Did you know that in the first half of 2018, lenders mailed some 1.26 billion personal loan solicitations?

That’s a lot of solicitation letters!

This may help explain how Americans ended up owing $125.4 billion in personal loans in the second quarter of 2018.

Another possible reason is the increase in credit application rejection rates that year. After getting turned down for credit, many applicants turn to personal loans instead.

If you find yourself in the same boat, or you seriously need money now, you’re likely thinking of applying for a loan. But before you do, make sure that you first understand what a loan entails. This way, you can make an educated decision on which loan is right for you.

Ready to become a responsible and smart borrower? Then read on to learn more about loans and what to do before taking one out!

Know Your Credit Score

An applicant’s credit score is one of the key factors that lenders consider. This is especially true in the case of traditional lenders, like banks and credit unions.

One reason is that a person’s credit score is an indication of repayment ability. It also shows lenders that a consumer pays their debts and credit obligations on time. So, the higher a loan applicant’s credit score is, the lower the risks that lenders take on.

For borrowers, this means that their credit score affects their loan’s approval rate. The higher a person’s credit score, the greater their chances of getting a yes from a lender. Excellent scores also land borrowers more favorable terms, such as lower interest rates.

So, how’s the U.S. doing in terms of credit performance?

The latest reports show that only 21% of Americans have exceptional FICO scores. If these people apply for a loan, they will enjoy the lowest bank prime rates, which is currently at 5%.

Conversely, lower credit scores equate to higher interest rates. People with very poor credit scores may not qualify for any loan at all. In fact, back in 2017, poor credit scores were the reason why 32% of loan applications were denied.

If you’re unsure of where your credit stands, don’t hesitate to request a copy of your credit report. It’s free, and it’ll allow you to check for any discrepancies in your report. You’d want to dispute and get those possible errors fixed before applying for and taking out a loan.

Always Compute the True Cost of a Loan

Let’s say you already know your current credit score or you don’t have time to wait for the copy of your report. Even in cases like this, you should still take time to compute the total cost of each loan offer you get.

Even a 1% difference in interest rates can make a big difference. Getting a 1% lower interest rate can save you hundreds and even thousands if you take out a major loan.

For simplicity’s sake, let’s use a $1,500 loan with a six-month term as an example. Lender A charges a monthly 7% interest rate, while Lender B charges a monthly 8% interest rate.

With Lender A’s offer, your interest payments would be $105 a month, or a total of $630 for six months. Your monthly loan payments will be $355, which means that in total, you’ll pay back the lender $2,130.

If you miss out on Lender A’s offer and go with Lender B, your monthly interest payments will be $120, for a total of $720. Every month, for six months, you’ll make a payment of $370. At the end of your loan term, you would have paid the lender $2,220.

That’s a considerable difference of $90. That’s money that you could’ve otherwise saved if you compared even just two loan offers. Imagine how much more you can save if you compare three or more!

Factor in Your Repayment Ability

Now that you know how the basic loan payment structure works, let’s talk about your ability to pay back a loan.

For this, you’ll need to deduct your monthly expenses from your take-home pay. Let’s say you make $3,000 a month, and your expenses are $2,500. This means you have an “extra” $500 a month.

If you take out a loan with the exact terms we used in the above example, then you would be able to pay it back. Of course, it’s always a good idea to put away whatever you can into your savings account. But if you’re in dire need of cash now, then technically, you can afford to take out a loan similar to our example.

But what if your salary “left-over” is equal to your estimated monthly loan repayment?

In that case, you’d end up stretching your finances too thin, and you’d be at risk of coming up short once your loan due is up. This may force you to take out even more debt to avoid defaulting on your current one.

To avoid this, it’s best to take out a loan that has a smaller principal. A smaller loan amount will translate to smaller monthly payments. You’ll also pay less interest over the life of your loan.

If you can’t afford to get a smaller loan amount, then at least get a longer-term loan. This comes with lower monthly payments, so it’s easier to pay back every month. However, since you’ll stretch your payments over more months, you’ll also be in debt longer.

Prepare Your Financial Documents

Speaking of salary, you’ll need to provide proof of income and employment to lenders. This goes for both traditional and online lenders.

Online lenders usually ask for fewer documents, which may either be a salary letter or pay stubs. Whereas banks require both, plus W-2 forms.

