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Unsecured Personal Loans: Advice for First-Time Borrowers

One of the most difficult decisions you will have to make when applying for an unsecured personal loan is figuring out how much you should borrow and for how long. It is important to understand that the more you borrow, the more you will save. How? Lenders will usually enforce higher interest rates for smaller loan amounts. Therefore, applying for more than you need is a great idea only if you can resist the urge of spending those additional funds. A good idea would be to take those extra funds and invest them into an appealing high interest money market or CD.

Determining how much you can afford

If you are not looking to borrow more than you need, we suggest utilizing the following input: Create a budget including all of your daily living expenses and monthly bills. Subtract the total of all your expenses from your monthly net income. The amount left over is not going to be what you can afford towards payment of an unsecured personal loan. Why? You don’t want to leave yourself without any emergency money. You never know when you may need some extra cash for an unforeseen situation like a car or home repair. 75% of the amount left over should be designated for monthly personal loan payments.

Determining how much to borrow

Evaluating the total intent of your loan is critical when calculating how much to borrow. For example, if you are planning a vacation, you will need to not only factor in the cost of the flight and the hotel, but also the costs of eating, drinking, sight-seeing, etc..

Determining how long to borrow

A loan term is the total length of time you have to repay your loan. Typical terms for unsecured personal loans range from 12 – 72 months. It is essential that you comprehend that the greater the duration of your term, the more costly your loan is going to be. With a longer term, your monthly loan payments are going to be lower, but the amount you pay in overall interest fees is going to be greater. But, it may make sense for you to make use of a longer term. For example, suppose the plumbing system in your new home stops working and needs to be immediately repaired. However, you moved in less than one year ago and have zero equity in the house. And, you are having a difficult time satisfying your existing monthly monetary obligations. For this type of situation, it makes sense to satisfy your immediate financial needs so that you can get your plumbing repaired without having to put too much additional strain on your wallet. Saving money is good, but keeping your sanity is better!

Determining where to apply

Your local bank is probably the first option that comes to mind. Don’t limit yourself. Take advantage of the internet. Online lenders, like Choice Personal Loans, compete with local banks by offering extremely competitive rates and terms for their unsecured personal loans. They even offer no credit loans for those looking to establish their credit history.

Prepping for an Estate Sale

Finance

At the end of the month, we’re having a massive garage/estate sale. When my mother-in-law died, she left us a lot of stuff.

A lot.

Really, when I say “lot”, I mean it. When most people say they have a lot of stuff, they mean they’ve got a closet to clean out. That’s similar to looking at a “scale of the universe” app and comparing a grain of salt to the Oort cloud. We’ve donated several truckloads of blankets, jackets, and toiletries to a homeless shelter and more than 80 rubbermaid containers full of clothes to the Salvation Army. That’s on top of two dumpsters(big enough to park a truck in) full of garbage of things we didn’t think were worth salvaging. That has still left us with several rooms packed full of stuff.

When I say ” a lot”, I mean it in a visceral, oh-my-god-can-this-be-over-or-should-we-consider-arson kind of way.

Now, it’s time to get rid of the stuff that’s left.

The things that have sentimental value have already come home with us.

The things that look unique, rare, or collectible–like the 1970s Pepsi glasses–have been set aside for more research. They may end up in the sale, or on eBay, depending on what we find out.

From here, I think I can just follow my garage sale guide.

We’re going to run the sale on Friday, Saturday, and Monday of Labor Day weekend, to maximize traffic.

We’ll advertise in the paper and put up some signs. The house is on the busiest street nearby, so passing traffic should be high.

The nice thing about having an emptied house is that setup can be completely done ahead of time. We’re setting up tables and starting to price it all this weekend.

On the days of the sale, we’ll have at least 2 people working the entire time. One will be inside, while the other will be outside for the tools and furniture that are getting sold. Both will have money and be able to make change.

Outside, we’ll have the bigger pieces of furniture, tools, and some kid stuff to draw in passerby. Inside will be the appliances, jewelry, and the small and/or valuable items. We’ll only be setting up in the living room and dining room, with the back hallway and kitchen roped off, to control access and visibility.

We’ve got a bit of help available at different times over the weekend, so we should be able to handle the entire sale, including breaks, relatively smoothly.

Have you ever run an estate sale? Anything I’m missing?

How Refinancing Your Student Loans Can Save You Thousands

Finance

Students who graduated college in 2015 were said to have graduated with an estimated $35,000 in student loan debt. Of course, some students will have less and some more depending on what you did throughout your time in college. Either way, it is a lot of money and money that must be paid back whether you want to or not.

Student loan refinancing is an available option for many students and it will provide them with some of the relief they need financially. Did you know that refinancing your student loans can save you thousands of dollars? It’s okay if you didn’t – I will show you just how it can save you money and ease the strain on your budget.

Student Loan Refinancing: What the Heck Is It?

