4 Overlooked Items You Can Use As Collateral For a Loan

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

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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

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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.

Related:
Learn How Personal Loan Might Help Your Credit Score in 6 Ways

Don’t Break The Bank When Redesigning your Kitchen

Don't Break The Bank When Redesigning your KitchenThe kitchen has fast become the centerpiece of many people’s homes which means we want to keep it looking in great condition at all times. Upgrading a kitchen is far from cheap, which is why taking out a short-term loan is an option taken up by many homeowners.

You obviously want to make the most of the funds available to you, so here is a list of 5 ways to save money redesigning your kitchen.

  1. Upgrade your hardware

Even the smallest of changes can make a big difference in how you look at your kitchen. Changing the sinks and taps, or cabinet and drawer handles can instantly refresh the entire space. The more you spend on these items the better quality you can secure and it is a more cost-effective option than spending money on new flooring or countertops.

Upgrade your hardware
Source: Pinterest
  1. Repaint the cabinets

The cabinet doors and joinery pieces represent the character of the kitchen. These can be easily rejuvenated at any time with a new paint job, which will cost less than replacing them. However, not everyone has cabinets that can be painted, so refacing is the best alternative. This means changing the drawer and cabinet fronts, which while more expensive than painting is still cheaper than installing brand new fixtures.

Repaint the cabinets
Source: Pinterest
  1. Mix up the counter tops

Many people think that all of the counter tops in the kitchen have to be identical and of the same material – but that isn’t the case. Installing granite or marble looks fantastic but it is a more expensive option. By mixing and matching various types – such as composites or laminates – you can still have standout countertops balanced with cheaper options that significantly reduce the cost. Divide them into sections so the areas that are used frequently feature the cheaper materials, while a centerpiece – like an island counter – can be of a higher quality.

Mix up the countertops
Source: Pinterest
  1. Create a DIY kitchen island

Paying for someone to build a brand new fixed island, or installing one from a supplier can be quite expensive. Alternatively, you could convert an old table, or trolley into a movable island, saving money while still achieving the desired look. Adding some castors to the bottom of a table, while building the required shelving and cabinets around it, gives you functionality and style without having to break the bank.

Create a DIY kitchen island
Source: Pinterest
  1. Install a backsplash

Adding a backsplash to a section of the kitchen can have a big impact. A cheap and effective option is to apply a peel-and-stick backsplash that is quick and easy to put in place. For an even more bespoke option, the more experienced can install real tiles to create something special. If you already have a trowel and tile cutter then all you need to buy are the tiles and pre-mixed grout.

Install a backsplash
Source: Pinterest
  1. Maximize your current space

Changing the layout of your kitchen will invariably require you to do some rewiring and plumbing, which can get complicated and expensive. Make the most of what you have and work with a contractor to avoid moving fixtures around and concentrate on upgrading the existing fixtures and fittings you already have in place.

Changing the layout of your kitchen
Source: Pinterest

A bonus tip: Apart from the hardware, upgrade your kitchen appliances as well. Switch to high-tech kitchen appliances, ditch your old cooking range and get a new propane gas grill. Update the food factory and all everyday tools like the blender, chopper, and more.
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Related:
5 Simple Kitchen DIY’s to Reinvent Your Kitchen’s Look
5 Ways to Update Your Kitchen on a Budget
Roll up Those Sleeves: 5 Easy DIY Kitchen Projects You Can Do in Your Spare Time
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Learn How Personal Loan Might Help Your Credit Score in 6 Ways

Learn-How-Personal-Loan-Might-Help-Your-Credit-Score-in-6-WaysDid 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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Payday Alternative Loans vs. Personal Loans: What is the Difference?

At times, you need some urgent cash. Say, for example, you need to handle an emergency. In this situation, finding a way to borrow some money can be a complex thing. For a good number of people, turning to payday loans is their first option. However, payday lenders take advantage of you by charging hefty interests and fees.Payday Alternative Loans vs. Personal Loans_ What is the Difference

Also, they offer a short repayment period. The other option is taking a personal loan. This option, too, is not easy as you must meet particular criteria set by your bank.  Fortunately, you can now have alternatives to payday loans, called Payday Alternative Loans (PALs). This article will help you understand what the PALs are and how they differ from traditional personal loans.

You probably think that these loans are just alternatives to payday loans because of the name. Well, you’re not alone. Many people will have the same interpretation. However, this is not the case even though they are one of the alternatives to payday loans (others are advances, overdrafts, credit card loans, and peer lending). If you are confused, do not worry as this article is here to educate you.

What Are Payday Alternative Loans?

