten a bit of bad rap in the recent past. While they can charge high interest rates, they also provide quick cash for many individuals with bad credit who have difficulty otherwise obtaining a cash loan in a time of crisis. This article details how a loan from a title loan company works and whether they might be a good idea for you in a time of emergency.
At its simplest a car title loan is a cash loan secured by a piece of property, your car, truck or other vehicle. The way it works is that you bring your car title and your car to the title loan company. They will appraise your vehicle and tell you the maximum amount of loan that are willing to extend. Most loan companies will not loan more than 50% of the appraised value of your vehicle. For instance, if you bring a car to a title loan operation and they value the car at $5000, you will probably not be able to obtain a loan for more than $2000.
Now, in order for a loan to be processed you must own your car clear. If you are making payments or if the car’s title is not in your name, you will not be granted a loan. If you co-own the car with a spouse or family member, you must both be present to sign the loan paperwork.
The issue with car loans is their terms. In most cases, even though your loan is secured, you end up paying more than 300% in annual interest rates. Now, if you are able to pay off your loan in full at the end of the 30 day period, you will pay much less. But, even in that instance, you will still pay at least 20% for the loan, which is considerable interest on a loan of only 30 days.
However, if you do not have great credit or access to other sources for quick cash, title loan companies provide a critical service in times of emergency. In a true emergency, most people are willing to pay 20% to get out from a jam. But, these loans are not for everyone, so it is critical that you educate yourself about the associated fees before you sign any papers.
By: Ovri Ellington
Defaulted Bank Loan Workouts
Most people frequently speak about SBA guaranteed loan workouts which have their own specific requirements. There are, however, an enormous number of traditional secured and unsecured bank loans which are in default and require workouts resulting in debt forgiveness. There are consulting companies who do hundreds of these every year. They are different and frequently easier to work out as there is far more local authority and flexibility as the banker and the ruling committee has the option of making whatever decision they choose to make without the restrictions than with SBA requirements and objectives which can handcuff a banker’s decision.
The bank can modify, defer and compromise its loans as it deems appropriate. Consultants can fashion more creative workout resolutions which will work even better for the borrower as well as the lending bank. It is far more of an open negotiation and works out very well; frequently better than SBA guaranteed loan workouts.
Unfortunately, the opposite can also happen as the local bank being unrestricted and not under anyone’s control can act irrationally, emotionally and contrary to workout logic either making unreasonable demands or simply refusing to resolve a workout unless under their terms.
Fortunately, loan default consultant experts seldom have such issues and their secured bank workouts are always well done and totally satisfactory to the borrower, with similar results as their experience with SBA guaranteed loan workouts… pennies on the dollar. These consultants perform the same strategies, protecting the assets and eliminating the personal guaranties. The difference is these consulting experts are dealing with the bankers’ personalities and their own guidelines.
They seldom have any difficulties. Bring your secured and unsecured bank loans and they will work them out as successfully as they do the SBA guaranteed loans.
By: Don Todrin
401k Loan
Your Personal Economic Stimulus
401k Loans Relieve Financial Distress
The Internal Revenue Code allows more flexibility and latitude about 401k loans than your employer’s plan rules probably will grant. The law does not restrict 401k loans, but it also does not require your employer to offer them. Although most major corporations do provide 401k loans for employees experiencing temporary financial difficulties, they must comply with strict guidelines about how to manage them. When your employer sets-out your 401k loan’s terms and conditions, saying “my hands are tied,” he means it.
Do not get confused by a tricky distinction in the law: The Internal Revenue Code mandates how your employer must set-up and pay-out your loan; it sets limits on how much you can borrow; and it establishes the timeline and requirements for repayment. The Internal Revenue Code also establishes the consequences for default. But the law says nothing about why employees do or do not qualify for 401k loans.
Your employer maintains complete discretion over conditions, circumstances, and restrictions on 401k loans. And if you work for a relatively small company, your employer simply may not offer 401k loans because they add too much to his administrative costs. The majority of large corporations will allow 401k loans when (1) employees pay college costs for their children, their spouses, or their children; or (2) the 401k loan will prevent eviction from or foreclosure on their homes; (3) the money pays reimbursed medical costs-co-pays or the cost of procedures insurance does not cover; or (4) the loan goes toward the first-time purchase of a home.
Internal Revenue agents and 401k specialists advise your employer on limits and guidelines for 401k loans: Because they pay administrative costs for managing your loan, most employers set a minimum loan amount-typically $1000. They also set the ceilings on 401k loans-typically 50% of your vested amount. If you’re married, your employer may require your spouse’s consent to the loan. Especially in “community property” states where your spouse could be saddled with the debt in the case of separation and divorce, he or she has a right to full disclosure and informed consent. Your employer probably then will stipulate that your loan payments must be deducted from your paycheck; although the stipulation seems to protect him against default, it actually does more to protect you.
Naturally, because you are, in effect, borrowing money from yourself, the loan requires no credit check, and most details about 401k loans are not forwarded to credit reporting agencies. You do, however, have to pay interest. The interest payments actually make up for lost earnings on your principal, so that they work to your long-term benefit. The interest rates almost always remain extremely low-usually the Federal Reserve’s Prime Rate plus 1%, which definitely qualifies as a “preferred rate.”
