sri lanka economy – Gurugama http://gurugama.org/ Tue, 14 Jun 2022 07:43:32 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 http://gurugama.org/wp-content/uploads/2021/06/favicon-16.png sri lanka economy – Gurugama http://gurugama.org/ 32 32 Get the vivo X80 Series on installment plans through Home Credit or other credit cards http://gurugama.org/get-the-vivo-x80-series-on-installment-plans-through-home-credit-or-other-credit-cards/ Tue, 14 Jun 2022 07:05:00 +0000 http://gurugama.org/get-the-vivo-x80-series-on-installment-plans-through-home-credit-or-other-credit-cards/ Now you can own your masterpiece with the professional imaging capabilities of the vivo X80 series from ZEISS! MANILA, Philippines – Following its successful launch in the Philippines, the vivo X80 series has already proven its impressive showcase position. Due to its premium design, powerful camera features, and strong performance, it has garnered rave reviews […]]]>

Now you can own your masterpiece with the professional imaging capabilities of the vivo X80 series from ZEISS!

MANILA, Philippines – Following its successful launch in the Philippines, the vivo X80 series has already proven its impressive showcase position. Due to its premium design, powerful camera features, and strong performance, it has garnered rave reviews and created higher demand from fans and consumers, including photographers and photography enthusiasts.

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Next-level professional imaging

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The vivo X80 Pro has a large 4,700mAh battery and the vivo X80 has a 4,500mAh battery. Both variants also come with an upgraded 80W wired FlashCharge, and the X80 Pro takes it even further with 50W wireless FlashCharge compatibility.

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Possible Financing Installment Loans Review 2022 – Forbes Advisor http://gurugama.org/possible-financing-installment-loans-review-2022-forbes-advisor/ Thu, 09 Jun 2022 17:12:24 +0000 http://gurugama.org/possible-financing-installment-loans-review-2022-forbes-advisor/ While Possible Finance can offer borrowers with bad credit (or no credit) quick, small loans, it charges higher APRs than some other personal loan lenders. This is how installment loans from Possible Finance compare to the competition. Possible financing vs. upgrade Upgrade offers personal loans starting at $1,000, so it might be a better option […]]]>

While Possible Finance can offer borrowers with bad credit (or no credit) quick, small loans, it charges higher APRs than some other personal loan lenders. This is how installment loans from Possible Finance compare to the competition.

Possible financing vs. upgrade

Upgrade offers personal loans starting at $1,000, so it might be a better option than Possible Finance if you need to borrow more than $500. In fact, you can borrow up to $50,000 with Upgrade, and APRs start at around 6% and go up to 36%. Since Upgrade’s rates are much more competitive than Possible Finance’s, it might be worth checking if you qualify for one of their personal loans before borrowing an installment loan from Possible.

Upgrade requires a minimum credit score of 580 to qualify, making it a viable option for potential borrowers with damaged credit ratings.

Related: Update Personal Loans Review

Possible financing vs. SoFi

Possible Finance offers small loans up to $500, but SoFi funds personal loans ranging from $5,000 to $100,000. SoFi’s competitive APRs start at around 6%, but you must pass a credit check to qualify. SoFi requires a minimum credit score of 650. If you cannot qualify on your own, you can apply with a co-borrower, such as a co-borrower. B. a spouse or trusted friend.

Related: Review of SoFi Personal Loans

Possible funding vs. LightStream

Similar to SoFi, LightStream also offers personal loans ranging from $5,000 to $100,000, depending on the purpose of the loan, with competitive APRs that start in the single digits. While Possible Finance funds short-term loans, LightStream lets you pay off your loans over two to 20 years. You must have a minimum credit score of 660 to qualify for a LightStream personal loan.

Related: Review of LightStream Personal Loans

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How Student Loans Affect Your Credit Score: Everything You Need to Know – Hometown Station | KHTS FM 98.1 & AM 1220 – Santa Clarita Radio http://gurugama.org/how-student-loans-affect-your-credit-score-everything-you-need-to-know-hometown-station-khts-fm-98-1-am-1220-santa-clarita-radio/ Fri, 03 Jun 2022 18:11:37 +0000 http://gurugama.org/how-student-loans-affect-your-credit-score-everything-you-need-to-know-hometown-station-khts-fm-98-1-am-1220-santa-clarita-radio/ By John Brown Student loans can be a significant burden on your shoulders. Not only do you have to worry about paying off all that money, but you also have to worry about how that debt will affect your credit score. Online lending platforms like get cash can be an easier option if you want […]]]>

By John Brown

Student loans can be a significant burden on your shoulders. Not only do you have to worry about paying off all that money, but you also have to worry about how that debt will affect your credit score.

