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Financial Freedom Blog

  • Wedding Bells and Wedding Bills – Using a Personal Loan for Your Wedding

    A wedding is a joyous occasion…and for many people, an expensive time as well. From photographers and venue fees to a cake and an open bar, an average wedding can cost well over $30,000 — and that amount does not include an engagement ring or a honeymoon! For many couples or their parents, that amount is simply out of reach. If you are planning a wedding, consider a personal loan as an option for paying for your big day.

    A personal loan can help you finance the wedding of your dreams. Personal loans can be used for almost anything, including wedding expenses. While you may see these loans advertised as “wedding loans,” they are really just personal loans used for a wedding. These loans can be secured — using personal property, like a vehicle, as collateral — or unsecured. Secured loans will typically have lower interest rates. Depending on the lender, a wedding loan can be made in amounts up to $35,000. Once approved, a lump sum will be released to the borrowers. The amount is repaid in installments over a set period of time (usually three to five years).

    Paying for your wedding with a personal loan can help you have the wedding that you want, without draining your savings or using high interest credit cards. It can also help ease the financial strain on your parents, by covering at least a portion of the costs. A personal loan can be used for any of your wedding expenses, from favors to a wedding dress to a honeymoon.

    But before you apply for a personal loan, take a close look at your wedding budget. Starting a marriage in debt can put an enormous strain on your relationship, and can make it more difficult to achieve other goals like buying a house or starting college funds for your children. Be realistic about what you can actually afford, and get creative to have a fantastic wedding without breaking the bank. You may consider having heavy appetizers or a buffet instead of a more expensive sit-down dinner, for example, or finding less expensive centerpieces for the tables. Forego wedding favors or a limo, find a less expensive wedding dress, or set up your iPhone with speakers instead of hiring a DJ or band. By making smart choices, you can go into your marriage on secure financial footing.

    Once you have a sensible wedding budget set, consider applying for a personal loan for the costs you cannot cover out of pocket. A fixed interest rate — typically lower than most credit cards — can help you pay for your wedding over an extended period of time with monthly installment payments. Review these interest rates and the monthly payment amount to figure out if you can really afford the wedding that you want — and revise your budget to land at an amount that is reasonable for you.

    Using a personal loan to pay for a wedding may not be the right choice for every couple, but it can help you make sure that your big day is special. Contact us today to find out if you qualify for a personal loan!

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    Patriot Finance
  • Building Your Credit Through Personal Loans

    It’s an unavoidable fact of modern life: credit is incredibly important to almost every financial transactions that you make. Your credit rating is checked whenever you apply for a credit card, a rental or a utility hook-up. If you don’t have a credit history, chances are good that you won’t be approved. The dilemma, of course, is that you cannot establish a credit history until someone gives you credit. So how exactly do you build credit?

    To obtain a credit score, you need to have at least one account that has been open for six months or longer, and at least one creditor reporting on your activity in the past six months.

    Most people assume that credit cards are the best — and simplest — way to establish a credit history. While credit cards are often available to first time borrowers, they may not be the best option, especially since so many people make only minimum monthly payments leaving them with credit card debt for years.. A credit card may also tempt you into spending more than is advisable, leading to debt and potentially a bad credit score. Instead of opening a credit card, consider a personal loan as a better option for establishing credit.

    A personal loan can be used for just about anything. Personal loans can either be secured — i.e., guaranteed by putting up collateral, like a car — or unsecured. Secured loans will typically have lower interest rates and a longer repayment period. Unsecured loans have higher interest rates and are harder to obtain, but do not require you to provide an asset as collateral.

    If you’re trying to build credit, start with a small, manageable loan to ensure that you are able to pay back the loan on time — or even ahead of time. Depending on the lender and the laws in your state, minimum loans can range in size from a few hundred dollars to a few thousand.. Providing collateral will make it easier to obtain a loan, and will result in a lower interest rate. While you may be wary of putting up their car or other personal property as collateral, remember that lenders don’t want your stuff; they want you to pay back the money. This makes them more willing to work with borrowers to get the loans repaid. If possible, ask a trusted family member or friend with a good credit history to co-sign your loan. Having a co-signer on the loan can increase the chances of loan approval, and usually with a lower interest rate. Keep in mind, however, that the co-signer will be on the hook for the loan if you do not pay.

    A personal loan builds credit in much the same way that a credit card does — and with the benefit of a fixed monthly payment for a fixed term. Once the loan has been approved, the payments will be reported to the credit bureau. Consistent on-time payments, paying more than the minimum amount due and paying off the loan quickly will all contribute to a favorable credit score. Paying off even a small loan in a timely manner will help you to not only build credit, but to establish a good credit history.

    Building credit can seem daunting, but a personal loan is a great way to start the process. By taking out a small personal loan and consistently making on-time payments, you can establish a solid credit history — and be well on your way to a successful financial future.

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    Patriot Finance
  • Get Control of Your Debt With a Debt Consolidation Loan

    Carrying a large amount of debt is both financially burdensome and mentally taxing for many people. Before getting into one way to address your debt burden, let’s talk about how to avoid this situation entirely.

