Repaying Old Loans with a New Loan: A Detailed Analysis

Personal loan. Calculator, dollar bills and pen.

Digging yourself out of debt can seem like a daunting task, but luckily, you have a lot of options at your disposal when you try to work your way out of past mistakes. Keep in mind, however, that working yourself out of debt requires some smart decision making. If you misuse the tools at your disposal, you can undo your efforts to improve your situation and make things worse.
So how do you make personal loans work for you instead of against you when you’re trying to pay your old loan? Simple: take advantage of good situations when they arise and take the time to make the right calculations. Here are a few tips to help you do exactly that!

Know Your Interest Rates

Failing to know an interest rate is a common mistake people make when trying to get themselves out of debt. But when you’re dealing with similar sums of money, the interest rate is vital to deciding which loan you should pay off first. If you ignore a larger interest rate, you’ll end up paying more in the long run.
By the same token, if you have a loan of $10,000 at 6 percent interest and you can reduce it to 4 percent, you can save yourself a few hundred dollars over the remaining life of your loan. But if you don’t know what interest rate you’re paying, you won’t know if you can save money with a new offer!

Borrow a Little More

When you take out a new loan to repay an old loan, it makes sense to borrow a little extra to make sure that you can cover any fees. Some loans have prepayment penalties or other fees attached, and if you don’t borrow enough to cover them, you’ll find yourself a few dollars short of paying off your old loan. Having to make two different payments isn’t an ideal situation, and it’s best to avoid it if possible by knowing what you need to pay and borrowing slightly more than enough to cover it.

Borrow What You Can Repay

Being honest with your finances can help you avoid compounding past mistakes. Make sure that you borrow only what you’re sure you can repay over the course of the loan. If you’re not certain about your finances, refinancing might not be right at this time.

Achieving financial success isn’t something that happens overnight but using personal loans responsibly can speed up the process. By knowing the facts and being honest with yourself, you can make a loan work for you and help you get out of debt, permanently!

Understanding Payday Loans

Understanding Payday Loans

Payday loans are generally loans from $300 to $1000. Each state has its unique guidelines and conditions determining the maximum fees, rates and loan amounts. Some states have totally banned Payday loans and made it illegal for any lender to advertise and or offer these loans. Qualifying Since a Payday loan is based on your next paycheck, the qualification guidelines are much simpler than a traditional loan. But since there are still certain risks associated with these loans, a lender may consider several factors such as credit, the line of work, outstanding payday loans, bad checks and wage garnishments that could potentially affect your ability to deliver your paycheck in a timely manner. General Requirements Apart from the qualification requirements, most lenders require the borrower to be 18 years old with an active bank account, a pay stub, proof of employment and a state or government issued ID. Things to Consider Payday loans are generally a costly method of acquiring financing. Thus, before committing to such a loan, make sure the expense for which you are securing financing is urgent. A payday loan should be one of the last options to consider. Credit cards often have special promotional rates which is a much more attractive alternative. A personal loan could also be considered as an option. Be sure to check the rate and the terms of the personal loan with the lender to make sure it’s the right choice for you. Regardless of what type of loan you are applying for, you have to negotiate with your lender.

10 Steps to Avoid Bad Credit

10 Steps to Avoid Bad Credit

Credit rating is a score accumulated from analyzing one’s debt and payments over a long period of time. Banks and financial institutions rely on credit ratings and scores to determine the default risk and the interest rate that justifies the risks associated with various loans. Credit agencies store a complete record of one’s financial transactions such as bank loans, credit cards, mortgages, auto loans and etc; it basically represents a citizen as a debtor and as a consumer. Lots of people stress over their credit rating while others are puzzled by the level of its significance in their life. As you already know, credit history plays an important role in your everyday decisions. The better your credit rating is, the lower the interest rate you qualify for, which will basically lower the cost of acquisition and enable you to buy more. Having a bad credit does the exact opposite. If you are not among the lucky ones and now have a-less-than-perfect credit, you will end up with higher interest rates, you will not necessarily qualify for financing even at higher rates, it may even effect your employment options and sometimes make it more difficult to qualify as applicant for an apartment. Is it hard to build credit and maintain it? No. Does it require rocket science? No. You just need a little discipline. Avoid bad credit with these 10 easy steps:

1. Build yourcredit history early

We all begin with a clean sheet. Whether it goes good or bad depends on us and our choices. You can start working on your credit history by simply having a credit card and making timely payments!

