Is It Better to Get a Home Loan From the Bank or a Lender?

When you are ready to buy your home, there will be plenty of choices. The two most common options to finance your home are non-bank lenders or large banking institutions. However, each of them has some differences, and your choice could depend on what's important to you. Learn more about how they differ below.

What is the Difference Between a Bank or Mortgage Lender?

Either a bank or a lender can help you get the funding to secure your new home. The applications will depend on credit, income, and debt qualifications. However, there are some critical differences between the two.

Mortgage lenders have several loan options, while banks have fewer options. Also, banks will usually have tighter credit requirements. It's common for mortgage lenders to sell your loan to another lender after closing. Home loans can be secured with either option, but you should consider how they differ.

No matter who you choose, having a decent credit score can only help in your effort to secure a loan, whether it be through a lender or a bank. 

If you’re unsure of your credit score or how it would perform, you’ll want to focus on increasing your score to at least 700 or higher. In fact, if you were able to get a score of over 800, you could likely get yourself a better interest rate.

How to Know Which Is Right For Me?

There are some pros and cons to each option. Let's start with banks. Banks generally have lower interest rates and will continue to service your loan after closing. Also, they may offer special rates if you already have other financings through them. Banks typically try to promote better loan terms and products to maximize their revenue.

Some cons to bank lending include having stricter lending standards, more fees, and longer closing times. One of the more challenging pieces of a bank loan is getting approval. It's generally more difficult to qualify for a bank loan, and the process takes much longer.

Mortgage lenders have many pros, including more options, quicker loan closing, and may be more willing to negotiate the terms. However, some cons include the servicer selling your loan to another lender after closing, meaning you can expect changes to how you’d pay your loan to the new lender.

Lenders and banks both have their advantages and disadvantages to offering loan services. Thus, it's best to shop around and determine which option is best for you. You can get quotes from several different lenders and banks and compare rates, terms, and closing costs from each. Ask lots of questions to understand your agreement.

How to Decrease Your Loan Interest Rate

Taking out loans is useful for a variety of purposes. You might want to consolidate credit card debt or take care of necessary repairs on the house.

Paying back the loan can start to feel stressful after some time, especially when you look at the interest rates. Fortunately, you can use some strategies to try to get the interest lowered.

Negotiate a Lower Rate

One possible solution is to simply ask for a lower rate. Call the loan provider to find out what options are available. If you have consistently made regular payments or even extra payments, use this information as evidence as to why you might be entitled to a lower interest rate. 

Remember that the loan provider might deny your request, but at least trying this strategy is important.

Refinance Your Loan

Another way for borrowers to get loan modifications is through a refinance. Due to an improvement in your credit score or lower interest rates in the market, a refinance may be available. Depending upon the type of loan you're refinancing, you may be able to get a cash-out option as well. 

For example, when people refinance their mortgages, they sometimes do so with the cash-out option. You can put that extra money toward other home modifications or debt while still getting a lower interest rate.

Improve Your Credit Score

Your credit score is one of the elements on which your interest rate is based. Improving your credit score can, therefore, assist with getting a better interest rate. Take a look at your credit report to find out what factors are hurting your score the most.

Having too much debt without enough available credit seriously influences your score. Try paying off as much debt as possible before asking for a lower interest rate.

Try Again

If you've asked for a lower score and were rejected, you should try again in the future. Interest rates themselves can change, and so can your financial situation. 

In the event that the lender denies your request for a lower interest rate, ask what the determining factors were in the decision. By doing so, you will know what you have to work on before submitting another application for a reduced interest rate.

Don't feel as though interest rates are destroying your financial situation. In many cases, you are not permanently locked into your current interest rate. Explore some possibilities for getting a lower rate either now or in the future.

5 Consequences that You Have to Face for Defaulting a Personal Loan

A personal loan is one of the most beneficial financial products that can help align finances effectively. Choosing a personal loan can help meet urgent financial obligations without any worries.

Borrowers can choose the repay their loan amount as per the repayment capacity through EMIs. Every personal loan comes with a financial commitment to repay the outstanding amount.

Borrowers must comply with the terms and conditions of the loan to avoid default. Choosing the best personal loan rates and the right EMI amount is crucial after assessing factors such as projected income, expenses, existing loan obligations, etc. 

Defaulting on loan repayment can have grave legal and financial repercussions. Read on to learn more about defaulting on personal loan default and its consequences.

Understanding a Personal Loan Default

In the financial world, the term default is used for situations where borrowers fail to comply with the legal obligations of a loan. Failing to make the repayment through EMIs is a case of default. 