Online lending platforms like get cash can be an easier option if you want to make money fast. Because lending platforms like these provide access to a network of lenders who work with borrowers of different credit scores, you are more likely to find a loan with acceptable loan terms and interest rates.

Whether you already have student loans or are looking to open one now and are curious how it will affect your credit score, you’ve come to the right place. This article will also discuss steps to ensure your credit score remains as high as possible.

How Do Student Loans Affect Your Credit Score?

In most cases, student loans show up on your credit report as installment loans. Installment loans are loans that must be repaid in fixed monthly installments, while revolving lines of credit are loans that you can repay in full at any time. The type of loan you have affects your credit score differently. Specifically, student loans are part of the “credit mix” criteria on your credit report, affecting about 10% of your credit score calculation.

With an installment loan, the loan amount and your payment history are reported to the credit agencies. On-time payments improve your credit score, while late or missed payments hurt your credit score. The higher the loan, the more it affects your score.

What can you do to improve your credit score?

If you’re concerned about how your student loan is affecting your credit score, there are a few things you can do to improve your score. First, make sure you make all your payments on time. This is the single most important factor in your credit score, so it’s important to keep track of your payments. If you can, pay more than the minimum payment each month. This will help you pay off your loans faster and improve your loan utilization rate.

Another thing you can do is sign up for automatic payments. This way you don’t have to worry about forgetting to make a payment. Many lenders will also give you a small discount if you sign up for automatic payments, which can be economical across the board.

Finally, remember to monitor your credit utilization rate regularly. If it gets too high, pay off your debt as soon as possible.

Does Paying Student Loans Build Credit?

Yes, paying student loans builds credit. As mentioned earlier, making payments on time improves your credit score, while late or missed payments hurt your credit score. Remember, if one of your intentions with your student loans is to build your credit, you need to make sure you make all payments on time.

The best way to pay off your student debt depends on your situation. If you have the cash, it’s wise to make larger monthly payments to pay off your debt faster and also improve your loan utilization rate.

If you’re having trouble paying some of your loans, you can always request changes to your payment schedule or sign up for a deferral to temporarily suspend your payments. It’s useful to know that a change in credit terms won’t hurt your credit as long as you handle your payments well.

The final result

Whether you are getting a student loan for the first time or are struggling to understand how your loan will affect your credit score, we hope this article has provided you with some clarity. If you follow recommended practices and monitor your credit more closely, things will become a little easier for you. There are several other ways to keep an eye on your credit, but the steps mentioned in this article are a good place to start.

Author’s biography:

John is a financial analyst, but also a man with other interests. He enjoys writing about money and giving financial advice, but can also delve into relationships, sports, gaming, and other topics. Lives in New York with his wife and a cat.

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Payday lenders want to offer larger loans. Critics say it’s “designed to catch low-income families.” | legislative branch http://gurugama.org/payday-lenders-want-to-offer-larger-loans-critics-say-its-designed-to-catch-low-income-families-legislative-branch/ Thu, 26 May 2022 22:00:00 +0000 http://gurugama.org/payday-lenders-want-to-offer-larger-loans-critics-say-its-designed-to-catch-low-income-families-legislative-branch/ Is a $1,500 loan worth it if it costs another $1,500 in interest and fees? That’s what payday lenders would be authorized to charge defaulting consumers in Louisiana if Gov. John Bel Edwards allows it Senate bill 381 become law. The legislation would allow lenders to offer installment loans worth up to $1,500 over three […]]]>

Is a $1,500 loan worth it if it costs another $1,500 in interest and fees?

That’s what payday lenders would be authorized to charge defaulting consumers in Louisiana if Gov. John Bel Edwards allows it Senate bill 381 become law.

The legislation would allow lenders to offer installment loans worth up to $1,500 over three to 12 months with an annual interest rate of up to 36% and a monthly “upkeep fee” of up to 13% of the original loan amount. Loans over $400 may also incur a $50 subscription fee.

The proposal, which flew through the Legislature and is now on Edward’s desk, would limit the cost of financing to 100% of the original loan amount – meaning lenders could charge up to $1,500 in fees on a $1,500 loan for a total payback of $3,000.

SB381’s sponsor, Senator Rick Ward, a Port Allen Republican, dubbed the measure the Louisiana Credit Access Loan Act and says the new loan product will help Louisiana residents who live paycheck to paycheck so they can get over making ends meet unexpectedly high spending.

But critics say it’s a predatory product and allowing payday lenders to make larger, longer-term loans with sky-high fees will trap low-income Louisiana residents in debt cycles.

