Personal Loans Archives - Oh My Heartsie Girl

At various points in our lives, we need a little help on the financial front. Money tends to get tight for a variety of reasons. Maybe your hours as a customer service representative have been cut at work. Maybe your credit card payments have risen a bit higher, due to a change in your credit score. Or maybe you’re making extra payments on the engagement ring you bought for your upcoming nuptials. Whatever the reason, people sometimes find themselves in financial straits and needing extra money to help them out. In cases like these loans can come in handy.

When people receive loans, they often have to put up some form of collateral or security. Collateral is a borrower’s pledge of something specific to the lender. This will often secure the repayment of the loan to the lender. It’s a good example of a sort of “you give me something, I give you something” relationship. Security can come in a variety of forms when building such loan-centered relationships. Such partnerships show no signs of slowing down either. In 2021 alone approximately 51.3 percent of people in the United States stated that they have taken out a personal loan during their lifetime. So, what can we use as security for a loan? Today we’ll focus on four overlooked items that you can use as security for a loan.

1. Jewelry

One of the most cherished pieces of items in a person’s life is jewelry or trinkets. Jewelry holds importance on a variety of fronts for owners. Jewelry can be given to loved one’s, and can also be seen as an investment. For other people, trinkets can be passed down through families over time, and can also represent a social status for other individuals. Before using jewelry as security, definitely do your research to see how valuable it is. For example, look at Agape Diamonds reviews before using Agape diamonds as security for a loan that you’re seeking.

Lastly, jewelry can also be used as security for a loan because of the value such pieces bring. Some people use Agape diamonds, engagement rings, earrings, necklaces, diamond rings, white gold jewelry, and loose diamonds to receive confidential cash loans. Jewelry stands as a great example of what you can use for security when seeking out confidential cash loans.

2. Cars

Cars can also be used as security when trying to obtain a loan. If you’re looking to get a confidential cash loan in the state of California, or anywhere across the United States, using your vehicle is another good idea. As an owner of a vehicle, you can use that item as security for a secured personal loan, or an auto equity loan. After you’ve checked with the folks at Maxferd.com about putting up jewelry like Agape diamonds, engagement rings, earrings, necklaces, and diamond rings up for collateral loans, also consider the same option for your vehicle.

3. Future Paychecks

Another way that you can obtain a loan is by putting up money from your future paychecks as collateral. For a lender, this is a guaranteed way to receive something for their services. They know that they will receive collateral for the confidential cash loan which they’ve made available because they know the lendee is employed. With such an agreement you are borrowing money now which you will pay back when you are paid.

4. Collectibles

Another group of valuables that can be used as security for loans is collectibles. Though not as shiny as Agape diamonds, or an engagement ring, collectibles can be just as valuable. Some of the following items can also be included as high-value collateral for loans: Rare coins, comic books, trading cards, antique furniture, and rare stamps. Each of these can be used as collateral for those seeking a confidential cash loan.

Did you know that personal loans can help improve your credit? How can you benefit from personal loans in this regard? Well, let us first understand what credit score is and its relevance. Before a loan application is approved or declined, lenders often conduct credit checks on applicants. An applicant is supposed to meet some requirements in order to be considered for a loan. A credit score is one of the most common eligibility tests that borrowers are often subjected to.

What Is Credit Score?

This is a three-digit figure that was established to determine the creditworthiness of borrowers. It ranges from 300 to 850 points. In general, any score above 800 points is considered excellent. A score of 700 points is good and most lenders will prefer giving loans to you at lower interest rates and better terms. A score that ranges from 650 to 700 points is fair, and even though you can qualify for most loans, your chances are limited compared to someone with good credit. Any score below 650 is bad and your chances of securing loans here are very minimal. Yes, you can qualify for loans but at higher rates.

It is important to note that one can have bad credit not because of defaulting loans, but because of not using credit. Again, it takes time to build credit. Everyone desires to have good credit to qualify for most loans at better rates and terms.