Defaulting on the repayment of a personal loan for over 60-90 days is a serious concern for lenders. After a period of 90 days, the financial institution can issue a notice and take legal action against the defaulter. 

It is also crucial to note that defaulting on a personal loan for such an extended period can damage a person’s creditworthiness and reduce the credit score significantly.

5 Consequences of Defaulting on a Personal Loan

The lending institution which has offered the personal loan can take various actions against the defaulters. The extent of financial and legal damage depends on the terms and conditions of the loan. 

Let’s take a quick look into some significant consequences of defaulting on a personal loan.

A major dip in the credit score

Defaulting on a personal loan for an extended period can seriously damage the borrower’s credit score. A credit score is a 3-digit number that can range between 0 to 900, depending on the person’s credit history. 

It is a quantitative measure used to compute a person’s creditworthiness. A higher credit score indicates better creditworthiness. Multiple factors are considered before calculating the credit score. 

Repayment of the borrowed credit has the maximum weightage. Therefore, defaulting on a personal loan can seriously dip the credit score.

Reduces the future borrowing capacity

Defaulting on a personal loan will lead to a decrease in the credit score. Your credit report will also show that you have defaulted on a loan. This will limit the borrowing capacity of defaulters in the future. 

Lenders will perceive borrowers who have defaulted on a loan in the past as high-risk candidates. Therefore, they can limit the loan amount for past defaulters. Lenders can also increase the interest rate on these loans to hedge their risks. 

In short, your borrowing capacity will be pretty limited in the near future. Also, you won’t be eligible for great loan offers and the best personal loan rates. In some cases, defaulters are unable to get any amount of loan, given their poor track record.

Debt accumulation

Not repaying the borrowed amount punctually as per the agreed terms and conditions of the loan can lead to a massive debt pile. This can also lead borrowers into a debt trap. 

Defaulting a loan obligation means adding more burden on the next payment cycle. You will have to pay additional interest charges and late fees (if any) for defaulting along with the last outstanding amount. 

If you keep on defaulting for a more extended period, the debt will amplify, and this will put more strain on your finances.

Legal consequences

In case of default, the lender can issue a legal notice to borrowers and take matters to court. The lending institutions have several legal ways to recover the borrowed amount. 

However, they don’t take such extreme actions in the first 2 to 3 months to maintain a healthy relationship with the borrowers. 

However, after a duration of 90 days, they might exercise their legal rights to recover the loan amount. It is vital to avoid these legal hassles and repay the outstanding balances timely.

Confiscation of collateral

Some lenders might ask prospective borrowers to pledge collateral for issuing a personal loan. In this case, there is an added risk for borrowers. 

It is important to note that defaulting on a personal loan for an extended period can lead to confiscation of the security/collateral offered. Therefore, you must not default on secured loans at all.

However, new-age lending institutions offer collateral-free personal loans that reduce the risk to some extent. However, you must always repay the loan amount timely. A personal loan EMI calculator can help you find a suitable EMI amount.

4 Financial Facets of Owning a Car You Must Attend To

Owning a car is a huge financial responsibility. When you are buying a car, there are many things to think about. Not only do you have to decide on the make and model of the car, but you also have to think about the financial aspects of owning it.

There are many things you need to attend to keep your car running properly and protect your investment.

Car Insurance

The first thing you need to do is find a good car insurance company. You want to find a company with a good reputation that offers coverage that is right for you. 

There are many different types of coverage, so make sure you understand what each one covers before you choose.

You will also need an insurance company that offers good insurance rates. The last thing you want is to overpay for your coverage.

Financing Options

The next thing you need to think about is how you will finance your car. If you are going to buy it outright, you will need to have the cash available. If you are going to finance it, you need to find a good interest rate and make sure you can afford the monthly payments.

It is important to compare rates from your bank to other lenders before you make a decision. You want to make sure you are getting the best interest rate possible.

Your Credit Score

Your credit score is another important factor when you are financing a car. The better your credit score, the lower your interest rate will be. If you have a good credit score, you may even get 100% financing.

If you have bad credit, you may still be able to get a loan, but it will likely have a higher interest rate, negatively impacting your future finances. You can improve your credit score by paying your bills on time and keeping your balances low.

Your Income

Your income is the most significant factor you need to consider when financing a car. You need to make sure you can afford the monthly payments. If your income is low, you may want to look into a used car or a car with a lower interest rate.

You also need to think about how much money you will be spending on gas. If you have a long commute, you will want to choose a car that gets good gas mileage.

Furthermore, be keen to set aside a budget for routine maintenance and repairs.

Lastly, owning a car is a big financial responsibility, but if you take the time to attend to all facets, it can be very rewarding. Make sure you do your research and make smart decisions about buying and financing your car.

