It happens every day in cities across the country.
Work-a-day Americans find themselves short of cash. Maybe their hours have been cut. Perhaps they experienced a medical or family emergency. Most likely, though, they’ve simply run out of money to pay the bills and need to find a way to get through to the next payday. So they turn to personal installment loans for relief. Yes, small personal loans are exploding in popularity. Here’s why: 1) Applying for a personal installment loan is simpleThe way personal installment lending works is actually pretty simple–much, much simpler than the process involved with applying for and obtaining a loan from a traditional bank. Where traditional banks require a lot of documentation, paperwork and perusing of job history, references and credit reports, personal loan lending often only requires that you have a job and a valid government identification card. It works like this:
Small personal loans typically don’t require an extensive credit historyLife happens–and it isn’t always pretty. This is especially true for young people who are just getting started and trying to build a solid foundation. They may have jobs, be in school, have just signed leases on their first apartments or become parents. They’re working hard, doing everything right … and then life happens. A car accident. Unexpected illness. The washing machine breaks. All of these things–and more–can happen at any moment and wind up costing a lot of money. For those with a lot of money in their savings account or a long and impressive credit history, unexpected expenses might not qualify as emergencies. They can tap into their savings accounts or get loans pretty easily. But for those who are just scraping by or who do not have a long credit history (or good credit or any credit at all), unexpected expenses can send you into crisis mode. Thankfully, they can turn to personal installment loans to get access to quick cash that can be used for emergency purposed. No contractsAfter the Great Recession struck in 2008, many people lost their faith in traditional lending institutions. People lost their jobs. Families lost their homes. Cars were repossessed and many wondered what had happened to the “American Dream,” which was largely built on the belief that banks had the backs of Americans from all walks of life. Many people turned their backs on banks and other traditional lending institutions. They did not want to be roped into long-term contracts that were designed to help bankers get rich. They simply wanted financial products that helped them get their hands on the money they needed, when they needed it, without having to turn over months or years of their lives to get it. Enter: personal and installment loan lenders. The terms of most payday loans are for 30 days or less. They are specifically designed to help people get by until the next payday. It’s a temporary solution, designed to help the person borrowing the money. People like that. Interest ratesImagine you want to purchase a new gaming system, television or phone. Or you have to fix your car, take a trip to see a loved one who is sick or pay for an emergency medical procedure for yourself–but you don’t have the cash right now. You have some options. You could put off spending the money until you’ve saved enough, which might make sense if you’re buying a TV, but probably isn’t feasible if you need an emergency medical procedure. You could apply for a short-term loan from a bank, but unless you have stellar credit and a slew of references, there’s no guarantee you’ll be approved. And even if you are, the process could take a week or more. You could also put the expense on a credit card, which will likely charge you a lot of interest, allow you to make “minimum payments” over the course of many months and wind up costing you a lot more in the long run. Or you could visit a payday lending company, get the money immediately, take care of business and pay it back the next time you get paid. Sure, you’ll pay a fee that is about 15 percent of the total value of the loan, but that will likely still wind up being less than what you’ll pay if you choose the other options (besides saving for the expense). Relatively low interest rates (if the loans are paid back within a few weeks) are one of the key reasons the popularity of payday loans is soaring. Anonymity Many people don’t like talking about money, much less being judged for their current financial status by bankers, friends or family members. The relative anonymity that payday lending provides is one of the most important reasons it is proving so popular. People don’t have to bare their financial soles to bankers, who will then hold their financial futures in their hands while they sit back and evaluate the loan applicant’s past, present and future. People also don’t like to tell friends and family members that they are in financial need. They don’t want to cause a scene, don’t want to be judged and simply don’t want the people they know in their personal business. What they want is access to a simple, helpful loan. And that’s exactly what payday lending provides.à Source: Why Personal Installment Loans are Exploding in Popularity from PersonalMoneyStore.com
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You’ve probably heard the old adage that you have to spend money to make money, and it’s true. If you want your business to grow, you have to be able to invest in the expenses of growth, like equipment, advertising, and property.
The problem is that managing all those costs in addition to the expense of running your business can be tricky, and paying upfront for your business needs is often impossible until your business sees more growth. It’s a circular problem. You can’t grow unless you invest, but how can you invest in your business while keeping money in your business for operational costs? The solution may be small business loan. While taking on debt can seem scary for small business owners, a loan can help you finance changes in your business that can result in a high return on your investment. Here are 5 reasons why your business might need a loan: 1. ExpansionProbably the most obvious reason to consider a small business loan is to invest in an expansion opportunity for your business. When business is booming, continuing to grow your business can help ensure that your profits don’t plateau or shrink. Of course, further growth has many costs, such as advertising, new property, building renovations, and increasing staff sizes, and it’s unlikely you’ll have the cash on hand to cover it all unless you take it from the funds that keep your business operational. Loans can help you cover the expenses of expanding your business without eating your operational funds, so that you can continue to impress customers while growing your business. 2. InventoryOne of the largest and most difficult to manage expenses in many industries is inventory. The problem is that you have to invest in the products you’ll carry before your customers can buy them and offset the cost. Once you’re operating, you’ll need to continually expand and replenish your inventory to keep up with demand and to provide better options to your customers. This expense is even more difficult when your business requires seasonal inventory, such as winter coats. By taking out a loan to offset inventory costs, you can stay ahead of trends and customer demand without hurting your cash flow. 3. Cash FlowCash flow is always a challenge for a small business, and it can continue to be a problem when you’re dealing with customers who don’t pay for services or when you have unsold inventory that needs to be moved to bring in new products. These issues are even more problematic when you factor in the regular costs of your inventory, staff, utilities, and rent or mortgage. A short-term loan provides money to be used for your regular operational costs, and can help your business stay afloat when profits are low. By keeping money flowing through your business, you can continue to bring in new customers to drive revenue while making up for other losses. 4. EquipmentEvery business has equipment that’s necessary to do the job, such as a machinery, or equipment your customers use, like a treadmill. Equipment is expensive, and it wears down and becomes outdated over time. Unplanned expenses like the repair or replacement of broken equipment can break your budget, and sometimes running without that piece of equipment isn’t an option. Broken or faulty equipment can also increase your liability and chase off customers who need reliable service, costing you more money in the long-term. Loans can help you manage the costs of equipment that will allow you do your job and provide a better experience for your customers. They can also help you keep your business up to date with new technology that improves your services and interaction with customers. 5. To Improve Terms on a Larger LoanIf you’re planning on needing a large loan in the future for business expansion or upgraded equipment, it may be smart to take out a smaller loan first, especially if your business doesn’t have a credit history. The first loan you take out for your business will probably have less-than-ideal terms, because you haven’t built your credit yet, and high interest rates will hurt on bigger purchases that are essential to your business. One strategy to ensure you get great terms on a large, vital loan is to get a small, easy-to-repay loan before you need a big one. When you pay off the small loan quickly, it may mean that you can strike a better deal when you need a larger loan in the future. Consider using your first business loan for a small piece of equipment that would make life easier, but won’t break the budget. Then, when you need to purchase something big, you’ll have a strong credit history to help you qualify for better rates. Of course, no small business should to take on debt that isn’t necessary, but there are times when a loan is the right decision to keep your business afloat or to improve the bottom line. Always weigh the cost and benefits of a loan, but if it has the potential to considerably grow your revenue, it might be time to look at your loan opportunities. Source: 5 Reasons Your Business Needs a Loan |