Attractive Deals for Personal Loans

There are different options for borrowers who are looking for low rate auto loans, including mortgages, home equity loans, and others. The interest rate depends on the borrower’s payment and credit history. Attractive deals are usually offered to customers with a stable income and excellent credit.

Payday loans are one solution for borrowers who have exhausted all other options. The problem with payday loans is that some lenders tend to ignore legal restrictions. Lenders advertise quick approval but require that borrowers show a source of recurring payments. While a verifiable source of income is one of the main requirements, you must of a citizen or resident of the age of majority. Financial institutions also offer reverse and foreign currency mortgages. There are straightforward and complex products to choose from. Borrowers have plenty of choice, including loans and revolving credit. These are short-term unsecured loans with a term that usually varies from 2 weeks to 1 month. The default rate is between 10 and 20 percent, which means that lenders take more risk compared to banks and credit unions. Some lenders offer APR of 65 to 1400 percent. There are alternatives to payday lenders, including auto pawn loans, pawnbrokers, and credit card cash advances. Online platforms offer personal loans and have strict lending criteria. This is one alternative to banks and credit unions whereby online platforms serve as an intermediary between borrowers and lenders. According to platform owners, the default rate is low meaning that individual lenders take less risk. A cash advance and a loan from your employer are two options to consider.

There are different types of financing, including auto, student, and consumer loans. Online banks offer low rate personal loans and attractive deals because they save on staff, rent, and utilities. Some of these loans are unsecured while others require collateral in the form of a valuable asset such as land, real estate, vehicle, or anything else of value. Mortgages are the most common type of secured financing. Financial institutions offer different options, including all inclusive, preapproved, 6 month convertible, and equity mortgages. Piggyback loans is also an option for borrowers. Ask your lender about the capital and interest payments. Check the closing costs, including survey, recording, and attorney fees. Consider both conventional and high ratio mortgages.

Sources to Make a Down Payment

If you need a significant amount to make a down payment for a car loan or mortgage, there are plenty of sources to consider, including your life insurance policy, cash in your savings account, selling assets you don’t kneed, and others.

Assets and Securities

If you have a large car, old furniture, or anything else you don’t need, you can sell it to cover the down payment. Other assets include collectibles, antiques, electronics, your bike or boat, etc. In addition to miscellaneous assets, you may sell bonds, mutual funds, stocks, and other investments you hold. Basically, you have two options – you can sell personal property or real estate and use the proceeds.

Family, Friends, Employer

Down payment assistance is offered by some companies and universities. These programs are designed to help valued workers and employees. If this is not an option, ask your family or friends for a loan to cover a portion of the down payment. You can use a gift as well. Financial institutions usually require a copy of the money transfer or check, along with a gift letter. Gifts are acceptable sources of financing when offered by government agencies, charities, friends, labor unions or employers, or family members.

Negotiate with Your Bank

In some cases, financial institutions agree to reduce the down payment and contribute the difference toward the closing costs. While this sounds like a great option, especially if you are a first-time buyers, the closing costs add up. You will pay fees and charges such as appraisal, mortgage application, and survey fees, transaction stamps, title service costs, and other fees. This is a good solution if you expect to get promoted, for example. If you are self-employed or your income varies, you may want to think of another option. Moreover, your financial institution may charge a fee to reduce the down payment.

Seller Financing

Some sellers and builders are willing to cover the closing costs. The reason is that competition is tight in some areas. You will need to apply for a standard loan, if the seller has a mortgage loan.

Other Options

The minimum down payment in Canada is 5 percent. Then the borrower is required to purchase mortgage insurance. Alternative sources of financing include cash back incentives, sweat equity, borrowing against valuable assets, and using your registered retirement savings plan. While a cashback mortgage looks like a good idea, this is an expensive borrowing option. Financial institutions usually require excellent or at least decent credit. They also offer a higher interest rate to borrowers who need cash back for the down payment.

Qualifying for Mortgage Insurance

The Canada Mortgage and Housing Corporation has a set of criteria for borrowers. Acceptable sources include borrowed funds, lender incentives, a gift from a family members, and own resources (e.g. cash in a savings account). The debt load of the borrower should not exceed 40 percent of his income.

Offering a small down payment when buying real estate is risky in that you may be unable to make monthly payments. There are exceptions to the rule. If you have enough resources, have a high credit score, are qualified, and have substantial income, many financial institutions will offer attractive deals and interest rates. It is usually young people and first-time buyers who resort to alternative sources of financing. The reason is that they lack savings and often have student loans to pay. Of course, one alternative is to live in a rented accommodation until you save enough for the down payment.


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