Financial Freedom Blog

  • Covering the Unexpected: Using Personal Loans for Medical Bills

    Although medical insurance is more affordable and widely-available than ever, many Americans are still uninsured or underinsured.  When they have a medical emergency or are diagnosed with an illness, medical bills can easily mount.  In some cases, medical expenses can lead to crushing debt and even bankruptcy.  Fortunately, there are options for anyone struggling with medical debt.  Using a personal loan for medical bills may be a good choice if you are unable to pay off your medical bills and require a manageable way to pay off your debt.

    Medical bills can add up in any number of ways.  Some plans require their members to pay large deductibles before coverage begins.  Others have large co-payments for appointments, treatments and procedures.  Some policies do not cover certain prescription medications or diagnostic testing.  Even if you are insured, it is still possible to rack up thousands of dollars in medical debt if you have any sort of medical emergency or are diagnosed with an illness that requires regular treatment.  You may also go into debt for procedures that are usually not covered by insurance, such as orthodontics, weight loss surgeries or fertility treatments like in vitro fertilization.

    Using a Personal Loan for Medical Bills

    Personal loans may be an option if you have medical bills that you simply cannot afford.  A personal loan is a loan that you can use for almost anything, including medical expenses.  After being approved for a personal loan, you will receive the full amount of the loan, which you can use to pay off your medical bills.  Then you can make regular monthly payments for the length of the loan, which is typically from two to five years.  Most personal loans have fixed interest rates, and there is often not a penalty for paying it off early.  There are two primary types of personal loans: secured and unsecured loans.  Secured loans tend to have lower interest rates, because you have put something up for collateral, such as a car.  Unsecured loans do not involve collateral, and have higher interest rates than secured loans.

    Financing Options for Medical Expenses

    Some medical professionals and facilities offer in-house financing for medical debt.  While financing the loan directly from the provider may seem like a good idea, carefully check the terms and conditions before applying.  Many of these financing options include very high interest rates and fees, making it a poor financial decision.  In most cases, a personal loan will have much more favorable interest rates and loan conditions than the financing options available through a medical professional or facility.  If your medical provider offers you financing, request information and compare their terms to the loan terms offered by different personal loan companies.

    Medical debt can be an overwhelming burden, particularly if you are sick and undergoing treatment or trying to recover from an illness or injury.  A personal loan can be a solution that helps avoid these bills going into collection and damaging your credit rating.  If you have medical expenses, consider a personal loan as one way to pay off your debt and get your financial life back on track.  Contact us today to learn more about our personal loan options and to see if you qualify for a loan!

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    Patriot Finance
  • What to Consider before you Apply for an Online Loan

    In the past, getting a personal loan could be a difficult process, requiring multiple steps, lots of paperwork and at least one visit to the lender’s office.  The internet has changed this process, making what was once a complicated process into a relatively simple one. With the ability to apply for an online loan and get a decision almost instantaneously, it is faster and easier than ever before to obtain a personal loan. But just because you get a personal loan does not mean that you should.  Read on to learn what you need to know before applying for an online loan.

    Before Your Apply for an Online Loan

    First, figure out how much you can actually afford to borrow.  Personal loans can be used for just about anything, from home improvements to medical expenses to debt consolidation. If you need to borrow money, the key is to only take out an amount that you can realistically repay.  This can be determined using online loan calculators, where you input the amount you plan to borrow, the interest rate that you will likely have, and the length of the loan.  Based on this information, the loan calculator will tell you how much your monthly payment will be.  If the amount is something that you can afford on top of your other expenses, such as rent and car payments, then you can probably afford to borrow that amount.  Use the loan calculator to figure out how different interest rates and loan terms will affect your monthly payment; you may find that by decreasing the length of the loan, you will save a substantial amount of money over time.  If the monthly payment is higher than you can comfortably afford,  then consider borrowing a smaller amount or, if possible, not taking out the loan until you can afford to make those payments.

