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Professional Loan

Professional Loan

A professional loan, because the name suggests, may be a loan that may be taken out by professionals like accountants, doctors, journalists, engineers, dentists, company secretaries, surveyors, lawyers, architects, management consultants and professionals concerned in practice. Professionals applying for knowledgeable loan should be qualified and should possess the correct skillset needed to follow their trades. it’s kind of like a private loan within the sense that it’s typically a no-collateral loan. Note that some lenders may need a collateral demand, therefore it’s higher to envision along with your loaner beforehand.

 

professional loan
Reasons to require out knowledgeable Loan
A professional loan will be availed for needs relating business needs like the acquisition of kit, business growth, construction of business premises, renovating business premises, money for capital, amongst alternative business needs. This loan can even be availed to finance work-related foreign visits, seminars and conferences. The loan is meant specified it helps the freelance skilled overcome a liquidity crunch in times of want and avoid dipping into their savings. Government banks, personal banks, furthermore as NBFCs, supply skilled loans.
Professional loan eligibility criteria
The eligibility criteria for skilled loans is easy, with borrowers allowed to use for Loans in each personal furthermore as joint capacities.
1. those that area unit already active their trades or novices in several professions, with licenses issued by the state or central legislation.
2. cluster or association of individuals humoring in one profession providing each member of such a bunch is authorized and is punctually qualified to follow the aforementioned profession.
3. Copy of skilled certificate denoting that they follow the said profession.
4. Professionals will embrace individuals having a diploma/degree WHO area unit sufficiently qualified or possess the talents to follow professions like lawyers, journalists, hired engineers, hired accountants, software system engineers, management consultants and similar fields.
5. people, joint borrowers, partnership firms and companies and proprietorships will apply for this sort of loan.
6. candidates between the ages of eighteen to sixty-five years will apply for skilled loans
Features and edges of skilled loans

professional loan
These loans area unit full of options as per individual banks’ policies. every bank offers its own set of advantages and options, however, the outlook for the offerings is additional or less a similar for all lenders.
1. Hypothecation of the purchased assets or mortgage of premises accepted as primary security.
2. 0.5 the loan quantity as collateral security beside one sponsor, desirable spouse equivalent of the soul is also needed, as per loan documents.
3. Collateral security might not be needed for premise effort needs. If needed, unmovable properties or workplace instrumentation are going to be accepted as collateral by the disposition authority.
4. a number of the accepted collateral securities embrace LIC/KVP/NSC policies, land, and building, bank deposits etc. subject to acceptance by the bank.
5. Personal guarantee of partners/friends/family/title holders of collateral securities etc. is also needed as per your loaner.
6. just in case of the loan being employed for the motorcar purchase or connected usage, loan terms can typically be a similar to for motorcar loans.
7. most compensation tenure is usually sixty months, tho’ some banks additionally supply eighty-four months or additional compensation amount to customers. This tenure includes/excludes up to six months moratorium.
8. there’s typically no payment penalty on skilled loans.
9. Business-related travel expenses like edifice boarding, airfare, seminar fees etc. will be coated by the loan.
10. Self-assembled instrumentation like computers is usually not eligible for finance.
11. Payments are also created on to the dealers/suppliers if the case therefore arises. The loan can also be disbursed in installments once the loaner verifies the tip use of the finances.
12. fast authorization and disbursal.
13. interest rates and compensation tenures.
14. easy and simple application method.
Professional Loan eligibility criteria in India:
The eligibility criteria for skilled loans is straightforward and kind of like the eligibility criteria for private loans. Those craving for the knowledgeable loan should be:
• The soul has to be knowledgeable – comptroller, Dentist, Doctor, Engineer, Surveyor, Architect, etc.
• should be active their trade with success for a minimum of a pair of years
• should be an authorized freelance professional—must possess licenses issued by a state or central bodies.
• ought to be ideally among twenty-one to sixty-five years previous. The age criteria dissent from loaner to the loaner.

professional loan
Professional Loan – Documents Required:
The general documents needed area unit KYC documents and documents relating your profession. Following is AN overview:
• instructional degree documents: Qualification proof of the very best skilled degree.
• PAN Card – For Company /Firm/ individual.
• KYC documents – Aadhaar Card/Passport/Voters ID card/driving license/Pan Card.
• Residence Proof – Aadhaar Card/Passport/Voters ID Card/Driving License
• Last vi months financial statement
• Latest ITR beside computation of financial gain, record, and Profit & Loss a/c for the last a pair of years. punctually authenticated by a CA.
• Proof of continuation of business (ITR / Trade license / institution / nuisance tax certificate)
• alternative documents as mandated by the loaner.
Professional Loan Interest Rates in India:
The interest rates on knowledgeable loan may vary middle eleven.50% to twenty p.a. or perhaps additional, betting on each your individual and business credit history, annual turnover, the variety of years operational, revenue, profits and in fact, the lender’s polices among many alternative factors.

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10 steps to your best deal on a car loan

10 steps to your best deal on a car loan

Arranging an extraordinary cost on another auto is recently a large portion of the fight: You additionally require an incredible auto advance to make it an awesome deal.Here are 10 hints to enable you to get the best vehicle credit

10 steps to your best deal on a car loan

1. Shop the advance independently from the auto.

Before beginning arrangements on the correct auto and value, start the advance application process with credit unions, banks, very much regarded online loan specialists and even your collision protection organization. “For the most part, we’ve seen that online banks have been the best,” says Anthony Giorgianni, relate back editorial manager of “Customer Reports Money Adviser” bulletin in Yonkers, N.Y. “The little banks may be extremely aggressive,” he says. “A considerable measure of them didn’t become involved with the credit crunch.” And credit unions rates have a tendency to be around 1 percent to 1.5 percent lower than banks, says Jim Hanson, a VP at the Credit Union National Association in Madison, Wis.

You can get pre qualification for an advance, which would empower you to go to the merchant with an unlimited free pass — great up to a predetermined sum, says Phil Reed, senior customer exhortation supervisor for Edmunds.com. When you have a strong, composed contract with the merchant, at exactly that point inquire as to whether they can beat the financing bargain you as of now have.

2. Farthest point your advance shopping to a two-week time frame.

Each time you apply for an advance — whether you are affirmed, regardless of whether you utilize it — your FICO rating goes down and it makes it marginally more hard to get a prime-rate advance. In any case, on the off chance that you make the greater part of your applications inside a two-week time frame, they consider just a single request.

3. Get comfortable with your own record of loan repayment.

Get free duplicates of your three credit reports, from Equifax, Experian, and TransUnion at www.AnnualCreditReport.com. On the off chance that you need to take in your correct scores from the three organizations, you can arrange them for a little charge from their individual Web locales. The credit or FICO score you purchase is most likely not a similar one your bank utilizes, but rather it ought to be close. With a vehicle advance, you have somewhat more squirm room as far as your score. “What’s viewed as useful for an auto credit will be a little lower than what’s useful for a home loan,” says Gail Hillebrand, the senior lawyer with the San Francisco office of Consumers Union.

