Your complete guide to achieve financial freedom. Proven tips, tools and tactics for you to achieve financial freedom. Make money, save money and effectively manage your money.

Bad Credit Loan -- Let’s Cut Through the Hype!

Written by Dian Herdiana on 11:50 PM

Bad credit loans seem to be a hot topic these days. In reality, if you require a bad credit loan, you are likely to discover an overabundance of info.

See if this sounds familiar. You need a loan. Maybe you want to buy a car, enroll in college, or take out a home improvement loan. Or perhaps you are a first time home buyer and you are looking for a mortgage. The problem is, you have got a bad credit history, and you are afraid you won't be able to find a lender.

But then you do a little research on bad credit loans and find that, lo and behold, there ARE loans for people with bad credit available! In fact, EVERYONE wants to give you a loan. Loans for cars, mortgage loans, student loans, personal loans, loans for just about anything you want. Not only loans, but credit cards too. Why, who would have ever thought is would be so easy to get a loan when your credit history is so dismal?

So, that is great news, right? RIGHT?

Let's just stop for a moment. Ask yourself "Why is everyone so eager to extend credit to me when my credit history is so bad?"

The question can be answered in two words -- HIGH RATES. Sure, you can get a bad credit loan easily enough. But you will "pay through the nose" when it comes to the interest rate.

So "What's the 'big deal' about paying a little higher rate?" you ask. Let's look at a few figures.

Suppose you want to buy a car. After looking long and hard, you find the "perfect" car for $20,000. So you apply for a car loan and get a loan with no trouble, but because of your poor credit, you have to pay 20% interest. On a 60 month loan, your monthly payments will be $529.88.

Now if your credit were very good, you might have gotten the same 60 month loan at an interest rate as low as 10%, with monthly payments of $424.94.

The bottom line is, over the life of the loan you'll have paid an additional $6,296.40 in interest that you would NOT have paid if you had you gotten the loan at 10% interest. Your bad credit loan will have cost you $6,296 more FOR THE SAME CAR!

But if you believe that%u2019s bad, take a look at a home mortgage loan.

Assume you desire to buy a $100,000 home and you're just thrilled to find a lender willing to give you a 30 year loan in spite of your bad credit. He'll charge you 12% interest, and your monthly payment is going to be $1,028.61.

If your credit had not been so bad, you could have gotten the loan for a rate closer to 9%. If your credit had been very good, you might have been charged only 6% interest and your monthly payment would have been $599.55.

The bottom line? That bad credit loan will have cost you (over the 30 year term) a staggering $154,461.60 MORE than you would have paid had you gotten a loan at the 6% rate.

No, this is NOT a typo. Your lender is going to pocket $154,461.60 in alternate interest payments because you were charged a better rate for a bad credit loan. That's over 1 1/2 times the cost of the house itself!

So why did he charge you the higher rate? Because he knows he can get it! After all, he's got you "over a barrel" He knows (and you know) that you need a loan, but because of your bad credit no one's going to give you one at a low interest rate.

Do you see now why people are so eager to lend you money in spite of your bad credit? In fact, credit reporting companies make a fortune selling lenders the names of people who have bad credit. Those lenders know they can charge them high rates, and that if they need credit, they have no choice but to pay them.

So what's the solution? You may be thinking "What choice do I have anyway? My credit is bad, I need a loan to get a house (or car, college education, or whatever) and there's just nothing I can do about it except find a lender willing to give me a loan at whatever interest rate I can get"

But deliberate for a second whether you probably be looking at the condition from a entirely wrong angle. Somewhat than resign yourself to the situation, you have to be thinking about repairing your credit.

Now if you just found the house of your dreams, you may have no choice but to act now before someone else buys it. But if you can wait a couple of months, it's highly likely you can make some major improvement in your credit score and THEN look for a loan.

Maybe this isn't what you wanted to hear. After all, you're looking for a loan, NOT credit repair advice. But wouldn't it be worth it to postpone getting that house or that car if it would save you thousands, tens of thousands, or maybe even $150,000.00 or more over the long haul?

If you're thinking your bad credit history is something you're just stuck with, or that it will take years to improve, you're mistaken. It's often possible to make major improvements in your credit rating in just a few months, and in some cases in as little as 30 days!

It's not that difficult either. You basically have 2 options. You can hire a "Credit Repair Agency" or you can take the "do it yourself" approach.

If you decide to hire an agency, you can easily find one in your phone book or online. Just look for "credit repair" However, it won't be cheap. Agencies usually charge from $2,500 to $5,000 or more to repair your credit. But that's still a bargain compared to how much you'll be saving in the long run.

But if you think only a professional agency can fix your credit, think again! In spite of their high fees, they won%u2019t do anything for you that you can not easily do for yourself. If you can write a few letters, address, stamp, and mail them you can repair your own credit.

If you choose the "do it yourself" route (recommended) you can learn how by doing some online research. Unfortunately, along with all the good information you are going to find some misinformation as well. A superior choice is to discover an authoritative book on credit repair and follow the suggestion therein.

In conclusion, you should seriously consider postponing your search for a bad credit loan. First spend a couple of months improving your credit rating. Then you can abandon the search altogether, and begin looking for a GOOD credit loan!

Money Market Savings Account Free Tips Inside

Written by Dian Herdiana on 8:58 AM

If you want to earn higher interest rates but less of the risks that are often attached to investing in stocks or bonds, then you might as well open a money market savings account. The money that you invest in this type of account is insured with the Federal Deposit Insurance Corporation (FDIC) and therefore you can be secured knowing that even if the financial institution where you have opened the account goes out of business, the government will return the money to you up to the amount that is insured and allowed by the FDIC.

Here are some free tips that are worth considering when you decide to invest in a money market savings account:

• Before you open your money market savings account, it will help to do an online checking of the different financial institutions that offer this account. You can then compare their offers and get the best interest rate possible.
• Read the reviews about money market savings account as well as the financial institutions that offer them. It is important to open the account where you will feel most comfortable doing business with and where you have the higher trust to safe keep and invest your hard-earned money.
• Make sure that you understand clearly the terms and conditions, including the fine prints, of the money market savings account that you are planning to open. Remember to consider the number of withdrawals that you are going to make in a month to conform to the set limit of withdrawals in this type of account.
• As money market savings account require higher initial opening balance as well as a higher minimum maintaining balance. Evaluate your cash situation and make sure that you will be able to comply with the minimum comfortably to earn the higher interest rate that this account offers. If you can’t conform to the minimum, then it will be impractical to invest in this type of account since the interest rate that you will earn, though higher than a regular savings account, may just go to penalties and charges.
• This brings us to the significance of checking the fees that are associated with this type of account. There can be fees or charges in exceeding the number of withdrawals allowed in a month or charges for going below the minimum maintaining balance required by the account. You should always pay particular attention to details like these.

The principle in investing in a money market savings account is to start your savings account at a higher balance, you make lesser withdrawals or none at all, and you enjoy the power to earn more from the higher interest rates. Here, you can certainly earn more from the interest as compared to a regular savings account.

Opening a money market savings account is as easy and as straightforward as opening a regular savings account. The only difference is that it requires a higher initial amount of deposit.

Since your money is guaranteed by the FDIC, you have the assurance and the peace of mind that your money is safe while it earns for you.

About Me

Hai! Odie is here to help YOU get in shape! Bookmark my blog now, and hoping you have a great knowledge from my blog!!

Want to subscribe?

Subscribe in a reader.