How a Credit Union Account Can Help You With Your Money

Once you have made the wise decision of choosing a credit union over a bank, you can start making other decisions that can put you on the right path to your financial journey.

It is up to you to check out what your credit union has to offer and how it can help you achieve specific financial goals. Let's take a look at some of the personal-finance options generally offered by credit unions and how they can work in your favor:

Personal Deposit and Checking Accounts

Your money is safe when it is deposited in a credit union account. Similar to the Federal Deposit Insurance Corporation, the National Credit Union Administration has the backing of the United States government to guarantee the safety of your funds up to $250,000. 

This will protect you even if the credit union goes insolvent or falls prey to a major cyber heist, and it is definitely safer than keeping all that cash at home.

Using Credit Union ATM Networks

By virtue of being organized as non-profit financial institutions, credit unions are more likely to offer low-cost access to automated teller machine networks. 

In some cases, credit union ATMs can be used for free; however, you have to check how much the ATM operator will charge you for the transaction, and this is often disclosed upfront.

Improving Your Credit Score

Not all credit unions offer this service, but quite a few of them have been expanding their offerings to include it. In essence, a credit union, for example, one like Credit Union of Denver, may extend you a friendly loan that features a small balance and a very comfortable interest rate. 

When this loan is linked to automatic debit from your account for a term of six months, the reporting made to the national credit bureaus will show that you made timely payments without interruption or tardiness, thus resulting in a nice boost of your personal credit score and history.

Compound Interest Savings Accounts

Putting your credit union money to work can be as easy as opening a high-yield savings account that pays compound interest on a daily basis. 

The interest growth on these accounts turns exponential over time as long as you make regular contributions in the form of deposits. Since credit unions are not looking to profit from their members, these savings accounts generally carry low fees and few penalties.

The personal finance options listed above only scratch the surface of what modern credit unions offer. Be sure to check with your credit union representative about loans and other financial products that can boost your personal worth.

4 Helpful Steps to Getting Better Credit

It's often stated that cash is king. While cash is important, nothing beats an excellent credit score, especially when credit can get you so much farther these days. With an excellent credit score, you’re able to open so many wealth-building doors. 

You can leverage an excellent credit score to get amazing interest rates, points, and loans. Not only that, but it makes big purchases, like houses or cars, much easier since the people you’re working with know they can trust you. 

If you don't have a great credit score, there's no time like the present to begin the rebuilding process. Consider the four helpful steps in order to achieve better credit.

Pay on Time

While there are certain tricks of paying at a time when the credit bureaus track everything, start by focusing on making payments by your assigned due dates. Also, it's important to note that many creditors require you to pay by a specific time of the day. 

If your credit card payment is due on July 27th, don't think that you can pay anytime before midnight. In fact, many creditors require you to pay no later than 5 PM PST or 8 PM PST. If you pay even a minute later, it's considered late.

Get a Consultation

In order to leverage your credit moves, consider a consultation with a financial professional. Talking with professionals who know how to navigate financial management and credit scores, professionals at establishments such as Luckie Seven Solutions Inc, means it should be easier to get a better understanding of how long it can take to improve your credit, practical steps, and credit goals. 

They can even help you come up with a financial plan to improve your score and keep you on track to maintaining it.

Pay the Balance Each Month

When you're able to pay the full balance each month, this may open up more perks from your creditors such as grace periods and points. Be intentional about planning your spending on your credit cards. 

If you can focus on purchasing the necessities with your card, pay it off at the end of each month. You should already have the money to cover the necessities so it won't be difficult to develop a strategic system with your credit card usage.

Use No More than 30%

If you're not the most disciplined person, don't use the entire balance if you don't need it. If you have access to a $1,000 credit limit, try not to use more than $300. 

Unless you know that you can pay the balance every single month, try not to use more than 30% of your available credit. It doesn't look good when you have a habit of maxing out all of your credit cards without paying the balance down completely.

While there are financial advisors who preach the "debt-free" gospel, it's only practical if you don't know how to manage credit wisely. In fact, it's best to learn how to manage credit wisely in order to leverage it and build wealth. 

Plus, when you have excellent credit, you'll be able to recognize how much access you truly have because creditors trust you to manage their resources well.

How to Decide if It's Time to Refinance Your Home Mortgage

Some homeowners decide to refinance their mortgages for various reasons. Since you already own the property, it is easy to refinance it when possible. However, it'd be best to determine the right time to refinance the mortgage. Here are reasons to refinance your mortgage.

Get a Better Interest Rate

Every homeowner wishes to get a lower interest rate on a mortgage. Refinancing home mortgages is an excellent way to get a better interest rate each month and over the loan term. 