4. Shop the aggregate credit sum, not the regularly scheduled installment.

The main time you ought to consider the regularly scheduled installment is the point at which you secretly figure the amount you need to spend for your auto. From that point onward, don’t talk about regularly scheduled installments. A few loan specialists may concentrate on the installments to instigate you to acquire more cash by expanding the quantity of months you pay. That way they make more in intrigue, and you need to drive your maturing auto longer.

10 steps to your best deal on a car loan

5. Try not to accept the best.

Loan specialists aren’t committed to offering you the best rate for which you qualify. In 2007, auto merchants increased credits by a normal 1.8 percent on utilized autos and 0.6 percent for new ones, as indicated by Josh Frank, senior specialist for the Center for Responsible Lending in Durham, N.C. Tell the loan specialist you’re looking for as of now have another offer. Will probably observe a superior rate. You can locate the best accessible automobile credits in your general vicinity at Bankrate’s auto rate tables.

6. Get the correct apparatuses.

What’s better for you — super-low merchant financing or money refunds? You can find a fast solution to that by utilizing Bankrate’s auto discount versus low-premium mini-computer. Inside a couple of moments, you’ll know to the penny which is the better arrangement. For the most part, it’s the money, says Giorgianni.

7. Read the fine print.

Take the advance printed material home and read it before you sign anything, prompts Massachusetts customer lawyer Yvonne Rosmarin. In the event that a moneylender or merchant dismisses that, exit. This is an official understanding that will keep going for quite a long time, so you have to know precisely what’s in it. A few focuses that warrant exceptional alert:

Required restricting discretion: “It takes away your entitlement to go to court for anything,” says Rosmarin.

Variable loan cost: Figure out the most astounding conceivable installment. In the event that you can’t manage the cost of it, the credit’s not for you.

Prepayment punishments: How much will it cost you to pay off the credit early in the event that you need to offer or renegotiate?

Is everything the bank guaranteed in the agreement? Oral guarantees are hard, if not difficult to authorize, says Rosmarin. In the event that there’s something missing that is essential to you, don’t sign until the point that it’s incorporated. In the event that it’s work that is guaranteed, don’t sign until the point that it’s finished.

8. Check the math.

On the off chance that the regularly scheduled installment is even somewhat unique in relation to your computations, the advance won’t have the terms you think you arranged. Utilize Bankrate’s auto adding the machine to twofold check.

10 steps to your best deal on a car loan

9. Dodge restrictive financing.

Never take an auto from a merchant until the financing — initial installment sum, financing cost, the length of the advance, regularly scheduled installments is settled. On the off chance that the financing is “unexpected” or “restrictive,” they can change later and you could stall out with less worthwhile terms.

10. Explore your bank.

“Beware of anybody you’re managing,” says Rosmarin. Attempt your state lawyer general’s office and the workplace of buyer issues, the Better Business Bureau, and in addition any administration offices (state or government) that control loan specialists. Hunt online to realize what clients and previous clients are stating. While you should take online remarks “with a grain of salt,” says Rosmarin, they can likewise give an early cautioning of conceivable issues.

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Methods to Calculate Loan Payments

Methods to Calculate Loan Payments

Should you recognize the way to calculate financing payment, likely to be able to place up the budget, therefore, there aren’t any complications. mistreatment an online loan calculator is usually recommended, just because of however simple it’s to form faults once shrewd long treatments on an everyday calculator. it’s crucial to combine taxes and insurance once shrewd a home loan payment as this may be needed by most lenders. (See “Warnings. “)
Loan Payment Calculator
Technique 1:
1 ) Employing an Online Calculator
a) Open an online loan calculator. You can click on the calculator in the “samples” section towards the top of this web page, then open it with Google Drive, or down load it to open with Excel or another sheet program. Alternatively, visit one of this links:
Bankrate. com and MLCalc are both simple calculators that also show a complete desk of your payment timetable, including remaining debt.
b) The calculator is advantageous for loans with unusual repayment or compounding intervals. Pertaining to example, Canadian mortgages are normally compounded semi-annually, or two times a year. (The calculators above assume the interest is compounded monthly, and payments are made every month. )
c) You can make your own loan calculator in Excel,
2. Enter the loan amount.
This is the total amount of cash borrowed. If you are calculating a partly paid loan, your amount of money you have left to pay.
3. Enter the rate of interest.
This kind of is the current gross annual rate of interest on your loan, in percentage form. Intended for instance, if you pay a 6% interest rate, type in 6. The compounding interval does not matter here. The interest rate specified need to be the nominal twelve-monthly interest, even if interest is calculated more frequently.
4. Enter the loan term.
This is the amount of time you intend to spend paying off the loan. Make use of the amount of time given on the money conditions to calculate the lowest monthly payment required. Help to make use of a not as long amount of time to calculate a higher regular monthly payment that would pay back the loan sooner. Spending the loan off quicker will also mean less total investment property. Browse the label next to the field to determine whether the calculator uses several weeks or years.

Methods to Calculate Loan Payments
5. Get into the get started date.
This kind of is wont to determine the date once you will end paying off the money.
6. Strike calculate.
Some calculators can mechanically update the “Monthly Payment” field when you enter the data. Other folks wait till you strike “calculate, ” then provide you a chart or chart showing your payment timetable. The “Principal” is that the level of the first loan left, whereas “Interest” is that the staying further charge. These calculators can show info for a “fully amortized” loan payment schedule, which advises you’ll pay precisely the same quantity each month. If perhaps you pay but the quantity displayed, you’ll find yourself paying one large payment at the suggestion of the loan term, and you’ll find yourself paying more money total.
Technique 2: Calculating Loan Payments Manually
1) Write down the formula.
The method to use when determining loan payments is Meters = P * ( J / (1 – (1 + J)-N)).[1] Follow the steps below for an in depth guide to employing this method, or refer to this quick explanation of each variable:
M = repayment amount
P = primary, meaning the amount of money borrowed
J = effective interest rate. Take note that normally, this is not the gross annual interest; see below for evidence.
N =12 total number of repayments
2) Be careful about rounding results partway through.
Ideally, use a graphing calculator or calculator software to calculate the complete formulation in one line. If perhaps you are by using a calculator that can only deal with one step at a time, or if you need to follow along with the steps in details below, round to no fewer than four significant digits before moving ahead to the next step. Rounding to a shortest decimal could bring about significant rounding errors in your final answer.
Even simple calculators ordinarily have an “Ans” button. This enters the previous answer into accompanying calculation, that is a lot of correct than shrewd it below.
The examples below area product rounded when every step, even so the ultimate step includes the answer you’d get if you finished the computation using one line, therefore you are going to be able to look at your work.

