Budgets, Taxes & Your Fresh Start

Once again, it’s tax time in the USA, and even though you’re digging through all of your receipts, statements, and paperwork from last year, it’s never too early to start thinking about this year!   If you’re like most people, as you go through all those papers, you’re looking at what you spent on things like groceries, electronics, utilities, and credit cards, and it can get pretty depressing.  You look at all those payments, and you start thinking that it’s really hard to ever get ahead when you’re paying so much interest every month.  You wonder if you’ll ever get everything paid off so you can relax and maybe even have a little bit of money left over in your budget at the end of each month.

Well, 2019 just might be the year that you are able to do that, if you’re ready to take the bull by the horns and make a few smart moves with your credit cards!

First and foremost, if you ever want to get them paid off, you’ve got to stop using them!  Gather up all your credit cards, take them out of your wallet or purse, and put them away.  That’s right, put them away.  Put them in a box, file, or on a shelf, but don’t carry them around any more.  If you don’t have them with you, you won’t be able to use them for those impulse buys!  And, chances are, if you have to go home to get one of your credit cards, you won’t go back to the store and use it.

Secondly, you’ve got to make a plan to pay off the bills that you already have, and you have a couple of options to accomplish this.  You can utilize money you have in savings, you can consider balance transfer options with introductory rates, or you can take out a personal loan.  All three of these options have both pros and cons – using your savings can eat up the cash that you have on hand, and should you have an emergency expense later on, you’ll end up having to use a credit card to pay that expense.  Taking advantage of a balance transfer option on a new or existing card is a great option as long as you are able to pay the balance off within the allotted time frame – if not, you’ll face a huge interest charge when the introductory period ends.  And finally, taking out a personal loan does involve interest charges, but typically those interest rates are less than credit card interest rates, so you do save in the end.

Which option is for you?  While the balance transfer is a good option for those who don’t have much credit card debt to pay off, when you need to consolidate a lot of credit card debt, a personal loan is usually the easiest way to pay off everything, lower your monthly payments, and still keep your emergency cash in savings.

Think a personal loan is the right choice for your financial situation? Take a look at these lenders and see if one fits the bill:

Interest Rates are Climbing!

If you’ve been watching the financial market lately, you’ve undoubtedly noticed that the Federal Reserve has raised the interest rate on federal funds once again.  It’s now at 1.75% to 2.00% and they’ve signaled that there are two more interest rate increases coming this year.

But, what does that mean to you?  And how will it affect your finances?  Even though you may not think so, this rate increase will most certainly hit your pocketbook in less than 30 days, and the next two rate hikes?  You will feel those almost immediately, too.

So, if you’re planning to buy a home, refinance the car, or take out a personal loan to pay off those credit cards, there is no time to waste.  Interest rates on that new home, car, or personal loan will almost certainly go up immediately, as will the rate on those credit cards that you’re paying on every month.

Personally, we’re looking at taking out a personal loan to pay off the credit cards, to save money on the credit card interest and pay them all off sooner, so we will do this sooner rather than later, as that extra .25% will affect both the personal loan rate AND the interest rate on the credit cards.  Plus, with two more increases expected this year, NOW is the time to lock in that fixed rate, regardless of what you’re planning to buy.

What about you?  Think a personal loan might be the right choice for you?  Take a look at these offers:

Loan Options for Really Bad Credit

If your credit has ever been really bad, or if it is now, then you know how hard it is to get any kind of credit.  Even worse, you’re so convinced that you can’t get credit that you don’t even try, but there are options, even for those of us with really bad credit.

Let’s talk about some of those options:

  1. Payday Loans:  Payday loans are probably the most expensive type of loan that you can get.  The interest rates are typically significantly higher than traditional loans, and you must repay them on the due date (your next scheduled payday) or there will be steep fees added to the account.   That said, there are times when you absolutely have to have the money right now, and as such, a payday loan can be a life saver.
  2. High Interest Rate Loans:  There are loan companies that will work with you, but beware of the interest rate that you may be charged, pay attention to any fees, and make sure you can actually make the payments before you sign on the dotted line.
  3. Title Loan:  If you own your vehicle outright, a title loan can be a less expensive loan option, especially if your credit is less than perfect.  Interest rates on title loans tend to be lower than unsecured loans.   In exchange for the cash that you need, the loan company will place a lien on your vehicle while you make the required payments.  Once the loan is paid off, the lien is released.
  4. Home Equity Line of Credit:  If you own your home, and you have some equity in the home, then you may be able to borrow against the equity that you have in your home, but be sure that you can make the payments on this loan, as you are taking a big risk with this type of loan.
  5. Borrow Against Your Retirement Account: Again, this is not a favorable option because of early withdrawal penalties and tax repercussions associated with borrowing against your retirement account. However, in the event that you do have to borrow against your retirement, make certain that you opt for a loan and not a straight distribution from your account.
  6. Cosigners and Relatives:  Although this is the least favorable option, you can approach a relative to either loan you the money that you need or cosign along with you on the loan.  However, the cosigner’s credit will likely be affected by the joint loan and they are held responsible in the event that you don’t make the payments, so if at all possible, I would avoid this option.

As you can see, you do have loan options, even with really bad credit – the main thing is to be certain that you choose wisely, and once you’ve made your choice, that you pay the loan back as soon as possible!