“This harmful law is aimed at the hard-working families of Louisiana who do not deserve to have their scarce assets snatched away by a machine designed to trap them,” said Davante Lewis of the Louisiana Budget Project, serving low- to middle-income residents. “The governor should immediately veto this bill.”

The state’s current payday loan system allows lenders to offer a loan of up to $350, which is due on a borrower’s next payday. The maximum a payday lender can make per loan is $55. Ward’s proposal does not replace or reform this system. Instead, a new product is created.

Lenders offering the new product described in SB381 would make most of their money with a monthly “maintenance fee” of up to 13% of the original loan amount.

For a $1,500 loan, that fee would be $195 per month.

Alex Horowitz, a consumer finance researcher at The Pew Charitable Trusts, said he’s never seen a fee this high.

“We find that the bill would expose Louisiana consumers to financial harm rather than create an affordable credit market like that seen in states that have successfully reformed their payday loan laws,” Horowitz said written in a letter for both Ward and Edwards.

Kenneth Pickering, who has twice served as Louisiana’s top banking regulator, said he has no idea what the monthly maintenance fee even covers.

“Once a loan is on the books, there’s nothing left to maintain,” he said, adding that the fee was “nothing but more interest.”

Pickering, who represents the Louisiana Finance Association, an organization of more than 600 state lenders, told lawmakers, “That fee, in my opinion, makes this bill a violation of our usury laws in Louisiana.”

“The Good Alternative”

Ward argues that the new loan product is needed for Louisiana residents who cannot obtain a loan of a similar size elsewhere.

“As soon as someone offers an alternative, and I don’t mean an alternative that’s just a pie in the sky, but a viable alternative, I’ll be there to support it, but I haven’t seen it yet,” Ward told his colleagues. “Until then, I think this is the best we have to offer.”

But Stanley Dameron, whom Edwards appointed commissioner for the Office of Financial Institutions, told lawmakers there were many alternatives.

“Some of the people who would apply for these loans might not qualify at your bank, but they certainly would at a credit union or financial firm,” Dameron said.

Get the inside scoop on Louisiana politics once a week from us. Sign up today.

Jessica Sharon of Pelican State Credit Union told lawmakers it’s a “myth” that there aren’t similar borrowing options for those in financial need. She noted that credit unions were formed specifically to help people of modest means.

“Our goal is to help people who are struggling with their finances, who have low incomes and low credit scores,” Sharon told lawmakers. “Not only are we against (SB381), we also know that we are a good alternative.”

There are 165 credit unions in Louisiana, and 133 cater specifically to low-income demographics, Sharon said, adding that many already offer installment loans without having to charge a 13% monthly maintenance fee.

Ward argues that the legislation would help those whose financial history has prevented them from opening a bank account. But Horowitz, with Pew, said payday loan borrowers need to have a checking account somewhere.

“These aren’t the bankless,” Horowitz said. “You must have a checking account to get a payday loan.”

Horowitz noted that seven of the country’s 12 largest banks have started or recently announced programs to provide small loans to customers.

Local vs. national

Behind Ward’s proposal are two non-government companies that together own dozens of Check-Into-Cash and ACE Cash Express locations across the state.

But not all payday lenders are on board with the bill.

Troy McCullen of the Louisiana Cash Advance Association, which represents Louisiana-based payday lenders, said there was no need for the new product.

“These loans are already available in Louisiana at a fraction of the cost,” McCullen said. “This is greed and arrogance at the highest level.”

McCullen made similar comments four years ago when Ward supported another measure that allowed payday lenders to offer longer-term installment loans. This measure failed at a committee of the House of Representatives.

Pickering of the Louisiana Finance Association said another problem with SB381 is that borrowers only have one day to cancel the loan. He said this is a “very short timeframe for anyone to reconsider.”

He also noted that the 100% cap on fees and interest does not include late fees or insufficient fund fees.

SB381 supporters include Community Choice Financial, an Ohio-based company that owns Check Into Cash, and Populus Financial Group, a Texas-based company that owns ACE Cash Express.

Finance America Business Group, a Louisiana-based company that owns Cash 2 U stores, supports the measure, as does the Louisiana Payday Loan Association, which represents local lenders.

The bill passed the Senate in April by a 20-14 vote, just enough to pass. State Senator Gary Smith, whose wife Katherine Smith is a registered lobbyist for Community Choice Financial, was the only Democrat in that first vote to support the measure.

“She never spoke to me about it,” Sen. Smith said in an interview, adding that payday lenders are the “only place some people have to go to get a loan.” You can’t go to a bank. You can’t go to a credit union.”

The measure passed the House of Representatives by a vote of 54 to 35 in May.

The Legislature sent the bill to Edward’s desk on May 19. Under the Louisiana Constitution, the governor has 10 days after receiving a bill to sign it, veto it, or allow it to go into effect without his signature.