If you have a side job or also take on freelance jobs, be sure to provide proof for these, too. They add to your income, so they can help boost your chances of securing a loan.

If you’re self-employed, prepare at least two years’ worth of tax returns. Gather receipts, invoices, bank statements, and proof of assets. All these can help prove your ability to pay back a loan.

Lenders will also ask you for government-issued IDs, including drivers licenses and passports.

Don’t Lose Hope if One Lender Turns You Down

Just because one lender rejected you doesn’t mean the next one will. Banks and credit unions aren’t your only option, as there are now more than 200 digital lenders in the US.

That said, you may want to give these lenders a go if a bank denied your previous application and you need money ASAP. They have looser lending requirements, so their loans are easier to qualify for. It’s also due to their more relaxed policies that 38% of approved personal loans in 2018 came from them.

Always Verify the Legitimacy of Online Lenders

Before you apply for a loan online, confirm that a legitimate company is behind the website. Looking up a lender’s registration or license is one way to do this.

Note that each state has its own regulations, but they do require lenders to be a registered business.

For example, in Texas, the law requires lenders like tiempoloans.com to hold a license. They also need to register with the Office of Consumer Credit Commissioner of Texas. Before a lender can get licensed, it must satisfy everything in the state’s finance code.

Other states follow similar lending regulations, so it’s best you know your state laws. This way, you can avoid shady businesses or paying exorbitant interest rates.

Consider Borrowing Against Your Assets if You Need Money Now

If you have no or low credit score, but you have valuable assets, consider applying for a secured loan. In this case, your asset, say a vehicle in great condition, can serve as collateral. Collateral reduces the risks for lenders, so they’re more inclined to approve a loan.

Before you accept a secured loan, make sure that you can really make the repayments on time. Defaulting on this kind of loan can mean losing your property. The lender will liquidate the collateral so they can recover the money they lost.

Never Borrow More Than What You Can Pay Back on Time

This may seem obvious, but the fact is, loan delinquencies are still very common. Just take the 7 million Americans who have serious delinquencies on their car loans. Forbes reports that 11.4% of the 44.7 million student loan accounts are now also on serious delinquency status.

Loans are no doubt helpful, but they can lead to long-term debts. So, be careful when borrowing money. Even if you get approved for a high amount, make sure you can afford to pay it back. If in doubt, take out a lower amount.

Start Shopping Around for the Best Loan Now

There you have it, your in-depth guide on loans and how to ensure that you can pay them back. Even if you need money now, hold your horses for a bit longer so you have more time to explore your loan options. This way, you can compare interest rates and terms and determine which loan offer is best for your needs.

Need more help figuring out your expenses or how to pay back your debts? Then don’t forget to check out and bookmark our site’s Spending Plan and Debt Management pages!

Times are hard for everyone. If you feel as if money is tight for you and your family, you’re not alone: over half of American families are currently living paycheck to paycheck.  It’s a tough reality, but what can you do?

In desperate times, some families consider pulling money early from their retirement accounts. While this isn’t advisable, sometimes it is the only move in a time of impending financial disaster.

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Every year, it’s your job and responsibility as a taxpayer to ensure you properly file and pay your taxes to the IRS based on the U.S. Tax Code. This is true even if you file your annual taxes with a tax professional.

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Check writing is a key component of the overall business cycle. Checks make it possible to exchange money with relevant parties without the need of carrying around large amounts of cash. Even in an era where digital payments have become much more common (Venmo, PayPal, etc.), check writing is still incredibly ubiquitous.

This Photo by Unknown Author is licensed under CC BY

If you are the owner of a business, developing an efficient check writing system will be incredibly important. By being able to ensure that all money is distributed to the correct location on time, your business will be able to maintain positive relationships and improve its overall cash flow cycle.

When deciding which check issuing system is right for you, the first thing you’ll need to ask yourself is whether you hope to use a paper check writing system or an online check writing system. As is the case with any component of your business’ operations, these systems will have both pros and cons attached to them. Before making any final decisions, be sure to compare all available options.

In this article, we will discuss why many businesses choose to use an online check writing service. In the modern era, the development of these innovative systems is something that is far from surprising. By understanding both the pros and cons of online check writing, you’ll be able to determine if it makes sense for your business.

Affordability

The most obvious benefit of using an online check writing service is that, especially when compared to many of the alternative options, it is incredibly affordable. By being able to cut out as much overhead as you possibly can, your business will be able to improve its bottom line.

