Fixed Rate Personal Loans vs Credit Cards

credit cards vs personal loans

The worlds of credit cards and personal loans continue to grow on a daily basis.

When asking around you will find out that almost everyone has at least one credit card and it is not uncommon to find people who have ten or even more credit cards that they carry around with him or her on a daily basis.

The frightening thing is that those people who have a large number of credit cards typically have very high balances as well. The debt does not stop there either.

These borrowers are also found to have at least one personal loan as well. It is easy to get into debt. However, it is not as easy to get out of debt.

Credit Cards Vs. Personal Loans

When trying to decide what the best financial move is for you it can be difficult when trying to make the comparisons between credit cards and a personal loan with a fixed interest rate.

It is best to make the best financial decision so you will want to lay it out all on the line when making your decision.

This article will help to assist you in comparing the difference between them.

Applying For Personal Loan

It is a good idea to learn about how personal loans function before you apply so that you do not end up with any surprises. You should not apply for a loan if you cannot make your monthly payments, as this might lead to long-term financial hardship. Only borrow what you can afford to avoid difficulties with this money.

Always look at the bigger picture. This includes the total bill from the loan, customer reviews, registration in the company, and other important pieces of information. Also be sure that you understand the terms of your contract in order to not be caught off-guard later along with payments, interest rates, or the entire loan.

There are many services that make finding personal loans in your city much easier, even if you have bad credit. Use them and you’ll even be able to apply online without leaving your home.

Make sure to read the terms and conditions of a company and its guidelines before doing business with them. Once more, this will prevent any shocks later on down the road and will enable you to guard yourself against a poor deal.

Lastly, never, at any time take out more than one loan during a period. This not only will cost you a lot of cash in fees, but these the situation is hard to get out of, and the likelihood of missing payments is very substantial. This will cause your situation to become more serious than it is currently, and will spiral out of control in little time.

Interest Rates

The first item will most likely wish to compare is the interest rate between a credit card and a fixed rate personal loan. With the fixed-rate personal loan, you will have an interest rate that will not change over the life of the loan.

This means that your payment will remain the same month after month until the loan is paid off. Also with a personal loan, you will find that the interest rate will be much lower than that of a credit card.

The interest rate on credit cards can be very high especially if you are a borrower who has a poor credit history and a low credit score.

Repayment Period

Another important item to compare between the two is the repayment period. When paying back a personal loan you will have a monthly payment that is required to pay your loan commitment back in full within a preset period of time. A credit card is just the opposite.

The only amount that is set to be paid every month is a minimum payment. This amount will be different depending on the total balance outstanding.

Of course, when you are only paying the minimum payment it could take many years before your card is paid off and that is if you do not continue spending on it.

Annual Fees

A negative point to be made when speaking of a credit card is that several credit cards are only offered with an annual fee included. It will not matter if you use the card or if it sits with a zero balance on it.

Every year you will be charged a fee. When compared to a personal loan you will find that a loan does not involve a fee of this type.

Conclusion

When comparing a credit card to a fixed rate personal loan you will find that there are more disadvantages to a credit card.

These disadvantages will often cost you more money in the long run. It is important to read all of the fine print and select what is best for your financial situation.

7 Reasons That Are Compelling The Entrepreneurs To Choose Unsecured Business Loans

If you want to expand the business without borrowing the money from your friends or other ways, you can avail of the business loans. Many business owners are showing interest in availing unsecured business loans.

The best part of the unsecured loans is that the business owners do not need to pledge their assets until the loan amount is repaid. The businesses can get finances without putting anything as security.

There are many unsecured business loan products available with the lenders and financial institutions from which the borrowers can pick the right one that meets their financial needs and payment capability.

The loans are being disbursed by the financial institutions in a short period of time by using financial technology and evaluating the credit score of the borrower.

The unsecured business loan products have different interest rates, repayment period and the criteria for eligibility.

Few of the reasons that are compelling entrepreneurs to choose unsecured business loans include:

Get credit without collateral

Every business owner would need investment to start any business or to expand their business and take it to the wider audience.