Methods to Calculate Loan Payments
3. Calculate your effective interest
Most loan conditions refer to the “nominal gross annual rate, ” nevertheless, you potential are not paying your loan off in twelve monthly installments. Divide the gross annual rate by one 100 to put it in fracción type, then divide it by a number of payments you create annually to induce the effective rate. For example, if the gross annual rate is five-hitter, and you pay in monthly installments (12 times per year), compute 5/100 to induce no. 05, then calculate J= 0. 05 / 12 = 0. 004167.
In unusual cases, interest levels are worked out at another type of interval than payment schedule. Most especially, Canadian mortgages are determined twice a year, in-spite of the borrower making payments 14 times a year. In this case, you would probably break down the twelve-monthly interest by two.
4. Note the total number of obligations N.
The loan term may already specify this number, or perhaps you may need to calculate it yourself. For example, if the loan term is 5 years and you will be paying in twelve monthly payments each year, your count of payments will be N = 5 5. 12 = 60.
5. Calculate (1+J)-N.
First add 1+J, then raise the response to the power of “-N. ” Make sure you include the negative sign in front of the D. Should your calculator can’t deal with negative exponents, instead write this as 1/((1+J)N).[2]
Inside our example, (1+J)-N sama dengan (1. 004167)-60 = zero. 7792
5. Calculate (1+J)-N.
First add 1+J, then raise the reply to the power of “-N. ” Be sure to include the negative sign in front of the In. If the calculator can’t take care of negative exponents, instead write this as 1/((1+J)N).[2]
Within our example, (1+J)-N sama dengan (1. 004167)-60 = zero. 7792
6. Calculate J/(1-(your answer)).
On a simple calculator, first calculate one particular – the quantity your worked out in the previous step. Next, calculate J divided by the result, using the effective interest rate you calculated above for “J. inch
In our example, J/(1-(answer)) = zero. 004167/(1-0. 7792) = zero. 01887
7. notice your monthly payment.
To do this, multiply your previous result by the loan quantity P. The end result are the precise quantity of cash you wish to pay every month to be able to pay off your loan punctually. For example, if you borrowed $30, 000, a person would multiply your answer from the last step by thirty, 000. continued our example on top of, 0. 01887 * 30000 = 566. 1 dollars per month, or $566 and ten cents.
This kind of works for any foreign currency, not merely bucks.
If you calculated our example all on one type of a flowery calculator, you’d get a lot of accurate monthly payment, terribly close to $566. 137, or regarding $566 and fourteen mere cents every month. If we instead paid $566 and 10 cents each month like we calculated with the less accurate calculator above, we would be slightly off by the end of the money term, and would need to pay a few dollars extra to make up for it (less than 5 in this case).
Method 3: Understanding How Loans Work
1. Understand fixed-rate vs . adjustable-rate loans.
Every loan falls as one of these two categories. Be sure to know which applies to yours:
a) A fixed-rate loan has an uninteresting interest rate. The regular monthly payment amount for these will not ever change, as long as you pay them on time.
b) A great adjustable-rate loan periodically changes its interest rate to match the current standard, so you could wrap up owing more or less money if the eyesight rate changes. Interest rates are just recalculated during the “adjustment periods” specified on your loan term. In the event you find out the actual current interest rate is a few months before the next adjustment period happens, you can plan ahead.
2. Understand retirement.
Amortization refers to the rate where the opening amount borrowed (the “principal”) is reduced. You will find two common types of loan payment schedules:
a) Completely amortized loan payments are calculated so you pays the exact same amount each month for the complete duration of the loan, settling the principal and the interest with each payment. The calculators and formulas above all believe you want this kind of schedule.

Methods to Calculate Loan Payments
b) Curiosity only loan payment programs offer you cheaper initial obligations throughout the specified “interest only” period, because you are only settling the interest, not the initial “principal” you borrowed. After the interest only period operates out, your monthly repayments will jump to a significantly higher amount, because you’ll start paying off the principal as well as the interest. This kind of will be more expensive in the long run.
3. Give more money early to save money in the long run. Adding an extra payment will reduce the total amount of money the loan costs in the long term, since there is less cash for interest to collect on. The earlier you do this, the greater money you will save.
a) On the reverse side of the piece, paying less than the monthly payment you worked out above will cause more total money spent within the long term. additionally take note that some loans have a minimum needed month to month payment, and you’ll be charged further fees if you fail to accomplish this.

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How to Finance a Car and Get a Car Loan

How to Finance a Car and Get a Car Loan

For most car buyers, it’s the last step, but ideally it should be the first. Knowing your finance options and your budget is a critical part of the buying process. A little preparation and knowledge can save you thousands of dollars.Many of the best car deals come from special financing offers from carmakers, so it’s important to check out what’s available on your chosen model. See our Best Car Deals and Best Lease Deals pages for the latest manufacturer incentives. To help you find dealers that are offering the lowest prices, check out our Best Price Program, which can save you thousands off of MSRP.Most car shoppers need a car loan to buy their next new or used car. Knowing the car financing basics covered below can help ensure you get the best financing deal on your new vehicle.

The Basics of Car Loans:-A car loan is one way for you to purchase a new or used vehicle. You borrow money from a lender and pay them back over time, usually with interest, unless you’re able to take advantage of a manufacturer’s special zero percent interest offer. The amount you borrow is called the loan principal or financed balance.Lenders almost always charge interest, which is how they cover their administrative costs, cover losses from people who fail to make timely payments, and make a profit. The interest rate is a percentage of the loan that you must pay back in addition to the loan principal. Interest rates are presented as an annual percentage rate.You’ll need to use a financial calculator to determine how the interest rate affects your monthly payment (use the U.S. News Car Payment Calculator). Changes in interest rates can dramatically change the affordability of that dream car. If it costs $20,000 and your 60-month loan rate is 5 percent, you’ll have a payment of $377 per month. If you’ve done your research and find a rate of 2.9 percent, you can drop it to $358 per month.That might not sound like a huge difference on the monthly payment, but over the life of the loan, you’ll pay $22,620 for your $20,000 car at 5 percent, while you’ll only pay $21,480 at 2.9 percent – that’s a $1,140 difference. While you’re paying back the lender, you’re also responsible for all taxes, fees, and expenses, like gas, insurance, and maintenance.Many people think that when you finance a car, the finance company lends you the money and the car is yours. In reality, however, the lender is buying the car and letting you use it. The lender actually owns the car, and they’re nice enough to let you drive it while you’re paying off the loan. In fact, you won’t have the title to the car and own it outright until you make your last loan payment. If you don’t make your car loan payments, the lender can repossess the car. If the car is destroyed or stolen during the term of the loan, you are still responsible for paying the loan back, which is why lenders require you to carry insurance on the car that names them as the lienholder.If you fail to provide proof of insurance to the lender, they will purchase insurance on your vehicle to protect their investment. You don’t want that to happen, however, as it’s very expensive insurance, and it only protects the lender, not you.

The Car Loan Term:-The length of the loan, or loan term, simply refers to the amount of time that it will take to pay the lender back. If you sign up for a five-year term, over the next 60 months you’ll pay the money back and then own the car free and clear.The vast majority of auto loans are repaid in monthly installments. You send the lender a set amount each month and slowly pay off the loan. Most financial institutions can set up automatic payments, which are a great way to ensure that an installment is not late or forgotten.With the rising cost of new cars, there’s been a trend in the industry to extend longer and longer loan terms to consumers; many lenders now offer eight-year car loans. While such long terms create somewhat lower payments, they can also create situations in which you owe significantly more money than the car is worth.

