Despite the fact that the lender has no claim to any of the borrower’s assets in the event that the loan is defaulted on, the lender can choose legal means to recover the money. If the case is won in court by the lender, the borrower may then find it necessary to sell some of his assets to pay back the money.

Due to the fact that this loan is not secured, the interest rate is generally high and the APR or rate of interest is greater than that found on a secured personal loan.

Advantages of an Unsecured Personal Loan

There are some benefits of an unsecured personal loan that are worth taking into account:

• Credit history is the variable that lenders look at and assets play no role in the decision making process.
• Borrowers do not have to worry about providing any copies of their tax returns or any financial statements. Most lenders of guaranteed unsecured loans offer a stated loan which means that the person is taken at their word about the present state of their finances and does not need to have documents to verify such.
• Borrowers do not have to come prepared with an elaborate business plan as an unsecured personal loan can be sought for any purpose, whether it be personal or otherwise. The lender is not as concerned about your purpose for wanting to borrow the money but instead about your ability to pay the money back.
• Most unsecured personal loans are approved in a relatively short period of time which means there is no long drawn out waiting period for the money.
• The application process for an unsecured loan is very simple and easy to fill out. In most cases it is a one page application form with very basic information required.

Always ask yourself if what your buying is too much house for you, some specialists say that your mortgages be less then X% of your income, I think it varies too much on a case by case situation, basically play online with free mortgage calculators and determine what payments you can afford.

Lets face it, personal finance is PERSONAL.

The key to becoming rich is to manage your money more effectively, this means getting out of longterm debt (high credit card balances, mortgages, student loans etc.) and instead just use money to your advantage (credit card benefits, interest being payed to you not from you).

If you are like most people you are in debt, probably two or three cards with anywhere from $1000 to $10000 each not to mention home mortgage, car payments etc, maybe you are barely making minimum payments. And you want out.. So do you pay off the smallest one first like some people would have you believe? or does it make more sense to pay off highest rate first and work your way down?

Some people think it is better to pay small stuff first for the “moral victory”. Crunching the numbers tell you that highest rate first costs you the least amount of money in the long run. SO why would some people would like you to spend more money in the long run to get you out of debt and on the road to finical freedom? Mindset, your too dumb to understand how debt works so if you get lots of these little victories you continue your fight. Kind of insulting right? Well then again you are the one that got into debt (which isn’t avoidable sometimes, the trick here is to make sure the thing you are becoming indebted to is worth it so at least you are not going into debt for buying junk).

Sure I am harsh, but the important thing here is not that we are friends, it is that I give you good advice, and to hurt your bottom line because I personally don’t think you are smart enough to keep on trying with out lots of little fake victories. That is just ill-logical budgeting.

Read Also

• Credit Cards Vs. Debit Cards
• Credit Card are Cool or Brainwashed Budgeting
• I’m thinking of a number….

1. When used properly you can increase your credit score, getting you a better rate for when you are forced to get a loan, (lets face it not everyone can pay cash for a house).

2. Many Credit cards have perks (2% cashed back, ect), if you are spending the money anyways, might as well get some cash back to lower your costs.

3. Easier and therefore better for keeping track of expenses then the old pen and paper.

Now I agree there are some people out there that can not handle an open credit line, they are foolish, and get into sticky situations where they get into debt up to their eyelids and just struggle to make ends meet. These people should destroy their cards, (if you can’t handle the temptation you should get out of the kitchen). But to make a blanket statement that everyone should destroy their cards is just foolish and bad advice. It is better advice to use them only if you need to, don’t dig yourself in too deep, and if you get in trouble there is always your emergency fund.

Bottom line is that debt is a tool, much like a hammer, if you are too dumb to not hammer your fingers, either learn how to not hit your fingers or use a screwdriver.

 Read Also

• Credit Cards Vs. Debit Cards 

I always try to keep my debit card around, as a college student there is an unwritten law that I am not allowed to carry cash. To be honest I don’t mean to always have no cash, but it makes budgeting easier so I am not complaining. I am able to track what I spend my money on down to the cent, where if I carried a lot of cash I would only have estimates (or sort through a pile of receipts). There is only one store I know of that doesn’t accept plastic that I shop at (it is a great local pizza place), any other store probably wouldn’t get my business. Do you use plastic to help your budget? Or are you brainwashed into thinking that credit of any kind is bad?

Another reason to not pay a third party to “track” your credit score for you is that it provides a false sense of security, if you know someone is supposedly watching out for you then you may not dispose of sensitive documents properly, let your guard down and make you more likely to be targeted. That is the funny thing about insurance (lets face it credit score watching companies is just another type of insurance). But more on insurance later.

Don’t get me wrong you should always check your credit report, always dispose of sensitive documents properly and of course always check your bank balances, budget and you should never act more indiscriminate just because you have insurance.

If none of these reasons work for you, how about the ads are just dumb. Why does the guy from free credit report (BTW it itsn’t free) want to be working in a restaurant? Because he got his credit stolen… Yah I didn’t see the connection either. It is sad how much of a consumer nation we have become.

No matter which route you decide, you need to do your research. The internet is an excellent source for information, you can learn what the marketer’s suggested price is, what other people that have the car have to say about it. Before you make such an important finical decision you should check your personal budget and finances to see what is best for you. Just remember it is better to invest and save for the future today then put it off till tomorrow.

Much like Hedge funds Mutual funds are a professionally managed group of many different investments that pool money from many different people. These funds like hedge funds can invest in pretty much anything, stocks, bonds, money markets and other securities. This type of investment is good for people that want to spend a little bit of more time managing their portfolio and is an alternative to hedge funds. What kind of investment fund is your favorite?

Read Also

• The Power of a Savings Account
• Investing – CD’s
• Investing – Bonds
• Investing - Stocks

You don’t have to be a flipper to make money in the real estate business, a friend of mines family mad the majority of their money buying a few acres in the almost center of a developing town, fifteen years later they sold it for millions to a developer and now it has apartment housing on it. Not a bad passive investment. Next week, dust off your clippers we are going tackle those hedges!

Read Also

• The Power of a Savings Account
• Investing – CD’s
• Investing – Bonds
• Investing - Stocks

One great system for managing your CD’s is to set them up so they each mature a month after the next, therefore if you end up needed the capital back there is a CD maturing soon. and of course if you don’t need the money you still just roll it over for another year of very secure money making.

I like to keep this CD system because it is a good use of emergency money. Technically I know that a CD is a form of saving, but since I plan on not using them and instead save them for the future they are kind of like very secure investments. I know that if I ever really need them, I can get it within a few weeks if I need it, for instance, say I need $900 next week, well I put it on my credit card temporarily, CD matures in 3 weeks, so 2 weeks from now I have $1k coming in to pay off CC, no charges, no interest paid to the evil credit cards (I always pay it off every month but more on that later).

Read Also

* The Power of a Savings Account
* Investing – Bonds(2nd of 5 part special)
* Investing – Stock (1st of 5 part Special)