Cash Loans Online

Personal loans aren't cheap, but they can be easy and fast to get compared with other types of financing. And the loan, typically $5,000 to $35,000, can be used for an almost unlimited list of needs, wants, goals and dreams.
The most popular use of a personal loan is to combine other debts, such as car loans, credit cards and payday loans, into just 1 loan with a fixed rate, fixed monthly payment and closed-end term.
Before you take out a loan, it’s important to determine how much money you’re going to put down. A hint: Zero is NOT the best answer, unless you’ve got cash stashed away to pay off the loan that’s earning more money than what you’ll be paying in interest on your new loan. Businesses all over the place work to entice consumers with the “No Money Down!” message, as if it’s a great thing to finance 100% of what you’re buying. However, this can lead to a big mountain of debt and large payments real quick. When we work to teach our kids about money, we try and instill in them that it’s best to simply pay cash when possible, or to have the money for the loan earning a high interest rate elsewhere, but we also encourage them when they don’t have the money to pay the loan in full, that it’s important to put at least 20% cash down for whatever item they’re borrowing for.

The Debt-to-Income Ratio

The debt-to-income ratio is a number that many people are still largely unaware of in their lives. A person’s debt-to-income ratio is calculate by dividing all of your minimum monthly loan payments into your monthly income. So, if I had loans totaling $1,000 a month, and my income was $3,000 a month, my debt-to-income ratio would be 33%. Mortgage and other loan companies, when determining your DTI ratio, will use your gross monthly income, but many personal finance experts suggest using your net monthly income for a more accurate picture of your DTI ratio. Whether you use your gross or net monthly income to determine your DTI ratio, I think it’s safe to say that a 30-35% DTI ratio is about as a high a ratio as a person would want to safely go when they work to take out a loan. If your new DTI ratio after the loan you’re considering taking out is above 35%, you might want to reconsider the loan, or put a higher amount of cash down. The important thing is to not put yourself in a situation where the new monthly payment you’ve taken on has put you in a financial position where you’re left without any expendable cash at the end of the month.

The Term of the Loan

These are the days of the 40-year mortgage and the 7, 8 and 9 year car loans. Before you take out a loan, it is imperative that you think long-term when deciding on how long you want to make payment on what you’re buying. When you work to take out a loan, think seriously about digging in and getting it paid off as early as possible. This doesn’t necessarily mean that you’ve got to take a higher payment than you’re comfortable with for the sake of paying the loan off early, but instead, commit to making extra payments whenever possible, even if it means you’ve got to sacrifice a few dinners out, some new clothing, or living without cable TV until the loan is gone.