“Elements that Define the Interest Rate of Your Loan” plus 2 more

Elements that Define the Interest Rate of Your Loan
8 Ways to Save Money While Shopping Online
Dollar Matters: Credit and Debt

Elements that Define the Interest Rate of Your Loan

Posted: 03 Nov 2011 04:00 AM PDT

Have you ever considered applying for an unsecured personal loan to satisfy financial needs? These types of loans are an excellent means of borrowing, especially for those that are renters and have no property for collateral. However, be prepared to pay higher interest rates for your unsecured loan than you would for a second mortgage. The interest rates of personal loans are defined by a few important factors.

Current Market Interest Rates

The most dominant facet for defining loan interest rates is the current market interest rates. The Federal Reserve computes the market interest rates. The Reserve lends money to banks and frequently alters their lending rate, dependent on the economy. So, when the Federal Reserve raises their rates, individual banks must also increase their rates so that they are able to continue earning profit. It is critical to examine the market interest rates prior to submitting an application for unsecured loans. Your timing is going to be critical.

Bank Guidelines/Policies

The individual policies of the varying commercial banks are going to influence interest rates. They each have their own formula for generating profit off of your loan. This formula is mostly going to consist of what there back-end costs are going to be for servicing you loan based on your borrowing amount and requested term. Every bank has different costs and therefore are going to have varying interest rates than each other.

Credit Rating/Scores

The most influential element of the interest rates you receive for your loan is going to be your credit rating/score. Your past credit history is going to determine what your credit score is. Each potential lender is going to evaluate your credit history and score when determining whether or not to grant you approval and what sort of interest rates to grant. Individuals with credit scores of 600 or lower are usually considered as high-risk by lenders. Therefore, if you fit in this category, you may not even get approved for the loan you are looking for. 601 – 675 is considered decent credit, 676 – 700 good and 701+ very good. Obviously the better your credit score, the better rates you will receive.

Income

The amount of money you earn is not as influential as your credit score but is still a very important variable. It is crucial that you show enough earnings to be able to pay for your loan. For example, if you apply for a loan that is going to require a monthly payment of $1000, you better earn enough/month to be able to pay that amount. And it’s important to note that lenders are not going to require you to earn $1000, you will need to earn more. And enough to cover your current expenses as well as this loan amount. The more money you generate, the less likely you are going to default on your loan, the lower-risk you are considered, and therefore you will receive favorable interest rates if all other interest rate determining variables are positive.

Debt

Lenders are going to determine what your debt-to-income is when analyzing your debt situation for determining interest rates. The higher your debt-to-income is, the higher your interest rates are going to be. It is also important to note that the more debt you have, the less amount of financing you will be able to get approved for. Therefore, if you are able to, pay down as much debt as you can prior to submitting an application for a personal loan. Obviously this may be difficult for anyone to do since you are in need of extra cash, hence your reason for applying for a loan.

8 Ways to Save Money While Shopping Online

Posted: 03 Nov 2011 04:00 AM PDT

There are so many great reasons to do your shopping online–you can shop from the comfort of your home or office so that you don’t have to drive, park, and run from store to store to get the items you need. Besides saving time and eliminating a number of hassles, shopping online can save you money. If you know what to look for and where to do your online shopping, you can stand to save a significant amount of money–just one more reason to give it a try. Here are some helpful tips and suggestions to keep in mind if you want to get more for your money when you shop online. [Also See: 6 Tips to Make Your Online Holiday Shopping Safer]

Compare Prices

The beauty of online shopping is that you can compare prices and see what each store has to offer with just a few keystrokes on your keyboard. You don’t have to go from one store to the next trying to find the best deal–you can find it in a matter of minutes or less laid out before your very eyes. Comparing prices is always one of the best ways to save money whether you’re online shopping or in-store, so take advantage of the convenience and do a few searches so that you know you’re paying the lowest dollar amount possible for the item you want.

Look for Cheap or Free Shipping

Just because you think you found a great bargain online doesn’t mean you’re going to save a lot when it’s all said and done. Before you commit to buying an item online, be sure the shipping amount is reasonable. If the cost to ship the item is high, you may not really be saving anything at all. If you can wait a few extra days for your purchases to arrive, opt for the cheapest shipping method offered. Many larger online stores offer free or discounted shipping if you spend a certain dollar amount or are a frequent shopper, so keep an eye out for those options and save as much as you can on shipping costs.