    Consider Your Credit Score

    Second, take a look at your credit rating, which may also be called your FICO score.  This number is an indication of how trustworthy you are as a borrower.  The higher the number is, the lower your interest rate will likely be.  Anytime you take out a loan or request credit, the lender will check your credit rating to be sure that you are a good risk and that you are likely to pay them back.  Knowing your credit rating is an important step in determining whether or not it is a good idea to borrow money.  While you can still be approved for a personal loan with bad credit, you may end up paying a much higher interest rate.  If that is the case, you may want to hold off on getting a loan until you can improve your credit rating.  You also may consider taking out a small personal loan to help build or improve your credit.  With regular, on-time payments, you can increase your overall credit rating and get a better interest rate in the future.

    Understand Your Loan Terms

    Third, carefully examine the terms of any loan before agreeing to it to make sure you understand your loan terms.  This includes both knowing and understanding any fees, interest rates and other charges that may make the loan much more expensive than you originally anticipated.  Start by looking up the prevailing interest rate, so that you can compare lenders and determine if you can potentially get a better deal.  Examine the annual percentage rate (APR) of different loans, which can help you understand how much it will truly cost to borrow money.  Check to see if the loan is fixed rate or adjustable rate, which can impact the amount of money you have to pay back.  Read the loan terms carefully to see if this loan is a smart financial choice.

    Before applying for an online or traditional loan, a smart borrower will take the time to understand each of these three items.  If you believe that a personal loan is the right choice for you, contact us or apply online via our website today!

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    Patriot Finance
  • Personal Finance 101: Installment Loan Basics

    If you read financial advice columns or websites, you may wonder if an installment loan is right for you.  This common type of loan can be a great way to build credit, or to improve a bad credit score.  But before you take out an installment loan, it is helpful to learn more about what it is — and how it can help or hurt your credit, if you are not careful.

    Installment Loan Basics

    An installment loan can be any type of loan that is repaid over time with regularly scheduled payments over a set period of time.  The loan term can be anywhere from just a few months to 30 years. A borrower takes out a specific amount of money, and repays the loan over time, with interest.  Many types of loans qualify as installment loans, including mortgages, personal loans, car loans and student loans.

    Installment loans can be incredibly beneficial to anyone who needs a predetermined amount of money and has the financial discipline to pay back that amount over time.  In contrast to payday loans, which offer a small amount of money for a short period of time (at very high interest rates), an installment loan is usually offered for people who need to borrow larger amounts of money for a longer period of time.  They typically have much better interest rates than other types of credit, including payday loans and credit cards.  Repaying an installment loans involves committing to paying a fixed amount of money each month for the entire term of the loan.

    Installment Loan Benefits

    One of the key benefits of installment loans is the ability to get the entire amount of money that you need, often within days or even hours of applying for the loan.  Depending on the type of loan, this money can be used for a number of purposes, from purchasing a car or house to paying for higher education or even for funding a vacation.  Personal loans are a form of installment loan that allow you to put the money towards almost any purpose.  That could include updating your home, paying for a wedding or eliminating other forms of debt.

    Another advantage of installment loans is that they can often improve your credit score.  Your credit score is determined using a number of factors, including the type of debt that you have, your total debt load, and whether you make your payments on time.  Making regular, on-time payments through an installment loan can increase your credit rating.  It can also help to boost your overall score because it is a different type of debt than credit card debt.  And if an installment loan helps to reduce your overall debt, then your credit score will be improved in this way as well. Before committing to an installment loan, make sure that you understand the terms and conditions, including the interest rate.

    Whether you use an installment loan to pay for a vacation, buy a new car, or pay off debt, it is critical that you make the required payment each month, on time.  Being responsible with installment loans can boost your credit, saving you thousands of dollars on future loans because a higher credit score usually means a lower interest rate.  By the same token, being irresponsible with installment loans can make it incredibly difficult to get a loan in the future — or to get a loan at a decent interest rate.  If you take out an installment loan, know that you are committing to making monthly payments for the entire term of the loan, and adjust your budget accordingly.