Not all businesses can show assets to get the loan. This is where the unsecured business loans have come to respite the business owners. This loan is given without putting any collateral.

This helps the small business owners to buy equipment or raw materials or meet other financial needs with the loan amount that is obtained through unsecured business loans without putting anything as an indemnity.

A wide range of unsecured business loan products

There are many options that are available to the business owner to choose from the types of unsecured business loan products.

For instance, if the entrepreneur wants to take a loan to fund the business, he/she can go for a business line of credit, overdraft or a business credit card.

The business owner can avail point of sale finance based on credit and debit sales. The entrepreneur can maintain a good flow of cash in the business by picking the right unsecured business loan.

Easy to process the application

There are many lenders and financial institutions who give a chance to the borrowers to choose the type of loan they would like to avail through the website. They also keep the documentation less.

Therefore, it has become a piece of cake for the business owners to apply for a business loan online. They also need to wait only for a few days to get the loan approved provided all the documents are perfect. They can also apply for the right loan without wasting their valuable time and efforts online.

Quick approval process

There is a lot of time that is taken by the lending institutions to process the secured business loans over the unsecured business loans. This is another reason for the entrepreneur to go and choose unsecured loans.

This helps them to gain quick access to finances. The unsecured business loan also helps the business owners to meet the financial needs and boost the cash flow in the company.

There are many lenders who are taking just 72 hours to process the unsecured loans. However, the time depends on the lending institution.

Short time to repay the loan amount

The lending companies would provide unsecured business loans to the borrowers to meet their financial needs and repay back the amount in a short time span. The borrowers would need to repay the loan amount that they took from the banks or financial institutions in two to three years.

The repayment period varies from one unsecured business loan product to another loan product. These loans will be of great help to the business owners to meet their financial needs and without putting their business into debts by repaying the amount quickly. By having short deadlines, it becomes easy to have a positive flow of cash.

Easy to repay options

The repayment period will differ from one loan product to another loan product. Many lenders want the loan amount to be repaid on a monthly basis.

There are a few lending institutions that are offering flexible repayment options to the borrowers to let them repay at their convenient time. They also let the borrower choose multiple repayment options.

There are a few lenders who are allowing the borrowers to repay the loan amount before the loan term period without paying any penalty for closing before. The business owners can happily repay while maintaining a positive flow of cash in their company.

Do not need to give any share of ownership

There are many business owners who get funds from angel investors and venture capitalists. However, if the entrepreneur is not able to impress the venture capitalists, then they would not get funds to run the business or expand it. The best option that is available for them is to avail unsecured loans.

This helps the business owners to gain access to the funds in a simple and easy way. They do not need to share the ownership with the lenders, but all they need to do is to repay the loan amount within the given time.

 

Various Purposes Of Which The Business Loans Can Be Availed

Do you want to get an unsecured business loan? Then, you need to look for the best and reliable lenders available in the market. There are umpteen reasons for businesses to get business loans.

Many of the businesses are not aware of the business loan and its purpose. No one would ever think about the loan to hire new talent or to expand the business.

These are just two reasons and there are many more reasons, for which the business owners will apply for the business loans.

Many small businesses get scared to apply for business loans thinking about the repayment and the credit score. However, one thing that a business owner should keep in mind is that, to increase your revenue, you need to first get the finances.

With these finances, you can run the business and gain profits. If you want to stay free from debts, then your business becomes stagnant.

Though you have never thought about applying for a business loan, and then you need to think about availing a business loan if you lack funds or want to advance your business.

Few of the purposes for which the business loans are availed include:

Start a new business:

If you want to give wings to your dream business, you can get a business loan and start the business.

There are a few lenders who are providing loans to the start-up business in a short period of time to run the business while few other lenders would check the revenue that was generated by your business in the last 6 months to approve the loan.

It is not easy for a start-up business to get the loan quickly, especially if the business is in the idea phase.

Increase the working capital of the business

For a business to run the day to day activities it would require money. You can get this money by taking business loans. Many times, the business would lose a great business opportunity due to a lack of money to deliver the order on time.

