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Archive: personal loans

Tag Archive: personal loans

  1. Thinking of home improvements? Consider a home equity loan!

    Comments Off on Thinking of home improvements? Consider a home equity loan!

    Are you a homeowner? You may be able to use the equity you’ve built up in your home to borrow money for any purpose — including home improvements or renovations, debt consolidation, or college tuition — through a loan with Slovenian.

    There are two ways you can borrow money using your home as collateral — a home equity loan or a home equity line of credit, or HELOC, for short. Both loans are secured by your home, may have significantly lower interest rates than credit cards, and generally involve fees in order to originate. Depending on the situation, either may be of benefit to you.

    How home equity loans work

    With a home equity loan, the homeowner borrows a fixed sum at a fixed interest rate. You receive the loan money in one lump sum, and make fixed monthly payments to pay it back. Interest paid on a home equity loan may be tax deductible, consult your tax advisor for more details.

    In most cases, a fixed rate home equity loan could be used for a consolidation of debt, fund a home improvement, or pay for college tuition. One of the key factors to consider is when you need the money to work for you. Since the lump sum will be made at closing, interest will be charged on the full amount of the loan from the start.

    How HELOC works

    Home Equity Line of Credit (HELOC) works a little differently from traditional loans (including home equity loans). In this case, the bank approves the homeowner to borrow up to a certain amount of money, based on the value of the home. You can then borrow up to that amount of money by writing a check, as whenever you need it. It’s a flexible, revolving line of credit secured by your home.

    This flexibility allows you to only advance what you need in relation to the maximum loan amount. Each month you will make a monthly principal and interest payment based on the outstanding balance. As you pay down your line of credit, you will still have access to the difference between the amount owed and the maximum line of credit you originally took out. Depending on your situation, a HELOC could be considered an option to fund your need.

    The major advantage of a HELOC is its flexibility. However, unlike home equity loans, a HELOC has a variable interest rate. As interest rates rise, this loan will cost more in interest when compared to a Home Equity Loan.

    How to choose between a HELOC or home equity loan

    Home equity loans or HELOCs are suitable for people who own their own homes and have built up a reasonable amount of equity in them. They can be used for virtually anything.

    HELOCs are generally better for people who have long-term, ongoing expenses – such as education expenses or medical bills – because of their flexibility. Home equity loans are often better for fixed, one-time expenses, such as a major home renovation or consolidation.

    Stop into Slovenian Savings & Loan for more information about using your home equity to borrow money. We’ll be happy to review your specific situation and explain the pros and cons of each route.

  2. Debt Consolidation Loans

    Comments Off on Debt Consolidation Loans

    Many people find themselves struggling with debt from multiple creditors. Consolidating these debts can be a significant step toward getting out of debt and save you a great deal of money.

    The idea is simple – you take out a loan that pays off all your unsecured debts, and then pay back the loan over time. You won’t owe less money, but instead of juggling multiple bills each month with high interest rates, you pay one loan payment per month. Most importantly, debt consolidation loans generally have a fixed interest rate that can reduce your interest rate and save money.

    How debt consolidation loans work

    How do you know if a debt consolidation loan is appropriate for your specific situation? Well, for starters, these loans are only used for unsecured personal debt – that is, debts that don’t have collateral behind them. So you can’t use a debt consolidation loan to pay off a mortgage or a car loan, for example. Unsecured debt is most commonly credit card debt, but also can include some types of student loans and other personal loans.

    Again, taking out a debt consolidation loan won’t change the amount you owe, but can make paying back your debts much more manageable. Interest rates on loans are generally much lower than interest rates on credit cards! If you make payments on time, having a debt consolidation loan will improve your credit score, too.

    Types of debt consolidation loans

    Debt consolidation loans can be secured, or tied to an asset such as a home or piece of property, or unsecured. Secured loans do carry the risk of losing the asset and closing costs may apply, but can be for a higher amount, have a lower interest rate, and are paid back over a longer term. Sometimes the interest rate on secured debt consolidation loans is tax deductible. On the other hand, while unsecured loans have no risk of losing the asset, they have a shorter term and higher interest rate, no tax benefit, and are usually harder to obtain from a lender.

    How to get started

    To find out if you’re eligible for a debt consolidation loan, stop into a Slovenian Savings & Loan branch today. We’ll take a look at your situation and explain your options and eligibility – so you can make an informed decision.