Tuesday, January 18, 2011

Dealing With Rising Costs

Sadly, we don’t live in a world where one can realistically be expected to save their money. It just doesn’t happen anymore! A few decades ago that could have happened but not any more. It used to be that your income was far greater than your expenses and you could put quite a bit away. But now our income is often outstripped by our expenses! Our income has not kept up with rising prices and rising taxes.

So we’re forced to make due with our current income. Sure we can try to increase that income over time, through pay raises or moonlighting or getting a better job, but the reality for many of us is that we have to figure out a different way. One of those ways is to intelligently use loans to help you with your finances.

Perhaps it means getting a payday loan to bridge us to the next paycheck. Or maybe other times it means using our credit cards to consolidate our monthly expenditures and paying it back once at the end of the month. And still other times it means getting a loan to help us buy the things we need.

There are two types of loans. An unsecured loan is money that a lending agency gives to you based on their assessment of your risk. Your credit rating is one of the ways they make that decision. And since they lose their money if you default on your payment, the risk is higher so the interest rate is higher.

However, if you need to borrow more money or you want a loan at a more attractive interest rate, or you want some flexibility with the repayment terms, then borrowing against your assets is the way to go.

Some examples of assets, or equity, that you just might be able to use include your house your car, your stock certificates, or some other kind of valuable possession. Borrowing against these assets assures the lending institute that they can recoup their losses if you fail to make your payments since there is an alternate form of payment.

Lending agencies like this because it minimizes the risk they take. And you’ll love it because it increases the amount of money you can potentially borrow, it lowers the interest rate you’ll have to pay, and it lengthens the amount of time you’re expected to pay the loan back! What could be better than that?

Some excellent uses for secured loans include such things as debt consolidation or house improvement loans. In both cases, you’ll find that a secured loan gives you a good amount of money at an attractive rate so you can reduce your debt payments or increase the value of your house affordably!

We live in a world that expects us to borrow now and then. Don’t you think that a secured loan is the way to go the next time you need to borrow?

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