It is possible to get a potentially lower interest rate when you refinance your mortgage. This can save you more money in the long run as you clear the loan because it reduces the monthly payment. 

However, it is worth noting that the refinance interest rate depends on various factors such as creditworthiness and your debt-to-income ratio. So, it'd be best to analyze your current situation to help you make informed decisions before refinancing your mortgage.

A Good Credit Score Rating

If you have a good credit score, you can decide you refinance your mortgage because you stand a chance of getting better interest rates. This is a sound basis that determines whether you get the mortgage or not. 

The lender will analyze your borrowing history and decide whether to give you the loan or not. Even if you didn't have a good credit score when borrowing the loan initially, there are high chances that your score increases with time, meaning you qualify for a mortgage refinancing. 

You will be better positioned to get reasonable rates that reduce your monthly payment over the loan term.

Changes in the Loan Terms

When getting a loan, you either get a short or long-term repayment period. This depends on various factors. But the good news is that you can go for a mortgage refinancing and change the loan terms. 

For instance, you can refinance and get a shorter term from 30 years to 15 years. However, it increases the monthly payment and also saves you money in the long run. 

Clearing your loan sooner will also help you build home equity. So, if you can refinance your mortgage for a shorter term, go ahead and do so because it has excellent benefits.

Following the tips above can help you decide when to go for a mortgage refinancing. Doing it at the appropriate time can save you money and many hustles in the long run. Do due diligence by researching the appropriate information before you apply for the mortgage.

What are the Steps to Maintain a Good Credit Score?

Consumer credit scores are difficult to comprehend, but if you own or want to own a company, you'll need to take in even more detail. Much like companies receive a credit rating dependent on their individual creditworthiness, they also have a credit rating to show their overall credit health. 

credit scores are used in the same way as personal credit scores are. So, for example, if you apply for a business credit card or choose to deal with a credit-extending vendor, your Creditsafe business credit report will be used to assess your creditworthiness, as well as your interest rate and loan terms.

Like personal loan ratings, higher business loan scores are often better to achieve the best business loan rates and conditions.

How to verify the credit value of your business

You should know if you are wondering how you can verify your business credit that many third-party companies allow you to access an online business credit report. 

Every provider can view a version of Creditsafe business credit report, and some provide many packages that allow you to access more credit functions and details.

Maintaining a good business credit score in 6 easy steps.

#1: pay your bills on time if you own a company.

To improve your personal credit score, you must pay your loan EMIs and credit card bills on time. The same can be said for a company's credit score. 

Late payments hurt your credit score, making it difficult to get a business loan, line of credit, or credit card.




Paying your bills on time is one of the most effective ways to increase your credit score. Defaults, late EMI fees, and bounced checks all lower your credit score. 

Paying your bills on time not only boosts your credit score but also lets you keep good relationships with suppliers and other creditors.

#2: attempt to keep your credit card balances as low as possible.

A strict rule of thumb is to keep the company's credit utilization ratio under 30%. For example, let's say you have an Rs. 10 lakh overdraft from your deposit. Ideally, you should not use more than 30% of your usable credit (Rs. 3 lakhs). 

For example, if you drew Rs. 3 lakhs from your available OD cap, it's a good idea to repay the sum borrowed before making any more withdrawals.

When your credit utilization ratio exceeds 30%, your credit score begins to decline. However, even if you have to withdraw a greater sum, your credit score will improve if you repay the loan on time.

#3: maintain a low level of business debt.

Liabilities on your credit report include credit card balances, term loans, and other credit lines. The more loans you take out, the worse your company credit score will be. 

Lenders are hesitant to give loans to companies that have a lot of unpaid debt. So try to repay older loans as soon as possible to boost your credit score.

#4: take time for short-term EMI loan & repay.

This might seem to be counterintuitive but bear with us. Taking out a short-term business loan and repaying it on time shows the credit bureau that you can responsibly manage credit. 

This will help you improve a bad credit score. However, before implementing this tip, make sure you repay older loans.

#5: do not cancel old cards.

In deciding your loan score, your credit history plays a key role. An older credit card/other credit account is continuity and represents the confidentiality of your company suppliers and sellers.

The older a loan account, the higher its effect on your loan value. If an old credit card is canceled, the corresponding credit record is erased. Therefore, when determining the credit score, this background cannot be used.

It's always advisable to close the new credit cards if you have more than one company and want to cancel a few to minimize their effect on your credit score.

#6: periodically check your credit report and report for any errors

You have to correct this surveillance if you are one of the thousands of company owners who don't routinely track their companies' credit rates. 

At Creditsafe, you can check your business credit score. Provide some simple business information, and in a few minutes, you can obtain your new credit value and credit report.