2. Be consistent with your bills.

Make sure to pay your bills on time. Believe it or not, but being consistent with your payments has a positive effect on your credit history. Bank committees will see you as a responsible borrower.

3. Pay ALL your bills

Yes, while credit card bills may be your main priority, you also have to keep ALL of your bills such as phone, utilities, mortgage and etc. on track and current.

4. Know what bills report to the credit bureaus

Usually, rent or utility payments are not reported to credit bureaus. Nonetheless, these bills can still hurt your credit score, if they are overdue and the company forwards them to a debt collector. The problem with collection accounts is that even after paying your debt, the credit score will continue to be negatively affected by it. It could eventually be taken off your credit report, but with some work you could have it removed sooner with proof of payment.

5. Missed a payment? Catch up!

There are times when we just cannot pay ALL our bills on time. Life happens and things go wrong. If it does, just remember to pay within the next 30 days. Most financial institutions tend to overlook one or two 30 day late marks. Anything beyond 30 days will drastically influence your credit rating.

6. Control your debt

Another very important factor for your credit is the level of your debt. Keep your credit card balances low and make sure that all loan payments are made regularly to reduce the amount of outstanding debt. Do Not Max Out Your Cards


Also the bigger your debt is, the more difficult it will be to pay it off. If you see any signs of debt growing too fast – reduce your credit card spending before it’s too late.

7. Keep credit applications at minimum

Applying for multiple loans in a short time period? Hmm… Sounds suspicious. That’s why those big banks keep monitoring you. If bank considers you trouble, you may end up with additional fees and higher interest rates. Carefully consider your needs.Are you sure that buying a new car, getting a new apartment and purchasing things you don’t need is necessary right now? Pay down your existing debt before diving into new ones.

8. Debit-to-Credit ratio lower than 30%

Majority of credit experts recommend a debit to credit ration of less than 30% and don’t request credit limit increases if you don’t have to. Requesting credit increases usually indicates the borrower maybe building up debt.

9. Check your credit report

You may be 100% sure that you’ve got everything covered and there is nothing wrong with your payments. But how can you be so sure if you don’t see your credit report? Make a habit of checking your credit report diligently annually or at least semiannually. Look out for suspicious activities i.e. anything you cannot recall buying, credit cards you don’t recognize and etc. Monitoring your credit report is especially important if you have your accounts on auto-pay.

10. Keep educating yourself

Keep track of interest rates, new regulations about consumer loans and those that effect lenders and financial institutions. Do your homework prior to applying for loans, research the alternatives and understand every term in your contract. Consult with an adviser.

5 Ways to Get a Loan with Bad Credit

5 ways to get a loan with Bad Credit

Having no or bad credit can hold you back and prevent you from getting approved for a loan. Your bad credit makes you a high-risk borrower. As you already know, lenders put a lot of weight on and rely on credit scores to determine if a borrower qualifies and the rates at which the risk of lending will be an acceptable risk. To understand how your credit score effects your loan options, it’s best to start by getting your hands on a current copy of your credit report. There are several websites that provide you a copy of your credit report online for free. The one I personally prefer and use is, you may also be able to get a copy from your credit card provider. You need a copy of your report to review the accounts that are currently reporting under your name and their accuracy. If you notice any discrepancies such higher balances, higher minimum payments and accounts that are closed, call that lender and the credit bureau that is reporting it immediately. All these factors may have an adverse effect on determining your risk factor as a borrower. Avoid common mistakes that lead to bad credit;

  • Making multiple late payments. A 1 x 30 (30 day late mark) is not nearly as bad a 2 x 30 on your report.
  • Only making minimum payments instead of paying down your balance when you can.
  • All payments are important. In today’s digital world, all accounts are somehow connected.

If you’ve made some of the above mentioned mistakes, you can still qualify for a loan. Specially, if the loan will put you in a better financial situation. There are at least 5 ways to receive a loan without having a perfect credit.

1. Apply to Credit Unions

Credit Unions are similar to banks, but they are owned by their members instead of profit-seeking shareholders. A credit union, especially if it’s affiliated with your employer or community, may decide to grant you a loan based on your character and your ability to repay it despite your poor credit history.


2. Reach out to family and friends

Even though borrowing from family and friends is never a good idea, you can still consider it if you are 100% positive you can repay the loan and you are going to use the money to put in a better financial situation. Look at it as bridge loan till you get back on your feet. If you do decide to go this route, be sure to have a written agreement with interest rate, loan amount, payment terms and all the other factors you deem important to both parties.

