What You Need to Know About Personal Loans

There comes a point in your life when you need some additional cash to pay for things such as emergencies or small home improvements. You don’t always have the money at hand and, in such cases, you must call on personal loans.

These are not the easiest loans to obtain, but they’re not impossible to get either. Having that in mind, here are some things you should know before applying for a personal loan.

Personal Loans Have Fixed Amounts

Usually, depending on your income and credit score, you can borrow a certain amount of money. If your income is high, then the amount of cash you can get will be quite big. Some banks even have a cap on the amount of personal loan you can borrow. The amount also depends on the lender, and you can borrow from $1,000 to $50,000. So, even if you’re a qualified borrower, you may only be able to borrow a maximum of $10,000.

Personal loans are not like credit cards – they represent a one-time loan. So, if you were thinking about doing this again after a while, you should know it’s not possible. They don’t work the same as a revolving credit card balance does.

When you repay the loan, your account is closed, so you have to apply again if you need to borrow more money.

Personal Loans Aren’t Secured

In other words, this indicates that you don’t have to use an asset as collateral. Basically, you don’t have to worry about the lender suddenly taking a piece of your house as a payment. This is one of the things that makes personal loans harder to obtain compared to other methods.

However, if the lender can’t take your house, car or another asset, that doesn’t mean he can’t take other actions. For instance, he may hire collection agencies, report the late payments to credit bureaus, or even file a lawsuit against you.

Personal Loans Affect Your Credit Score

When you apply for a personal loan, you should know how it affects your credit score. Basically, if you don’t make your loan payments on time, this may have a negative impact on the rating. So, if you pay the money on time, you’ll be able to maintain a good balance and not have it influence future encounters.

They Have a Fixed Repayment Period

The periods for personal loans are stated in months. If you have longer repayment periods, they lower your monthly loan repayment. They also mean you will pay more interest than you’d do with a shorter repayment period. Moreover, it indicates that the money will be tied up in the loan for longer.

Longer repayment periods also indicate how you’ll be paying for the loan for longer. If you have an open loan, it may affect your chances to get approved for other credit cards or loans.

Personal loans may help you, but they also have some factors that need to be taken into consideration, as presented in this article. Did you ever apply for a personal loan? If so, how was your experience?

How to financially secure your house before you buy it

It’s probably the most amount of money you are ever going to spend in life, and for that reason alone you need to take great care when buying your property.

One bad decision can lead to years of bad debt – and this is the reason today’s article has been penned.

We will now look at some of the ways you can safeguard your investment when you buy your home, to make sure that the purchase doesn’t come around to haunt you later down the line.

Are you paying the right price?

When buying a property, one of the principle mistakes that a lot of people make is letting heart rule over head. There will be the odd house that you instantly fall in love with as you look round, but you still need to make sure you get your numbers right as you progress to making an offer.

In other words, there’s no excuse for failing to conduct background research. Nowadays, it is easier than ever before for the Average Joe to find out how much nearby properties have sold for, and work out whether or not their offer falls within the current market.

If it doesn’t, it can lead to a lot of heartache down the line. You can fall into the trap of negative equity, and this can mean that moving home in the future is nigh-on impossible.

Are the properties appliances going to bleed you dry?

Something else which you need to keep an eye on are the appliances in the property. These days, the likes of fridges, freezers and ovens can cost thousands of dollars, and the last thing you want is for them to fail on you. If they are expensive in the first place you might have a massive liability on your hands, while if it is clear that they are aging and might not survive the next few years the same rules apply.

As such, mull over the best rated home warranty plans. Some of these can cover everything from plumbing to dishwashers – so they even include the internal systems of your home. Suffice to say, if something fails, you are properly covered.

How is the property structurally?

Next on the list is the structural condition of the property. Again, some property defects are no laughing matter and will cost a small fortune to fix if you are not careful. To coin a few examples, subsidence and roof issues are the two main ones, and the issues for these can lead to years of trouble.

For this reason, you cannot rely on your own eye to spot these issues in advance. You need a surveyor; a registered professional who will be able to assess if the structural condition of your home is satisfactory.

There’s another reason why you should turn to a professional as well; you will be legally covered. In other words, if they miss something, you can take legal action against them for any damages. While this might sound like a hostile action, let’s not forget this is part and parcel of the work of a surveyor and they are insured to safeguard themselves against such situations.


Reviewing Children’s Education Funds RESPs, Other Ways To Save for Education

Despite the rising cost of a post-secondary education in Canada, more than three in five (61 per cent) parents surveyed in HSBC’s latest global reportThe Value of Education: Foundations for the Future are funding their child’s education from day to day income, while over a third (35 per cent) are using a specific education savings or investment plan.

Still, the money parents save likely won’t be enough to cover all costs. Figures from Statistics Canada for 2018/2019 show that, on average, Canadian students are currently paying just over $6,838 per academic year for tuition, which does not include room and board, food, transportation and books.*

Parents feel responsible to help their children pay for schooling, but numbers like these leave parents surfing the web for data, asking advice from their peers, and seeking out financial advisors.

Don’t lose heart.

What you need is a plan:

  1. Start a Registered Education Savings Plan or RESP — You can begin an RESP from the time your child is born all the way up to age ten in order to be eligible for government benefits like the Canada Education Savings Grant (CESG). RESPs are designed to help parents save for their child’s post-secondary education and are provided by organizations like Ontario-based Children’s Education Funds Inc. (CEFI). Providing three main RESPs and supported by positive customer testimonials and reviews, CEFI’s Group Option Plan has paid out the highest scholarships 21 years in a row*.

The earlier you start saving, the more funds you’ll have by the time your child is ready to start their post-secondary education. You can get an idea of what you’ll need to save by using an online calculator, like this one.

  1. For your child’s sake, control your own budget. You need room in your budget for the above-mentioned saving. Though rewarding, raising a child is an expensive business. In the beginning, it’s the cost of diapers and formula, day care and child care. Later, it’s extra-curricular activities like sports and recreation that add up. Make a plan as early as possible—because the years whip by faster than you think.
  2. Get a part-time job, kiddo. That character-building weekend fast food job and through the summer beginning at age 16 will really help, but the concept of saving toward their own education begins with the lemonade stand. This is more important than ever, since parents can still be paying for their children’s education well into their twenties. The children who sow into their own futures take ownership of them.

* Tuition Fees Increase Rates Source – Statistics Canada Summary Table – Average undergraduate tuition fees for Canadian full-time students, by level of study, by province published September 6, 2017. https://www150.statcan.gc.ca/n1/daily-quotidien/170906/t001b-eng.htm

* CEFI has compared its Scholarship payments for the Group Option Plan to those of other Group Scholarship Plans through publicly available financial statements and prospectus documents at www.sedar.com . On the basis of this comparison CEFI has determined that its Group Option Plan has paid the highest Scholarship payments per unit to beneficiaries from 1997 to 2017 inclusive.