Before you can apply for refinancing, you need to understand what it is. When you refinance your student loan, your new lender will pay off your old loans and gives you a new loan with updated terms and rates.

Most student loan refinancing is done through a private lender, which means that there may be eligibility requirements that need to be met before you can actually go through with the refinancing.

How Can Refinancing Save Me Thousands?

There are a couple of different ways that refinancing can help save you thousands. First and foremost, you will receive a new interest rate. The rate itself will often vary depending on your situation, but usually falls somewhere between 2-5% for most students. The jump from a 6-8% interest rate to a 2-5% interest rate it immense. Let’s take a look.

For example, if you have a student loan balance of $25,000 at a 6.5% interest rate and your term is 10 years, you will pay a total of $9,065 in interest over the course of the term. Now, if we change the interest rate down to 3.5%, you will only pay $4,665 in interest payments over the course of the 10 years. That is a savings of $4,400!

The second way that you can save thousands is by adjusting the length of your payback period. Often times, the default is set at 10 years, but students often extend it out to 20 or 25 years. This will increase the amount you pay in the long run because you now need to pay interest over that extended period.

When you refinance your student loans, you are able to shorten the term of your loan, which means you pay thousands less because you do not have to continue to pay interest over the extended length of the loan.

Final Thoughts on Student Loan Refinancing

Student loan refinancing is a great option for students looking to destroy their debt, but it is not always an option for everyone. You do need to qualify, which means you need a good credit score or a cosigner with a good credit score. Refinancing your student loans can help save you thousands of dollars over time, so if you do have the option to do it, you should.

Homeschooling for Free with Khan Academy

Business

If you are a parent who is planning to home school your children or if you are already involved in homeschooling and seeking additional resources, using Khan Academy online is highly recommended regardless of the type of material you are trying to teach or learn. Learning with Khan Academy is possible for students of all ages as well as individuals who are simply seeking new methods of learning without having to pay for the education.

What is Khan Academy?

Bug Report screenshot for Khan Academy (Photo credit: syvwlch)

Khan Academy is a free online resource for anyone interested in learning new material in a wide range of subjects. Whether you are a parent who is planning on homeschooling your children or if you simply have an avid interest in science, mathematics or even art history, using Khan Academy can ultimately give you the knowledge you need for any reason.

Khan Academy operates as a non-profit organization and offers all courses and materials absolutely free of charge. Using Khan Academy is ideal if you are actively seeking out new lesson plans for your own children but you are stumped for ideas and material yourself.

Courses Available From Khan Academy

When you sign up for Khan Academy you can immediately dive into various lessons depending on what you want to learn. Whether you are seeking out assignments in math, science, humanities or even economics and finance, there are plenty of courses in different areas of education. You can also learn all about computer programming and various levels of specific subjects based on whether you are teaching your children or looking to learn something new for yourself.

Why Learning Online From Home Works

Learning online from home is a way for you to incorporate well-developed lessons into your everyday homeschooling lesson plans at any time. When you choose to use an online community such as Khan Academy there are also no deadlines or restrictions on the lessons you want to teach or learn more about yourself.

You can also hand pick specific lessons to help with individualizing each one of your children’s educational outline and plans. Depending on the age of your children and their own interests you can choose from a variety of lessons for beginners and those seeking more advanced work.

Teaching your children new material with the use of the online Khan Academy is a way for you to ensure they are truly understanding the lessons before moving on. Additionally, using Khan Academy is ideal if you are seeking educational content that is sourced, referenced and completely free of charge. Khan Academy lessons and content is and always will be free as this is one of the main missions of the academy itself.

Knowing the benefits of using Khan Academy and how it can help you or your children grow educationally is a way to truly take advantage of the services and lessons being offered. Using Khan Academy when homeschooling brings expansive lessons into the home regardless of your own knowledge and areas of expertise when you begin to teach your children.

Refinancing Through the HARP Program

Finance

HARP Refinance

If you owe more than your house is worth, and want to refinance to today’s low interest rates, you need to check out the HARP program. Millions of homeowners with underwater homes are finding relief in a new version of the Home Affordable Refinance Program (HARP). Refinancing to lower interest rates could slash your monthly mortgage payment or shorten the time it takes to pay-off your mortgage.

The new HARP loosened qualification rules, making it it easier for underwater homeowners to qualify for a refinance. When HARP 2.0 was released in November 2011 you had to work with your original lender. Since March 2012, when Fannie Mae and Freddie Mac rolled out the automated underwriting systems, you can work with any participating HARP lender. That means more competition for your business and better rates for you

HARP 2.0’s Hurdles

There are two series of hurdles you must clear before you can refinance your loan under HARP 2.0. The first set of hurdles concerns the loan itself. The three key eligibility questions are:

Is the loan owned by Fannie Mae or Freddie Mac?
If so, was the loan purchased by Fannie or Freddie on or before May 31, 2009?
The loan was not refinanced under HARP before (some exceptions apply).