3. Get a co-signer

Asking a friend or family member to co-sign a loan is a great option. Not only will their good credit help you qualify at a better rate than you would get with your bad credit; it will also help you rebuild your credit if you make all your payments on time. Don’t forget the loan is tied to both your credits. Thus, if you miss a payment, you will ruin your co-signers credit and adversely affect someone who was kind enough to help you when you needed it.

4. Turn to Personal Loan Lenders

Personal Loan Lenders such as the ones works with have created a fairly new industry which makes it possible for people with bad credit to be matched with a lender who’s guidelines they meet. Some personal loan lenders do everything online and get you qualified in as fast as a few minutes and get you the cash you need within 24 to 48 hours.Usually, the application process is simplified and very easy. Their qualification guidelines are not limited to your credit history, they use algorithms and other data to access risk.

5. If there is no other way, consider Secured Loan

If your credit score is not good enough to meet any lenders guidelines, the best chance of getting a loan is by applying for a secured loan. A secured loan is a loan granted based on a tangible asset you own. The lender holds the asset as a collateral and will liquidate it if you should fail to meet your financial obligations. Usually, secured loans have lower interest rates and better terms. Plus, if paid in a timely fashion, they can also positively affect your credit score.

How to Build Credit for Your Business

How to Build Credit for Your Business

The first and the most important step for establishing your business credit would be to separate your business credit from your personal one. It will minimize the risk of a personal credit history having a negative effect on the business credit. If you are not running your business as a sole proprietorship or as a general partnership, you have to establish a clear separation of the business affairs from personal activities.

1. Incorporate your business

Incorporating a business or setting up a Limited Liability Corporation legally separates a business from its owners, protecting the business credit from consequences of bad personal credit history of the business owner. And more importantly, it provides the business owner an umbrella protection as long as there is no commingling

2. Obtain EIN

EIN – a federal tax identification number, a social security number for your business. You are required to have this number for federal tax filings and to opening bank accounts in the name of the corporation or LLC. An EIN number is also required by many corps prior to paying out for services.

3. Open a business bank account

Create a separate business account under the name of your company and make sure that all financial transactions of your business are done through this account.

4. Get listed with the business credit agencies

Getting your company listed with one or more of the business credit reporting agencies such as Dun & Bradstreet will make the process of obtaining and maintaining good credit so much easier. Plus, it’d be good if your business credit card is from a company that resorts straight to one of those agencies.

5. Create a line of credit with vendors/suppliers

Working with at least 5-7 vendors and/or suppliers that offer you a line of credit or financing on your purchases will help establish credit for your company. You may also ask them to report your payments to the business credit agencies.

6. Be consistent with your payments

Pay all your bills on time. Business credit will suffer from late payments just as personal credit does.


Good business credit has multiple benefits:

  • New vendors and suppliers are more willing to work with businesses that have a good credit history;
  • Banks and lenders will generally offer you better interest rates and lower fees;
  • It will give you more flexibility in negotiating payment terms with your vendors.

Once your established your business credit, make sure to monitor and maintain it just as you protect and monitor your personal credit. We advise you to Check all business credit reports diligently and look out for any inaccuracies.

Build Business Credit with a Bad Personal Credit

Build Business Credit with Bad Personal Credit

Launching your own business often requires personal investments and additional financing. However, proving the creditworthiness of you and your idea to a bank and or a commercial lender might present a difficult task with a bad personal credit history. Although decisions and risk assessments for business loans aren’t solely based on the borrower’s personal credit score, it still plays a major role in establishing a character profile the lenders are looking for. Therefore, prior to jumping into a new business, you must first review your current financial status, review your outstanding loans and minimize your existing debt. This may take some time and it may require you to reconsider your life style and spending habits. Doing all that will surely have a positive impact on your creditworthiness which makes you a more desirable borrower.
#1 improve your credit profile A well written business plan is a must for anyone seeking startup financing for a new business; business credit / history is the integral part of securing a loan for an existing business. Lender’s tend to look at the business models and their ability to generate sufficient revenue to cover the debt. If the business model and industry is acceptable to the lender they will proceed to the next step which is usually looking at your personal credit history. Not all lenders will require a perfect credit. Lenders such as the one works with offer competitive rates with more flexible guidelines than traditional lenders. Assuming that you qualify for the loan, be sure to make all payments on time. This will help you establish business credit and improve your personal credit. Once you have established sufficient business credit, you most likely won’t have to rely on personal credit for loans in the future.
#2 separate yourself from the business If you have an existing business, apply for a loan under the business name. Assuming you have assets, you can personally guarantee the loan and usually qualify for a lower interest rate. Some lenders report the personally guaranteed loans to the credit agencies which can help improve your personal credit.


