Month: November 2020

People take out loans for many reasons. Some people take out loans for a house remodel, a new computer for work, or a wedding. Whatever the reason for taking out a loan, it’s always a big decision. 

When making a big purchase, you want to consider every option so you get the best rate possible. Many vendors provide their financing solutions. However, it is in your best interest to consider other options. 

One of the best options for purchasing is a fixed rate personal loan. But what is a fixed-rate loan, and why are they better? 

What Is a Fixed Rate Personal Loan? 

Many people prefer fixed-rate loans because the interest rate and monthly payment of the loan are consistent throughout the loan’s life. That’s ideal for people on a tight budget who need to plan for a specific amount each month. 

One common example of a fixed-rate loan is a thirty-year mortgage. With these kinds of loans, purchasers keep the same fixed payment amount for the entirety of the loan until it is completely paid off. The loan doesn’t have to be for a house, though. You can take out a loan on just about anything. 

Most banks will require a statement of what the loan is for before they give you the money. As long as it’s for nothing illegal, and you have the income that shows you can make the payments, you should be good to go for whatever it is. 

Interest rates depend on the loan amount and your credit score. As a rule, the larger your monthly payment, the lower your interest rate. In other words, the quicker you pay off the fixed-rate loan, the less interest you’ll pay in total. 

Fixed-Rate Loan vs. Seller Financing

Many vendors will offer in-house financing for their items. This is tempting because you don’t have to wait for loan approval and experience that instant gratification. 

However, before you commit to seller financing, it is in your best interest to explore other loan options. With a personal loan, you will get a better interest rate. That results in a lower overall purchase cost. 

 With a personal loan, you can decide how much money you need to make the purchase. Instead of financing the entire purchase, you can finance only part of the purchase. 

Seller financing typically has much higher interest rates. So, if you do not plan on paying off the loan within a short amount of time, you will end up paying more in the end. 

With a fixed-rate loan, you know exactly how much you’ll spend overall on the purchase before you sign the contract, no matter how long it takes you to pay the loan. 

What to Consider Before Getting a Personal Loan

Before getting a personal loan from a bank, it’s a good idea to determine a few things. First, figure out how much money you need to borrow. Most lenders have a minimum requirement for personal loans. Some minimums are as low as $500. However, others are twice that. 

You don’t want to take out a loan that’s bigger than you need. If your loan is under $500, consider other options.

Before you qualify for a loan, consider how long it will take to pay off. Some loans can be paid off in a matter of months, others years. Depending on your monthly payments and the loan amount, you have to decide how long you’re willing to take. 

Finally, the most important factor to consider is whether or not you can afford the monthly payments. No matter how big or small the payment is, you have to pay it every month on time to avoid extra fees. 

Credit Scores and Loans

Your credit score determines the kind of rate you get on the loan. It could also determine what kind of loans you have access to. If your credit score is too low for the kind of loan you want, you have two options. You can wait to make the purchase and build up your credit in the meantime. Or, you could have a co-signer on the loan. 

Another thing to think about is how the loan will affect your credit. If you don’t have much credit, having a loan and paying it off may improve your credit.

As long as you pay the monthly payments every month on time (or if you pay the loan off early), your credit score shouldn’t be negatively affected. 

Paying Off Credit Card Debt With a Personal Loan

If you have several maxed-out credit cards, you can use a fixed rate personal loan to consolidate the debt into one payment. Since fixed-rate loans have better interest rates and lower fees than credit cards, this can save you some money as well. 

Some loan companies will pay the loan money directly to the credit card company. That way, you only have to worry about paying the one fixed-rate payment a month. 

Other people choose to refinance their student loans into fixed-rate personal loans. This is an option for people who cannot afford their previous monthly rates. However, this keeps you from taking advantage of any government assistance with your student loan.  So, whether that is helpful to you or not depends on the amount of student debt left on the loan. 

Find More Finance Advice

If you’re thinking about making a purchase, consider all your options. Before you go through with seller financing, look into your fixed-rate personal loan options. That could save you money and hassle in the future. 

Before settling on a loan, make sure you can afford the monthly payments, check your credit score, and ensure you have a regular, reliable income. If you do those things, a fixed rate personal loan is a good option for you. 

If you found this article helpful, visit our blog for more financial advice. 

