Why Collateral Loans Are Utilized to Cover Emergency Expenses?

Negative credit rating can spell problems for those who live with very limited funding. There are times when certain individuals encounter emergency expenses that may arise because of unexpected medical procedures, car repairs, home maintenance, and natural disasters among others.
When these unexpected circumstances arise, those who have negative credit rating may find it difficult to avail loans from banks and conventional lenders. Because some circumstances are unavoidable, it makes it challenging for people to exercise loan options elsewhere, making their financial management procedures a tad difficult.
Collateral Loans
Collateral loans, with very minimal prerequisites and requirements, are tailored for the aid of debt-ridden people and others who have a poor credit rating in the market. One usually needs a high credit score to be able to avail of beneficial loan schemes and programs.
Those who are not familiar with the said loans are encouraged to read the succeeding paragraphs. The following piece of information will surely help you understand the ins and outs of collateral loans in the US better and give you a greater clarity on why and how you can use it.

#1 No credit score requirement

This is the main advantage of collateral loans. In general, the loans that are out on the market require good credit scores. Luckily, lenders of the said loans do not check credit scores. While most loan options and schemes require a standard or decent credit score from applicants, collateral loans have got nothing to do with your poor or high credit score. Therefore, even individuals with negative credit scores can apply and become approved.

#2 Quick cash

Another notable benefit of collateral loans is cash can be released in no time at all. This is not the case with other loans since many of them require countless hours in the application and the documentation stages. Releasing funding is easy in collateral loans because borrowers need to submit very few requirements. Collateral loans are easy to apply for and even easier to manage and track. This makes it easier for borrowers to cash in their funds without having to submit a large list of forms or fulfill never-needing legal requirements. Yes, everything is legal, yet easy for you to apply for such loans and even get the returns in the shortest span of time.

#3 Lifestyle change is unnecessary

Car pawn loan lenders also release instant cash but borrowers need to surrender their vehicle to the lending company. On the other hand, collateral loan lenders allow their borrowers to use their car even if the loan is not yet paid. You can choose your preferred lifestyle and continue to live it without having to give up on anything. There is no concept of either putting up your assets as a mortgage in case you are unable to repay the loan, or having to give up your car in the same case. There will be a stipulated time allotted to you, within which you will have to repay, although such periods are pretty flexible and for long-term use.

#4 Flexible repayment programs

In support of the point above, the repayment scheme of collateral loans is quite longer than conventional loans. For instance, some lending institutions give repayment periods of up to three years. When it comes to bank loans and pawn loans, the repayment schemes are very strict and the probability of losing one’s car is quite high. Compared to collateral loans, it is extremely easy for individuals to manage their finances due to minimal restrictions and elongated repayment periods. You actually have quite a lot of time to repay such loans. Also, collateral loans have a number of flexible repayment options that you can choose from, depending on what fits your financial situation and capabilities the best.


As mentioned earlier, collateral loans are ideal for those who have a negative credit rating and need of instant cash. On the other hand, it should be remembered that borrowers should make sure that they will repay their loans because not doing so may cause serious financial problems.
Borrowers need to have a concrete repayment strategy and send payments religiously so as to avoid high-interest rates and additional fees. Showing maturity when it comes to repaying loans can help settle emergency expenses and improve credit ratings. Always make sure that you repay all your loans, irrespective of the repayment scheme you have availed and the repayment time-period allotted to you. With timely payments and strict adherence to guidelines, while applying for and repaying collateral or third-party loans, you can maintain the stability of your financial situation and eventually get into a better position to manage your personal finances in the long run.

6 Steps to Follow To Get Your Personal Loan

Are you looking for ways to cover a few expenses such as credit card debts, chase an adoption or move across borders without breaking your savings nest then a personal loan can be the best thing to look for. Although, getting a personal loan approved can be a hassle-free experience for some and a nerve-wracking for others.
personal loans

What is a Personal Loan?