    Apply for an Installment Loan

    If you would like to learn more about installment loans, contact us today for more information or apply for a loan online via our easy-to-use application form!

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    Patriot Finance
  • Credit Score 101: How to Build Your Credit

    When it comes to your ability to borrow money, it starts and end with your credit score. But, what happens if you don’t have any credit yet? How do you establish credit so that you can build credit so that you can get credit? Seems like a catch-22, right? Here are some first steps towards building your credit.

    Apply for a Secured Credit Card

    Secured credit cards available for those with limited credit. To get a secured credit card, you must make a deposit that is held by the issuer and usually matches the amount of your credit limit. Think about is like this – you deposit $500 with a bank and the bank give you a credit limit of $500 to use. This might seem like a game, but really, it is a great way to practice using credit and paying timely. More importantly, your timely payments will be reported to the credit reporting agencies and help you establish a credit history.

    Get a Co-Signer

    This option might not be available to everyone, but having a co-signer sign on your loan will typically allow you to borrow even without previously established credit. Two caveats: first, your co-signer needs to have good enough credit to quality for the loan, and second, the co-signer needs to understand that they are liable for the full amount of your loan or the amount you borrow.

    Become an Authorized User

    Similar to a co-signer, you are benefiting from the established credit of another individual. Again, here you need to establish an understanding – you can benefit from the other person’s credit, or you could potentially be hurt if they fail to pay timely.

    Open a Store Credit

    Many stores have credit available for the purchase of certain items. Don’t confuse this with the very expensive rent to own options in many stores. Instead, look for a store credit card or installment loan for a small ticket item for your first purchase.

    Any way you begin to establish your credit, remember – making timely payments as agreed is the key. Get off on a good credit foot, and you will be setting yourself up for many more options in the future.

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  • Is Reduced Credit Card Debt Harming Millennials?

    According to the New York Times, new data from the Federal Reserve shows that the percentage of Americans under 35 who hold credit card debt has fallen to its lowest level since 1989. The report shows that while many Americans are reducing their credit card debt, no other age group has had as rapid decline in the proportion holding credit card debt.

    Why Are Millennials Less Likely to Hold Credit Card Debt?

    It seems Millennials are less likely to take on credit card debt after watching how indebtedness impacted their parents. Combined with already large student loan debt and a reduction in mortgage debt, Millennials have a different combination of debts than previous generations. Further, many recognize the credit card trap – making minimum monthly payments, but never seeing a reduced balance. Or, spending up to your limit, getting increased limits, and spending further. So, is avoiding credit card debt a bad thing?

    Impact of Reduced Credit Card Debt on Millennials

    While reducing exposure to credit card debt is clearly not a terrible thing, there are some potential unintended consequences that need to be considered. First, delaying opening a credit card account reduces the chances to learn how and when to responsibly use credit. More importantly, opening a credit card account early in life has long been one of the key ways to establish a solid credit history – important for building towards larger purchases financed by debt (such as a car or a home mortgage for instance).

    Personal Loans – An Alternative to Credit Card Debt

    While many are hesitant to open a credit card account for the reasons stated above, there are alternative forms of credit that both help establish a credit history while allowing the borrower to make purchases financed by debt. Personal loans are a great alternative in that they have fixed payments for a fixed term – allowing for easy budgeting while avoiding the minimum payment trap. With a personal loan, you can borrow exactly what you need – for instance, to purchase a large ticket household item or take a trip. You then make your regularly scheduled monthly payment for the term of the loan – typically anywhere from 12 to 48 months, and that is it. No revolving balances and no minimum monthly payment trap. As always, it remain critical to take out only the credit you need and make your scheduled payments on time to see the benefit on your credit score and your wallet.

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    Patriot Finance