It is now so easy to make a secured loan application, you can do it from your own home. Many lenders allow borrowers to apply for loans directly on their websites but independent loan brokers can offer independent advice and a choice of different loans from different lenders. They generally make the comparisons between different loans easy for people to see by using a table. This way, potential borrowers are able to ‘compare apples to apples.’ One loan can initially look better than another until you consider comparable terms and conditions.
One-stop-shop loan websites usually provide an online calculator to help you work out what your monthly payments will be for different interest rates and loan terms. By spending some time playing around with one of these calculators you will be able to determine what interest rate and fixed term you will need to get a monthly payment you can afford comfortably.
This knowledge can guide you when making your secured loan application. It means you will apply for a loan with the lowest possible interest rate and request a fixed loan term that will give you the best monthly payments for your needs. Of course, there are limits to your ability to get a loan term and interest rate that will give you the outcome you want. However, you are far more likely to achieve this or get close to it if you plan ahead by using an online loan calculator.
Even before you are ready to submit a secured loan application, it is a good idea to read through the online form to know what information you need to have on hand. This will save you time later. For a comprehensive loan application you will need to provide income and expenses information that can be verified upon request with payslips and rent receipts or mortgage information as well as details about your current employer and perhaps even employment history. You will also need to provide information about the security you are offering for the loan. If you are still paying a mortgage on the property you are offering as collateral, you will need to provide information about the lender for that property.
However, many so-called online applications are really just an initial contact with the lender. Once they receive your secured loan ‘application’ a loans officer will contact you to talk you through a real application. By spending a little time browsing some loan websites you can find out which applications are comprehensive and which are simply indicating an interest. With the more comprehensive applications, quick conditional approval is often advertised. This means that your application is approved subject to documentation supporting the claims made in the application.
Remember when you make a secured loan application you are agreeing to the lender putting a lien on property to cover the loan amount. This means that if you default on the loan you will have your property seized and sold to pay the debt. It is therefore important to be sure of your ability to make your loan payments in full on or before the due date every month. If you have a history of late payments or financial difficulties, you may need to reconsider whether this sort of loan is in your best interest.
Applying for a loan online can be deceptively complicated. Many websites will entice their customers with marketing messages promising ‘Lowest Rates’ or ‘Guaranteed Acceptance’, in return for completing a short application form consisting of little more than contact details.
Unfortunately, in the majority of cases, the loan applicant is simply providing their personal details to a lead generation business which makes its money selling loan applications to one or more loan lenders or brokers, and cannot accurately suggest whether or not the applicant is eligible for the loan they applied for.
It is possible that the applicant might see an indicative table of loan results, again reiterating the enticingly low rates and universal acceptance of the original marketing message; however, in most cases, this will be merely a list of lenders’ lowest possible rates, rather than a properly underwritten representation of products specifically tailored to an individual applicant’s personal circumstances and credit profile.
There are clear reasons why this unfavourable (to the loan applicant!) situation persists:
An applicant is more likely to offer their personal details to a website if they are promised an easy route to the funds they need and have been promised the lowest rate products in the first place.
Accuracy can only be increased if the route to application includes a detailed credit reference check and these can only be accessed by actual lenders and brokers. Crucially, performing this search costs money each time a reference check is performed.
Performing a credit reference check can have a negative impact on the applicant’s credit rating, especially if many are performed in a short period of time.
So, in short, the loan website is benefited by the applicant blindly filling in their contact details on the promise that they will be given access to the best rate and most inclusive products.
The applicant may then find that their contact details are sold to multiple lenders and brokers, many of which might offer unsuitable products or charge up front applications fees. Clearly this situation is to be avoided.
So what is the answer?
Recently, it has been made possible for loan applicants to see which products they qualify for in a controlled and safe online environment. This is due to an advance in credit reference technology called a ‘quotation search’ which, even when performed multiple times, does not have any effect on the applicant’s credit rating. There is still a cost for performing the search; however the applicant does not bear the brunt of this cost, the loan website does.
