Uses of Various Personal Loan Types

There are different types of personal loans that are available for individuals and business owners to choose from depending on the purpose of the loan. These loans have been subsidized into various forms ranging from personal commercials loans, personal investment real estate loans, no guarantee personal loan, commercial building personal loans to mention just but a few.

Personal commercial loan is a short term loan that is granted to business owners to either start or improve their businesses. In some countries, personal commercial loans are subdivided into various forms for use in running businesses. Normally, the repayment terms and conditions for this type of personal loan are always 90 days. The loan can either be secured or unsecured, but still it can be granted to various businesses including savings and associations, schools, insurance companies, credit unions, and all credit institutions amongst others.

Another type is the investment real estate personal loan which is short-term for meeting urgent financial need with real property as the collateral. This loan type is usually secured by a mortgage. The loan is granted specifically for purposes of initiating project and development programs which includes all kinds of real estate investment projects. There are many development projects that fall in this category.They include franchise, restaurants and different business premises. In addition, it can also be used to in modernizing existing projects and programs which perhaps lack funds to complete. Similarly, the loan can also be used in large scale projects such as building homes and buying automobiles. It is therefore evident that investment real estate loan has set uses, but though, your business plan will be needed to explain all that you want to spend the money on.

Another one is the personal loan no personal guarantee,which is simply a loan granted without personal guarantee. Building your corporate credit even at the time you do not need it is a very good step forward which puts you in a perfect position of obtaining loan no personal guarantee much easier.

A personal loan is characterized with many benefits. One of its benefits is its ability to give investor an opportunity of owning an asset even without enough funds that caters for its entire cost. Similarly, when you obtain personal loan, it gives you an opportunity of owning a real estate with less risk. Another benefit is that repayment of this loan is relatively easier since it is paid on annual basis.

Considering A PayDay Loan? READ THIS FIRST!

Payday loans can be a lifesaver if it’s truly used for an emergency – only you can decide what’s truly an emergency. Most times something comes up; we freak out and instead of thinking things through and finding other alternatives we quickly react and put ourselves in a worst position than we initially started out; hence the existence of payday loans and car title loans and every other high interest loans available to those with less than stellar credit.

To borrow a payday loan is simple; you typically pay $20 per $100 borrowed or more. The appeal is all you need is a job, proof of employment and a check with a future date stamped on it – easy, right? No hassle, and most importantly no credit check. I’d rather you avoid them completely but if you must please choose one that is with the Community Financial Services Association; an association that provides guidelines that protect the consumer.

The most negative thing about a payday loan are the interest rates/fees! It comes to about 400% interest on a loan! That’s absurd. But if you need your car fixed; furnace repaired, water heater replaced – it suddenly doesn’t seem that bad. The key thing to remember is not to borrow more than you need. The payday loan clerk is a salesman; just because he/she states you can borrow up to $1000 does not mean you should accept it. Borrow only what you need!!! And if they offer you the monthly payment plan don’t fall for it; remember their job is to sell so that THEY can make more money. Pay if off all at once and avoid the pitfall of the monthly payments that make them more money and cause a financial strain on your budget.

So; what if you ignored everything that I’ve just said and borrow more than you can pay back by the next pay period? Well if they’re a member with the CFSA, all you need to do is tell them you can’t make the payment by the due date. As a member of the CFSA, they’ll need to stop all collection activity and give you 4 additional pay periods to pay back the loan in full. Oh, and they can’t charge you any additional fees during this period either. This must be done before the due date; or at least before close of business on the day before the loan is due; preferably in person; and it can only be done once on the same loan. It’s called an Extended Payment Plan. If they deny you or state they don’t offer this; call CFSA directly at 888-572-9329.

Now I must admit the collection activity from payday loan companies are THE WORST! They call your job; threaten automatic wage garnishments, threaten to sue you or file a police report for bank fraud to send you to jail (based on the post-dated check you wrote them); the list goes on and on – and its illegal. State laws govern the collection activities of original creditors; and fortunately most state laws closely follow the laws of the Fair Debt Collection Practices Act so all you need to do is look up your state’s laws on payday loans collection activities and rules. The list is usually found on your state’s Attorney General’s website; your state’s Consumer Affairs website will have some valuable information as well.

How to Get Construction Financing

Are you interested in a construction mortgage? There are two types of construction mortgages that you can go for: completion construction mortgage and progress draw construction loan.

Completion construction mortgage

You should apply for this loan when you are purchasing your home from a qualified builder at a fixed price upon completion of the building.

There are two types of this loan:

All-in one construction loan: this is a simple loan that offers you a one rate for both the construction process and the financing that comes at the end. When you take this loan you need to repay it within one year. You should note that you have to pay a penalty if you go over the time limit.

Purchase plus improvement: this is the one that you get when you buy a home that needs to be taken good care of. The contractor needs to keep on making the improvements that you ask him/her to do and you should only accept the building once you are satisfied with the improvements.

Both of these construction loans have a number of features:

The builder has to own the lot where the home is to be built
The builder can request for money only when the home is 100% complete.
The lender may require an appraisal before, during, and after the construction. This is to ensure that the home is worth the amount being mortgaged
You need to make a down payment-which can be made in a series of installments
Since the loan is almost similar to a resale property mortgage, the mortgage agent won’t require an administration fee in order to arrange this type of financing.

Before you are given the loan, you need to present a number of documents to the lender. The documents include:

Copy of building contract that has been signed by you and the contractor
House plan and working drawings
Site plan that shows the legal description and dimension of the property
An appraisal that indicates the final value of the home after construction

Progress draw construction loan

This is ideal when you are planning of construction your home using your own general contractor. You apply for funds at three different stages of the loan: when the building is 35-40%, 65-70% and 100% complete. You should note that the interest rates of this loan are higher than that of a traditional mortgage.

When applying for the loan you need to present a number of documents that include:

Copy of land contract
A resume confirming that you have good knowledge of the construction process
Copy of all sub-contracts which confirm the construction costs.