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What is credit history? | accelerate credit http://gurugama.org/what-is-credit-history-accelerate-credit/ Thu, 26 May 2022 21:31:29 +0000 http://gurugama.org/what-is-credit-history-accelerate-credit/ How to build a strong credit history Building a credit history takes work and unfortunately doesn’t happen overnight. However, there are a few things you can do to improve your credit history, which we’ll outline below. Start with what you can afford You may need to apply for some type of credit or loan to […]]]>

How to build a strong credit history

Building a credit history takes work and unfortunately doesn’t happen overnight. However, there are a few things you can do to improve your credit history, which we’ll outline below.

Start with what you can afford

You may need to apply for some type of credit or loan to establish credit history. As a rule of thumb, don’t borrow more than you can afford to pay back. You might want to consider a few types of credit that people with minimal or no credit history can use to build credit:

  • Secured Credit Cards: Secured credit cards require a cash deposit to open an account. This reduces the risk for the credit card issuer. For example, you can post a $200 deposit as collateral and receive a $1,000 line of credit in return. Finally, you may be able to apply for an unsecured card when making your regular payments.
  • Authorized user credit cards: As an authorized user, you can use a master account holder’s credit card. You would have access to your own credit card linked to the main user’s account. As an authorized user, you can access the account without having to fill out an additional application or undergo a credit check.
  • building loan: Credit builder loans are used to make fixed payments to a lender (who holds your money in a bank owned by the lender). At the end of the loan term, you will have access to the loan amount.
  • Co-signed loans: Co-signed loans involve another person agreeing to take responsibility if you fail to make your payments. It is important to choose someone you trust to help you build a good credit history.
  • Credit cards for students: If you are a student, you can also apply for a student credit card. A student credit card typically offers lower credit limits and fewer incentives, but gives you a good start toward building credit.

Pay your bills on time

Credit histories place a high value on whether bills are paid on time. As previously mentioned, a FICO® Score category comprises 35% of your payment history. Pay your bills on time every month, even if you can only make the minimum monthly payment.

Late payments will show up in your credit history and may affect yours credit-worthiness. They can also stay on your credit report for up to 7½ years, although the impact of late payments diminishes over time.

Keep your accounts open

The longer you keep accounts, the stronger your credit history will be. If possible, avoid closing lines of credit. This action can increase your credit utilization, which refers to the ratio of your total credit to your total debt, expressed as a percentage.

For example, if you have two credit cards with a limit of $1,000 each and you owe $500 on both, your credit utilization ratio is $1,000/$2,000, or 50%. You want to try to keep your credit utilization as low as possible.

Keeping your accounts open can demonstrate a longer credit history, while closing them automatically shortens your credit history.

Check your credit reports

Checking your credit reports is important because errors can affect your score. It is possible that your credit report contains incorrect personal information, incorrect accounts due to identity theft, inaccuracies in account status (e.g. closed accounts reported as pending), balance or data administration errors.

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New laws, lenders improve access to affordable small loans | personal finance http://gurugama.org/new-laws-lenders-improve-access-to-affordable-small-loans-personal-finance/ Tue, 24 May 2022 21:37:52 +0000 http://gurugama.org/new-laws-lenders-improve-access-to-affordable-small-loans-personal-finance/ Annie Millerbernd Inflation has already hit people particularly hard struggling to put gas in their tanks and food in their fridges. For many, a payday loan seems to be the only way to get the money they need. In recent years, however, more and more states have placed restrictions on risky, short-term borrowing, and new […]]]>

Annie Millerbernd

Inflation has already hit people particularly hard struggling to put gas in their tanks and food in their fridges. For many, a payday loan seems to be the only way to get the money they need.

In recent years, however, more and more states have placed restrictions on risky, short-term borrowing, and new lenders have emerged offering lower-cost small loans, making it easier than before to find affordable credit that doesn’t plunge you into unmanageable debt.

In some states, new laws mean better credit

There is currently no federal law on maximum interest rates for small loans; rather, States decide whether to cap payday loan installments. As a result, the cost of a few hundred dollars’ worth of credit often depends on where you live.

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In recent years, four states – Colorado, Hawaii, Ohio and Virginia – have passed laws that effectively lower the cost of small loans and give borrowers longer repayment periods. A study by The Pew Charitable Trusts, published in April, found that payday lenders continued to operate under the reforms, but with more secure credit.

Although some new lenders did business in those states after the laws went into effect, the primary impact was that existing payday lenders consolidated their storefronts and made their loans more affordable, says Alex Horowitz, a senior research officer at Pew.

National banks and local credit unions step in

A bank or credit union might not have been your go-to place for a small loan in the past, but it might be today.