A personal loan is a loan borrowed from a credit union, online lender or a bank that can be paid in fixed instalments over two to five years. In general, the personal loans are unsecured (which simply means loan can be obtained without a collateral unlike for a home or car loan). Also, the loan amount, rates and terms may vary depending on your credit score. Here are the 6 steps to getting your unsecured personal loan:

What’s your credit score?

A credit score is a very important number that shouldn’t be ignored,as it plays a vital role in the entire loan process. Having a strong credit score can get you all the best deals from an easy loan approval to lowest interest rates. The credit score is calculated based on a lot of factors such as credit history, number of credits, timely payments etc.
So, when was the last time you checked your credit score? Here is the free ways to check your credit score.

Do your homework on available loans

It is recommended that you do some homework on the loan options available and look what’s on store for you. You can pick from small local lenders to big financial institutions such as Discover,Citibank etc. You may go for credit union if you’re looking for a small loan amount with a lower interest rate. You can do a pre-check to understand more on the factors influencing your loan process.

How about getting pre-qualified for a loan?

Pre-qualifying for a loan can give you the insight and understanding of your current situation.
The info you need to provide for the pre-qualification process:

  • Salary
  • Date of Birth
  • Social security number
  • Debts
  • Employer details
  • Education
  • Address, phone number, email etc.

But there are chances that you may not pre-qualify for a loan and the reasons may be bad credit score, less salary, little or no work history, debts etc.

Do a comparative study on the various credit options available

Never be satisfied with just the one that crops up first especially when it comes to personal loan options available. Analyse the credit options that are available such as:

  • Are you eligible for a 0% credit card?

Having a good credit score can fetch you a credit card with 0% interest. It can be the best option if you can repay the loan amount on time.

  • Which one should you pick: secured loan or unsecured loan?

If your credit is bad, then secured loan may be a great choice to get better interest rates. All you need is a property as a collateral.

Read the terms and conditions properly

Before you say yes, you need to read every line of the terms and conditions mentioned. You can narrow down your gaze to the following:

  • Automatic Withdrawals: If the lender requires you to set up automatic withdrawals from your account then keep monitoring your account to avoid overdraft fee.
  • Exit fee: See if there’s any fee charged for early closure of loan.
  • Annual Percentage Rate: See if it clearly indicates the total loan amount, origination fees etc.
  • Flexible payment options: waiver on late payments
  • Direct payment to creditors:Can be beneficial for debt consolidation
  • Are the payments reported to credit bureaus? Can be an added advantage to your credit score if on-time payments are reported to credit bureaus.

The final approval processes

After doing your study on the personal loan options, you need to understand the documentation involved. If you’ve found the right lender to match your requirements, then the final loan approval process would require you to produce the following documents:

  • Identification document such as passport, driving license, social security or state ID.
  • Proof of Income such as payslips, bank statements, tax forms.
  • Address proof such as copy of lease, property documents, utility bills.

Once you’ve submitted the above-mentioned documents, the lender would do a credit analysis for credit score, history etc. The final approval would mean getting your funds within a week.

Summing up:

You can get approved for a personal loan easily by following the above-mentioned steps that involves doing a study on the available options to understanding your credit score. Apart from choosing the right sources to get the loan, it is equally important to understand the terms and conditions as well.

Financial Advice You Can Trust: Choosing a Financial Professional

Countless Americans turn to financial advisors to help them plan for their financial future. If you don’t know a lot about financial matters, it makes sense to seek the help of a professional. However, many folks don’t trust their financial advisors. In fact, a 2016 poll conducted by the American Association of Individual Investors showed that 65% of participants mistrusted their financial professionals to some degree.
The general mistrust of financial professionals can lead to the potentially dangerous decision of making financial decisions on your own. While it’s a good idea to educate yourself about short-term and long-term financial strategies, trying to “wing it” on your own could lead to serious financial trouble. Most of us are not financial experts. Working with the right financial professional could mean the difference between a comfortable retirement or one that just barely covers the basics.
Choosing a Financial Professional
Choosing the right financial professional for the job can be intimidating. How do you find an advisor you can trust? How do you know your financial advisor has your best interests at heart? Here are some steps you can take to help you find a trustworthy financial professional. 