Ways in Which Personal Loans Might Help Your Credit

In light of the above, it is vital to improving your credit score in case it is bad, or to maintain it if it is good or excellent. If you are not careful, your score can plummet with ease and will require a lot of effort and time to establish it. There are different criteria for improving the credit score. The rest of this discussion will illustrate different ways in which personal loans might help you improve your credit score. Let us start.

Earn Points by Borrowing and Repaying in Time

Usually, most lenders report payments to credit rating agencies. According to financial experts, timely payment is a credit factor that accounts for up to 30% of borrowers’ scores. Some lenders offer personal loans even to individuals with bad credit. You may have heard of personal loans for bad credit. This means that if you borrow and repay the loans in time, your score will improve gradually. That is why individuals are often advised to borrow loans and repay them in time while building credit. You have so many borrowing options in this regard. Look at the Best Lowest Payday Loan Singapore and apply it in case you need instant. It can help improve your score.

So, what happens when you don’t repay the loans in time? Notice we said credit agencies use your payment history to compute your score. Therefore, if you do not make payments in time, your score will dip significantly. This is something you should never allow. Lenders are aware there are unforeseen circumstances that happen and render you unable to make a payment in time. Whenever you anticipate this possibility, talk to the lenders in advance. Trust me your payment schedule might be adjusted, though at a fee.

Debt Consolidation

Debt consolidation is one of the effective strategies individuals use to manage debt. Having a lot of payments every month can actually be overwhelming. Incontrovertible, the chances of forgetting the due dates of payment are quite high in case you have to make a lot of loans to pay. But this is exactly where debt consolidation comes handy. Imagine you are making four different payments every month for your credit cards to clear the outstanding balances on them. This means you have four different interest payments at different rates every month.

You can take one personal loan, which is a debt consolidation loan that is sufficient to pay off all the four credit cards and then repay the loan every month with one payment. So how does this help improve your credit score? Well, by making the payments and paying off the credit card balances, your credit score will improve. There is yet another benefit. If you can get a debt consolidation loan with a lower interest rate compared to the rates you are paying on the four credit cards, you will be able to make a lot of interest savings.

Credit Building Personal Loan

Some personal loans can be used primarily to build credit. Loans used for this purpose are referred to as credit-builder loans. How does this work? Well, a borrower is required to make fixed payments every month on the desired loan. Once the loan amount plus the interest is paid, he or she can gain access to the funds. Once you are done with the payments, you would have already built credit through the monthly payments. The funds will then be yours without any restriction. You can also try a credit builder credit card and link our article: Credit-builder-card-everything-you-need-to-know

Personal Loans Allow a Borrower to Use a Co-Signer

In case you have bad credit, you can look for a friend who can co-sign the loan for you. The point here is that going to mutually share the loan responsibility. In case you default, the co-signer will be held personally liable for the loan. But why think of defaulting when you want to build your credit? Co-signing a loan is also among the most effective ways of building credit. The payments made are usually reported on both you and the co-signers credit profile. This means that the technique will improve credit for each one of you.

A personal Loan Can Help Lower Your Credit Utilization

We have already explained how debt consolidation loans can help improve your score. Credit utilization is closely related to the debt consolidation technique. In case you have used a personal loan to pay off all your credit card outstanding balances, the credit utilization on all the cards will definitely drop. Keeping your credit limits open serves as a catalyst in improving your credit score. Credit utilization is also one of the factors used to compute credit scores. To maintain or raise your score, you should keep your credit utilization limit at a maximum of 30%.

Allows for Credit Mix

A credit mix is also considered in computing credit scores. It usually accounts for up to 10% of borrowers’ credit scores. The point here is that lenders want to be certain you have the ability to deal with different types of credit in a responsible way. Just single or two types of credit cannot help you.

The Bottom Line

There are different ways of improving the credit score. Personal loans can help in at least six ways as discussed in this blog. If your goal is to build credit, you will do your best to avoid financial habits that can hurt it. In our next blog, we will discuss the focus on that.
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