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Identifying the Ultimate Personal LoanOne's misfortune has become some organization's profit. As the poverty stricken and work class continue to delve deeper into the pits of debt, businesses such as lending institutions and debt management firms and insurance agencies are turning one's hard luck into their fortune. The recent reports of the unethical practices have gained much controversy. Quite often, loan companies and credit counseling organizations employ high-pressure methods in targeting the indebted. For instance, Citigroup was accused of targeting low scoring and unemployed consumers. The deliberate tactics were noted as coercion to sign loans with inflated interest rates or to purchase "insurance" on loans â€" after the fact. One such case occurred with a woman who ended up paying for 5 types of insurance worth one thousand dollars on a $5000 personal loan. Another notorious tactic from Commercial Credit was the routine of charging an annual interest rate (APR) over 40 percent. The drawback of personal loans is how consumers are seen as a cash cow to lending companies and other financing firms. The supply and demand of the cash deficit lures many Americans into an infinite cycle of vast debt. Finding the Loan Despite, the negatives aspects of personal loans, consumers in need of a loan can find the ultimate loan. Aside from banks being in business to make profit margins, it's a way of life. The alternative for beating the cycle of financial depravity commences with researching the ultimate loan. Here are a few steps to consider, before you look for a personal loan:
Personal Loan Debt Test After reviewing your current financial status, answer the following questions to determine if you are really in need of a personal loan or you need to refine your spending behavior into a strict budget.
If you responded no, to most of the above questions, tightening your budget and meeting goals is vital to you digging your way out of debt. However, if you answered yes to four or more of the questions, then a personal loan is only inevitable. A monetary deficit, over extending credit cards coupled with inability to manage â€" financially during a dire emergency are indications that a personal loan and a change of spending behavior are critical. At the same token, consumers require a personal should not become so bent set on obtaining approval that they lose sight of a bad loan. Use the following checklist to identify the ultimate personal loan:
Obviously gaining approval for the ultimate personal loan will depend on your payment history and credit score. However, if your credit score is in the mid 600s, you should qualify for an unsecured loan. Remember, that a rate of 11 percent or more should be anticipated. Nevertheless, the ultimate personal loan should not exceed more than 18 percent in interest fee charges. © About-Personal-Loans.com. All rights reserved. Other articles by this author »
About Holly Bentz
Holly Bentz is a finance writer and a contributor to About Personal Loans. Related
And here is another random article you might be interested in... No Load Mutual Funds or Exchange Traded Funds (ETFs)?If you are fed up with early redemption charges and ever increasing mutual fund management fees on top of bad-performing fund managers, read on. There is a quiet revolution going on in the no-load mutual fund industry and you, the individual investor, may benefit from it greatly. I am referring to Exchange Traded Funds (ETFs), which have been around for years, but have grown tremendously since their inception. There are currently over 100 choices with around $10 billion in assets. In a nutshell, an ETF is a specific kind of no-load mutual fund that you might consider to be a basket of stocks. ETFs are diversified like mutual funds, only they trade like stocks. They are cheap to trade (as low as $8.00) and don't hit you with any short-term redemption fees. And they offer investing opportunities across the board. ETFs track every index under the sun including the S&P 500, the Nasdaq 100, The Russell 2000 and many others. Available through any discount broker, they basically fall into one of three categories: broad-based U.S. indexes, sectors and international. The have esoteric names such as iShares, StreetTracks, HOLDRs and SPYDRs. The difference is in the index they are tracking and the company marketing them. You will see big name companies offering them, like the American Stock Exchange, Barclay's Global Investors, Vanguard, and State Street Global Investors. In my newsletter I track the currently most appropriate ETFs for you to consider. For more detailed information you can visit these web sites: In addition to inexpensive trades and no short-term redemption fees, how else can ETFs save you money vs. no load mutual funds? One way is on their annual management fees. That fee for ETFs is in the area of 0.45% vs. 1.5% on average for no load mutual funds. The fees charged by discount broker are so low they almost can be disregarded, usually less than 0.1% of the transaction. For example, I have used ETFs for some managed account clients during my last Buy cycle, which started on 4/29/03, and paid $27 for a $28,000 order — and that wasn't even with the cheapest discount broker. So, if these ETFs are so great, why hasn't your broker or financial planner recommended them to you? Simple! Brokers, and those advisors working on commissions, don't make money on ETFs; no commissions up front or hidden on the back end. It's simply not in their interest to promote them. With all the positives for the investor, there is one disadvantage, which may not be applicable to you unless you are a hot shot no load mutual fund picker. It is that in any given economic environment really super performing mutual funds can outperform the indexes, but an ETF can never outperform the index it's tied to. You would need to look at your own investment record to know whether this is a downside for you. Here's a real life example from my advisory practice. My trend tracking indicator signaled a Buy on 4/29/03. Based on my momentum indicators I chose 5 no load mutual funds and 4 ETFs. Over the following 3 months my ETFs gained anywhere from +10.02% to +22.36%, while my no load mutual funds gained from +9.15% to +36.35%. If you're fortunate enough to make a superior selection you will outperform an ETF. Of course, that presumes you picked a very successful fund as compared to only a moderately successful ETF. A word of caution! Just because ETFs are cheap and easy to buy doesn't mean they will guarantee you a profit. You can lose money with them just as easily as you do with no-load mutual funds. You still need to make sure you have a disciplined methodology in place to help you get into and out of the market. If you don't, you're gambling no matter what you invest in. Having gotten the disclaimer out of the way, hopefully these insights into ETFs will broaden your perspective on ways you can prosper in your investments.
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About Ulli G. Niemann
Ulli Niemann is an investment advisor and has been writing about
objective, methodical approaches to investing for over 10 years. He
eluded the bear market of 2000 and has helped countless people make
better investment decisions. To find out more about his approach
and his FREE Newsletter, please visit: www.successful-investment.com. Related
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