Secured & Unsecured Personal Loans

Secured & Unsecured Personal Loans

A secured loan is a loan that is guaranteed by an asset. The asset is usually a collateral whose value determines the loan amount and the terms of the loan (interest rate, fees, amortization period and etc.). The more common types of secured loans are home loans, home equity lines of credit and auto loans. A secured personal loan lender could use anything from personal belongings such as your gold watch to major assets such as your house as a collateral. Secured loan lenders are exposed to a much lower borrower default risk than unsecured lenders. If the borrower defaults and or falls behind on a secured loan payment, the lender will foreclose or reposes the collateral. If a borrower of an unsecured loan fails to make payments, the lender will simply have to take a hit. Which explains the higher interest rates and lower loan amounts with unsecured personal loans. An unsecured loan could come in many forms and it doesn’t have to be in cash form as offered by the personal loan lenders on For example, even your credit card is an unsecured loan. The issuer is simply granting you credit based on your income, credit and employment history. If you don’t or can’t repay your credit card debt, their options are limited. Basically, they can report you to the credit agencies and make it more difficult for you to obtain financing in the future. They don’t knock on your door asking for the sofa or the shoes you purchased. Another form of an unsecured loan is a debt consolidation loan. A lender will review your credit, payment history and debt to see if a new loan will put you the borrower in a better financial position. If yes, they will offer a debt consolidation loan. The theory behind this is that if the borrower’s overall monthly payments are lowered, the borrower will continue to make good on their obligations. The major advantages to borrower are lower payments and freed up credit. The freed up credit and higher available revolving credit generally tends to improve your credit score too.

How to Get a Business Loan in a Few Steps

How to Get a Business Loan in a Few Steps

Sufficient financing is an integral part of starting and maintaining a new business. How do we determine what is sufficient and what is not? Unfortunately, there is no easy formula for calculating the exact amount you’ll need, but you can estimate the number of employees you’ll have and their salaries, rent, insurance and everything else that you know is necessary for the day to day operations. As a rule of thumb, I personally add 10% to this figure for the unknown and unforeseen expenses that may catch you by surprise. Once you’ve come up with a figure, you either have the cash or need to somehow get the cash. If you have it, great; but what if you don’t? Fortunately, there are financing programs for start-ups that you can apply for. You’ll have to do your research and be prepared to go through the tough small business loan approval process. I suggest taking a few steps to better your chances by becoming a borrower lenders would like. Here are a few easy steps you should take prior to getting a loan: #1 Think about why you need a business loan Lenders will certainly put this question before you. Do you need start-up capital or do you need the security cushion for the unexpected? Is your business brand new or have you been in business for a while? If you’ve been in business for a while and you need the security, a line of credit like the ones offered by could be a great choice. #2 Decide on the type of a loan you need The financing you apply for should be based on your purpose. For example, if you need the money for a one time nonrecurring expense, a business loan is what you should consider. If you intent to use the cash at some point in the future and plan on paying it back quickly, go for the business line of credit. If you are just starting out, you should look into a SBA program. Make sure you have a professional business plan and all your documents ready to go prior to applying. If the SBA loan doesn’t work out, consider using a low interest credit card to get you through the early stages of your business. #3 Look for a lender whose criteria’s you meet A small-business loan may be obtained from various places such as banks, private lenders and online lenders. Once you decide which type lender you are most comfortable with, go ahead and take a look at their qualification criteria’s and apply with the one that suits you the best. Banks are generally a good option if you have excellent credit, collateral and time for a lengthy approval process. If you don’t have prefect credit, documented cash flow and all the other stuff traditional lenders are looking for, try an on-line lender. They tend to have a more flexible guideline at competitive rates. For example, you can apply for a loan up to $500,000 in just minutes on They have flexible guidelines, offer loans to businesses in 750+ industries and only require a 9 months of business history.

#4 Get organized and apply Once you know what you want and what you qualify for, get all your documents organized and ready. Lenders will generally ask for corporation documents, tax returns (both personal and business), bank statements (2-6 months), bankruptcy discharge papers if you’ve had a bk, and other documents that will prove business sustainability and your ability to repay the loan. Good Luck!