Your Credit Score:-When it comes to how much interest is charged on a car loan, some people get charged more interest, and some get charged less. Obviously, you want to be the one who gets charged less. The interest rate lenders charge is based on a number of factors, one of which is your credit score. Your credit score is sometimes called a FICO score, though FICO is only one of a number of credit scoring methods used by lenders.A credit score is a number that credit bureaus assign to you based on how much debt you have, the number of accounts that you have open, how much credit you have been offered, how good you’ve been about paying bills on time, and how long you’ve been using credit. Your lender will use information from your application and credit report to determine your debt-to-income ratio (the amount of debt you have compared with how much money you earn).Lenders use the score to predict your ability and likelihood to pay them back. If your score is low, lenders will assume that you’re at high risk for not paying the loan back, and they will charge you a higher interest rate to cover the higher risk. Lenders may also require a larger down payment from buyers with lower credit scores, or only extend a loan offer for a shorter term.The last place you want to find out that your credit score is low is a dealership’s finance office. You should know what your credit score is before you apply for a car loan and do your best to make sure it’s as high as it can be. Generally speaking, credit scores of 720 and above get the best loan rates.Though you are entitled to free credit reports from the major credit bureaus each year, you’ll often have to pay a few dollars extra to get your actual credit score. If your score is not as high as you’d like, paying off old bills (like credit card debt) and paying all bills on time for six to nine months should bring your score up and help you get a better interest rate. If you don’t have any credit card debt, closing unused cards can help raise the score. If you do have card balances, closing cards can actually hurt your credit by raising your percentage of credit utilized.You’ll also want to take a look at your full credit report to ensure its accuracy. If someone stole your identity and opened a credit card in your name and you aren’t aware of it, it could affect your ability to get a car loan, or the terms of any loan that you are offered. You need to report the fraudulent activity right away to the credit bureaus so any errors can be fixed before you apply for auto financing. Dealing with the credit bureaus takes time, so getting out ahead of issues is critical.

Apply:-You wouldn’t just apply to one job or one college, so you shouldn’t apply to just one lender for a car loan. Contact your bank, local credit unions, other lenders (both brick and mortar and online), and auto manufacturers to find out what they’re offering. You’ll have to fill out loan applications, which will ask for your social security number, employment and income information, monthly expenses (like mortgage and rent), and any outstanding debts, including credit cards and student loans.When you fill out auto loan applications through multiple lenders, be sure to do it over a short period of time. If you spread your applications out, the multiple applications for financing can lower your credit score, as it might look like you need multiple loans. Do all your applications around the same time, and the credit bureaus are smart enough to see that all f the inquiries are pointing to a single potential loan.Do not exaggerate your income or misstate your expenses and amount of debt. The lender will pull your credit history and credit score. If you lie, you’ll get caught. Evidence of dishonesty on a loan application can cause the loan to be rescinded at any time during its term.If you are planning to use your vehicle for a ride sharing service such as Uber or Lyft, be sure to tell potential lenders. Many will then consider the potential loan a business loan, which is subject to different underwriting standards. Failure to disclose such use can result in a lender requiring immediate full repayment of the loan.Taking out a car loan is a complex transaction, but carefully looking over the loan offers and ensuing documents is vital. The interest rate and the monthly payment shouldn’t be the only things you look at. Avoid offers that charge you high fees unless a lower interest rate or shorter loan term offsets the initial costs. Watch out for variable rate loans that start at a low rate, but climb based on time or some other rate index. With interest rates expected to rise for the next several years, it’s probably best for most buyers to lock in a low fixed rate today.Watch out for loans that have a prepayment penalty, which is a fee charged if you pay the loan off early. Paying the loan off early may not be something you’ll be able to do, but if your long-lost Aunt Mabel dies and leaves you a fortune, paying it off could save you a lot of money, and you don’t want to pay extra fees to do it.

Don’t Feel Dejected about Getting Rejected:-If your car loan application is rejected, you’ll probably feel terrible, but in the long run that rejection is likely a good thing. A rejected loan application means the lender didn’t think you’d be able to pay the money back. As hard as that is to hear, that lender likely saved you from getting into more debt than you can handle. When loans are not approved, the lender is required by law to provide you with the reasons why. You may even find in the explanation that the lender relied on erroneous information, and you should have been approved.If the rejection was based on solid information, it’s time to reassess your budget to determine what you can truly afford – not just monthly, but over the life of the loan. Try finding a less expensive car to buy, or save up more money so you have a larger down payment, reducing the amount you’ll need to borrow.Whatever you do, don’t fall into the trap of a lender who promises that they can find financing for anyone, regardless of their credit. Such high-risk loans are likely to have such unfavorable terms that they can do tremendous damage to your overall financial picture for years to come.

Show Up with Financing:-As with nearly every aspect of the car buying process, financing is negotiable. Unfortunately, it’s also confusing, which a dealer can take advantage of to make more money. In many cases, the dealership makes more money from the financing than they do from the sale of the car. So while a dealership might offer you a spectacular price on that dream car, they’re likely to come out ahead by selling you on expensive financing.While many car buyers want to believe that the car dealership is offering them the best financing rates, that’s not always the case. While you should certainly consider the loan the dealership offers, the best way to get the lowest interest rate is to bring a pre-approved loan from your bank, credit union, or third-party lender when you go to the dealership. If the dealership can beat the interest rate, fees, and other loan terms, you can decide to take the dealer’s offer. If not, you already have financing in hand, and you can focus on the price of the car and your trade-in.Now that you understand the basics of financing a car, you’ll be able to get the best car loan for your budget. Remember the foremost rule of car-buying: Knowledge is your best friend.Some of the best car deals come from special financing offers from carmakers, so it’s important to check out what’s available on your chosen model. See our Best Car Deals and Best Lease Deals pages for the latest manufacturer incentives. To find dealers that are offering the lowest prices, check out our Best Price Program, which can save you thousands off of MSRP.

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Automated Teller Machine

Automated Teller Machine

An automated teller machine, also known as an automatic teller machine (ATM, American, British, Australian, Malaysian, South African, Singaporean, Indian, Maldivian, Hiberno, Philippine and Sri Lankan English), automated banking machine (ABM, Canadian English), cash point (British English), cashline, minibank, cash machine, cash dispenser or bankomat is an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions, particularly cash withdrawal, without the need for a human cashier, clerk or bank teller.According to the ATM Industry Association (ATMIA),there are now close to 3 million ATMs installed worldwide.

On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date or CVVC (CVV). Authentication is provided by the customer entering a personal identification number (PIN) which must match the PIN stored in the chip on the card (if the card is so equipped) or in the issuing financial institution’s database.Using an ATM, customers can access their bank deposit or credit accounts in order to make a variety of transactions such as cash withdrawals, check balances, or credit mobile phones. If the currency being withdrawn from the ATM is different from that in which the bank account is denominated the money will be converted at an official exchange rate. Thus, ATMs often provide the best possible exchange rates for foreign travellers, and are widely used for this purpose.

History:-The idea of out-of-hours cash distribution developed from bankers’ needs in Asia (Japan), Europe (Sweden and the United Kingdom) and North America (the United States).Little is known of the Japanese device other than it was called “Computer Loan Machine” and supplied cash as a three-month loan at 5% p.a. after inserting a credit card. The device was operational in 1966.In the US patent record, Luther George Simjian has been credited with developing a “prior art device”. Specifically his 132nd patent, which was first filed on 30 June 1960 (and granted 26 February 1963). The roll-out of this machine, called Bankograph, was delayed by a couple of years, due in part to Simjian’s Reflectone Electronics Inc. being acquired by Universal Match Corporation.An experimental Bankograph was installed in New York City in 1961 by the City Bank of New York, but removed after six months due to the lack of customer acceptance. The Bankograph was an automated envelope deposit machine (accepting coins, cash and cheques) and did not have cash dispensing features.