As with all major financial decisions, you should not take out a 401k loan in haste and without professional advice. At work, talk to your 401k Plan Administrator, and then talk to your tax person or your financial planner.
By: Jeffrey DeGraauw
Loan Modification For Boat or RV Loans
The economic climate in the past years was really distressing, and it’s no longer a surprise why many people are applying for a loan modification. Just in case you applied for a boat/RV loan, and you are unable to pay on time, you can always work it out with the bank or financing company. It can be hard to tell when the economy will go up or down but with enough knowledge, you can still keep your boat or RV.
While it can be daunting to approach the lender or bank, you should not have any second thoughts about making a compromise because it will also benefit you in the long term. The procedure is similar to that of car loan modifications but this time you will be working out for a boat or RV modification.
You should be aware that this is a special case since the boats and RVs are more expensive than cars. Financial institutions have no interest in getting your boat or RV just because you missed out on your monthly payments. These lenders are willing to talk with the debtors and the most appropriate solution that will benefit both parties is the modification of the existing loan.
Lenders will always be after their best interest so you need to be extra careful when talking to the loss mitigation department. You can ask help from professionals or a lawyer so that you will have a representative who will work out the loan terms with the lender. Both parties will mutually agree to new terms.
Such new terms can make your monthly payments more affordable, and so you can pay for it with ease. The payments can be reduced by extending the loan term or by reducing the rate of interest. Lenders will not always choose repossession because it will involve reselling of the boat or RV which is harder as in comparison to a modification.
If you can’t pay for your boat or RV loan because of financial constraints, you can apply for loan modification. You can ask help from a third party, or you can approach the lender/bank. The decision is yours but you have to ensure that the situation will favor you.
By: Khmer Lee P. Lugod
Small Loan Amount For Special Occasions
Most of us do not make extra efforts to sort out the things in the initial stages and this relaxed attitude may cost dearly. It very often happens in case of personal finance. If you have a tendency to flash out credit cards on every occasion you make purchases, you are in for a big trouble. It is better to check this habit in the beginning or else it may take huge proportions.
The only benefit that people get by using credit cards is the convenience and an interest free purchasing on credit for a limited period. But, once this ‘bait period’ is over you are exposed to the harsher realities of credit cards. The question is – what is the alternative especially when you need small amount of money only? Well, there are many options in the market like petty loans that are available with the lenders without any security, at very competitive rates.
Borrowing a small loan amount is relatively easier than large loans. You are not likely to be asked to pledge your home for borrowing small personal loans up to 10-15,000 pounds. The rate of interest charged on such loans is significantly less than the credit cards which are so popular in the market. There are many lenders that offer these loans on easy terms and conditions, and that too, within a short period of time.
Besides, there are many benefits of taking small personal loans in comparison to plastic money. As you know, your credit card is prone to be misused and hacked by miscreants around you. These cards can also become a liability in a number of other ways – fraud and identify theft are on rampage in the UK. So, it is better to avoid these cards and opt for loans that give more benefit and are less burdensome on your pocket.
Small personal loans can be used for a number of purposes like education, shopping, Christmas celebrations, home improvement, buying gifts, etc. At times when you are going through financially lean periods, these loans are a great help. In festive season, a lot of people require financial assistance to meet their budget. Such loans are not too difficult to get even when you are facing bad credit score. The lenders can afford to take small risk by raising the interest rates. These loans really provide you an opportunity to take care of your small demands in an easy manner.
By: Samantha Bonsu
NRI Home Loan Maximum Amount
The normal rule is that banks and housing finance companies easily provide NRI home loans up-to 85% of the cost of the residential property. However, the upper limit of the loan amount sanctioned and the down payment will depend on various factors and can also vary from lender to lender.
For example if you take a NRI housing loan for purchase, construction, extension or renovation of a new house or flat from ICICI Bank, it will happily finance 85% of the total cost of the property. However, if you take a NRI home loan for purchase of a plot of land for residential use, the maximum amount of home loan financed will be 75% of the total cost of the property.
Again there are special schemes offered by banks, which break all the rules, like the one from Citibank, which provides a NRI home loan up to 89% of the property value if the loan value is less than or equal to Rs. 50 lakhs.
Here is a roundup of the maximum and minimum loan amounts offered by various banks for their NRI home loans:
Minimum loan amount
SBI offers a NRI Home Loan for a minimum of Rs. 3 lakhs ICICI Bank gives a NRI home loan for a minimum of Rs 5 lakh. ICICI bank offers a minimum of Rs. 10 Lakh for loan against property Citibank offers a NRI home loan for a minimum of Rs. 2.1 lakhs
Maximum loan amount
SBI offers a NRI housing loan for a maximum of 60 times NMI ( Net Monthly Income) or 5 times NAI (Net Annual Income) for applicants below 45 years of age and 48 times NMI or 4 times NAI for applicants above 45 years of age SBI special maximum loan amount terms: Maximum loan amount for repairs and renovation: Rs.10 lacs Maximum loan amount for purchase of plot for construction of house : Rs.20 lacs Aggregate repayment obligations should not exceed 50% of NMI or NAI
ICICI Bank gives a NRI home loan for a maximum amount of Rs. 1 crore. Citibank provides a NRI home loan for a maximum of Rs. 5 crore. This amount is available for a loan of 15 years tenure. The maximum amount for 20 year NRI home loan from Citibank is Rs. 1 crore.