In a simple definition, Payday Alternative Loans are a form of short-term loans or credit offered by federal credit unions offered to credit union members; they follow strict regulations. Unlike payday loans, credit unions must meet the regulations and requirements of the National Credit Union Administration, a body that regulates credit unions in the United States.  Some of these rules are:

  • The loan must be between $200 and $1000.
  • The interest rate cannot be beyond 28% (but this depends on the set lending rates).
  • The processing fee is not more than $20.
  • You have a repayment term of between one and six months.
  • You cannot take more than three PALs in a span of six months.
  • Payday Alternative Loans cannot overlap each other. This aspect is common in payday loans, though.
  • You need to be a credit union member for at least one month. However, the NCUA enacted new rules in 2018 to eliminate this requirement.

With these rules, Payday Alternative Loans have become more flexible and better than the normal payday loans or various alternatives. However, it is important to note that these rules only apply to federal credit unions offering them. Private credit unions can have other terms, even though they fall under the National Credit Union Administration (NCUA) regulations.

Personal Loans

For a long time, people have confused the Payday Alternative Loans with personal loans. As you know, a personal loan is a form of loan you can borrow for a particular purchase or payment purposes. Mostly, it is unsecured meaning you will not need collateral; some lenders require some security. With this in mind, it is essential to determine the difference between the two loan types.

Differences Between A Payday Alternative Loan And A Personal Loan

These nation21’s dollar 2000 loans differ in terms of eligibility, repayment period, loaned amount, processing fee, etc. Here is an elaboration of each of these differences:

♦        Eligibility

Eligibility involves the requirements you need to fulfill in order to qualify for the loan. Even though the loans are easy to qualify for and have a decent interest, it is not available for everyone. These loans are part of the credit union credit laws. Therefore, one must be a member of the credit unions to qualify for a PAL.

However, becoming a credit union member is not an easy task.  The reason for the limited membership eligibility is because credit unions are not-for-profit organizations. Their purpose is to enable marginalized people to have an opportunity to access credit.  

♦        On the contrary, eligibility for personal loans is not strict. First, you do not need to be a member of a credit union to get a personal loan. Secondly, you can get a loan from any lending agency such as banks, national lenders, online lenders, and peer-to-peer lenders.

Repayment terms

Repayment terms are the next aspect that differentiates personal loans and Payday Alternative Loans. For the PAL, you have a repayment period of one to six months. This term is shorter than the personal loan repayment period. When you take out a personal loan, you have a repayment period of one or more years. This aspect allows you to have a lower monthly repayment. However, it also means you will be in debt for a longer duration, and it might be a good and bad idea.

♦        The loaned amount

As stated, Payday Alternative Loans are short, small loans, so, do not expect to get a huge amount. To reiterate, you can borrow a minimum of $200 and a maximum of $1000 from the PAL lenders. On the other hand, personal loans offer credit starting at $1000 and above. You can get a loan of $60,000 or more depending on your needs. When in need of small amounts to meet urgent needs, Payday Alternative Loans are a good idea.

♦        Similarly, if you are looking or in need of hefty amounts, personal loans are the best alternative.  The loan processing fee and cost

Obviously, each loan has costs and processing fees. Some lenders offer inexpensive interest rates, but make up for that by charging a processing fee and other costs. To shield borrowers from exploitation, Payday Alternative Loans have a capped fee of $20. Lenders can charge below this amount, but not more. Since they are not-for-profit lenders, they charge lower interest. Consequently, the loan cost is lower compared with other lenders.

For personal loans, lenders have different terms. The lenders can have different costs for these loans such as origination, application, and processing fees. Others will not charge you any fee. For those who charge the fees, they can put it as a percentage of the loaned amount or use other criteria to determine it. At times, the charges will be higher than those of PALs.  

It is essential to consider the terms and conditions of personal loans before accepting them. For the Payday Alternative Loans, you are safe from extra charges due to the capped fee rule.

♦        Processing time

When considering a loan, it is important to know the processing time. Shorter processing time is important when you need cash for an emergency. Like other payday credit companies, Payday Alternative Loans have a short processing period. This credit is set to help you handle emergencies. So, you will get money in a short duration, usually less than 24 hours after application.

For personal loans, you will need to wait longer before the loan processing process is complete. Remember, the lender needs to check various factors before releasing the requested amount. It’s clear that if you don’t need more than $1000 for an urgent issue, then PAL is a good option.   

Wrapping Up

In a word, Payday Alternative Loans and personal loans are reliable emergency credit possibilities. They can help you deal with urgent cash needs and purchases. However, each of them has different costs and fees. You need to understand the terms and conditions set before applying for the loan. In addition, each of these loan types is suitable for particular cash needs. Now, you know the difference.
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Related
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