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Financial health is important to physical health, and sometimes this health must be improved by obtaining a loan
to finance your needs without having to deplete all your investments and savings to obtain the goods and services
you require. The less financial stress you experience, the better your frame of mind and ability to make intelligent,
prudent decisions will become.
We've done a little research to find a few solutions to best suit your financing needs. Some of the most common
types of loans and easy ways to obtain these loans are provided to make determining which loans can best help you
much easier to understand.
Home Loans
Did you know that your home will possibly be the largest savings account you ever own? By paying monthly mortgage
payments until your home is completely paid, you will be building "equity" which represents the amount
of money you have invested toward the principal (loan value without interest) on your home. As you pay each month's
mortgage payment, you are actually making a deposit into this major savings account. Later in life, you will have
ways of accessing these savings if necessary.
There are lenders just waiting for you to apply for a home loan. These loans are easy to obtain, whether from
your local lending institution or from an Internet-based lender. The types of home loans are many and varied in
features. With just a little research, you can learn about all the different types of home mortgages and find the
type that best suits your needs. Simply use the Internet to search for "types of home mortgages." Some
of the results will include: Fixed Rate Mortgage, Adjustable Rate Mortgages, Interest-Only Mortgages, Bridge Loans,
10-, 15-, 20-, 25- and 30-Year Mortgages, Conventional Mortgages, FHA Mortgages, HUD Mortgages, and many more.
You'll find great information explaining what each type of mortgage involves, and the pros and cons of each. No
one except you and your financial advisor can determine exactly which type of home loan is best for your particular
situation. There is a wealth of information on the net to help you find what you are looking for--from easy-to-understand
explanations of mortgage types to finding mortgages for people with bad credit.
A mortgage calculator can also help you in determining what loan type and amount you should choose. A mortgage
calculator simply asks for simple information regarding the amount of mortgage your desire, the anticipated interest
rate, and the life span of the mortgage (length of time you want to pay for your home). The estimated home loan
payments will be calculated for you, giving you a good idea if you can afford the home of your choice. You can
enter varying numbers until you find the amount you can best afford and shop accordingly. Paying too much each
month for home loan payments is a sure way to increase your financial stress and negatively influence your overall
health and outlook on life.
Read the fine print. Some home loans have penalties for early repayment; some do not. Some have other stipulations
such as whether the property can be rented later if you choose or if this, too, is prohibited. Insurance requirements
will be included in the contract as well. Expect to pay some closing costs to initiate the loan, but learn exactly
what costs are required. Be a smart shopper when choosing a home loan.
Home Equity Loans
If you have paid into your "largest savings account" for some time and therefore have built substantial
equity--the amount of principal paid off on the loan--you can withdraw from your savings if necessary. This type
of financing is called a "home equity mortgage." These loans can finance large financial needs such as
unexpected medical expenses not covered by your insurance, home improvements, purchase of additional land, and
many other needs. Again, if you have savings, compare the impact of withdrawing savings from investments or savings
accounts with withdrawing from your home equity. Determine which is best for your situation. Online calculators
specifically for home equity loans are available and free to use.
Payday Loans
If you have a regular job and a checking account, you can obtain a payday loan should an unexpected emergency
arise that you must need assistance paying for immediately. Suppose the car breaks down and you don't have the
funds on-hand today to pay, but next payday you can pay for the repairs. Payday loans are perfect for this and
similar situations. You simply go to a payday loan office with proof of income (check stubs) and your checking
account information. A loan, usually not exceeding your next paycheck, will be issued immediately, or within 24
hours, and you will have to repay the amount in full on your next payday.
Emergencies do arise, and we like to think we will be prepared. Sometimes, however, this is not the case. Don't
stress over the situation; resolve the problem quickly. You will pay a fee for the loan, but compared to the hopelessness
of having no means of paying for the emergency, it is a good solution.
Auto Loans
Everyone needs transportation to get to work, doctors appointments, entertainment, shopping, and social events.
Most people today simply can't pay the cost of a vehicle in cash. Even if you can, with the advent of low-interest
and zero-interest car loans, you can often profit by keeping your savings in place and financing your auto. Your
local lender or the car dealership can help you with auto financing. Often the dealership where you purchase your
auto can provide the best financing arrangement since car manufacturers offer rebates and zero-interest loans in
many cases.
You can use an Internet-based, free-to-use auto loan calculator to learn more about payments. Simply search for "auto
loan calculator" and select one of the many that are available. Input the cost of the auto, the interest rate,
and number of payments. You will learn what you can expect to pay each month. Be sure the monthly payment will
be within your budget to avoid financial stresses.
A hint on using online calculators: if you plan to obtain a zero-interest loan, most calculators will not accept
zero in the interest field. Input .01 or whatever that calculator's minimum interest percentage may be and know
that your payments will be in that range or less.
Student Loans
Education is very important to a successful career. Whether you or your children are the students-to-be, college
and post-graduate education is expensive. Student loans, specifically earmarked to use only for paying for education,
can be obtained and many payment options available. Government student loans are available at reasonable interest
rates, as well as loans from private lenders. The interest rate on student loans is traditionally low and the loans
are reasonably easy to obtain.
A little online research can, again, provide the needed information. Talk to the Office of Financial Aid at the
university or navigate to http://studentaid.ed.gov/ (note:
there is no www. in this address, but it IS correct) for information. Student loan calculations are also available
to determine your estimated monthly payments on student loans; simply search the Internet and choose one of the
many free calculators.
A hint about educational financing: before seeking a student loan, research the possibilities of qualifying for
student grants. Grant money does not have to be repaid and depending on your situation, especially a student who
can declare themselves as living along and being self-supporting can often generate a portion of the monies needed
through grants, reducing the total loans required to complete their education!
Personal Loans
Personal loans are often called "signature loans" since there is generally no collateral required. These
loans can be obtained in amounts from as small as $1,000 up to huge sums, depending on your credit rating. These
loans can be used for many purposes since they are "personal" and not specified for a specific use; the
funds can even be used for your dream vacation, for example. If your credit is not optimal, collateral may be required.
Talk to your local lender or search the Internet for sources of personal financing options. Again, you can locate
a calculator to learn if the estimated payments fit within your budget.
In Closing
Remember, personal health and happiness depends on financial health as well as physical, mental, and emotional
health. Without financial health, how can one expect to be healthy in the over-all sense of the word? Over-extending
your budget with too many loans can be a sure way to stress your health in many ways. Be prudent in your decisions
regarding loans, and shop wisely. Talk to your financial advisor and research each type of loan considered for
the very best options to suit your situation. Make a budget and live within that budget to provide a happy, healthy
future for you and your family!
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