Monthly Archives: October 2014

Online lending will increase in demand during the holiday season, how to find a good deal

How to Get Best Online Loan during the Holidays

Many people look for holiday loans this time of year to finance their celebrations, buy gifts or go on vacation. These types of loans get very popular during this time frame so many lenders offer incentives such as reduced interest rates, grace periods or sometimes even higher loan amount options.

Here are three things most lenders consider when deciding whether or not they will give someone a loan during the holidays or at any other time of the year:

• Character- Lenders want to know the type of person someone is and if they are trustworthy and have a steady job to allow them to pay back a loan.

• Capacity- Lenders also want to know the amount of debt someone can handle, which means they will check their debt to income ratio. That is calculated by figuring what the person already owes and putting it against their monthly income. Usually, they will want a debt to income level that is low enough to ensure the person is capable of paying it back.

• Credit- Lenders also want to know a person’s FICO Credit score and if it is below about 650, it may mean you pay a much higher interest rate or don’t get the loan at all.

Holiday Loan Seeking Should Start at Your Bank, Credit Union

With the issues caused by the last year or so of financial issues like mortgage defaults, etc., lenders may be more likely to let you borrow money if they have a relationship with you already. Even if you are looking for online lending, your own bank or credit union likely has a website where you can apply for a holiday loan.

You should also compare other online loan companies and see the various deals they are offering. It’s surprising how much one could differ from another in what kind of loan deals they may offer during the holidays. Be sure to take into consideration each one’s interest rates, any fees, the repayment periods, and any possible discounts or special holiday deals being offered.

Try Peer to Peer Lending

A relatively new alternative to getting a holiday loan at a bank or credit union that is online is peer to peer lending sites. These sites get rid of the middleman and you get the loan from another consumer like yourself. Some of these peer to peer loans can go up from less than $100 to more than a few thousand dollars. Plus, these types of lenders can often give you a great interest rate and payment plan as well, and they often will also lend to those who have less than a perfect credit score.

All in all, it is possible to get a good deal on an online loan during the holidays as long as you are willing to take the time to do some comparisons and then take the best deal offered instead of rushing and taking the first loan deal you are offered

How Can Credit Unions Help Borrowers Who Need A Debt Consolidation Loan

Financial hardship, short or long-term, may seem like an insurmountable obstacle. Considering a debt consolidation loan from a credit union may be the boost you need to climb that mountain of debt. Here’s how they can help:

Credit Unions Have A Generous Approval Policy

Unlike banks, credit unions are not-for-profit organizations. Their sole purpose is to administrate the financial needs of their members. Banks have a set formula that measures income, credit history and holdings to determine credit worthiness. If you fall short in any of those categories, you will be denied. Credit unions, however, are able to offer much more personalized service. They will review your situation individually, as opposed to using a one size fits all template. A blemished credit history isn’t necessarily a deal breaker at a credit union. If you are able to show that the situation that led to credit problems has been resolved, or is in the process of being resolved, a credit union has more flexibility to work with you.

Credit Unions Offer Lower Interest Rates

The interest rates offered by a credit union will almost certainly be lower than the rate you are paying on your credit cards or other debts. They can also offer loan terms that are unique to your situation. By offering lower interest rates and more time to re-pay the loan, credit unions can lower your monthly burden. Conversely, if you would prefer to pay off your debt sooner, credit unions have the flexibility to shorten the length of the loan or accept pre-payment, usually without penalty.

Credit Unions Are More Customer Friendly

Most financial institutions focus on profit and nothing else. Large banks have millions of customers. Losing one customer due to poor service is not of any concern to them. Credit unions are smaller and much more focused on keeping their members satisfied. The loss of a single member is more impactful on the smaller structure of a credit union. This gives them incentive to provide service with the customers best interest in mind. If an unexpected expense pops up, calling multiple credit card companies and other debtors is not likely to yield successful results. However, one quick call to your credit union may well result in an authorized payment skip or due date delay that can help you in your time of need.

Offering services that are tailored to the needs of their members make credit unions a great place to start looking for your debt consolidation loan.