It is widely accepted that the first ATM was put into use by Barclays Bank in its Enfield Town branch in north London, United Kingdom, on 27 June 1967.This machine was inaugurated by English comedy actor Reg Varney.This instance of the invention is credited to the engineering team led by John Shepherd-Barron of printing firm De La Rue,who was awarded an OBE in the 2005 New Year Honours.Transactions were initiated by inserting paper cheques issued by a teller or cashier, marked with carbon-14 for machine readability and security, which in a later model were matched with a six digit personal identification number (PIN).Shepherd-Barron stated; “It struck me there must be a way I could get my own money, anywhere in the world or the UK. I hit upon the idea of a chocolate bar dispenser, but replacing chocolate with cash.”

The Barclays-De La Rue machine (called De La Rue Automatic Cash System or DACS) beat the Swedish saving banks’ and a company called Metior’s machine (a device called Bankomat) by a mere nine days and Westminster Bank’s-Smith Industries-Chubb system (called Chubb MD2) by a month.The online version of the Swedish machine is listed to have been operational on 6 May 1968, while claiming to be the first online ATM in the world (ahead of a similar claim by IBM and Lloyds Bank in 1971).The collaboration of a small start-up called Speytec and Midland Bank developed a fourth machine which was marketed after 1969 in Europe and the US by the Burroughs Corporation. The patent for this device (GB1329964) was filed on September 1969 (and granted in 1973) by John David Edwards, Leonard Perkins, John Henry Donald, Peter Lee Chappell, Sean Benjamin Newcombe & Malcom David Roe.

Both the DACS and MD2 accepted only a single-use token or voucher which was retained by the machine while the Speytec worked with a card with a magnetic stripe at the back. They used principles including Carbon-14 and low-coercivity magnetism in order to make fraud more difficult.The idea of a PIN stored on the card was developed by a British engineer working on the MD2 named James Goodfellow in 1965 (patent GB1197183 filed on 2 May 1966 with Anthony Davies). The essence of this system was that it enabled the verification of the customer with the debited account without human intervention. This patent is also the earliest instance of a complete “currency dispenser system” in the patent record. This patent was filed on 5 March 1968 in the US (US 3543904) and granted on 1 December 1970. It had a profound influence on the industry as a whole. Not only did future entrants into the cash dispenser market such as NCR Corporation and IBM licence Goodfellow’s PIN system, but a number of later patents reference this patent as “Prior Art Device”.

Diffusion:-Devices designed by British (i.e. Chubb, De La Rue) and Swedish (i.e. Asea Meteor) quickly spread out. For example, given its link with Barclays, Bank of Scotland deployed a DACS in 1968 under the ‘Scotcash’ brand. Customers were given personal code numbers to activate the machines, similar to the modern PIN. They were also supplied with £10 vouchers. These were fed into the machine, and the corresponding amount debited from the customer’s account.A Chubb-made ATM appeared in Sydney in 1969. This was the first ATM installed in Australia. The machine only dispensed $25 at a time and the bank card itself would be mailed to the user after the bank had processed the withdrawal.
Asea Metior’s Bankomat was the first ATM installed in Spain on January 9, 1969 in downtown Madrid by Banesto. This device dispensed 1,000 peseta bills (1 to 5 max). Each user had to introduce a security personal key using a combination of the ten numeric buttons.In March of the same year an ad with the instructions to use the Bancomat was published in the same newspaper.

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Consolidated Loans In America

Consolidated Loans In America

Private lenders once played a larger role in the student loan market than they do today.  In the past, students submitted the Free Application for Federal Student Aid (FAFSA), to the Department of Education, before being referred to private lenders for loan fulfillment.  In other words; the Federal Government would determine your eligibility for subsidized loans, and then a private credit union, bank or loan servicer would provide the funds.

Debt is a way of life for Americans, with overall U.S. household debt increasing by 11% in the past decade. Today, the average household with credit card debt has balances totaling $16,748, and the average household with any kind of debt owes $134,643, including mortgages.

While “don’t spend above your means” will always be sound advice, NerdWallet’s annual survey of household debt and its costs makes clear that increasing debt loads aren’t just a case of lifestyle creep. The rapid growth in medical and housing costs is dwarfing income growth, making it challenging for many families to make ends meet without leaning on credit cards and loans.

But this doesn’t mean Americans are doomed to be indebted for life. Careful spending and steady debt eradication can go a long way toward getting people to financial freedom.Bank of America was active in that market, providing financing for participants in the Federal Family Education Loan Program (FFELP).  Stafford Loans, and other government-subsidized initiatives, including consolidation loans, were among BOA’s stable of student assistance programs.  Today, regional and national banks extend attractive private student loan products, but they are no longer included in the federal financial aid process.Educatioon Reconciliation Act of 2010 made fundamental changes in the way student loans are administered.  Subsidies for banks that gave student loans were eliminated, and the student loan program took on a self-funded model.  By cutting out the middleman – the private lender – the Department of Education administers funding with greater efficiency, thus expanding educational opportunity among borrowers.

All loans issued after July 1st, 2010 are part of the William D. Ford Federal Direct Loan Program, which distributes aid directly from the DOE. Federal Loan Consolidation remains an option for students, and BOA does offer a portfolio of student-oriented financial services that meet a variety of educational needs.

Pre-Consolidation Considerations:-Loan consolidation allows students to package existing educational debt into a single government loan. If you have multiple outstanding federal student loans, including Stafford, Perkins and PLUS Loans, it might make fiscal sense for you to utilize consolidation. But participation does not always guarantee a rosier outlook.  Some candidates are better off sticking with the status quo.  Ask these questions to help determine whether or not consolidating is your best option:

    -How many lenders hold your student loans?
    -What types of student loans do you have?
    -What are your interest rates?
    -Are monthly payments difficult to meet?
    -Are you still within your grace period?

Federal Consolidation Loan:-Federal Consolidation allows some students to realize better interest rates and structured repayment that is within reach.  For qualified participants, a single monthly payment eliminates the need to pay each loan individually, and the repayment terms of the loan can be extended for as long as 30 years.Students in the market for this type of loan should pay close attention to how total repayment costs might be impacted. Consolidating and extending the repayment schedule of your loans adds more interest, which has the potential to add considerable costs to your total debt obligation. If you are struggling to make monthly student loan payments, consolidating your student debt might be required to protect your credit.  By extending the life of your loan repayment, your monthly payments are made smaller, but borrowers must weigh these benefits against the higher amount of interest that will be paid over the course of the loan.Consolidating extends student loan repayment up to 30 years, and it also provides opportunities for borrowers to add fixed interest rates to outstanding loans. Variable interest terms that come with some student loans are subject to fluctuations, so locking a fixed rate makes sense. Direct Consolidation changes are irreversible. Once you consolidate, it is as though your original loans are off the table, and you are starting with a clean slate.  Before you consolidate, make sure that positive features of your original loans are not lost during the transition.