If the cash flow of the business is smooth, then the business can grow briskly. There are times when the sales of the business start to fluctuate; you would need to have the working capital to keep running the business successfully and as usual.

The worst part is that you do not know how much money you would need to run a business, but all you need would be working capital to keep running a business. In this case, the better option that is available in front of you is the short term credit that you can use whenever required.

Purchase raw material:

Be it the business is in the nascent stage or well established one or small or big would need to have the working capital to buy the inventory to manufacture the products.

When you have enough inventory in your warehouse, you can meet the demands of the customers on time and keep them happy.

The businesses that in the retail industry would need to have the finances to keep the raw materials full in the warehouse, especially when the store sees a rise in the number of customers for a seasonal product.

For instance, if the company is selling any holiday gift would need to get a business loan to have this product before the holiday season starts and repay back the loan once the seasonal sales are on.

Purchase equipment:

The businesses that are into manufacturing would need equipment to manufacture and ship the products before the given time with the customers. Be it you need gym equipment or vehicles to run a business, you would need to have a good capital.

If you lack funds, you can get business loans and buy the required equipment and pay back the amount with the profits you earn. This helps you to bring the business that is in the struggling phase out of it.

You can get this loan to buy the equipment immediately. The best thing about this type of loan is that you do not need to put any asset as collateral to get the loan sanctioned.

Hire new employees:

Many businesses are not able to grow because of a lack of potential talent. Many companies are not able to afford to hire a new talent due to a lack of finances.

The payroll has to be borne by the business, which includes wages, benefits, training, and healthcare of the employees.

If the company is not having enough funds, then they would need to downsize the employees and reduce the benefits that are offered to them.

It is a risk to hire employees by taking a loan, but this helps you to release your products on time and earn huge profits as employees are the main asset of every company.

The above are a few purposes for which the employees get the business loans.

 

What Are The Different Types Of Unsecured Loans Available?

Unsecured loans are the loans that are given to the borrowers without keeping anything as security by the banks or lenders. The unsecured loans are offered to people based on their income, credit score, financial documents, and many other factors.

As there is no collateral kept by the bank, so the risk factor for this type of loan would be higher. These types of loans are available from businesses for various purposes such as to start a new business, expand the existing business, buy new equipment to run the business, etc.

This type of loan helps the entrepreneur to get a new capital to expand the business and grow. The loan interest charged by the banks for this type of loan is pretty high.

Few types of unsecured loans include:

Personal loans

This is a short term loan that is taken by the individual to meet their long or short term financial commitments.

To avail this type of loan, you do not need to put anything as security unlike the home or car loans where you need to put security to get the loan approved.

This type of loan is availed by many people to meet their financial needs without asking for money from a friend or a family member.

Although the interest rates are high, there are a few lenders who are offering flexible repayment options. This loan can be used for medical emergencies, paying the college fee of your children, renovate your home, purchase a gadget or go for a vacation.

There are many lenders who are allowing the borrowers to apply for this loan online. The paperwork done to get this loan is also less and is sanctioned based on the income, credit history, repayment history of the borrower.

Business loans

The main objective of every entrepreneur is to expand their business and see it growing. For a business to grow the main thing that is required for an entrepreneur is the capital and this capital is provided in the form of unsecured business loans by the banks.

This is the best option that is available for business owners to get financial aid immediately. However, it takes a little amount of time to get this loan approved since the banks should take a look at your credit history and other financial documents thoroughly before sanctioning the loan.

They give the loan to the people who have the capability to repay within the set time period.

Education loan

This type of loan also falls into the unsecured loan category. This is the ideal option available for the students who want to pursue their higher studies and lack funds.

This loan is a boon for the students to fulfill their career aspirations. There are many lenders who are offering this type of loan at lesser interest rates and with flexible repayment options.

Credit card

This type of card is given by the banks and financial institutions to the people to buy using the credit card and repay the amount later.

This is the best alternative to cash. There is a myriad of benefits a customer can reap by using credit cards. These include cash backs, rewards, interest-free periods, etc.