If you have a checking or saving account with a bank, you may know something about bank fees. Yes, those dreaded fees that come up ever so often. They are pricey and bothersome as they tend to come up in times that you may not have money in your account to pay for them. 

It seems that nowadays banks have a fee for everything. These fees can certainly add up fairly soon. Too many, and you might end up having to close your checking or saving account as you will find yourself having a low account balance or, even worst, find yourself in the negative. 

It is important to be familiar with the bank fees that are imposed by your bank. You can avoid many annoying fees that arise when using your bank. We all know that saving each penny matters, so learn how not to fall victim to charges.

1. Overdraft Fees

Bank fees can hit you from the left and right. One of the most common is the overdraft. You may be familiar with this fee if you have withdrawn more money then what you had available in your account. 

This is a bank fee that one can find themselves paying if they have purchased something that cost more than the money they have in their account. In the case of an emergency, you may find yourself having to pay for this fee if you end up buying something and you don’t have the money for it. 

The amount that you are charged for an overdraft depends on the bank. Fortunately, there are ways to avoid overdraft fees. Contact your bank associate to inform him or her that you want to opt-out of the overdraft service. This will prohibit a transaction from being approved if you don’t have the funds available in your account. 

2. Monthly Maintenance Fees

One of the most dreaded bank fees is the monthly maintenance fee. This is like a fee that you can expect to see every 30 days. Some banks have it in writing that they charge a fee to maintain your account. They inform you of this when you open the account. 

In most cases, monthly maintenance fees are avoidable. You have to meet certain criteria to avoid monthly maintenance fees. For example, if you have a large balance in your account, you may not need to pay such fees. If you have direct deposit, you may not need to pay for monthly maintenance fees.  

3. Card Replacement Fees

Card replacement fees are what you have to pay to the bank if you need to order a new debit card. If you lost your debit card or accidentally damaged it, you may have a double whammy. Not only do you no longer have a debit card, but you must also pay the bank to receive a new one. 

The bank will charge you a fee for this service. The new card may take about a week to be mailed to you. If you want it to come faster, some banks give you the option of expedited service. Pay a little bit more for rush delivery.

Yes, this is like rubbing salt into your wounds. 

Unfortunately, there is not much you can do this avoid this bank fee. If you lose your debit card, you will need a replacement one. You need to keep your debit card safe so you do not lose it or damage it. 

4. ATM Fees

There are fees that you may have to pay for if you use an ATM that is out of your bank’s network. If you find yourself in an area where there are no ATMs sponsored by your bank and you have an emergency, you may have to withdraw from an out-of-network ATM. 

This is a bank fee that can cost you double. The owner of the ATM may charge you a small fee, and your bank will charge you another fee. 

To avoid this type of bank fee, make sure you carry money, especially in the case of an emergency where you may need to pay with cash as credit cards may not be accepted. If you are looking to open a new bank account, make sure to open an account with a bank that has a large network of ATMs.

Also, consider asking your bank if they can reimburse you for the ATM fees. This is a service that some banks may provide you. 

5. Inactivity Fees

You may be asking yourself, “Why do banks charge an inactivity fee?” Quite shockingly, many banks do charge inactivity fees. If you have a bank account and have not used it in a specific period, expect to see this type of bank fee in your bank account statement. 

Banks do not want to have customers who have inactive bank accounts. It is not good for their business. You may find yourself having to pay for this fee if you have not had any activity in your account in a year. 

These Bank Fees Can Add Up 

No one likes to lose money, especially if they have to give it away to a bank. Bank fees can add up. And for the most part, they can be avoided. 

Make sure that you are aware of the bank fees that your bank charges. This information you can find on a bank’s website. Take the actions that are necessary to avoid bank fees. 

Consider joining a private bank that may not impose these charges. If you would like to read more about private banks or finance-related topics continue to explore the website. 

Most people need only two bank accounts: one checking account and one savings account. This keeps things simpler and your finances easier to manage.

Savings accounts limit your access to your money, which is why they’re best for saving. Checking accounts, though, allows you easy access.

These are for spending, so they’re for paying bills, withdrawals, and so on. That’s why every person must have them.

If you’re a beginner to all these, you’re in the right place. Keep on reading for some tips on opening a checking account.

1. Know Your Needs and Frustrations

When opening a checking account, you first need to choose a bank. However, all the options can overwhelm you.

There are online banks, traditional banks, and even credit unions. Then, there are lots of options under each category.