Private Student Loan Consolidation:-Students that need assistance beyond federal loans and scholarships seek private student loans.  The Bank of America Student Program Consolidation Loan gives borrowers the flexibility to roll multiple private education loans into one consolidated loan.  Eligible loans include those that were used for expenses like textbooks and computers.

A single, consolidated monthly payment offers relief from high interest rates and reduces administration costs on multiple loans. The minimum consolidation loan is valued at $10,000. Borrowers with 48 consecutive on-time payments earn a .78% interest rate reduction and an additional .25% is discounted when participants enroll in an automated withdrawal payment program.

Key findings:-Why debt has grown: The rise in the cost of living has outpaced income growth over the past 13 years. Median household income has grown 28% since 2003, but expenses have outpaced it significantly. Medical costs increased by 57% and food and beverage prices by 36% in that same span.How much debt we have: Total debt is expected to surpass the amounts owed at the beginning of the Great Recession by the end of 2016.Americans will soon owe more than they did in December 2007 — but that doesn’t mean another recession is looming.

The cost of debt:-The average household with credit card debt pays a total of $1,292 in credit card interest per year. This could increase to $1,309 after the Federal Reserve voted on a rate hike of a quarter of a percentage point.After adjusting for inflation, household debt has grown 10 percentage points faster than household income since 2002. However, this gap has gotten significantly smaller since 2008, when the difference between debt and income was 38 points.After years of rapid growth, education costs have stopped outpacing income — growing 26% since 2003 , compared with 28% income growth.And while student loan debt has grown 186% in the past decade, this growth has also slowed in recent years. Between September 2015 and September 2016, student loan balances increased by just 6.32%, the lowest annual growth since we started tracking the numbers in 2003.In addition to the apparent plateauing of education costs, it’s possible that student loan growth has slowed because of lower college attendance, specifically in the for-profit sector. There’s been a steep decline in enrollment at four-year for-profit institutions: 13.7% between fall 2014 and fall 2015.
This isn’t totally surprising. Several for-profit colleges have closed due to pressure by the Department of Education and stronger regulatory scrutiny, and others are losing students as the economy rebounds and their potential students now have more job opportunities. In addition, the number of for-profit colleges that can award financial aid has declined.For-profit schools are, on average, more expensive than public universities, and students who attend are more likely to take out loans. Students are opting instead to either attend nonprofit colleges or universities or be in the workforce, both of which likely contribute to lower overall student loan balances.

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Personal Loan – Advantages & Disadvantages

Personal Loan – Advantages & Disadvantages

Personal Loan is a type of unsecured loan that is given to a consumer to cater to any of their personal needs like buying a vehicle, home appliances, marriage or for renovation etc. It is given after verifying your ability to pay, particularly the source of income and also as per your credit history.Personal loan as the name itself suggests are those loans which are given to individuals for personal use and they are given without any security, in case of home loans property is a security, in case of vehicle loan vehicle itself is security but in case of personal loan the individual himself or herself is security and the repayment of this type of loan is dependent only on the income of the individual. In short personal loan is an unsecured loan; let’s look at some of the advantages and disadvantages of personal loan.Some processing fee is charged and the amount according to your paying ability gets credited to your account. The payment of the loan is made through fixed installments including interest for a fixed period of time. Personal loans come handy these days. You do not have to go through tedious paper work and loads of formalities. Majority of banks and financial institutions provide personal loans. The interest rates are also quite reasonable and people often take a personal loan for purchasing purpose.
 
Advantages of Personal Loans:-The biggest advantage of personal loan is that it can be used for variety of purpose, unlike housing loans which can be used for only construction or purchase of house or vehicle loan which can be used only for purchasing of vehicle. For example, if an individual needs $5000 for marriage, $2000 for the renovation of a house and $1000 for other important expenditures then a personal loan of $8000 will solve all his or her problems.Another advantage of personal loan is that the whole process right from applying for loan to the documentation of loan and then disbursement of loan takes far less time then compared to other loans. Hence when one is in urgent need of funds then a personal loan is the best option.All type of loans requires collateral security but personal loans are exception and hence people who do not have any fixed assets with them and are unable to get any loan then personal loan comes to rescue for such people. In short lack of any requirement of collateral security gives personal loan another edge over other types of debts.

Easily Available:-Getting a personal loan is not a tough task. Personal loans are offered at reasonable interest rates by almost all banks and financial institutions. It is easy and convenient to get these loans in comparison to other types of loans.

No Agent or Middleman Involved:-In order to get a personal loan you do not have to approach a middle man or an agent. This avoids unnecessary delays and expenses. You can directly approach the bank or financial institution for the purpose.

Unsecured Loan:-As stated earlier, personal loan is an unsecured loan. There is no collateral security required in order to get this loan. All that is required is your ability to pay back the money. You are not required to mortgage any of your assets or provide for any kind of guarantee. One the lending institution become sure of your re-payment ability, they process the loan.

Less Processing Time:-As personal loans are available without any security or guarantee the processing time involved in getting it is also very less.  

All Purpose Loan:-Personal loan is such where it is not mandatory for you to specify the cause for which you are to use the money. You can use the amount credited in your name for any purpose. It is at your discretion to decide what you have to do with the money.

Minimum Paperwork:-Getting a personal loan does not require verification of any asset or any other kind of proofs and certificates that involve a lot of paperwork as none of your property is mortgaged.

Schemes and Offers:-Number of banks and financial institutions keep announcing special schemes and offers of personal loans for professionals like Chartered Accountants, Doctors and Architects etc.

Amount and Tenure:-Personal loans are offered ranging from Rs15K to Rs 20 lakhs varying from bank to bank. The repayment can be made through EMIs which is an option available. Loans tenure may depend upon the amount borrowed and may be from 12 months to 60 months. It is always advisable to opt for a personal loan instead of going in for borrowing cash from credit card as the interest rate is comparatively low for the first one.

Disadvantages of Personal Loans:-The biggest drawback of this type of loans is that they carry very high interest rate, since personal loan is unsecured in nature therefore lenders or banks charge higher rate of interest on these loans as compared to housing or vehicle loans.It is not easy to get this type of loan it is not like you will walk in the bank and bank will give you money, in order to get personal loan an individual needs to have good credit rating and good credit history hence this requirement regarding credit rating and history makes majority of individuals ineligible for personal loan.Another disadvantage of personal loan is that many banks and financial institutions do not allow part repayment of the loan which in turn results in debt getting bigger and bigger due to interest. So for example if you have taken $10000 personal loan and if you want to repay $1000 then bank will not allow such part repayment which is not the case with housing or other type of loans where the loan amount keeps getting reducing due to part repayment feature resulting in lower overall interest.

Qualification Criteria:-You need to qualify for a personal loan as per the guidelines of the bank and once you do that there is no delay. The guidelines vary from one bank to the other and the lenders do observe strict guidelines in this case as there is no collateral security.

Credit History:-It is mandatory for you to have a good credit history when you apply for a personal loan or else your application may get rejected. No lender would want a bad debt for the amount he lends. So prior to applying for your personal loan make sure you have a good credit history without any default in payments. It is advisable to apply for a personal loan with the bank in which you have an account or with which you share good rapport. Applying for a personal loan with a new bank or financial institution may result in more paperwork as they may call for detailed documentation and references for verification.