There is a huge demand for credit cards globally and there is a gamut of credit card options provided to the customers by the banks with different features. You can pick the card that suits your financial requirements.

Payday loan

No matter whether it is the start of the month or the month end, you would get unexpected and unforeseen financial emergencies.

You cannot borrow from your friends and relatives and ruin your relationship for not paying on time and listening to “no” from them. So, the best option that is available for the borrowers is to take a payday loan.

This type of loan can be availed by the people who want the cash immediately and can repay back as soon as they get the paycheck.

If you maintain the emergency fund, then you do not need to worry about it, but in case if you have no money in hands and have to pay for the medical expenses or buy medicines, then you need money in hands.

This money can be obtained immediately by availing payday loans. You can apply for the loan and get it approved on the same day.

The money will also be credited to your account immediately, which you can use to meet your financial needs. This type of loan is also called as instant loan and an unsecured loan.

Business cash advance

This type of loan is given based on the earlier debit and credit sales. This has to be paid back every week based on sales.

Equity crowdfunding

This type of loan is given as a contribution by multiple lenders in return the lenders would receive equity in the business and repayment amount.

 

6 Key Benefits That Are Offered By Unsecured Business Loans For Small To Medium Size Businesses

Do you want to start a new business or expand the existing one? Then, you need to take business loans. There are different types of business loans available in the market.

You need to avail unsecured business loans. In this type of loan, you can borrow the money without putting any asset as an indemnity near the lenders or banks. You need to make regular payments every month until the loan amount is cleared. As there is no security kept by the lenders, therefore, this type of loan has higher interest rates.

The companies that get unsecured business loans would get the working capital. This amount has to be repaid over a period of time. The rate of interest charged would be fixed and there is an additional fee that is charged by the lenders to arrange this type of loan.

Generally, unsecured business loans are provided by banks, business lenders, angel investors, etc. The main purpose of taking unsecured business loans includes:

  • Increase the working capital and manage the flow of cash in the company
  • Buy assets for the company such as equipment, furniture, vehicles, etc.
  • Expand the business
  • Refurnish the existing business

Many small and medium-size companies will be availing this type of loan to sustain in the business for a long time and give fierce competition. Undeniably, capital is a boon for the SMEs to take their business to the newer heights and keep the crises through which they are going through at bay.

The best loan that is available for them is the unsecured loan. This is provided by the lender or a bank to the business or a person who puts any asset as collateral for the loan.

To be precise, unsecured business loans will not put anything as collateral. There are a few criteria that have to be met by the companies to take unsecured business loans. However, this would be definitely met by small and medium companies.

Few of the benefits that are offered by the unsecured business loans include:

Zero Collateral

If you would like to avail of this loan, you do not need any collateral, which means that you do not need to put anything as a security deposit with the banks or lenders to secure the loan, unlike the secured loans. This allows smaller businesses to get the loan approved briskly without putting any assets at risk.

Quick Approval

The time that is needed to keep the unsecured loan secured is very short.

With the easy to meet criteria and no collateral, it becomes easier for the businesses to keep this loan secure in a short time. This type of loan is generally taken by businesses when they are facing financial crises.

This loan is also quickly approved by the banks or lenders, thereby helping the businesses to get rid of the financial hardships immediately.

Short Term

The unsecured loans will have short term periods, unlike the secured loans. You need to repay this loan in a short time span, thus making it easier for the businesses to clear the loan amount.

If the debt is cleared by the businesses, they do not need to have any kind of long term liability. This type of loan makes it easy for smaller businesses to get access to the capital in no time.

Quick Access

There is very less amount of paperwork that has to be done for this type of loan, so it becomes quick and easy for you to get the approval.

There are many lenders who do not have much paperwork and take very less time to approve the loan provided the documents are accurate.

Credit Rating

There are many banks and financial companies that check the credit score of the borrower before approving the loan amount.

However, this is not the case with unsecured business loans.

Even if the borrower has a poor credit score, he/she can avail of this loan in a short time period without facing any hassles. Although you need to have a good credit score to keep your unsecured loan secured.