To start choosing a bank, know your needs and frustrations first. What services are important to you? How about perks you’d like to get with your checking accounts?

Then, know what frustrates you, as well. Do you want to avoid huge fees? Do you have issues with certain features or requirements?

If you travel a lot or are online often, you may also want to use mobile banking. Check if the bank offers that as well.

Knowing what you like and don’t like will allow you to shortlist banks and the types of checking accounts.

2. Review the Features of Different Banks

Once you have a shortlist of different banks, it’s time to review their features, fees, and services. Check the minimum balance requirements and any fees, like the monthly service fee, overdraft fee, ATM fee, printed statement fee, and other fees you can incur.

You should also check out the insurance that the bank provides. Make sure it’s from either the National Credit Union Administration (NCUA) or Federal Deposit Insurance Corporation (FDIC).

The interest and rewards will also vary per institution. Check which features are more convenient or more preferable to you. The ATM network is something to consider, as well.

3. Consider a Lower Risk Account

Some banks and credit unions don’t allow you to overdraft. Meaning, you can only spend the money you have in your account. Even for online bills payment and checks, the account won’t let you overdraft.

Such accounts pose lower risks as you won’t get surprised with an overdraft fee or other common banking fees. These can go unnoticed, especially when people think they still have money they don’t have. You also cut the risk of losing your account privileges only because of some unpaid overdrafts.

Don’t hesitate to ask the bank if they have a “no-overdraft” account. Some have them but don’t market them, while others may not have them at all.

4. Visit the Bank In-Person

Modernized banks and online banks allow you to do everything online – from applying for accounts to sending e-documents. This makes for a smoother experience as you can open an account without stepping foot out of your home.

However, some people might prefer doing this process in person. If this is you, don’t hesitate to visit the bank you’re interested in. This also gives you an idea of their locations and if they have one near you.

This is also the preferred choice of other banks that are yet to modernize. In that case, you’ll have to schedule an appointment.

5. Ask the Right Questions

When you visit a location in person, prepare a set of questions to ask the teller, particularly about opening a checking account balance. Don’t hold back; opening up an account can be a long-term commitment.

Ask about all kinds of fees you can incur and how you can avoid them. Make sure you know the minimum balance requirements. And, clarify if this is for one account only or for across all accounts you have with them.

Clarify the withdrawal and transfer limits, as well. Then, ask how much are the fees if you go over the limit.

6. Look for Online and Mobile Features

Not all banks are up-to-date with recent technologies. As such, don’t expect them all to have mobile and online banking features.

A bank app is a must because it makes banking more convenient. You won’t have to fall in line to transfer money, for example, and you’ll have access to your balance at all times. Some of them will even let you deposit checks via a mobile app.

So, before you sign any contract, make sure the bank has an app you can access online or download to your phone. Seeing as how we spend an average of 6 hours and 42 minutes per day on the internet, online banking is a non-negotiable feature.

7. Prepare the Minimum Deposit

The initial deposit should matter in your decision-making because, in some banks, the opening deposit can go as high as $100. Most usually ask you to deposit around $25 to $100 to open an account.

Find out if your chosen bank and account needs a deposit and prepare that before applying. Even if you’re qualified and you have all the documents you need, you won’t be able to pursue the application without it.

Some accounts don’t require a deposit right away, though. Look for these accounts if the deposit is an issue for you.

8. Bring the Necessary Documents

To ensure a smooth process, research all the documents you need to bring when going to the bank. It’s a fairly simple process, but only if you prepare everything you need ahead of time.

Research the requirements for a checking account from your bank of choice. Remember that these may be different when you’re underaged or more than one person is opening the account.

Aside from the filled-up forms, banks usually require identification documents. In general, you’ll need a government-issued ID, SSN or TIN, and proof of address. You may also have to bring your student ID, power of attorney, or anything else for special cases.

Review Checking Accounts Before Committing

What we can take away from this is that you should review checking accounts before opening one. This ensures you get the best option for you and you’re satisfied with all the features, requirements, and terms before signing a contract.

If you have any questions, though, we’ll be happy to help. Contact us today.

In 2018, over two-thirds of adults from the UK used some form of online banking. Though you may not think of banking and finance work as exciting or high-stakes, the field is evolving rapidly. As banking moves more and more digital, you may be wondering if your current bank is keeping up. 

