Personal Finance Tips

No doc loans are mortgages that do not require the borrowers monthly income amount and employment source to be filled in on the mortgage application. No Doc loans are a great program for the borrower that just doesn’t have the ability to come up with the required paper work for a conventional or stated income loan such as a self employed or unemployed borrower. No Doc mortgage loans are available for the purchase or refinance of Single Family homes, town homes and condominiums. No Doc Loans are also available for non owner occupied investment properties as well, but have different lending guidelines that will apply and they are only available at lower loan to value ratios and will require a down payment or equity for a refinance.

A no doc loan means that no documentation regarding amount or the source of the borrowers income is required; assets are left off the mortgage application as well. No doc loans are underwritten entirely on the strength of the borrower’s credit report and down payment amount or equity in the property. Past credit history and credit score are very important factors when applying for a no doc mortgage loan since the underwriters final decision is based on very limited information. Credit scores of 680 or above are commonly required for a No Doc mortgage loan. However many sub prime lenders offer No Doc mortgage loans but as the sub prime industry tightens up these are the first programs to be eliminated due to the risk involved to the lender.

The only real drawback to a No doc loan is the higher interest rate. Interest rates can be as much as 2% higher for a no doc loan compared to a standard fully documented loan. Even with the higher interest rate No doc loans are perfect for people who have changed careers or have income that is hard to prove, seasonal or very wealthy borrowers who do not want income and assets exposed. Even though they do not require income amounts to be listed on the loan application No doc mortgage loans are not a opportunity to lie about the amount of your income to buy a more expensive house that you normally would not qualify for. Despite the fact that you have excellent credit the lender will typically charge you a slightly higher interest rate than if you were providing full documentation of your income and assets.

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During times like this when the world is reeling under recession, banks are trying various techniques to get more business. One of the strategies applied by banks to lure prospective customers is by offering low interest personal loans. Though the name seems very tempting and alluring, remember “all that glitters is not gold”. There are many hidden facets to such loans which people are generally unaware of. You must take all these into consideration before you decide on which loan you would like to apply for.

There are various types of low cost loans available to consumers. We shall talk about four of them in this article to help you understand the benefits and drawbacks of each personal loan. The first type of low cost loan available is the secured personal loan. This type of loan offers one of the least interest rates to the borrower which is the main benefit of this loan.

The drawback is that the loans can be availed only by pledging collateral like a car or property. Failure by you to repay the loan will result in the loss of your collateral. Since the lender stands to benefit irrespective of if the loan is repaid or not, the interest charged is very low.

The next type of low cost personal loan provided by the bank to its customers is the unsecured personal loan. As the name says, you do need to have any collateral to avail this type of loan. The lender is not well covered if the borrower does not repay his/her dues on time. Due to this risk running high, though priced low, these loans have a higher rate as compared to the secured personal loans.

In addition to the type of loan that you would like to opt for, there are many other decisions that you need to make. You need to decide on which bank you would like to borrow from. Since every bank around the street corner is willing to offer personal loans at low interest rates, it is better to shop around and go in for the one that suits your needs the best. Also, ensure that you have good clarity of all the charges involved during repayment. You don’t want to get up in the morning and realize that you have been duped!

Nothing in the world comes cheap. Remember the saying “precaution is better than cure”. Hence, it is better to take time while opting for a personal loan at low interests rates rather than getting rejected at a later time.

How can one avail personal loans? Are there different types of loans in the personal loans category? As the types of personal loans are different so are their requirements. Broadly personal loans can be divided into two types – one is secured and the other is unsecured.

People once clear about the personal loan options will be in better position to decide which type of loan will work for betterment of their life instead of making their life hell. Many lives make and break with the loans. After all, unbearable debt burden will take steam out of your life.

The first type of the loan is called a secured loan. As the name suggests availing secured personal loan requires the borrower to give some kind of collateral or security for sanction of such loan. The very common types of collateral or security used to have secured loan is personal property such as land, home or automobile. A loan in which your home acts as collateral or security is termed as a second mortgage loan or a home equity loan. The other things that can be used as security for secured loans are bonds, stocks, saving account, and fixed deposits.

Lenders are more flexible when they are to grant secured loans. In secured loans the borrower is offered low rate of interest as well as longer period of repayment when compared with unsecured loans. The drawback of secured loan is if you default on the taken loan or fall short to repay it, the lender can seize the collateral used to get the loan.

In case you do not have any collateral to put as a security you will not qualify for secured personal loan, unsecured personal loan is the only option left with you. In unsecured loan you don’t require any collateral to secure a loan. For non homeowners unsecured loan is an excellent option. The requirements needed for an unsecured loan has to largely depend on the credit history of the borrower. The past credit history of the borrower is of utmost importance when loan is to be sanctioned without collateral.

The approval of unsecured loan has higher chance for borrower with higher credit score. A good credit score is helpful in securing higher amount of loan and that too at lower interest. With poor credit score, unsecured loan can still be provided by the lender but be ready for higher rate of interest.

Fee-for-Service or indemnity plans are the oldest type of health coverage out there, providing you with the greatest extent of flexibility. You are absolutely free to choose the doctor, specialist, surgeon or even the place you will receive your medical service from and it doesn’t require any approvals or referrals from other institutions. So what’s the catch?

The drawback of Fee-for-service plans is that they are quite costly and usually have higher deductibles than managed care plans. Besides, you will also have to pay a large part of your actual medical bill out of pocket. That’s the price you have to pay in order to obtain the flexibility provided by these plans. But this doesn’t mean that there are completely no restrictions with fee-for-service plans.

For instance, fee-for-service health insurance plans will not provide coverage for preventive healthcare services, meaning that any vaccinations, regular check-ups and physical exams will be paid for entirely out of the customer’s pocket. This makes fee-for-service plans quite inconvenient for families who need regular medical services and doctor consulting.

Fee-for-service plans require an annual deductible to be paid in order to receive the coverage benefits from the insurance provider. Once you do so, your medical expenses are distributed between you and the insurance carrier. You will usually pay something between 20% and 30% of the entire service fee and your insurance company will cover the rest. So it’s really important to choose a plan that has a smaller co-insurance (the part you have to pay out of pocket) before actually purchasing it.

With most fee-for-service plans you also have the so-called “caps” that are basically the upper limits of your yearly deductibles. These can be anything from $1,000 to $5,000 not taking your monthly premiums into account. So it’s better to see what your plan carries before signing it if you really want cheap health insurance with fee-for-service.

On the other hand, fee-for-service plans offer comprehensive and timely coverage when you need it, especially when there’s a medical emergency. You are completely free of the bureaucratic restrictions and setbacks of typical managed care plans that can turn down any desire to receive medical assistance in the first place. However, bear in mind that fee-for-service plans won’t be suitable and attractive for everyone. If you want to get comprehensive coverage for preventive care or have a large family with diverse healthcare needs you better investigate managed care plan options instead of indemnity plans.

And don’t forget about comparison shopping when purchasing fee-for-service coverage. Try to get as many health insurance quotes from different providers as possible and compare them in detail. You will be surprised to find out that different companies have different premiums, “caps” and co-payments that will all contribute to the final cost of your insurance coverage. So it’s always better to take some time comparing you options rather than complaining that you have a costly insurance plan after purchasing it.