You should check your business credit report regularly as a business owner. Check for errors or inaccuracies. Even a minor error like a wrong mobile number in the credit report will affect your company's ranking. If you find any errors/inaccuracies in your credit report, report it and correct it as soon as possible to the credit office.

Finally, maintain intact your credit value.

If you have a new company or a proven company, most lenders often examine your personal credit before granting loans. Make it easier to handle the company's cash flow and keep your business and personal finance apart. Get your company credit card and not use it for household/personal expenses to pay your regular costs.

Keeping a decent Creditsafe business credit report increases the chances of achieving the best possible price for business finance.

Choosing the Best Lender for an FHA Streamline Refinance

Finding the ideal FHA mortgage lender is not as effortless as it sounds. First off, you need to narrow down your choices to come up with an approved list of lenders from the Federal Housing Administration because not every lender offers these kinds of loans. Also, check their current fha streamline rates and the amount of money you stand to save by opting for an FHA Streamline refinance.

In this post, we discuss a few tips that will help you search for the ideal FHA mortgage lender.

1. Know your credit score

It is crucial to note that FHA seeks borrowers with a credit score of at least 500. However, if you desire to get an FHA loan but have a down payment of 3.5%, you will require a credit score of 580 and above.

For FHA Streamline Refinance, appraisals are unnecessary. Your Loan-to-Value-Ratio is calculated based on the last appraised value when you received the current loan.

In some instances, an appraisal, however, may be required.

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Also, to assess the prevailing mortgage rates, you need to request the most current rate quote by completing a rate quote request from the lender. Interestingly, you will discover that they have the same rates or even lower compared to other FHA programs.

2. Shop around for more than one FHA lender

FHA mortgage rates may be all over the place, and for this reason, you need to do thorough research to ensure that you settle or the best mortgage rates. Some lenders may offer lenient terms compared to others. Or may qualify you for an FHA mortgage loan faster compared to others.

Remember, lenders often price their mortgage loans vis-à-vis the prevailing marketing conditions. And also mark up their interest rates as a result of profit targets and business costs.

Figure out the difference between lender fees and FHA mortgage insurance premiums

To cater to the loan default costs, FHA-backed loans need mortgage insurance. FHA mortgage insurance is similar. You will be required to pay uniform premiums at lender one as you will at credit union two. Lender fees are dissimilar from lender to lender. That makes it effortless to compare the fees and terms on offer for each lender.

3. Look out for the APR

Another way to figure out how much fees is required is to compare the annual percentage rates of varying lenders. They will always make money by charging you different fees such as application fees, processing, and origination fees. And or through building their profits into the interest rates you pay.

That is why you need to factor in your payment interest rates plus the fees included APR. You may use the calculator provided on various lender sites to help you assess the difference between annual percentage rates and interest rates.

4. Customer service

When choosing the best lender for an FHA streamline refinance, you want to ensure that they exhibit exceptional customer service. Choose a lender who responds to phone calls, messages, emails, and other communication channels on time or reaches out to you as soon as they can.

You want to ensure that the staff are polite and show concern for their clients.

5. Stellar reviews

Before settling for a lender for an FHA streamline refinance, you need to ensure that they have a good name. You can find out how clients perceive their services by checking their comments on social media platforms, the company's website, Google, and other equally helpful avenues.

The ideal FHA streamline refinance lender offers exceptional services to their clients, alongside reasonable interest rates. You want to steer away from FHA streamlines that have an unpleasant history. And those with bad reviews on their platforms.

You may also consider recommendations from trusted family members, relatives, and friends of FHA streamline refinance lenders they have worked with before. And would vouch for their services.

You also want to ensure that you are working with award-winning experts whose primary aim is to provide their customers with the best rate quotes.

Is Freedom Debt Relief a Reputable Company?

If you have a veritable boatload of outstanding debt, you may want to consider Freedom Debt Relief (FDR), which offers strategies for shedding your unsecured obligations. But is FDR a reputable company?

The short answer is yes, let’s take a look.

FDR At A Glance

Basically, the company requires a minimum debt of $7,500, and its typical customer has $25,000 in obligations. Fees range between 15% and 25% of the enrolled debt, although the amount varies depending on your state. 

The time it takes to eliminate debt is between two to four years, with the average debt resolved in three years, 10 months. Post-fees savings to consumers are between 15% and 35%.

How Does FDR Work?

Freedom Debt Relief has trained debt professionals who will work with you to put in place its debt relief and settlement programs.

Initially, a certified debt consultant will discuss your situation with you and evaluate potential remedies. If you sign on, the consultant will help you create a personalized repayment plan.

