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October 2, 2018

DIY Investing with Peer to Peer Loans

another loan optionAre you a hands-on investor who enjoys evaluating investment opportunities and finding a diamond in the rough? If so you may want to consider investing in peer to peer lending. As a peer to peer lender you have the opportunity to review individual borrower applications and select the ones that you think are going to repay their loans.

What is Peer to Peer Lending?

For those of you not familiar with peer to peer lending (also know as P2P lending), let’s take a moment for a quick introduction. In the past ten years several websites (known as platforms) like LendingClub and Prosper have sprung up offering personal loans to individuals. This is certainly not unique but what makes them different is that they are not banks or financial institutions in the traditional sense. These websites get funding for the loans they provide from individual investors in amounts as small as $2,500. In a sense, anyone can be a banker with just a small amount of money. The signup process is quick and easy, and as soon as you transfer the funds you can start investing.

How Do You Invest in Peer to Peer Loans?

The process for P2P lending investing is pretty simple. Once you have opened and funded your account you will be able to see all of the loan applications that the platform has approved. These loan applications have been evaluated based on industry standard underwriting techniques and many are rejected. The ones that are approved are rated and the highest rated borrowers get the lowest interest rates.

Lenders review the approved loan applications and decide which loans they would like to invest in based on their comfort level with risk and their desired return. Investment in a loan can be as little as $25 and most experts recommend investing the minimum amount and spreading your portfolio over as many loans as possible in order to minimize risk through diversification. This is where you get to Do-It-Yourself. The platform provides dozens of pieces of information from the loan application and the borrower’s credit history. You get to determine which factors matter, how much to weigh them and what a good borrower profile looks like. To some people this may sound boring and tedious but for many investing junkies this is the fun part. You can look at data like length of employment, debt-to-income ratio, home ownership vs. renting, late payments, outstanding debt, bankruptcies and so much more.

There are a limited number of filters available on the platforms that allow you to quickly find loans that meet certain criteria, then you can review them in the more detail individually. Or, for the really hardcore investment analysis junkies, the information for all available loans can be downloaded to a spreadsheet for study and review. There are approximately 50 to 250 loans available at any given time and there are approximately 80 pieces of information available so, as you can imagine, this can be an enormous amount of data to review. However, with some simple sorting and filtering in your spreadsheet you can pretty easily identify the loans that meet your criteria.

There is also room for intuition and past experience in the analysis process. There may be more loans that meet your criteria than you have funds to invest. Ultimately, you may have to ‘go with your gut’ in order to select the loan or loans that you think are most likely to be paid back.

For those who want passive income or do not feel they are savvy enough to select quality loans there is also an auto invest feature that will choose the loans for you based on your desired risk/return level. But for the investment analysis enthusiast the DIY approach is the way to do. All in all, this can be a fun way to achieve a great return on your investment.

Cody Smith is the founder of PeerLoanAdvisor.com which provides information and advice to peer to peer lending investors.

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June 19, 2018

5 Things to note before taking your first personal loan

obtain personal loansIf you’re taking out your first online personal loan, it probably means you don’t have a credit history or a credit score. This doesn’t however hold true if you’ve had or currently have a credit card (if you’ve had a credit card in the past, you’ll have a credit score). Lenders use your credit score obtained from your credit report to understand how good you’ve been at managing credit in the past. Personal loans are unsecured loans that don’t involve collateral, and usually come with a higher interest rate in comparison to secured loans. This is precisely the reason why having a good credit score is important for your application to get approved.

Let’s forget the credit score part for now. If you’re a first timer, here are some things you should note before taking your first unsecured personal loan:

Know the various charges involved

Personal loans come with a list of charges that include late payment charges, EMI bounce charges, processing charges, pre-closure charges, and part-payment charges. When you’re taking out your personal loan for the first time, make sure you are aware of the various charges. It is of course, always good to be aware about how much lenders are charging you.

Choose a short repayment period

Choosing a short repayment period helps reduce the interest payment over the course of your loan tenure. Longer tenures attract higher interest payments, but lower monthly repayment amounts. As your first loan, you wouldn’t want to pay too much interest, do you? However, if lower monthly repayments suit you, you should go ahead and choose a longer tenure, for you can always pre-close your loan after a certain period. Note that most lenders require you to complete a minimum of 6 months or 12 months of your tenure before you can pre-close.

Don’t borrow more than you need

Your approved amount might be higher than what you asked for – lenders use this tactic to make you borrow more. Don’t fall for it thought. Borrow only how much you need. Borrowing more than you need is just setting the platform for unnecessary debt accumulation.

Negotiate the interest rate

Negotiating the rate with the bank will help you get a lower interest rate on your loan. Moreover, if you don’t have a credit history, there’d be multiple lenders in the market willing to offer you a loan. Going by this logic, it is advised that you negotiate the interest rate on your loan to get a reduced rate.

Don’t apply with multiple lenders

Applying with multiple lenders negatively affects your credit score. Too many credit inquiries reflect credit-hungry behavior, and lenders can reject you on the basis of this – rejections bring down your credit score as well. So for starters, make sure you apply with only one lender.

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April 13, 2018

Important Tips While Budgeting For a New Home

new home budgetingYou dream of owning a great home to suit your taste and needs. However, this may have to cost you quite a lot of money. It therefore means that there will be alterations in your current spending or savings. Well, the way you will budget for a new home is dependent on several factors. It will depend on whether you are planning to own the first home, meaning you want to move from a rented house to your own home, or if you want to move from a first house to a dream home.