Seven major banks have begun offering small loan options with low APRs, or announced plans to offer them, in recent years, Horowitz says, including Bank of America, Wells Fargo and Truist. These loans are available to existing bank customers nationwide, regardless of government interest rate limits.

Banks rely primarily on their customers’ banking history, rather than their creditworthiness, to determine whether they are eligible for a small loan. The loans — which start as little as $100 — are typically repaid in monthly installments at an APR of no more than 36%, the highest rate an affordable loan can have, consumer advocates said.

“The fact that banks are starting to offer small loans could turn the entire payday loan market upside down,” says Horowitz.

Local credit unions have membership requirements and are less well known than payday lenders, so they’re often overlooked by people who need a quick buck, says Paul Dionne, research director at Filene, a think tank focused on helping credit unions serve their communities .

But if you can walk to your local credit union, chances are you qualify for membership, he says.

That’s because credit unions often serve people who live or work in their communities. These organizations have strived for financial inclusion by better tailoring their products, like loans, to the needs of their customers, says Dionne.

“Credit unions are getting better and better at actually having the best product and not saying no, but figuring out what the best fit is for this person coming in,” he says.

Other borrowing options

Even in states where laws aim to ban payday loans altogether, people can find Alternatives to risky borrowingsays Charla Rios, small-dollar credit and debt researcher at the Center for Responsible Lending.

You may be able to work out a payment plan with your utility company or borrow from a friend or family member, she says. Here are some borrowing options to consider before getting a payday loan.

salary advances. Some companies, including Walmart and Amazon, give their employees early access to a portion of their paycheck as a workplace perk. This can be an interest-free way to borrow money if your employer offers it, but since the repayment comes from your next paycheck, it’s best to use it sparingly.

cash advance apps. Apps like Earnin and Dave let you borrow a small amount of money before payday, typically $25 to $200. They sometimes charge for instant access to your money or ask for voluntary tips. They also take repayment from your next paycheck.

“Buy now, pay later.” For necessary expenses, a Buy Now, Pay Later loan allows you to purchase an item with only partial payment. You pay the balance in equal installments, usually over the next six weeks. This type of financing can be interest-free if you pay the entire balance on time.

Low-interest installment loans. Depending on your credit rating and income, you may qualify for an installment loan with an APR of less than 36%. These loans are for amounts ranging from $1,000 to $100,000 and are repaid over longer terms, typically two to seven years. Online lenders who often offer bad credit loans pre-qualify for a loan Use a soft credit pull, which lets you compare loans without hurting your credit score.

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The National Bank of Coxsackie offers commercial e-loans http://gurugama.org/the-national-bank-of-coxsackie-offers-commercial-e-loans/ Thu, 19 May 2022 12:05:14 +0000 http://gurugama.org/the-national-bank-of-coxsackie-offers-commercial-e-loans/ COXSACKIE – Changing the national trend towards online mortgage offerings, the National Bank of Coxsackie has launched a digital lending platform for small businesses. With the NBC Express Now program, small businesses can apply for installment loans or credit lines digitally via this platform and complete the entire process from application to financing online. “You […]]]>

COXSACKIE – Changing the national trend towards online mortgage offerings, the National Bank of Coxsackie has launched a digital lending platform for small businesses.

With the NBC Express Now program, small businesses can apply for installment loans or credit lines digitally via this platform and complete the entire process from application to financing online.

“You wouldn’t really set foot in the branch,” said Nicole Bliss, NBC’s vice president and human resources officer.
“We thought it would be a nice addition to what the bank already offers,” she said.

Imagine small business owners like B. Contractors who may need a new truck or piece of equipment but are also busy and using the resource sharing platform.

The new system is not for mortgages.

NBC has offices in Albany, Greene, and Schoharie counties, but some of its business customers are located in remote or rural areas, as well as in other counties, including Columbia.

“We understand that time is an invaluable resource for small business owners, and we want to make the process of obtaining a term loan or line of credit easy, quick and hassle-free,” NBC chief credit officer Charlene Slemp said in a statement about the new Platform that went live in March.

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Loans vs Lines of Credit: Which is Best for You? http://gurugama.org/loans-vs-lines-of-credit-which-is-best-for-you/ Thu, 19 May 2022 11:30:27 +0000 http://gurugama.org/loans-vs-lines-of-credit-which-is-best-for-you/ Post Views: 412 When you need or want to buy something that exceeds your available funds, it is common to borrow the money elsewhere. If you can’t get it from friends and family, the following practical solution is to apply for the funds from a bank or lender. However, most consumers are unaware that there […]]]>

Post Views: 412

When you need or want to buy something that exceeds your available funds, it is common to borrow the money elsewhere. If you can’t get it from friends and family, the following practical solution is to apply for the funds from a bank or lender. However, most consumers are unaware that there are multiple borrowing options, including a loan or line of credit. Ultimately, the differences between these financial products will help you determine which one is best suited to your circumstances.