There are quite a few reasons why using an online check writing service can save your business money. Ordinary costs such as paper, ink, and stamps can be immediately eliminated. Additionally, your business will not need to invest in an industrial printer. 

Popularity

Over the past decade or so, online check writing services have taken the business world by storm. According to some estimates, as many as 67 percent of businesspeople have issued or received an online check at some point in time.

While following the crowd may not always be a good thing, it certainly makes sense when it comes to things such as distributing and receiving funds. For example, if both you and your suppliers use the same checking platform, your funds can be quickly transferred with ease. Before making any changes, you may want to consider speaking with the parties you are issuing checks to (suppliers, employees, etc.) and see which systems they personally prefer.

Accessibility

Another benefit of using online check writing services is that these systems can be accessed anywhere in the world. Thanks to the development of cloud technology, your business can carefully monitor all checks and make any changes as needed.

As long as you have an internet connection, you’ll be able to track the status of all outstanding checks and view instantly generated statements with ease. Depending on the nature of your business, you may also want to extend access to additional parties, such as top-level employees. By staying in control of the entire check-writing process, your business will be much less likely to experience any future cash flow issues. 

Security

When it comes to payment processing, one of the most important things for your business to keep in mind is security. Without a system that is entirely secure, your business will quickly find itself experiencing damaged relationships and, potentially, even facing legal issues.

Considering that, according to JP Morgan, roughly 4 in 5 businesses were exposed to fraud in 2018, it is clear that your business needs to be proactive about keeping all of its financial information secure. Online check writing services have reduced rates of fraud and have put systems in place that can restore your financial security when needed. Though you will still need to be vigilant when dealing with any financial information, using these services can certainly give you some much needed peace of mind. 

Customer Service

The importance of customer service—in all aspects of the business world—cannot be overstated. Fortunately, each of the top online check writing services will have plenty of features that allow your business to manage its digital checks with ease.

Unlike most traditional banks, online checking services can be accessed 24/7, allowing you to quickly resolve any developing issues. Not only will they alert you of any potential checking issues, but they will also answer any questions you have as they inevitably emerge. By developing a positive relationship with your digital checking partner, you’ll also be able to improve your relationships with your employees and your suppliers.

Advanced Technology

With each passing year, the digital checking technology available continues to improve. In addition to the proliferation of new security features, digital check writers have been listening to their partners and making major improvements to their online portals.

Having new technology available is undeniably a very valuable thing. Advanced online checking features allow to accelerate the payment process and gain total control of your outstanding payments. Being able to securely sign, view, and manage your checks from a single location can help give your business a lasting competitive advantage.

Professionalism

Successfully running a business is all about developing lasting and fruitful relationships. In order for other businesses to take you seriously, you need to first take yourself seriously. This all begins with establishing a strong sense of professionalism.

By being able to incorporate logos, use custom fonts, and quickly manage your checks, it will become clear to all relevant parties that your business knows exactly what it’s doing. Even if you are somewhat new to the world of business, using an online check writing service demonstrates a sense of professionalism and tech-savviness that every business ought to strive for.

Conclusion

As you can see, there are many reasons countless businesses switch to using digital checking services each year. With each of these benefits readily available, it may be time for your business to begin thinking about the online checking service that’s right for you.

Developing an effective forex trading strategy requires the ongoing use of both technical and fundamental indicators. Technical indicators rely on the use of hard numbers and patterns in order to predict future price movements. At the same time, fundamental analysis requires paying close attention to events and reports, allowing you to accurately predict which currencies are about to increase in value.

This Photo by Unknown Author is licensed under CC BY-NC-ND

Fundamental analysis is something that is relatively straightforward but will still require careful planning and practice. The value of any given currency will depend on how the currency is performing relative to all others. This means that, in order to become a successful forex trader, you will need to look at the forex market from a big-picture perspective.

According to some estimates, the forex market currently experiences about$5 trillion worth of activity per day. Trading activity increases even further when markets are relatively volatile, as they have been for most of 2019. If you are a trader who is currently overlooking the lucrative forex market, you may be missing out on opportunities to earn some easy money.

In this article, we will discuss ten fundamental indicators that can immediately enhance your overall forex trading strategy. By paying close attention to these indicators, you can stay ahead of the market and increase the probability of earning strong daily returns.