You then will usually cease paying your debts directly and instead deposit those monies into a dedicated account controlled by you. Once there are sufficient funds in that account, Freedom Debt Relief will open debt negotiations with your card issuers. 

This means that your creditors will be asked to accept a one-time payment in full for less than you owe. It’s important to know, however, that stopping payments on your current debt will, at least for the near term, damage your credit score.

If an agreement is reached with your card issuers, and you approve the amount, funds will be transferred to your creditors as debt payment.

Is FDR a Scam?

Hardly, although there are many unscrupulous agencies out there that are more interested in helping themselves than helping you. 

These firms often; charge fees before they settle your debt, “guarantee” to make your debt woes disappear, tell you to stop talking to your creditors, pledge that you’ll clear your debts for pennies on the dollar, say they can stop debt collection calls or lawsuits, offer a one-size-fits-all remedy that may not be right for you or use scare tactics to pressure you to enroll in their program.

Be leery of companies that do any of these things.

In contrast, Freedom Debt Relief is accredited by both the American Fair Credit Council and the International Association of Professional Debt Arbitrators. Since 2002, more than 650,000 clients have been served by FDR, which has resolved more than $10 billion in debt. So, you can sign on knowing you’re getting legitimate credit relief.

Here’s what Freedom Debt Relief does, which sets it apart from bogus or unsavory agencies:

• It never charges you until it negotiates a settlement
• It helps you deal with creditors but doesn’t tell you to cease communications with them
• It offers a subscription to the National Litigation Law Group service that provides certain legal representation if you need it
• It provides you with a realistic estimate of when you can expect to become debt-free
• It develops a bespoke relief plan for you that suits your needs and financial goals
• It spends time understanding your unique needs to make sure it’s the best solution for you

Is Freedom Debt Relief a reputable company? Well, it didn’t become the largest debt settlement company in the nation by ripping folks off. While no debt relief company can guarantee that it can reduce a customer’s debt with a creditor, FDR’s long history of negotiations with so many top creditors is real and gives it a leg up over the competition.

5 Ways to Improve Your Credit Score and Save Money

A credit score refers to a vital number that moneylenders use to determine if they will grant you credit and the terms and interest of the loan or credit. If your score is low, then you have lower chances of your loans getting approved. If approved, you might have to repay higher interest. 

That is why you want to score very high if your plan is to get a car or personal loan, a credit card, or make a mortgage application to purchase a home. Discussed below are five ways you can use to increase your credit rating and save cash.

1. Manage Your Debt

Since the second most important factor in your credit rating is the total debt, it is significant to keep your loans under control. In case you presently have a substantial amount of unpaid debt, your main concern should be to avoid having another loan and work to reduce the figures.

This is not always easy; however, the only means to enhance your debt condition is to stop utilizing credit cards or borrowing and continue making well-timed payments that minimize your balance.

You must also consider the amount of available credit. For instance, if you have several credit cards that have reached the maximum or are close to the bounds, it will negatively affect your score. Dual credit cards, which have a limit of $5,000 and a balance of $1,000 each, look better than one card with a limit of $2,500 and a balance of $2,000.

Use notifications to inform you of fresh purchases with a debit or credit card to better track your balance and expenses. You may also establish a split alert to notify you when the credit card amount hits a certain value. Consider scheduling biweekly or weekly payments to the cards to lose some interest and lower your debt balance faster.

2. Pay Promptly

The most significant thing you should do to maintain or improve your credit score is to pay promptly. Disbursement history is the single most important factor used to calculate your credit rating. Payments past due one month or more will point up on the report and affect your credit rating negatively. These negative numbers typically stay on the report for around seven years.




Consider scheduling automatic overheads from your current account to make it easy to pay on time. If you are not at ease with payments automation, you may set up prompts with your billing agent or through the account to inform you when the due day is approaching.

3. Use Different Forms of Credit

A minor portion of your credit rating is according to the kinds of credits you are using at a given time. Moneylenders would like to perceive your responsibility for returning credit, that is, loans and credit cards. If you do not possess a credit card, consider having one. In case you do not have a loan on your report, you can apply for a small individual loan to build credit.

4. Keep Your Old Accounts Activated

Credit history length is another significant creditworthiness factor, so keeping old accounts open can be an advantage. While you need to keep all your accounts manageable, it can sometimes be harmful to your score if you close the old account. 

Locking the old account while you still have a balance may also affect your score, as it directly upsets your credit use. For instance, if you want to purchase a credit mortgage and have a low score, consider using a bad credit mortgage broker instead of closing your old account.