There are a growing number these risk-free loan websites online now and the prospective applicant would be well advised to spend their time completing an application with one of these sites, rather than one which may sell their data.
The signs to look for are:
Does the website purport to perform a ‘quotation’ credit search?
Does the application form include job/residential/mortgage and property details? (All of this information is crucial to process of accurately underwriting a loan, so if it is not asked, the applicant will not see accurate loan results)
Does the website take the applicant’s data security seriously? Is the application form held on a secure ‘https’ part of the website?
If the answer to the questions above are ‘Yes’, it is likely that the loan website will provide a smoother loan application journey which is both accurate and risk free to the customer’s credit profile.
Believe it or not, every small business loan application doesn’t have to take up a few weeks of your life. Not every lender will require perfect credit, a complicated business plan, and pages and pages of documents just to tell you whether or not your business is going pay rent this month. Occasionally small business owners find themselves in a financial tight spot. That’s a simple fact of doing business. What’s not a fact is that the major banks, SBA and fast cash merchant cash advance companies are your only options for a small business loan application. Read on to learn what other small business loan applications options you have.
The Good and Bad of a Small business Loan Application from a Bank
If you have ever tried to fill out a small business loan application from a traditional bank, you may already understand the headline. If you haven’t, allow me to fill you in. Banks place heavy emphasis on the entrepreneurs personal as well as business credit, in addition to many other factors. For some business owners, a few missed payments on a credit card can be the difference between receiving funding and being left out in the cold.
Most banks will also want years’ worth of tax returns and other documents for their loan application. They will spend weeks analyzing the data, slogging through every decision you have ever made. You will also need to explain exactly how every penny of the loan will be spent in advance, and detail it in a business plan.
Banks will also require a list of collateral and capital that you are willing to risk on the loan. Should your business run into hard times, you may find the delivery van that you need to run your business has been taken away by the bank.
Finally, after the banking crisis of the last few years, many banks are still feeling the after effects of their poor lending policies that led to the near collapse of the economy in the first place. This can make it difficult to simply find a bank that is accepting small business loan applications at all.
I don’t want you to think that bank loans are all bad. Quite the contrary, banks provide some of the cheapest and safest working capital a business owner could ask for, which often more than makes up for the inflexibility of the loan application process.
What about an MCA or alternative loan for small business?
An MCA (Merchant Cash Advance) is a very different form of lending. To qualify, most lenders require you to have been in business for more than a year, as well as a minimum monthly number of credit card transactions. While the terms and process are much more flexible than a small business loan application, the price tag for the capital can vary widely from lender to lender.
MCA’s are not technically a loan; rather, the lender purchases an amount of future credit card sales your business is expected to make at a discount. Because of this, the loan is repaid in micropayments as credit card sales are made. The advantage to this is there are no large monthly minimums to meet. The disadvantage is a slightly higher overall cost unless the lender has access to inexpensive capital and can provide a discount on merchant account services that will further offset the cost.
Unsecured loans, while sometimes more expensive, often have a much simpler small business loan application process. The trade off is the possibility of slightly higher interest rates to cover the risk of the loan. Because of that, it’s best to find a company that offers a lowest rates guarantee during the small business loan application process. Shopping around can help you save a substantial amount.
So what are your options?
Choosing the right option really depends on your situation. If you can afford the extra time and resources necessary to get a traditional small business loan, then perhaps it really is the best option for you. If you have less than perfect credit or believe you may have a few slow months coming soon, a loan based on cash-flow or an advance on your credit card sales may be the best option. In the end the key is finding a reliable bank or lending company that you can trust to help you find the right solution
Steve R. Johnson is a small business finance adviser for Performance Commercial Capital in Irvine, CA. Performance Commercial Capital specializes in small business financing, including: loans, merchant advances, factoring, and more, so we can offer you the best option for your company’s needs.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.