However, you are not restricted to apply for this loan even if you do not have a good credit history. This loan is very easy to apply and secure.

This type of loan can also be used by businesses to improve their credit scores as the term is very short. If you can pay all the debts on time, you can grab the attention of more companies who are offering the capital of the company.

No Restrictions On Financing

When you are availing a secured loan, it is important to give a valid reason for taking the loan. However, this is not the case with unsecured loans.

There are no restrictions on the financing. The borrower can use the capital as per their business requirements. It is important to use this amount for business purposes.

It is better for the small and medium-sized companies to apply for this loan to expand and grow their business.

What Are The Different Business Loans That Are Right For You?

Although there is a lot of progress made in recent times in terms of technology, women are still lagging behind the men when comes to business.

The main fact is that women are not getting enough funds to start the business. Although they have the best business ideas that can make them flourish and skill set, due to lack of skills, the business ideas of women are taking a back seat.

When women try to give wings to their business ideas and expand their business, it has become very tough for them to obtain business loans from traditional lenders.

The process to apply for a business loan is also laborious. There will be a lot of documentation work that has to be done by the borrower. They also check the financial and business history of the borrower thoroughly to approve the loan.

When you are starting a new business, you would need to have enough capital to set up the office, buy furniture, material, hire employees, marketing and other expenses. As soon as you start the business, you do not get profits. You need to struggle for a few months to years to earn huge revenue.

Until then, to cover the expenses, you need to take the business loans. This keeps your cash flow intact.

Business loans are very beneficial for the business owners to maintain good cash flow during the growth time or during the busy season for the business. When you are planning to borrow money from the lenders, you need to have proper planning on how effectively to use the funds.

If you want to take a business loan, the first thing you need to do is to look for the best lender who is offering different types of business loans for women at a lower interest rate. These lenders will help you get the loan sanctioned briskly.

Prior to taking the loan, you should have a perfect business plan that makes sure that your working capital will drive your money and let you pay back the loan amount.

Few of the business loans that are suitable for you include:

A business line of credit

This is the type of loan where the maximum loan that the lender will let the borrower take from them.

You can withdraw the sanctioned loan amount on an installment basis and the amount should not exceed the sanctioned amount.

This type of loan is alike to that of a credit card; you can use it whenever you want. In this type of loan, the lender will let you make the monthly payments or on the predetermined schedules. You can borrow more amount as you are paying off the principal amount.  This is very much suitable for small business owners.

Revolving line of credit

This is the best and flexible method that is available for women entrepreneurs to borrow the money.

Rather than borrowing the money at a time, this allows the borrower to borrow the working capital up to the limit that is pre-approved.

This type of loan is best for businesses to keep their business operations smooth despite the sales going up or down. This loan saves the businesses from shutting down by letting them have a continuous flow of cash despite seasonal changes or shortage of cash flow.

This type of loan allows the business owner to pursue various business opportunities though they do not have funds available to them to make an investment.

Until you can cut down the debts and make the monthly payments on time, this type of loan is perfect for you. This is the best cash management tool for businesses to run their day to day operations without any hindrance.

Peer to peer loan

This is an online platform that is benefitting many borrowers. This would provide a common platform for borrowers and investors.

The borrowers can find investors who are ready to lend money to the borrower of their range. The borrower has to fill the application and receive the amount from the banking partner who is on the platform. The companies can invest in this type of loan that are given to the borrowers.

The best thing about this type of loan is that the investor has an option to select the borrower with whom he would like to engage. There is no need for the borrower and investor to have a relationship before.

Payday Loans

This type of loan is given to women without any asset as collateral. This type of loan helps small business owners to take their business to new heights.

Basically, this type of loan is given by non-profit organizations. The loan amount that is sanctioned through this type of loan is also less compared to the other loans.

The above are a few types of small business loans that you can get.

How To Raise Your Credit Score

A credit score takes into account years of past behavior.

Pay your bills on time. Get credit for making utility and cell phone payments on time.

Pay off debt and keep balances low on credit cards and other revolving credit. Apply for and open new credit accounts only as needed.