5. Be Cautious When Opening Fresh Accounts

Although fresh credit is not a significant feature in your credit rating, it is an essential concern. If you are looking for a credit card or new loan, make your purchases quickly. You do not want your credit report to display that you always look for credit.

Also, you do not want to apply credit accounts that you don't want to utilize. It can be luring to get the extra 10% off for opening a new loyalty card; however, the little cash you save can be negligible when several new accounts like this lower your score. 

Also, loyalty cards can regularly have a greater annual cost compared to the conventional credit card. If you fail to immediately reimburse the balance, the greater APR may offset the savings you get when you open the account.

Conclusion

Improving your credit rating can save you money. Use the above methods to build your score.

5 Tips for Building a Great Credit Score

Building an excellent credit score is a hard task. Even if you miss one payment, it can take a drastic toll on your FICO. Here are five tips that can help you to ensure your credit score is in the prime category, and you can buy whatever you need.

Don’t Pull Too Many Inquiries

When shopping for a loan, it may seem reasonable to look around. However, be careful about pulling too many “hard-hits” on your credit. You can pull your own score and know where you stand before you head to the dealership or a lender. 

When you make an inquiry on your report it’s not as damaging as when a company does it. Both types of hits will stay on your credit for 12 months. So make sure to allow people to pull your credit wisely.

Keep Your Credit Utilization Percentage Low

When you have credit cards and equity lines of credit, it’s easy to overspend. Some people feel that when they have plastic to spend that they can be freer than they can with cash. 

However, if you have more than 30 percent of your credit spent, then you will get a knock on your credit report. If you have a credit card with a $1,000 limit, then you need to spend no more than $300 of that credit. The less you spend, the better.

Don’t Go Over Your Debt to Ratio

Your income is a guideline that is used to see how much credit you can be awarded. However, a bank will only allow you a certain percentage of borrowing power based on that income. If you are beyond the 33 percent threshold, then you will be denied for loans. Additionally, your credit score will take a hit.

Diversify Your Credit

Never put all your “eggs” in one basket? You want to make sure that you have a nice mix on your report. You don’t want 12 credit cards and no auto loans as it looks odd to lenders. They see these credit cards as a potential for you to get into trouble. So it’s best to diversify your spending power to enhance your report.

Never Miss a Payment

Life happens, and there may be times when you are unable to pay a bill. Always call the lender or credit card services and make arrangements so that the late payment doesn’t show up on your credit report. 

Most companies will work with you. If you get a ding for a late payment, it sends a big red flag to potential lenders that there is an issue making payments on time. Your payment history will make or break your credit score.

Finally, building a great credit score isn’t going to happen overnight. It takes time and patience to get your FICO where it needs to be. Be careful when you spend money where your credit is concerned, and always pay your bills on time.

Considering Refinancing? Here’s How to Know When You Should

Good financial management means more than just watching every penny. It also means taking an occasional step back and looking at the big picture in the context of the world around you. An area where many people find a way to save money is by refinancing their homes. 

Here are four ways to know that it’s time to look into refinancing.

Market Rates are Better

Interest rates are almost always in motion, headed either up or down most of the time. At the time of your last refinance or the initial purchase, you may have taken a rate that was pretty solid. Since then, though, rates may have dropped, and a refinance could save you thousands of dollars in interest.

Your Credit Has Improved

One of the most important factors in the interest rate you get is your credit score. Over time, you should be able to see that figure gets better and better. Once you’ve reached a significantly better credit score, you will probably qualify for a better rate, making it worth your while to refinance. 



A home buying loan service can review your situation and see if there may be options for you.

Your Situation Has Changed

Since you took out your current mortgage, you may have encountered many changes. You could have had a job change that resulted in a lower salary, making your mortgage a bit of a strain. You may have experienced marriage, divorce, or the arrival of children. Each of these events can change your financial needs and make it beneficial to investigate refinancing.

You Need Cash Out

Your home is not just your residence. It’s also an investment. The dollars you put into it can someday come out if needed, even if it’s for upgrading the house itself. During a refinance, you can cash out some of your equity to take care of other expenses, such as tuition for the kids, debt consolidation, or even just a great family vacation. Instead of racking up student loans or credit card debt, look into a refinance that will cover the expenses.

When you think about it, very few mortgages should ever go the full term without being refinanced at least once. Changing interest rates and personal needs are a given when you’re considering a time horizon of up to 30 years. Check your situation periodically and be prepared to refinance when the right circumstances develop. You could easily save yourself thousands of dollars in interest.

5 Factors That Can Influence Your Business Loan Approval

If you are heading a large business needing expansion of a particular section, or a small business owner wanting to scale, or a budding entrepreneur, your priority is to secure funds at the right time. We want to focus on the term ‘right time’ because if a financial institution is unable to disburse funds at the right time, you may lose out on a lucrative opportunity.