What is a loan?

A loan is a specified dollar amount made available to another person or entity by a person, company, or financial institution in exchange for the borrower’s promise to pay the interest and the loan balance in full by the agreed date. It is a set amount of money intended for one-time use. There are many different types of loans, including mortgages, personal loans, car loans, home equity loans, student loans, payday loans, and installment loans. A little internet research can help you discover this What is the difference between a payday loan and an installment loan or the difference between a mortgage and a home equity loan.

What is a line of credit?

A line of credit is a form of loan as it is financing from one person or company to another. However, lines of credit are a fixed amount of money that can be used as many times as the borrower needs (or until the account is exhausted).

What is the difference?

While the definitions of loans and lines of credit give you some insight into their differences, let’s dig a little deeper into how these financial products differ.

  • Frequency of use – The most significant difference between a loan is the frequency of use. A loan is non-revolving, meaning you can only use the amount borrowed once. You then have to pay off the loan in full and, if necessary, apply for another one. A line of credit is revolving, which means you can use the amount you borrowed, pay back the balance, and use it as many times as you see fit.
  • Borrower Needs – Although personal loans can be used for any purpose, other loans are designed for a specific need. For example, a mortgage is used to buy a house, an auto loan buys cars, and student loans fund college tuition. On the other hand, you can use a line of credit to fund anything.
  • Accrued Interest – Once you get a loan, interest starts accumulating. However, a line of credit does not accrue interest until you begin spending from the account.
  • repayment – If you accept a loan, you must immediately start paying off the balance plus interest until you have fulfilled your obligation. With a line of credit, payments are not required until you spend money. Plus, you only pay for what you use with a line of credit instead of owing the entire balance.

Which one should you choose?

How do you know if you need a loan or a line of credit? Below are two factors to consider:

  • Financial Needs – The first thing to consider is why you need the money. If you’re trying to buy a home, car, or pay for college, a loan may be a better option because you can apply for specific loans that can give you larger amounts of money to make those important life investments. However, if you live paycheck to paycheck and want a financial cushion, often needing extra money to make purchases or meet ongoing expenses (e.g. dental work, college tuition (beyond tuition), etc.), a line of credit would make sense Ideal.
  • affordability – Being in debt can be a good thing, but too much debt can cause problems. Therefore, you want to choose the cheapest loan option. For example, a bank might offer lines of credit at 12% APR or 1% monthly interest. However, a personal loan can range from 10% to 36%. You don’t have to worry about repaying a line of credit when the balance is at zero; However, once you take out the loan, you will have to pay the required interest rate and the balance in full. If you’re trying to save money and not get into too much debt, a line of credit may be a better option.

When you find yourself in a jam or just want to make a major life purchase, applying for a loan or line of credit is often the quickest way to achieve your goals. Hopefully the information provided above has given you a better understanding of the differences, benefits and common uses so you can decide which one is best for you.

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Carvana provides $615.5 million in ABS for fixed-rate car purchase installment loans http://gurugama.org/carvana-provides-615-5-million-in-abs-for-fixed-rate-car-purchase-installment-loans/ Tue, 17 May 2022 02:22:00 +0000 http://gurugama.org/carvana-provides-615-5-million-in-abs-for-fixed-rate-car-purchase-installment-loans/ Online used car dealership Carvana is sponsoring a $615.5 million asset-backed securities deal this year for its latest asset-backed security (ABS), a deal that offers an initial credit enhancement of 9.5 % on the “AAA” rated debt securities included. Carvana Auto Receivables Trust 2022-P2 has an $82 million tranche that is KBRA rated “K1+” with […]]]>

Online used car dealership Carvana is sponsoring a $615.5 million asset-backed securities deal this year for its latest asset-backed security (ABS), a deal that offers an initial credit enhancement of 9.5 % on the “AAA” rated debt securities included.

Carvana Auto Receivables Trust 2022-P2 has an $82 million tranche that is KBRA rated “K1+” with an initial credit enhancement of 9.50%; two tranches of $185,500 million rated ‘AAA’ with an initial credit enhancement of 9.5%; a $97.550 million tranche rated AAA with an initial credit enhancement of 9.50%; an ‘AA+’ rated $18.450 million tranche with an initial credit enhancement of 6.45%; an ‘A+’ rated tranche of $17,550 million with an initial credit enhancement of 3.55%; $18.450 million

BBB+ rated tranche with an initial credit enhancement of 0.50%; and a $10.587 million tranche rated BBB- with an initial credit enhancement of 0.30%.