If you’ve been thinking about switching to a new bank but are still on the fence, read on. There are a few telltale signs that it’s time to make the switch. 

1. Limited Online Banking

Like we said, online banking is the newest frontier. In fact, there are many banks with no brick and mortar branches. These online-only banks are cutting-edge. 

Therefore, there’s no excuse for your bank to have a clunky mobile app or inaccessible website. If your bank isn’t keeping up with the digital revolution, it may be time to go. 

Of course, if you want a bank that still has physical branches, you have options as well. Many banking institutions have great technology and still allow their clients to bank in-person. 

Just know that you can easily upgrade your online banking experience!

2. The Service Fees Aren’t Worth It

Some banks pull tricks to try and get as much money from you as possible. This includes raising their overdraft fees, raising minimum balances, and charging a returned mail fee. 

If your bank is trying to take as much money from you as possible, run the other way. Many banks have reasonable fees, or even better, fee-free banking options. Banks with lower fees are more likely to view their clients as people, rather than potential profit. 

3. Your Savings Returns Are Unimpressive

Is your savings account languishing instead of growing? Are you earning pennies on your investment? Look for another bank. 

You can find lots of high-yield savings account options while shopping around. These typically offer between 1.2% and 3% interest rates, while some banks only offer around .6%. 

You can make your savings account work for you, instead of the other way around. Research other institutions and their high-yield account options. 

4. Getting Your Money Is A Hassle

With the advent of online banking, getting access to your money should be easier than ever. If a bank offers anything less than lightning-fast transfers, they’re being left behind. 

You may think that having slow access to your funds is a compromise worth making. But if you encounter any sort of emergency and need money immediately, you’ll wish you’d switched to a lower-hassle institution. 

Avoid banks that take a long time to finalize your deposits. Look for ones that will let you use your money as soon as you leave the branch. 

5. You Have Monthly Fees On Your Checking Account

Your current bank may have a surprisingly low monthly rate. However, even £10 is too much when it could be £0! 

Many banks offer an option where you only have to pay a monthly fee if you are below the minimum balance. But others have neither a minimum balance nor a monthly fee. Shop around and see what your local institutions offer. 

A monthly fee to keep your checking account is a sign that a bank views you as a number instead of a person. Monthly bank fees are unpopular among consumers, so many institutions are doing away with them altogether. Don’t settle for a low monthly rate when you could have none! 

6. The Minimum Balance Is Too High

Some banks offer high-yield checking and savings accounts but also require a higher minimum balance. If you’re in a tighter spot than you were when you opened your account, you may have trouble keeping the minimum balance. 

This is one of the most practical reasons to switch banks. If you cannot afford to stay with your original bank, you can find high-yield accounts elsewhere. You may have to compromise, but that’s okay. 

The stress of meeting an unattainable minimum balance isn’t worth it. You can make this easier on yourself by making a change. 

7. Lack Of Accessible ATMs

Though the world is moving more and more online, there are still situations in which you need cash. Though there seems to be an ATM on every corner, some banks charge exorbitant fees to use out-of-network machines. 

If you can only use your bank’s proprietary machines without paying a fee, finding the right ATM can be a hassle. This becomes an even worse problem when the right ATMs are few and far between. 

Find a bank that has convenient ATMs, or doesn’t charge ATM withdrawal fees. You deserve convenience, and shouldn’t have to pay to access your money! 

8. Customer Service Is Rude Or Unhelpful

When you encounter a problem with your bank, their customer service should be swift, polite, and helpful. You should not settle for less, especially when it comes to your money!

Your bank should make it easy to contact customer service. There should be multiple methods of contacting them: instant chat, phone number, email. The representatives should be kind and helpful. 

If you have had multiple bad experiences with a bank’s customer service, it’s probably time to switch. Even if there is little else to critique about your bank, bad customer service can drive you away. Your bank should be working to make sure you stay with them for as long as possible.  

Find A New Bank That Puts You First

When looking for a new bank, you may not be sure if it’s really time to change. There will always be a million reasons to stay, but just know, you don’t have to settle. The field of banking is advancing fast, and you can have a better banking experience than ever. 

Don’t be afraid to do your research. Don’t make your decision in haste, and ensure that your new bank works for you.

For more advice, trends, and market analysis, read through our blog. At Capital Finance International, we strive to bring you finance news that’s interesting and helpful. If you want to learn more about how to bank better, read our blogs now.