Take Advantage of Online Coupons and Rebates

Online coupons, promotional codes, and rebates can be found on a number of different coupon websites–and by using them you can really save big. Before you start shopping, make a list of the items you’re looking for and then do a few coupon and rebate searches and see what you can come up with. Online coupons and rebates can be found for just about anything including groceries, cosmetics, books, electronics, clothing, and more. [See: 6 More Places to Find Coupons]

Consider Buying Auction-Style

Online auctions are an excellent place to check for some exceptional deals. When you bid on an auction, you can enter in the maximum price you are willing to pay for an item. If someone outbids you, no harm done–you’re off the hook and you can simply look for a similar auction to bid on and start again. If you have no bidding competition, you might walk away with something you really wanted at a great price.

Watch for Special Sales and Bargains

Because you don’t need to leave home to shop online, you can frequently check your favorite online stores for special sales and bargains at any time–day or night. Watch for special featured sales that might be on the horizon, and check the various drop-down menus that online stores may have for bargain areas, discounts, and clearance items.

Sign-Up for Frequent Buyer Programs

Frequent buyer programs are becoming increasingly popular with online retailers–it’s a way for them to reward their loyal customers and keep them coming back for more. Find out if your favorite online stores offer frequent buyer memberships–even if you have to pay a small fee to sign-up it may be worth it if you are a regular customer. Many of these rewards programs offer their members benefits such as cheap or free shipping, discounts on most if not all purchases, and special bonus rewards of cash back or free items once a customer has spent a specified dollar amount.

Buy Used

Used items are not limited to just secondhand stores and yard sales anymore–you can find them on the internet, too. Larger online stores like Amazon, for example, feature an enormous selection of used items in nearly every category imaginable sold by private sellers and small shops via their website. It allows you, the buyer, to get great items at rock-bottom prices fully backed and guaranteed by a trusted company. Buying items used is a great way to save money when shopping online–especially when you’re looking for higher-end brand names or more expensive items like electronics.

Bundle and Bulk Shopping

If you’re going to be shopping online, try buying as many of the items on your list as you can from one retailer. If you are going to have to pay to have your items shipped, you’ll be better off getting as many of them as you can from the same place so you don’t have to pay multiple shipping and handling charges. If there are certain items that you buy on a regular basis such as cosmetics, toiletries, cleaning supplies, or other non-perishable goods, stock-up by buying them in bulk. That way you won’t have to pay so much in shipping and you may qualify for special discounts simply because of the quantity of items you’re buying.

As you can see, there are many different ways to save money when you buy online. By practicing some of these smart shopping tips, you’ll be able to find what you need online at prices you’ll feel good about paying.

Guest post from Adam. Adam shares coupon codes on FrugalDad.com.

Dollar Matters: Credit and Debt

Posted: 02 Nov 2011 08:45 AM PDT

Smart credit moves can save you money and help you position yourself to take advantage of financial opportunities. However, poor credit habits lead to debt and financial bondage. Here are some great articles on credit and debt from around the blogosphere this past week:

What Are Virtual Credit Card Numbers and How Can They Protect You?

Free From Broke takes a look at how virtual credit card numbers work, and how you can protect yourself with them. They can usually only be used for one purchase, it makes it difficult for the unscrupulous to run up bills in your name.

Just Do It: 9 Guilt-Free Ways to Rip Off Your Credit Card Company

Over at Len Penzo dot Com, you can learn more about getting the most out of your credit card. Yep, rip off your credit card company, and reap the benefits.

Struggling with Debt? Consider this Advice from Suze Orman

While you do need a debt plan, Quizzle takes a look at some recent advice from Suze Orman: Stop focusing so much on things. You will end up in a better situation if you shift your focus, and be able to pay off debt better.

Is a Balance Transfer Worth It?

Credit, Eh, takes a look at whether or not a balance transfer is worth it. Carefully consider your options before signing up for a balance transfer.

Dave Ramsey’s 6 Steps For Dumping Debt

If you are ready to get out of debt, you can consider some of this advice, from Dave Ramsey, that Debt Free Adventure shared. The number one thing to do? Stop borrowing.

RRSP Loans Actually Make Sense

Financial Uproar takes a look at how you can boost your retirement contributions (in Canada, of course) by getting an RRSP loan. An interesting payment.

Share Your Debt Free Bucket List. Win $500 towards Killing Off Your Debt!!

Enemy of Debt is really excited about this contest — and he should be. If you want to win $500 toward debt reduction, head on over to EOD and join the contest.

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