Personal loans – A great help in times of need

Low-Cost Personal Loans

Low-Cost Personal Loans

All of us want the good things that life can provide in terms of a good house, car and other luxuries. However, not many of us can afford all this out of the money we earn as salary and if we had to wait till we had sufficient money, then that day may probably never come. That is because growing inflation and other expenses are constantly working against us and irrespective of the savings we can make, we will never be able to afford some of the necessities that are needed.

This is where the concept of loans comes into play. Individuals can now take the help of loans from financial institutions to be repaid over time paying interest rates that are different depending on the purpose for which they are taken. These loans can be secured or unsecured. The secured loans are those where there is a backing of security or collateral and the unsecured loans are where there is no such collateral. It is not difficult therefore to understand that secured loans are offered at a lower interest rate whereas unsecured loans

Personal loans fall under the category of unsecured loans and are usually taken to renovate homes, settle credit card debt, consolidating other debts into one and so on. When taking this kind of a loan it is important to find out which institution is able to offer you the lowest interest rates. This will require you to talk to your friends, relatives for any recommendations and you must also visit websites of such lenders.

Taking a personal loan from a recognized financial lender has some advantages. They may be in a position to offer you competitive interest rates due to the economies of scale they operate in. Moreover, they would also be able to give you commitments on holding those rates. This means that you need not bother about varying monthly repayment amounts and that is a big relief when it comes to planning your budget each month.

Such lenders also do not levy any setting charges. You are free to decide on the starting date and you can also make an application for a payment break at the beginning of the loan itself. They also come out with special offers from time to time and that is when you should take the opportunity of entering into an arrangement with them.

Guidance for personal finance and investment

Personal finance and investment

Personal finance and investment

As the recessionary clouds are fading away from the international markets, investments and personal finance concerns are also picking up. Sadly most personal finance managers guide people on ways to increase liquidity by purchasing their company’s credit instruments primarily, credit cards and personal loans. The credit situation may get out of hands and debt refinancing or consolidation is the only options left with. And mind it! These are the high risk options which might lead cause an individual very dearly. For instance, a mortgage against home loan for sealing up the credit may lead to home foreclosure in case of payment defaults.
In order to stay afloat and maximize liquidity some of the best in class personal finance & investment tips are as follows:

  • Individuals should understand their risk capacity. Young guns can manage a 60%-70% debt and remaining portion with equity. As one grows older, the debt portion has to significantly come down. An ideal Debt portion should be 20%-30% for individuals aged 60+.
  • Investing in secured government bonds, fixed deposit schemes, pension schemes, insurance products and equity linked saving schemes is beneficial in the long run. Individuals can realize higher dividends and few are even tax free!
  • For children and spouses dedicated financial instruments should be purchased to look out for their education and health respectively. Friendlier payment terms can be negotiated with the bankers and other reliable financial institutions.
  • High risk instruments such as Mortgage loan against home or a mortgage loan against a vehicle might provide short term liquidity but can rip off in long term. These are smart instruments for service providers. The lesser rate of interest associated with them draw more people towards such instruments. However, what is missed out on is the longer payment durations and interest component.
  • At the start of each financial year, individuals should assess out their credit, equity and investment plans. Investment should be managed smartly in debt instruments. As far as possible secured investment instruments must be preferred.
  • At the time of financial year closure most individuals sort out tax benefits. Individuals should rather target the off season months or recessionary periods in economy. Bankers and other financial institutions generally offer discounts and healthier deposit rates than peak periods.
  • Only reliable bankers or financial institutions should be sorted out for managing your financial needs. Cheats and newer companies should be completely ignored. After all, it’s your hard earned money and it needs to be parked in safer hands.
  • Nobody can eliminate financial risks completely. The idea is to mitigate risks. If you have $1,000 available for investment it should be invested across various investment products and not one in order to maximize your profit at maturity.