Ups and Downs of Payday Loans

Ups and Downs of Payday Loans

“I’m short of money”… “Still have two days till payday” … Sounds familiar, right? We all go through rough patches dealing with everyday expenses in a hectic life. A payday loan may be a tremendous help in a time of financial need. So instead of pulling out your hair, consider of applying for a payday loan with a fast and easy application at A payday loan (also called a payday advance, salary loan, or a cash advance) is a small short term loan based on your next expected paycheck. Despite the name, the loan may be granted regardless of whether repayment is linked to a borrower’s paycheck or not. Usually, the loan is expected to be paid-off within a few days, but it could be for up to 30 days. Payday loans are generally popular because they provide access to quick cash without the usual hurdles of a typical loan a borrower would have to deal with. In order to qualify for a payday loan, the borrower has to present his or her payroll and employment records. With the increasing dependency and access to Internet, companies like are getting more and more focused on their on-line services enabling borrowers to apply for a loan in just minutes on their mobile devices and desktop pc’s. What are the advantages of a payday loan?


One of the major advantages of a payday loan is the quick application process. There is no background check, usually no credit history review and almost no paperwork. Just complete the online application and you’ll be approved in as fast as minutes.


After submitting the few documents required you should have your cash within 24 hours. No need to stand in long lines and wait a week for the approval process.


The single most valuable advantage of a payday loan is that you can qualify for a payday loan regardless of your financial history.


Contrary to the commonly sought after secured loans, a payday loan won’t put your property in danger if you fail to pay it back in time. Lenders generally ask for a post-dated check to secure their loan.


A payday loan may seem like the perfect remedy for your financial wounds, but it’s just like every other loan and it has a few disadvantages that you must weigh before making a decision.

– Higher interest rates

Due to the nature of the loan, the fact that it’s unsecured and granted regardless of your credit history, the lenders will charge a higher interest rate to justify the risks

– May affect credit

If you fail to pay your debt, the lender may sell your payday debt to a third party debt collector and report you to a collection agency. The negative report will definitely have an adverse effect on your credit.

– Not a long-term solution

A payday loan is only a short term solution for emergency situations. Please don’t make irrational financial decisions that will land you in a worse situation then your current state.

How to Improve Your Credit with a Credit Card

How to improve your credit with a credit card

Everyone wants an excellent credit score for obvious reasons such as lower cost of borrowing, higher credit limits and a number of other perks that are made available to people with excellent credit. Unfortunately, due to unforeseen and unexpected circumstances our credit rating can a take hit. It doesn’t have to be a significant hit to ruin our credit score; a simple over sight on a single payment can sometimes take months to fix. Credit scores are influenced by a variety of factors. To determine the right plan of action for rebuilding your credit, I advise you to read the following recommendations from;


Every twelve months you can request a free credit report (TransUnion, Equifax, and Experian) from to make sure everything is in order with all your accounts. Sometimes you may have an open balance that you’ve already paid-off or potentially a thirty day late that should have been removed. After analyzing your credit report you’ll have a fairly accurate understanding of your credit status. If you have excellent credit, you’ll obviously be able to apply for the card of your choice. Things get a little complicated if you don’t have perfect credit and pose a potential risk to lenders and creditors. Some creditors provide credit to people with sub-par credit, but if your credit has a lot of blemishes, you should apply for a card that doesn’t require any credit.

How to improve your credit with a credit card


If you have an active credit card it is better to stick with it rather than applying for a new one while trying to improve your credit rating. Multiple applications will have an adverse effect on your credit rating and indicate that you are potentially a high risk and desperate borrower.


The single key to having excellent credit is making on time payments. Not having a continuous history of making on time payments is almost as bad as having bad credit history. If the creditors don’t have any data to base their decision on, how can they rate your potential default risk. We advise you to apply for a credit card and start making purchases on that card every month. Be sure to pay off the card on a monthly basis. This shows budget responsibility and will help you establish credit.


Some creditors send emails and messages when it’s time for you to make a payment. The best option is to sign-up for auto payments and if you can’t afford to make full payments every month, some creditors offer a minimum payment option. Making minimum payments is not ideal, but it’s better than getting a ding on your credit.


Treat your credit card like a debit card. Only purchase products that you need and can afford. It’s easy to get sucked into buying things you don’t need and can’t necessarily afford hoping to pay for them in the future. The problem with that mentality is that the debt keeps adding up and it may become too much to handle.



It’s better to have multiple cards with low balances than having one card maxed out. Rule of thumb is to have balances under 60% of your available credit. That doesn’t mean the amount of debt will be over looked by creditors if you keep it under 60%. The creditors will generally look at your ability to repay all your debt and the debt to income ration prior to making a decision. The best advice anyone can give you is, A) be responsible, B) stay within your budget and make all your payments on time.