Carvana’s 17th overall ABS is scheduled to close on May 25th.

CRVNA 2022-P2’s pool balance is much smaller than that of its recent predecessors, which spent approximately $1.0 billion, KBRA noted.

Carvana, an e-commerce platform founded in 2012, operates in 315 markets. Users can buy, finance, trade and have cars delivered through the company. The Tempe, Arizona firm’s latest ABS is backed by $605 million in auto loans. The fixed-rate installment loans are to individuals with a “non-zero weighted average FICO score of 704,” the report said.

The average principal balance is $24,150 with a weighted average original and remaining maturity of 71 and 70 months, respectively, KBRA said. The net proceeds from the issuance of the debentures will be used for general operations, the report said.

Bridgecrest Credit Company, a subsidiary of DriveTime, is the service provider; Computershare Trust Company, NA, is the custodian and paying agent of the Indenture Trustee. BNY Mellon Trust of Delaware is the trustee of the owner and Vervent Inc. is the backup service provider.

Despite its national profile as an innovative auto seller, Carvana began lending sizable amounts in 2016 to get on KBRA’s radar, the report said.

KBRA negatively rated several aspects of Carvana’s business, citing a lack of robust historical performance data as one. Also, the company is focused on growth, which results in operating losses — a net loss of $287 million for fiscal 2021 — and negative cash flow since inception, KBRA said.

However, not all aspects of Carvana’s business are cause for concern. Its integrated business model allows the company to keep fixed costs more under control compared to traditional retailers, the report said.

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How piggyback loans work | Mortgages and Advice http://gurugama.org/how-piggyback-loans-work-mortgages-and-advice/ Fri, 13 May 2022 13:38:00 +0000 http://gurugama.org/how-piggyback-loans-work-mortgages-and-advice/ If you have a small down payment on your home, a piggyback loan can help you avoid some additional costs on your mortgage. However, these types of loans are not without their own costs and disadvantages. Here’s what you need to know. What is a piggyback loan? Homebuyers use piggyback loans to avoid paying a […]]]>

If you have a small down payment on your home, a piggyback loan can help you avoid some additional costs on your mortgage. However, these types of loans are not without their own costs and disadvantages. Here’s what you need to know.

What is a piggyback loan?

Homebuyers use piggyback loans to avoid paying a personal mortgage insurance policy, which typically kicks in when your down payment is less than 20% of the home’s selling price. PMI acts as an insurance policy to protect the lender if you default on payments or default altogether.

A piggyback mortgage agreement typically offers a primary mortgage equal to 80% of the home’s value and a home equity product to make up the difference between your down payment and the remaining 20%.

The piggyback loan usually has a higher interest rate than the first mortgage, and the interest rate can be variable, meaning it can increase over time.

Piggyback loans became popular during the real estate boom of the early to mid-2000s. For example, in 2006, about 30% of homebuyers in New York City used one, according to a 2007 report by the NYU Furman Center.

The loan combination allowed would-be homeowners to buy the homes they wanted and avoid PMI without putting up 20% or more in cash. But it also made their homes more vulnerable to defaults.

When the national housing bubble burst in the late 2000s, homeowners with less equity in their homes were more likely to default than those with significant equity.

Piggyback mortgages still exist but are rare. “There’s been a decline in popularity, but also a significant tightening of policy by the lenders who are offering these piggyback second mortgages,” said Jeff Brown, industry director and mortgage lender at Axia Home Loans.

And they’re not seeing a big comeback, even with the recent surge in house prices. According to Ralph DiBugnara, CEO of Home Qualified, a digital real estate resource, “Needs have been reduced with the expansion of mortgage products that require less than a 20% down payment and require no PMI.”

Types of piggyback loans

There are several ways you can structure a piggyback mortgage. Here’s how the different options break down based on your primary mortgage loan, your piggyback loan, and your down payment.

  • 80/10/10 loan. This option is worth considering with a traditional loan and involves a main mortgage covering 80% of the sale price, 10% piggyback loan financing, and a down payment covering the remaining 10%.
  • 80/15/5 loan. This option works similar to the 80-10-10 loan, but instead of depositing 10% and borrowing the remaining 10% with a piggyback loan, you deposit just 5% and fund the remaining 15% with the second home loan.
  • 75/15/10 loan. This option, which includes a 15% piggyback loan and 10% down payment, can be used when purchasing a condo. This is mainly because condo mortgage rates tend to be higher when the loan-to-value ratio is higher than 75%.
  • 80/20 loan. This scheme, popular in the years leading up to the 2007 housing crisis, required no down payment at all. You would simply take out a primary mortgage to fund 80% of the sale price and 20% with a secondary loan to cover the rest. However, this piggyback arrangement is no longer common.

