Your Questions About Save Loan

Charles asks…

What are the pros and cons of getting a loan from a pay-day loan type place?

Is it smart acquiring a $100 -$150 loan that I can pay back at the end of the month from a Pay Day Loan place? And how high will the actual bill be?

John answers:

Don’t ever do it because the interest is so high that you won’t be able to pay it off and it will be a continuing nightmare. Do without whatever it is you want until you can save up for it, or ask your parents for a loan until payday, that is if your payday would be enough to pay them back. There are no real pros. These kinds of businesses are always on the news taking advantage of people.

Daniel asks…

How exactly do Parent Direct Plus Loans work?

I am planning on taking out a $2,200 loan for summer school. How does the interest work? The interest rate is 7.9%. Does the 7.9% affect only the $2,200 loan or the total sum? I plan on taking out a Stafford loan in the Fall Quarter in order to pay off the Direct Loan because I am worried about the accruing interest. Help?

John answers:

Whoa, wait a minute.

Are you the parent or the student? A parent plus loan is when a PARENT takes out a loan for the student. Not the student takes out a loan for themselves from the parent.

If you are the student, you have to talk to your parents or legal guadian to see if they are willing to take out a loan to pay for you education. Those are some of the higher interest rates, and you should take out a stafford loan in your name to save your parents money.

Jenny asks…

How to obtain an auto loan from a bank/credit union?

I am planning on buying a new car from a dealer in the near future. I would rather take a loan from my credit union. What are the steps in obtaining the loan? Do I just go to the CU and get a approved for a certain ammount, find a car in that range, then have the a dealer draft the bank or do you need to have a fixed price and car when you go to the CU? Any help on the correct process is appreciated!

John answers:

Financing through your credit union can be a blessing, or a curse. A lot will vary depending on the size of your credit union. Interest rates at smaller credit unions can vary dramatically depending on the amount of money they have available to lend. One day they can be considerably cheaper than the marketplace, and next week be 1-2% higher. Check your rates in advance.

Larger credit union’s rates tend to be more stable with the marketplace, but frequently are less that market. It is good to be prequalified for that reason and use that information to go shopping. Find out what rate the dealer can get for you. If it is more than the credit union, then (and only then) tell them what rate you can get from your credit union and ask them to beat it. If you tell them the rate before they show their hand, they will only drop it enough to beat the rate (if they can), but if their rate can be even lower the dealer will not drop it any more than they have too.

Know under what terms your credit union will finance. If it is new them may finance MSRP (sticker price), plus taxes, license, title, fees, etc. However, if it used, they may only cover what a certain book says it is worth plus some extra and that may not be enough. That is when running back and forth to the credit union to find what they will loan on the car can take place and the vehicle can get sold.

However, some larger credit unions have indirect lending already set up at the dealership and the dealer can handle the loan processing right there saving you time and money.

But always, always check terms and conditions, and maybe preapproval, with your credit union first.

Donald asks…

What is the best personal loan to take out? Are there any with little to no interest?

I am thinking of taking a personal loan this year to help me with some extra expenses. Any advice? Thanks!

John answers:

My advice is: If you possibly can get by without borrowing, don’t borrow. The problem with borrowing is that you have to pay it back, and that often gets burdensome. Probably the best place to borrow with little or no interest if from a relative. (Good luck. – I won’t loan to my relatives who don’t try to save.) Next best would be to borrow against a savings account or a life insurance policy with cash value. It may be too late for you now, but I think it’s so much better if you take the money you would be paying on a loan and deposit that money (or more if you can) into a savings account so you will have some money available for unexpected expenses, and even for expected expenses that you’ll now be able to pay in cash. No interest to pay. No burdensome monthly payments.

Thomas asks…

How long do I have to wait before I can take a loan on my house?

I’m getting a great deal on a home which I will be purchasing with cash. My question is, how long do I have to wait before I can get a loan on the house for repairs and upgrades? I’m in missouri if that helps.

John answers:

As soon as it is titled in your name. I assume that you are going to try to flip the property. As a suggestion. Don’t pay cash for the property. Keep out enough money that you think you will need for the fixup. There isn’t any reason to pay for the property and associated fees and then have to pay a lot of them again to take out a loan. Save yourself some time and money.

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