As per a circular issued by the RBI on 31st January, 2007, if the loan is against the NRI’s NRE and FCNR accounts, the maximum loan amount cannot exceed Rs. 20 lakhs.
By: Aadi Sharma
Posted in Finance | 
Tags: 45 Years, Housing Finance Companies, Housing Loan, Lakhs, Maximum Loan, Minimum Loan, Renovation, Repayment Obligations, Residential Property, Rs 1 | 
No Comments »
Bank Loan Funds
As interest rates climb, most bond owners are shaking their heads. The price of existing bonds falls when rates are on the rise. There is a way to offset the decline. You can invest in bank loan funds, also known as floating rate funds. There is a risk to these funds, but they can be a rewarding alternative to traditional fixed-income investments.
Bank loan funds are made up of loans made by banks or other financial institutions to companies. They are often below investment grade. They aren’t really fixed income; there is the potential of losing money. The funds can provide a return equal to or better than high-yield money market accounts. The loans that make up the funds are short-term. This allows the lenders the opportunity to frequently raise the interest rate. This helps the funds keep pace with interest rate changes and helps keep the principal more stable than with a typical bond fund.
According to many portfolio managers, the way the loans are structured removes a lot of the risk to investors. The loans are secured by cash or assets. The funds are not independently rated, but experts say the bank should be able to show you the performance of the fund. The bank will package the loans and sell them, and the funds come into play.
Ban loan funds are senior loans. If the company defaults, senior loans must be paid back before bond holders are. You may not receive enough to cover your initial investment, but something is better than the nothing you could receive with a high-yield bond. Typically, in the case of default, the investors will recover 75 to 80 cents on the dollar.
The change of losing principal is reduced because the interest rates on the loans reset very quickly. Short-term interest rates rise and fall in response to the Federal Reserve. That, combined with the short terms of the loans, makes for a fund that responds quickly to the rise and fall of interest rates.
Many brokerages, including Merrill Lynch and Eaton Vance, sell bank loan funds. In certain asset classes there may be a high expense ration. Make sure that you check every fund out carefully.
Many funds in this group allow investors to buy shares at any time. There are some funds that will allow you redemptions at any time, while others will restrict you to monthly or quarterly redemptions.
By: Martin Lukac
Student Loan Debt Counseling
Today student loan debt management and counseling is within easy reach. Many organizations offer different debt management solutions for various kinds of people and their set of needs. These are organizations that address a varied set of different kinds of debt types. All of the programs work mostly in the same manner. They merge all your payments into one combined sum and then reduce your interest rates in an attempt to design a payment plan that you can you really keep up with. Student loan debt management is not very different from the others. It also works to reduce your costs and thus helps you to get rid of any kinds of bothersome miscellaneous fees.
These organizations provide you with counseling and help with your student loan debts and help you manage the loan efficiently. These days there is such a plethora of debt management services that is it becomes difficult to settle upon one. Make sure that when you do sign up with one of them then they should be distinguished in debt management counseling. These student loan counseling organizations help borrowers make smarter choices and are also instrumental in helping students stay out of the loan default categories.
A loan counselor can help you plan a good loan repayment scheme by letting you know in detail about your various loan repayment options. For those students who have already defaulted on a student loan, a debt counselor could be their savior. If you cannot afford your loan payments, these counseling agencies will help you lower your repayment amounts and will also guide you on other aspects of your loan. The trials and tribulations that most students encounter due to student loan debts can be dealt with easily with the aid of a counselor.
By: Max Bellamy
Getting a Home Loan
A ‘home loan’ or ’secured home loan’ is one where the borrower pledges an asset, in this case – your property (or in some cases a car) as collateral for the loan. When getting a home loan remember that the loan is secured against your property. If you cannot keep up repayments the lender will, in some cases, take possession of the asset. A home loan will usually offer a rate of interest and terms which is more favourable than an unsecured loan, because the lender is relieved of most of the financial risks involved.
Getting a loan can be a somewhat tedious process at times. Be aware that not every lender is the same, so ensure that when getting a home loan to check the terms of each one before your make your choice. When making your search remember to compare details such as loan repayment period and interest rate before committing to any decisions.
One of the first things that you will probably be comparing when getting a home loan is the interest rate of the loan. By no means is this the only thing which you should consider, but it is a very important part of choosing a loan. Over the period of the loan, even a small difference in interest rates could mean hundreds or thousands of pounds. Compare the interest rate of each lender along with other factors prior to getting a home loan. Remember not to choose a company who charges an interest rate which is higher than others.
The next thing you should look for is the repayment term; some people consider the repayment term to be equally as important as the interest rate. When getting a loan, lenders will vary on the length of time they will allow you to repay the loan. For instance, say you wish to borrow