If you answer yes to these three questions, then your loan may be eligible for HARP.

Tip: If your loan is a FHA loan, then check out a FHA streamline refinance loan.

The second set of hurdles concerns your finances and property. Fannie Mae and Freddie Mac set up the basic guidelines. There are two basic ways your loan can be processed:

Manual Underwriting System: Only your original lender (who is also your current servicer) can process a HARP loan through the manual underwriting system.
Automated Underwriting System: Any participating lender can process a HARP loan through the automated system.

Keep in mind that lenders are free to have stricter qualifying rules than the basic Fannie and Freddie requirements.

When shopping for a HARP loan, here are some of the main points to look out for:

Credit Score Requirements: Fannie and Freddie have no minimum FICO score requirements. However, each lender has its own credit score requirements, so if you are denied by one lender, keep shopping.
Income Requirements: Your original lender can approve a loan with no debt to income ratio (DTI) requirement. However other lenders must qualify you based on your DTI. The rule-of-thumb for a HARP loan is a 45% maximum DTI.
Timely Mortgage Payments: The HARP program allows for no late mortgage payments in the last 6 months and one late (30 days) payment in the preceding 6 months. However, some lenders do not allow any late payments.
Investment Properties Qualify: You can refinance a second home or rental property under HARP 2.0.
Fees: Lenders are not consistent in the fees or the interest rates they charge for HARP 2.0 loans. Some lenders charge a few hundred dollars for HARP 2.0 loan fees, and others charge thousands. It pays to shop around, so you can compare interest rates and fees.
Condos: While HARP guidelines for condos are tricky, many more condo owners will qualify for a loan under HARP 2.0 than under the first version of HARP.

Applying for HARP
First, go to the Fannie Mae and Freddie Mac Web sites to learn if either owns your loan and whether they bought your loan on or before May 31, 2009. If so, you can contact either your current mortgage servicer or shop around with the many lenders who are offering the HARP 2.0 loan.

If your application is rejected, ask for the specific reason why. If you applied with your original lender, find out whether the lender used the manual or automated system. Request manual underwriting if your original lender turned you down based on automated underwriting, as it may result in your loan being approved.

It pays to shop for HARP 2.0 refinance. Many homeowners report one lender will reject their application, but another will offer them an attractive refinance. Second, lenders are not consistent in their offers. As mentioned, closing costs are all over the map. Interest rates vary, too.

Summary
HARP 2.0’s rules are technical. Each lender creates different overlays. If you believe you qualify for HARP 2.0, be persistent! The rules that are in place today could very well be expanded in the future. This is one instance in life where shopping can be the solution to your problem.

Resolutions That Don’t Suck

Finance

I’m not a huge fan of New Year’s resolutions. Generally speaking, if you don’t have the willpower to do something any other time of the year, you probably won’t grow that willpower just because the last number on the calendar changed.

Seriously, if you’ve got something worth changing, change it right away, don’t wait for a special day.

That said, this is the time of the year that many people choose to try to improve…something. Some people try to lose weight, other people quit shooting meth into their eyeballs, yet others(the ones I’m going to talk about) decide it’s time to get out of debt.

Now most people are going to throw out some huge and worthless goals like:

I need to lose some weight.
I need to save more.
I need to be a better person.
I need to shoot less meth into my eyeball.

The problem with goals like that is the definitions. What is “some”, “more”, “better”, or “less”? How do you know when you’ve won.

It’s better to take on smaller goals that have real definitions.

Try these:

I’m going to lose 20 pounds.
I’m going to save $1200.
I need to stop locking my children in the closet when I go to the movies.
I am never ever going to shoot meth into my eyeball again.

But Jason, I hear you saying, where am I going to find $1000 to save? Well, Dear Reader, I’m glad you asked. Next time though, could you ask in a way that others can hear so my wife doesn’t feel the need to call the nice men in the white coats again?

Let’s break that goal down even further.

Instead of saving $1200, let’s call it $100 per month. That’s a bite-sized goal. Some people don’t even have that to spare, so what can they do?

Let’s make that resolution something like “I’m going to have frozen pizza instead of my regular weekly delivery.” If your house is anything like mine, that brings a $60 pizza bill down to $15 for some good frozen pizza for a savings of $45. If you order pizza once a week, that’s $180 saved each month, double your goal. That’s a win with very little suffering.

Now, you can take that extra $80 that you hadn’t even planned for and throw it at your credit cards. That’s a free payment every month. Before you know it, you’ll have your cards paid off and a decent savings account.

Then you can thank me because I made it all possible.

Search Results for: garage-sale-manual/subscribe-by-email/payday-loans-suck/5-life-altering-lessons-i-learned-from-my-debt

What is Khan Academy?

Courses Available From Khan Academy

Why Learning Online From Home Works

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