    Don’t Let Debt Get Out of Hand

    The best option is to keep your debt from getting out of hand in the first place. Of course, that is easier said than done as all kinds of things can come up as life happens that cause you to take on more debt than you planned. But still, here are a few ways to keep debt from getting out of hand:

    1. Pay your bills on time – and try to make more than the minimum payments. If you have a pile of credit card debt, it might seem like a good idea to make your minimum monthly payments until “you get your bonus” or “sell your baseball card collection”, but the dirty secret about credit card minimum monthly payments is that you are subjecting yourself to years of interest payments even for relatively small balances. More importantly, pay your bills on time. By paying on time, you avoid costly late fees and derogatory credit reports that will hurt your changes at obtaining less expensive credit in the future.
    2. Create a budget, and stick to it! Creating a budget is a great idea, but the key factor is actually sticking to it. There are many studies that show the importance of writing down your goals, and the same goes for a budget. Write it down, review it, and the next time you walk by that new dress that you just have to have, ask yourself if it fits into your pre-planned budget. Avoiding these impulse buys – especially impulse buys using credit – go a long way towards keeping your debt under control.

    Can a Debt Consolidation Loan Help Me?

    So, you are working to keep your debt under control and you have budgeted your spending and saving…what else can you do? In many cases, a debt consolidation loan may help.

    What is a Debt Consolidation Loan?

    A debt consolidation loan is designed to roll several of your debts into one loan with a goal of repaying within a certain amount of time. For instance, say you have a $3,000 balance on your Visa and a $2,000 balance on your Discover card. A debt consolidation loan would pay off both of those credit card balances and establish a new loan for you with a fixed payment designed to give you light at the end of the tunnel.

    Will Consolidation Loans Save Me Money?

    It depends. If you are only making your minimum monthly payments on your credit card debt, that $5,000 in credit card debt will take you 11 years and thousands in interest to pay off. So, if you can secure a consolidation loan, then you will save thousands over the life of the loan. Now, your monthly payment might be higher, but committing to the loan will allow you to pay off your loan years sooner. It is a choice to make.

    Debt Doesn’t Have to Control Your Life

    Taking a few small steps can allow you to both control your debt and work your way out of debt. You don’t have to let your debt control your life. Utilize the tool at your disposal to keep that debt from getting out of hand.

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    Patriot Finance
  • When It Comes to Your Credit Score, Time Takes Time

    One of the hardest lessons to learn is that some things simply take time to happen. If you want to lose weight, it is just going to take time. If you want to develop a basketball jump shot, it will take time. And, of course, if you want to improve your credit score, it is going to take time. But, here is some good news – unlike trying to lose weight, you can improve your credit score while still enjoying some ice cream from time to time!

    How to Build Your Credit Score Over Time

    So, you are beginning to realize that you want to build or improve your credit score. What can you do? Here are 4 steps you can work on over time to help:

    1. Make Payments on Time Over Time – The timeliness of your payments is one of the critical factors in your credit score. Credit reports show several years of payment histories, so, to make a meaningful improvement, you are going to have to make consistently on time payments over time.
    2. Keep Credit Utilization Low Over Time – Ideally, try and keep your credit utilization below 20% of your revolving availability over time. This shows that you can use credit responsibly.
    3. Establish and Use Credit Responsibly Over Time – Speaking of using credit responsibly, it is important to establish lines of credit in order to make payments on time and show you are using credit responsibly! If you don’t want to temp yourself with a credit card that can be maxed out, an installment loan may be a good way to establish a line of credit and show consistent payments over time.
    4. Monitor Your Credit Scores Over Time – This is key – keep an eye on your scores and make sure you understand what is being reported on your credit report. There are several great resources for monitoring your score – we recommend CreditKarma as one.

    Yes, it is like dieting as you know how to make the difference, and it is just executing on the plan that is the key. If you are ready to improve your credit score, start working on it now, and look for incremental improvements – and they will come.

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    Patriot Finance
  • Your 3-Step Guide to Building a High Credit Score From Scratch – Forbes

    Forbes recently published an article entitled, “Your 3-Step Guide To Building A High Credit Score From Scratch” that has some great advice for those looking to improve their credit score or simply begin to establish a credit score.

    First, why does it matter? Again, from Forbes:

    Your credit history can affect all manner of things. It can impact whether you qualify for a mortgage, car loan or credit card, plus what interest rate you’ll pay. It’s used by employers, landlords and even Internet providers.

    So, if you are looking to improve your score, what can you do? According to Forbes, the three initial steps are:

    1. Starting by checking your credit – There are several reliable sources for checking your credit such as annualcreditreport.com, Credit Karma, or going directly to one of the big three credit bureaus, TransUnion, Equifax, or Experian. By obtaining your score, you can begin to see where you stand.
    2. Consider obtaining credit – Forbes suggests a credit card, but for many a credit card can end up being a credit trap if they only pay their monthly minimum payment. Alternative, you could see out a personal installment loan for instance.
    3. Use credit responsibly – The absolute worst thing you could do would be to take out new credits and get behind or be unable to pay. This could impact your credit for years. So, use the credit you take our responsibly. Make your payments on time. Avoid taking out more credit than you can afford.

    While this isn’t a guarantee of an improving credit score, this article gives you a great place to start improving or building your credit.

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    Patriot Finance