Bank Account:-It is mandatory for you to have a bank account if you wish to avail a personal loan. Not necessarily with the bank you are applying for.

Lender’s Risk:-As it is an unsecured loan, the risk is quite high for the lender because there is no collateral security or guarantee with them. If the borrower defaults payments then recovery of these loans prove to be very expensive and tedious.

If you are the one who owns a good credit history and have means to repay the amount borrowed with interest then you can easily get a personal loan for any purpose you require. If you do a bit of research you may be able to strike the best deal in terms of interest rates while you apply for your personal loan.

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Types Of Personal Loans

Types Of Personal Loans

You’re in way over your head financially. You’re considering asking for a loan to consolidate your debt. You want to buy a new home or car. Whatever your reason for wanting a personal loan and before you decide your best option, understand that a loan, regardless of the type, involves borrowing money and having to pay it back with interest.

Different Types of Personal Loans:-Personal loans are not one-size-fits-all. There are several options. Personal loans include:

    -Convertible loans
    -Fixed-rate loans
    -Installment loans
    -Payday Loans
    -Personal Loans
    -Online Loans
    -Secured loans
    -Single-payment loans
    -Unsecured loans
    Variable-rate loans

What Is A Personal Loan:-A personal loan can be a secured loan or an unsecured loan. This kind of loan is used for everything from funding an education or financing a new business venture to purchasing luxury items or taking a lavish vacation. A secured loan uses an asset — such as a house or car — as collateral (or support). If the borrower defaults on the loan, the creditor can take the asset. An unsecured loan does not require collateral, so it is considered high risk for the lender. As such, it has a higher interest rate.Personal loans have evolved over the years to meet the changing needs of the consumer. It used to be nearly impossible to get a personal loan with a limited or bad credit history, but today there are loan options for people with bad credit and nearly every other type of consumer.

Benefits Of Choosing a Personal Loan:-The major benefit of a personal loan is in the name: It’s personal. You can use it for any reason you like and you don’t need collateral to get one.The choices range from something practical like consolidating credit card debt or remodeling the bathroom to something whimsical like buying a boat or taking a European vacation. The choice is yours.Personal loans, especially unsecured ones, usually don’t require much more than filling out an application form and supplying documents that verify your financial standing. The money doesn’t have to come from a traditional source like banks or credit unions.Family and friends can be the source of money, though it is advisable to have a formal loan agreement with them to make sure the relationship doesn’t go sour. There also are a number of peer-to-peer online lending sources like Prosper and Lending Club, as well as sites like Kickstarter and IndieGoGo that cater to entrepreneurs. The online sites normally charge a fee, but if you need money and need it fast, this is one of the options available.

Some other benefits of personal loans include:

    -You get the money faster. In most cases approval is much quicker than with conventional loans.
    -Don’t need a bank. The money could come from an online lender, a family member or friend.
    -Fixed rate interest, fixed length of repayment and fixed monthly payments
    -Loan amounts available from $1,000 to $100,0000
    -Lower interest rates than credit cards.
    -If loan comes from bank, possible discounts on interest rates.

Each loan type serves a purpose, so it is important to understand how to obtain the best type of loan for your individual situation.

Convertible Loans:-Normally used for business, convertible loans allow lenders the option to convert the outstanding principal of the loan into an equity position in the borrower’s company, which over time, may be worth more.

Fixed-Rate Loans:-Most personal loans are fixed-rate loans. The interest rate remains constant, so you pay the same amount every month until paid in full. Most homebuyers look for fixed-rate loans when they purchase a home. Though the interest rate is higher than with an adjustable-rate home loan, this type of home mortgage offers more security.

Installment Loans:-These are what most people think of when they think of a loan. You borrow a set amount of money and then repay it along with interest at regular intervals over a set period. These loans typically finance homes, cars, and other expensive items.

Payday Loans:-In general, payday loans (sometimes called cash advances) are one of the most expensive borrowing options, charging extremely high interest rates and excessive fees. They are a small, short-term loan secured against your next paycheck and are typically used for emergencies only.However, there are several payday loan alternative lenders out there like LoanNow, which offer better rates and experience for borrowers.

Secured Loans:-A secured loan is such because you offer an asset, like a home or car, as collateral to guarantee repayment of the loan. If you fail to pay, the lender takes your asset. Home equity and standard car loans are examples of secured loans.

Single Payment/Bridge/Interim Loans:-The single payment loan has many names, including bridge loan and interim loan. Generally, a single payment loan is used for short term, temporary financing and is repaid with interest in one lump sum at the end of the term. Payday loans are examples of a single-payment loan.

Unsecured/Signature Loans:-Unsecured or signature loans do not require collateral. With the right kind of credit history, your mere signature guarantees this type of loan. Unfortunately, they have a high interest rate due to the high level of risk. Credit cards are the best example of an unsecured loan.

Variable-Rate/Adjustable Loans:-Variable-rate loans are riskier for consumers than fixed-rate loans because the interest rate adjusts at different intervals throughout the life of the loan based on the market. However, the maximum interest rate a lender can charge is limited (capped). It is generally easier to get an adjustable loan, and the initial interest rate is typically lower. The most common variable-rate loan is the ARM (adjustable-rate mortgage) for homebuyers.

Securing a Personal Loan:-If you’ve read this far and have decided that a personal loan is right for you, there are steps you need to take before you get cash in hand.

    -Make sure your credit is good by obtaining a copy of your credit history. Review it carefully and fix any problems (such as outstanding debt or errors in the report) immediately.
    -Check out your credit score (760 or higher gets you the best deal). You can get FICO scores and credit reports at  (consumer division of Fair Isaac Company). You can also ask a lender where you’ve recently submitted a loan application, though they might not provide it.
    -Shop around for a lender. Some suggest shopping local (like the corner credit union) before contacting the larger institutions.
    -Compare lenders’ annual percentage rates, called APR. This is the annual rate of interest you pay for a loan.

Applying for a personal loan is a big step. Before you take any action, make sure you fully understand your options as well as the advantages and disadvantages of borrowing.

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Things You Should Know About Joint Checking Accounts

Things You Should Know About Joint Checking Accounts

Joint checking accounts offer convenient money management for many different types of relationships, including married and cohabiting couples and adult children and their parents.But the convenience of joint checking accounts potentially comes with a cost that families need to consider before signing up. Here are six issues you need to think through before you open a joint checking account with a spouse, a significant other, an adult child, or a parent.

There is no accountability for withdrawals:-Generally, couples tend to open joint accounts because they are sharing a home and expenses. That means that it’s in their best interests to be responsible with the money, since it will affect them both if the rent money is spent on a weekend in Vegas. However, if one person is unreliable with money, or planning to leave the relationship suddenly, a joint account can be dangerous for the other account holder.This issue can be more difficult when the two account holders are parent and child. Often, an adult child will request that they be added to their elderly parents’ checking account to help protect dear old Mom or Dad. They can help pay bills, and make sure that there is no fraudulent activity on the account. The problem is that both account holders have every right to withdraw money from the account — which an unscrupulous adult child could take advantage of.