1. Gross Domestic Product (GDP)

Gross Domestic Product is a metric that attempts to account for all economic activity within a given nation. While the metric itself may not be perfect, it is very useful for understanding just how big a given economy actually is. When GDP is growing—especially when compared to other countries—the nation’s currency will become inherently more valuable. In order for GDP to be useful, you should pay attention to raw GDP as well as how GDP has changed over time.

2. Retails Sales Reports

Every month, the world’s largest retail companies will release reports detailing their overall performance. When retail is expanding, traders will flock to the forex market and try to get a slice of the action. Retail reports are also useful for gauging the general attitude of consumers and determining whether a near-future recession is likely to occur. 

3. Crude Oil Prices

Even as our world continues to pursue alternative sources of energy, there is no denying that crude oil is still the backbone of the global economy. Changes in oil prices will have a tremendous impact on global currency values, especially the American Dollar (USD). In order to develop a productive forex trading strategy, pay close attention to the value of crude oil, along with any actions taken by OPEC and other relevant parties.

4. Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a metric used to evaluate whether ordinary consumer goods are increasing or decreasing in value. The CPI tracks how a “bundle” of common goods and services has changed in price over time. In other words, CPI is a metric used to indirectly estimate inflation and determine the usefulness of a single unit of currency. In the United States, the CPI is regularly reported by the Bureau of Labor Statistics.

5. Producer Price Index (PPI)

The Producer Price Index (PPI) is very similar to the CPI, but it looks at things from another perspective. Instead of focusing on how the cost of consumption has changed over time, PPI focuses on ongoing changes in the cost of production. Increases in PPI often occur directly before increases in CPI, meaning you can usually use one metric in order to forecast changes to the other. When both CPI and PPI are increasing, the spending power of a given currency can be expected to decrease.

6. Interest Rates

Interest rates determine how much it costs relevant parties (both banks and individuals) to borrow money. When the Federal Reserve—or any central bank, for that matter—changes interest rates, all global currency markets will be immediately affected. The Federal Reserve has a considerable amount of influence on whether currency markets are expanding or contracting. Because of this, any major decisions being made by the Fed should be directly reflected in your ongoing forex trading strategy.

7. Unemployment Rate

While, like most metrics, unemployment and employment rates can sometimes be misleading, both figures are still quite useful for understanding the general health of the economy. When the unemployment rate is increasing, a recession may be on the near horizon. It will also be incredibly useful to pay attention to the job reports released by the BLS every month.

8. Taxes & Tariffs

Taxes and tariffs will both influence just how valuable a given currency can be. When all else is equal, increases in either taxes or tariffs will hinder the spending power of a unit of currency and consequently make that currency inherently less valuable. If a nation is expected to leave a trade union, as the United Kingdom is expected to do by the end of the year, forex traders will typically position themselves away from their corresponding currency (just take a close look at how the Pound has been performing).

9. Institute of Supply Management (ISM)

The Institute of Supply Management releases a report suggesting whether new orders have been increasing or decreasing. As you might expect, increasing orders sends a signal that economic production is on the rise and that a currency is on the verge of becoming much more valuable. The ISM figure uses 50 as the benchmark for measuring these activities. When the ISM figure drops below 50, a retraction period is likely about to occur. When the ISM report rises above 50, you can expect currency markets to rally.

10. Index Performance

Though the stock market and the corresponding forex market don’t always move in the same direction, there is no denying that the relationship between these markets is incredibly strong. When markets are moving in a bullish direction, the corresponding currency (such as the USD) will become more useful and demand for that currency can be expected to increase. In the United States, three of the most useful indexes are the S&P 500, the Dow Jones Industrial Average, and the Russell 2000. When these indexes are moving in a positive direction, you will likely see the spending power of the dollar begin to rise.

Conclusion

Traders who consistently earn strong returns rarely do so by accident. Instead, these traders rely on a reliable set of fundamental indicators that make the forex market significantly easier to navigate. With the right set of indicators readily at your disposal, you’ll be able to forecast short-term market movements and open profitable forex positions.

If tax time leaves you feeling stressed every year, you’re among many. The American Psychological Association says that money is the leading cause of stress for most Americans.

Gathering all your necessary documents is a small but very important part of the tax filing process. But you could misplace W-2s or never even receive them from your employer.

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