Choose a Fee-Only Advisor

A fee-only advisor is one who does not accept commissions. An advisor who accepts commissions could have a conflict of interest, meaning he may be more interested in lining his own pockets than choosing what’s best for your financial future. A fee-only advisor is generally paid by the hour, or they may charge a percentage of your assets.  The National Association of Personal Financial Advisors is a great resource for finding a fee-only advisor. Note that a “fee-based” advisor receives a blend of fees and commissions-definitely not the same thing. 

Know What Type of Financial Professional You Need

There are a lot of different types of financial professionals, and each one specializes in a certain area. In fact, there are actually more than 200 designations for financial advisors.  It’s important to know what you’re shopping for before you start asking questions. Here are some of the most common designations:

  •         A Certified Financial Planner (CFP) is one who specializes in a little bit of everything. They will help you with your entire financial picture. A CFP has passed a series of exams that include topics like retirement and estate planning.
  •         A Chartered Financial Analyst (CFA) specializes in investing and portfolio management. They have passed a series of rigorous exams that show commitment to their profession and higher ethical standards.
  •         A Certified Public Accountant (CPA) is a tax expert. A CPA, like the ones at tempCFO, specializes in all aspects of personal, business, and executive tax planning. Your CPA will ensure that you adhere to all necessary tax regulations
  •         A Chartered Financial Consultant (ChFC) has specialized training in the areas of insurance and estate planning. 

Get a Recommendation

No matter what type of service you’re looking for, getting a good recommendation from a long-term client is a great place to start. Talk to friends, family, and co-workers to see who they’re using and if they would recommend them to others. 

Interview Prospective Advisors Carefully

Now is the time to be picky! You should interview several different prospects before settling on one. If you are uncomfortable talking to a certain prospect, then move on to a different one. Take advantage of any complementary introductory sessions offered to ask lots of questions. Ask about his or her background and core values, specific areas of expertise, their investment policy, and how they get paid. Be sure that you have a complete understanding of the services that will be covered before you sign any sort of agreement.
The prospective advisor should be asking you questions, too. For example, they should be interested in your goals, your income needs, your tax status, and even your age and health -especially before they start recommending any specific investments. If a prospective advisor is pushing you toward some hot investment in the first five minutes of your meeting, run the other way. 

Only Work with Investment Advisors That Use a Third-Party Custodian

A third-party custodian, such as Charles Schwab or Scottrade, will hold on to your money, instead of allowing the advisor to do it. Your account statements will come from their office instead of your advisors, too. If a crooked investment advisor is allowed to hold your money in his own custody, he could fudge your account statements and drain your savings, Bernard Madoff style. 

Do a Thorough Background Check Before Making Your Final Selection

When it comes to your financial future, there’s no such thing as being too cautious. Run a background check to look for criminal history. If your potential advisor is a registered broker, use the website www.finra.org/brokercheck to check him out. You can also check with your state securities regulator to see if he or she has had any disciplinary actions taken against them. Also, go here to view the prospective advisors Form ADV and check into their background and employment history. It’s better to find out about any skeletons in their closet now, before you are left with an empty bank account. 

Look for a Fiduciary

A fiduciary means that the advisor has pledged to act in their clients’ best interest at all times. Financial advisors who aren’t fiduciaries are held to a lesser standard. They can sell you anything they deem to be suitable for you, even if it’s not ideal or in your best interest. This point is critical. In fact, as of June 2017, financial advisors who work with retirement accounts are required to adhere to the fiduciary rule. 

Watch for these Red Flags

If something just doesn’t feel right, move on! Here are some red flags to watch out for:

  •         They make promises they can’t possibly guarantee, like beating the market.
  •         They don’t listen to you.
  •         They pressure you into taking risks you’re not ready for.
  •         Their fee schedule is confusing or they receive commissions or referral fees.
  •         They aren’t able to answer your questions and they seem inexperienced.

Following these steps will help you find an experienced financial professional that you can trust. Remember, it’s okay to be picky… it’s your hard earned money!