Now that you understand the significance of timely disbursal of loans, you need to ensure preparedness during the business loan application process. No one wants a loan application rejection as it will lead.

Let’s say that your organization is ready for new business loans, but you are unsure about the subsequent process, this article can get you covered. Here is a list of five factors that influence your business loan approval. Read this to know

Factors that Influence on Business Loan Approval:

A Healthy Credit Score/History:

The most basic and obvious factor for a successful loan application is a high credit score. Financial experts suggest that it is essential for a business owner to keep the personal credit score as high as possible. When it comes to small business loans, financial institutions take into consideration the personal credit score of the business owner. 




The borrowers with a credit score of 720 or higher get better interest rates. Alternate lenders or NBFCs try to fill in the void created by financial institutions by providing new business loans to borrowers with a credit score as low as 500. Hence, small business owners with low credit scores prefer private NBFCs for ease & speed of funding. 

However, good credit history is always a prerequisite for easing out the approval of new business loans. Timely payment of dues, transparent transactions, invoicing of every purchase with dealers are something that can help you build a good credit history.

Age of Business:

Occasionally, banks & NBFCs see the age of business, cash flow, statement of transactions, and other factors in approving your business loan. For small business owners, the APR or annual percentage rate is usually higher. 

Once your financial partners can see some traction in your business, they will follow up with better interest rates. However, many private lenders specifically provide small business loans. All you have to do is to gauge your requirements using a business loan calculator.

Collateral:

Financial institutions reduce lending risk by asking small business owners to use their assets as collateral to secure the business loan. Not being too rigid, lenders allow small businesses to use their stock, equipment, and similar business assets as collateral. Alternatively, institutions like NBFCs offer collateral-free small business loans as well.

Type of Business:

The type of business plays an impending factor in your loan application. If your financial partner considers your kind of business to be riskier, then things may get slower, with financial institutions charging higher interest. Complete market research about the potential of your business can be used to convince your banking or NBFC partner to believe in your vision.

Business Plan:

If you are a new business owner who would like to get started or an existing business owner who wants to expand the organization, you need a plan in place to show to the banks or NBFCs. If the business plan is impressive enough, then the following process is typically faster. You need to explain the purpose of the loan, vision, and other factors to structure your business plan well.

Conclusion:

The above factors play an important role in making your loan application faster and more effective so you can focus on your business aspirations. Also before processing for the loan must check the business loan eligibility for easy approval. Having a thorough understanding of the lenders’ requirements can make things more comfortable during the loan application process.

From a Building to a Home—Staying Financially on Track While Buying a House

Becoming a homeowner is an exciting yet daunting undertaking. However, great rewards invariably accompany great risks. If you’re gearing up to purchase a home and are looking for insight on how to remain financially stable, consider these expert tips.

Monitor Your Credit Score

Nothing will prove more stressful than watching your credit score decline while affairs are underway. What’s more, you’re likely to get hit with a higher interest rate if your finances aren’t in good standing. With that said, make it a point to track your credit score. 

Obtaining this information is exceedingly simple, and in this instance, ignorance certainly isn’t bliss. Most importantly, it’s crucial to go over your credit report with a fine-tooth comb; that way, you’ll be able to pinpoint any inaccuracies.

Consult with a Lender

You’ll want to forge an intimate relationship with your lender. In addition to offering sound financial advice, they also oversee your monthly payments. Should you have questions or concerns, they’ll be able to address them. 



Mortgage programs are inherently complex, but with assistance from a professional, all information will be rendered into layman’s terms.

Save

While this pointer may seem obvious, the importance of saving can’t be stressed enough. If you fail to save, you’ll inevitably wind up in a sticky situation. Unexpected fees are a part of the process, and in order to be financially prepared, saving is vital. 

Moreover, if you’re looking to lower your monthly payments, a larger down payment is required. In short, having a fair amount of money to lean on bodes well for a stress-free experience.

Pay Your Bills on Time

Nothing will compound your anxiety quicker than having charges pile up. You’ll also sully your reputation with your lender if you fall behind on payments. In essence, you need to account for any recurring charges. 

Lenders can be rather unforgiving, so if you drop the ball even once, it can be difficult to get back on track. If you don’t consider yourself a financial expert, enlist the help of a trusted advisor. There’s no shame in seeking guidance, and you’ll gain both knowledge and peace of mind by doing so.

It’s not uncommon for budding homeowners to wonder if their finances will soon hang in the balance. If you resonate with this notion, avail yourself of the above advice. As a result, you’ll maintain financial security while buying a home.