Joint accounts are vulnerable to the financial mistakes of both owners:-If either account owner has unpaid debts that go into collection, the creditor has every right to use the joint account to satisfy those debts. This means you might potentially find your joint checking account completely drained in order to pay off debts you are unaware that your co-owner has run up.In addition, if there is a legal judgment against either account owner, the money in the joint account could be considered part of the assets awarded in the judgment. For instance, if Jane is sued because she crashed into a bus, then the assets in the joint account she holds with her elderly father are considered part of Jane’s assets in terms of the lawsuit — even if the account was originally solely in Dad’s name.

A joint account could hurt your credit:-Although your spouse or child’s credit rating can’t ding your score, the way they handle their money can hurt your credit if you share a joint account with them. Since creditors are required to report joint account information, an account holder who struggles with debt and paying bills on time will negatively affect the co-owner’s credit rating — unless and until the money behavior improves.If either account owner needs to qualify for any kind of financial assistance, from financial aid for college to Medicaid, the money in a jointly held account is included in the eligibility calculations for the financial aid. That means you might end up forfeiting your ability to qualify for the financial assistance if your account co-owner holds more cash in the account than you would as a sole account owner.

Your co-owner can close the account without your permission:-Certain banks require consent from both parties to close a joint checking account, but most do not. Typically, state laws dictate that any person who can write checks on the account can close it, at any time, regardless if their co-owner is present or even aware. The benefit to this is if one party relocates, passes away, or otherwise becomes incapacitated, there are very few issues the remaining co-owner must go through to close the account. The danger, however, lies in the potential for one co-owner to simply deplete the funds, close the account, and disappear. Always make sure you’re sharing a checking account with someone you trust.

Parent/child joint accounts can have estate implications:-A joint account holder retains sole control of the money in the account in the event of the co-owner’s death. In the case of spouses or other cohabiting couples, this kind of financial transfer in case of death is not a problem. However, if the account owners are a parent and child, the issue is much more complicated.That’s because the money in the checking account stays with the surviving account holder, bypassing whatever the deceased account holder may have put in their will. For instance, Loretta has three children and has specified in her will that her assets will be distributed evenly among them. But Loretta has a sizable joint account with her son Jason, and upon her death the money in that account will be solely under his control. Unless Jason feels like splitting up the money in the account three ways, his siblings are not going to see that portion of their inheritance.

Merge with caution:-While joint checking accounts offer convenience to couples and parent/child relationships, they also come with a number of potential headaches. Make sure you know what you are signing up for before you and your potential co-account owner start picking out your personalized checks.

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The Different Types of Loans

The Different Types of Loans

The other day a friend of mine asked me about different loan types, as she was on her way to the bank to consolidate some high-interest credit card debt. I was surprised at the seemingly elementary questions she was asking — she is an intelligent well-established gal who is pretty good with numbers (the credit card debt is another story).It made me realize that maybe she is not alone. Although you may know what the various debt vehicles and loan types are, do you know all their inherent characteristics? If you’re not sure, here is a loan primer to refresh your knowledge.
Secured vs. Unsecured

All loans, no matter what they are, are either secured or unsecured.
Secured Loans:-These are secured (or borrowed) against an asset you own, such as your home, which is offered up as collateral. Ultimately if you default on the loan, the bank will get their money back by way of foreclosing your house (or otherwise seizing the collateral).The interest rate should be very low (and often negotiable), hovering close to prime rate. The better your credit rating is, the more bargaining power you have with the terms, including loan amount and repayment period.Payment terms are flexible, and can even be structured as “interest-only.”If the loan is secured against the equity in your home, the application process usually involves a “drive by appraisal” of your home and some legal fees, that together amount to a few hundred (up to a thousand) dollars. As such, it’s usually best to apply for a higher loan qualification amount than you think you need (as long as you know yourself well enough not to get into more debt unnecessarily). This way if you wish to borrow more money later on, new appraisals and legal fees can be avoided.

Examples of secured loans:-

   Car loans
    –Boat (and other recreational vehicle) loans
   Mortgages
   Home equity loans
    –Home equity lines of credit

Unsecured Loans:-These are (as they sound) not secured against any assets. The bank can only utilize collectors (and freeze your accounts) if you default.The loan amount granted is largely attributable to your credit history and income/assets/debts at the time of application. There is a considerably higher assumption of risk on the bank’s part with an unsecured loan. Thus, the interest rate is much higher.

Examples of Unsecured Loans:-

    Personal loans
   Personal lines of credit
   Student loans
   Credit cards/department store cards

Loan Types:-There are a few different ways the bank can lend you money.

Line of Credit:-Similar to a credit card,you are given a maximum allowable balance, and each month you can borrow as much as you wish from the line of credit up to the maximum.Monthly minimum payments vary from a percentage (e.g. 3%) of the outstanding balance (as for most unsecured lines of credit), to as little as interest only (as for some secured lines of credit).You can pay as much as you wish above the minimum payment amount, whenever you wish.Some lines of credit come with checks, or can be linked to your bank card for debit transactions.Can be secured or unsecured.

Conventional Loans:-Conventions loans include personal loans, home equity loans, car loans, etc.The repayment terms and amortization is pre-determined and consistent. For example, a $5,000 loan payable over 3 years in equal payments at 8% interest.You cannot add to this loan without applying for a new loan entirely.You can usually pay off the loan faster than schedule without penalty.Monthly minimum payments will often be higher than they would with a Line of Credit, due to the shorter amortization (period of time to pay it back).Can be secured or unsecured.

Mortgage:-Mortgages are always secured loans, with the collateral usually being real estate. They are for large amounts of money, and are payable over long periods of time.Maximum amortizations (repayment periods) for a mortgage range from 25 to 30 years, depending on where you live.You can borrow up to a certain percentage of the appraised value of the property, subject to some restrictions and insurance provisions.Interest terms can be either fixed or variable. Fixed interest locks your rate in for a fixed period, typically five years. Variable interest rates will fluctuate with the prime rate, and have little to no lock-in period.The penalty to break a fixed rate mortgage mid-term can be outrageous. So if the interest rates go down dramatically, you are stuck with the rate you have until the term (e.g. five years) is up. On the flip side, if the interest rates go up dramatically, your interest rate is protected for the duration of the term.

All the interest is paid up front. In the first few years of having a mortgage, almost all of your payments are comprised of interest, with only a few dollars reducing the principal. It is not until the later years of a mortgage that the reduction of your principal loan amount picks up momentum.Althoughp you can’t always repay as much as you wish, you can usually make additional payments which directly reduce your principal loan amount.

Credit Cards:-Known in some circles as the antithesis of all things good and pure, credit cards tend to get a bad rap. Depending on how they are used and abused, they can admittedly be bad news.You are allocated a maximum balance, with freedom to charge as much or little to it within the limit.Standard credit cards are always unsecured, so the interest rate is high: usually 9-19% (with the average being closer to 18%).The minimum payment is usually quite small — expressed sometimes as a percentage of the outstanding balance, but in some cases it is little more than just the interest.Ifyou pay off the balance in full before the due date, you are not usually charged any interest (this depends on the credit card).Each type of debt serves a specific purpose, although they can be interchanged depending on your situation. The most important thing in managing your debt is to be realistic about what you can handle. Underestimate the amount of money you have to pay towards your debt each month to be safe, in order to avoid getting in too deep.

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