Pros and cons of piggyback loans

When considering a piggyback mortgage, it’s important to understand both the pros and cons.

Advantages of piggyback loans

It could save you money. PMI can cost anywhere from 0.3% to 1.5% of your loan amount annually. So if your mortgage is $250,000, you could get anywhere from $750 to $3,750 in PMI awards each year. That equates to a monthly payment of $62.50 to $312.50 in addition to your principal and interest payment to your lender, plus property taxes.

Depending on how much the second mortgage costs in monthly installments, you could end up paying less than PMI. But it could easily go either way, DiBugnara says. “Some second mortgages used for piggyback loans will have a much higher interest rate,” he adds. “In this case, it is very likely that the payment is higher than a PMI payment.” Be sure to do the math to find out which option is better in your situation.

You can deduct the interest from both loans. The IRS allows you to deduct interest paid on up to $750,000 of qualifying mortgage debt ($375,000 if you’re married but file your tax returns separately). This includes home equity loans and HELOCs used to purchase, build, or substantially improve the home used as collateral.

Factoring these savings into your calculation of whether you can save money with a piggyback loan can complicate matters. Also, it can be difficult to know exactly how much you could save — or whether it even makes sense to break down your deductions and claim the mortgage interest deduction at all — unless you speak to a tax expert.

You can keep a HELOC for other purposes. A construction loan is an installment loan, ie you receive the entire loan amount in one sum and pay it back in equal installments. However, with a HELOC, you receive a revolving form of credit during the draw period that you can repay and borrow again over time to pay for renovations and other expenses.

Disadvantages of piggyback loans

Closing costs could reduce the value. In addition to the closing costs of your first mortgage, you may have to pay closing costs for your home loan or HELOC. However, some lenders offer home equity products with low or no closing costs. You should find out what the lender charges so you can factor it into your calculations.

Even if closing costs are low, the bill may not work out in your favor, and paying PMI could end up being cheaper than taking out a second home loan.

That could make refinancing more difficult. If you get your piggyback loan from a different lender than the one providing your first mortgage, which is typical, it could be more difficult later to refinance your home to get a payout or a lower interest rate.

This is because unless you take out a large enough refinance loan to pay off the second mortgage, both lenders would have to agree to the refinance. It can be difficult to convince both lenders, especially if your home has gone down in value since you bought it.

The costs could increase over time. If the second loan you take out is an adjustable-rate HELOC, don’t just base your calculations on the current cost of each option.

A floating interest rate can fluctuate with the market index interest rate. There is no way to know exactly how much more a variable interest rate may cost you as it is impossible to predict movements in market interest rates. If you’re on a tight budget and can’t handle an increase in your mortgage payment over time, an adjustable-rate piggyback loan might not be a good choice.

How do you qualify for piggyback loans?

Qualifying for a piggyback loan can be difficult because second mortgage lenders may have different eligibility requirements. While specifics may vary from lender to lender, to be approved for both loans, you typically need the following:

  • Credit-worthiness. You typically need a FICO score of 620 or higher for the primary mortgage, but the minimum for the secondary mortgage can be 680 or higher.
  • Debt to Income Ratio. Mortgage lenders like to see a debt-to-income ratio of 43% or less, and that includes both primary and secondary home loans.

Note that a lower down payment usually translates into higher interest rates.

Piggyback loan alternatives

Look for loans without a PMI. Some lenders offer traditional loans without a PMI even if you don’t have a 20% down payment. Depending on the lender, this may be limited to a first-time buyer or low-income program, or you may have to agree to a slightly higher interest rate.

Like a piggyback loan, run through the numbers to make sure you’re not paying more over the long term at a higher interest rate than PMI.

Pay off your balance quickly. Traditional mortgage lenders typically add a PMI to your loan when your loan-to-value ratio is greater than 80%, but eventually your loan balance should fall below that threshold. Lenders are required by law to automatically remove the PMI once your LTV reaches 78% based on original loan and home values.

If you’re anticipating a significant hit or cash flow to make additional payments, it could help reduce your loan balance faster and get you to the point where you no longer need the insurance.

If you’re working on paying off your balance and think your home’s value has gone up and you’re at or below 80%, you can get a home appraisal. If you’re right, you can request that the lender manually remove the PMI.

Wait until you’ve saved enough. While there are ways to buy a home now and avoid PMI, it’s best to wait until you have enough cash for a 20% down payment.

Saving the 20% you need to avoid PMI can take years. But if you think you can save money fast enough, it may be worth the wait.

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