Be smarter when talking about finances

A Home Improvement Loan for the Home You Love(1)

A Home Improvement Loan for the Home You Love

The world is a very dynamic place. Nothing is constant here and everything keeps on changing. So why your house should remain the same? Bringing changes to your house by repairing or remodeling is known as home improvement. Plumbing and electrical work are the most common repair work. House renovation includes a number of things. You may go for painting or wall papering to give a new look to your house. You may want to change the interiors of your house. New furniture can give a new life to your house. Build separate rooms for grown up children. That’s not all. Kitchen redesigning can make your wife happy.

Before carrying out home improvement, the first question that comes into your mind is how to finance it. You do not have to bother about it anymore. Banks, building societies and private lenders offer home improvement loans . The loans are tailor made according to the specific requirements of borrowers. The repayment terms can be adjusted as per your affordability. If you cannot afford to pay a hefty sum every month, then you can spread the loan repayment over a longer time frame so that your monthly installments become small in amount.

The rate of interest on home improvement loans depends upon a number of factors. The type of loan influences the rate of interest. Secured loans carry lower rate of interest than unsecured loans. Since secured loans are less risky for lenders, they charge low rates of interest on such loans. Another factor that influences the rate of interest is the credit score of the borrower. Borrowers having a good credit rating are charged lower interest rates than those with a poor credit history.

You can take out a personal loan to undertake home improvement. Personal loans are usually unsecured. It is very easy to obtain a personal loan. The rise in demand for personal loans has given a good business opportunity to lenders. Therefore, lenders are always ready to offer personal loans . If you are a homeowner, you may use your house to get a homeowner loan. A homeowner loan can also be used for home improvement

Low Interest Payday Loan How To Figure Out The Apr Of A Payday Loan

Low Interest Payday Loan - How To Figure Out The Apr Of A Payday Loan

The annual percentage rate (APR) of a payday loan is a helpful tool to compare rates of lenders. According to the “Truth in Lending Act,” passed by Congress, payday companies are to provide you with the APR. Some companies list this information on their site, while others only provide the fee amount and give you the APR after you have submitted an application.

You can figure out the APR based on the fee amount by using the following formula. This way you will have an accurate way to compare costs, enabling you to find the best deal.

The Formula

Begin by multiplying the payday loan fee by the number of pay periods in a year. So if a payday loan lender charges a fee every two weeks, then there are 26 pay periods.

For our example, we will use a loan fee of $15 for every $100 borrowed. This is a typical rate, although you can find lower rates for first time borrowers.

The formula looks like this:

15 (loan fee) x 26 (pay periods) = 390

The 390 equals the yearly charge for the loan. To find the percentage rate, we will have to do one more step. Divide the yearly charge by the loan amount, then times the total by 100 to get the percent.

For instance, we will take 390 and times it by $100 since that was our original loan amount. The formula is:

390 (yearly charge) x 100 (loan amount) = 3.9

3.9 x 100 (to get the percent) = 390% (APR)

What It Means

Payday loans give you a cash advance with the intention that you will pay back the loan on your next payday. You will not be paying $390 in finance fees for the year, only the $15 for the pay period. However, if you roll over the loan, you will be racking up the finance charges.

Cash advances are best used for temporary emergencies, like covering a bounced check or car repairs. For longer term credit, it is better to look at a credit card or personal loan. While these types of loans will affect your credit score, they will also provide better rates.