Whichever level you are at, there are several factors that will determine how much you budget for a new home. These factors include;

• Your earning– It could be your personal earning, or yours and that of your spouse if you plan to jointly buy a home.

• The Location of your home – Where exactly do you want to live? Some estates are more expensive than others.

• The size of your dream home- This may also include the size of the house as well as the land on which the house will sit on.

• How long you want to pay for it – If you want credit for a shorter time, then you may have to choose a cheaper home and vice versa.

After considering these factors, then it is time to come up with a real budget for your home. Remember that it is your own home, a treasure for yourself to take pride and find comfort in. Therefore, take time to budget for the best. Below are basic steps towards getting a perfect budget for your home:

1. Get informed

Be sure to visit a real estate and property development company, to get the available options in terms of different properties available in the market and their value as they have a better understanding.

2. Timing

Decide the exact day that you want to move to your new home. Do not wish for a particular time span when you want to move to the new home, say like in the next three months, but rather set a specified target date.

3. Calculate how much you can afford

Use a mortgage calculator to determine exactly how much you can afford to pay monthly.

If you are cost sharing a mortgage;

• Open a money market account or an alternative of a high-interest savings account. Ensure the Federal Deposit Insurance Corporation guarantees your money.

• For every month, deposit the total money (two halves if you are two) to the savings account monthly. Deposit the money until the date for moving in is due. Spend the money to pay for your new home.

4. Reduce your spending

In order to do this, you need to be realistic by spending less than you earn. Make a plan and stick to it. For example, you may realize that you don’t need to live in that two bedroom apartment especially if you don’t have kids. Therefore moving to a one bedroom apartment may save up to around 30% of your expenses which you could channel towards home ownership.

5. Increase your earnings

While most people believe in spending less to save, I think working that extra job is a sure way of increasing your savings. Take up any money making opportunity that comes your way. You could also opt to get a second job as a side hustle to top up your main source of income.

Conclusion

To succeed in owning a new home, you may have to forego some expenses, however small they may seem. These may include your daily cup of coffee which may cost $5 but accumulates to $150 in a month.

As much as you are looking towards owning the best home, be careful so that you do not strain so much that you will have to compromise on basic needs such as food.

While owning a home may seem a hard process that requires a lot of sacrifices, at the end of the day, it is worth it, so go for it!

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March 8, 2018

Key Mistakes You Should Avoid When Getting A Personal Loan

about personal loansIt’s always a stressful situation whenever you’re bombarded with numerous financial responsibilities at the same time – you know, those instances when your house bills, children’s tuition fee bills, business expenses are piling up on you. This kind of situation might force you to seek for immediate financial refuge, and in this context, a personal loan might just be the most comfortable solution for you to take. There’s nothing wrong in acquiring for a personal loan – that’s your decision and if you, think that this is the only way you can resolve all our financial woes, by all means, go ahead and file for one! However, if this is your first time to apply for a personal loan, there are certain things which you should avoid to make sure that your entire personal loan experience will be hassle-free.

Applying for a personal loan requires your time. It entails a lot of processes which you’re required to go through. The entire process is something that you should be careful since it will require resources from you. And to ensure that this process will go as smoothly as possible, stray away from committing any of these mistakes:

● You don’t have the clarity for the purpose of the loan: You might be enticed to apply for a personal loan because it doesn’t require rigorous background checking and it only requires minimal requirements from you. If these are the sole reasons pushing you to get a personal loan, you’re doing it all wrong. You should get a personal loan because you have an immediate financial need – you might be financing your sibling’s studies abroad or you might be saving up for a business. Whatever it is, you should have a clear picture of where the money will be spent on. Sure, personal loans might have low interest rates but you’re still paying more than what you’ve borrowed, that’s why you should be very keen on how and where you should spend your borrowed money.

● You don’t consider your repayment capacity: Once you’ve decided to apply for a personal loan, the only thing you might have in mind is how you will spend your borrowed money. This is normal, and there’s, nothing wrong with that notion but you should also remember that in this process, you’re a borrower and you’re expected to pay a certain amount to your lender. You should think first if you can actually repay the amount you’ve borrowed within the time frame given to you. Don’t borrow an amount which will require you to have significant adjustments in your life. Instead, opt for an amount which you’re confident in repaying from your monthly income.

● You approach too many lenders: While it’s always good to look for possible lenders which you can acquire personal loans, going overboard with this might have negative effects on your credit score. This happens because whenever you approach too many lenders in a short span of time, all of these queries will gradually reduce your credit score. In the eyes of banks and other credit company, you’re now considered as a credit hungry person and that’s not a good thing. Banks and other companies might have the assumption that you don’t know how to manage your finances that’s why you ended up asking help from too many lenders, and this might hinder you from securing approval for your loans in the future.

● You don’t disclose existing loan details: Remember the quote that says, “Honesty is the best policy”? Yep, this one’s still applicable in the financial context. The moment you talk with your lender about your personal loan application, be honest in informing the other party if you have existing loans. This is important because by doing so, you’re giving the lender more reasons to trust you (so it’ll also be easier for them to trust you with their money), and you can make negotiations with your lender regarding your repayment terms to ensure that you can still manage to pay all of your loans on time. But if you decide to mum this information to yourself, you might end up paying higher interest rates or worse, your loan application might be disapproved once the lender learns about this information from other sources.

● You don’t read through the fine print: Not everyone has the patience and the willingness to read through a document which consists of, let’s say, five pages of texts. Yes, it’s something that requires too much time and focus but if you’ve decided to apply for a personal loan in the coming days, you should be able to change your mindset. You should know how important it is to read whatever documents you and the lender might share throughout the entire process. Once you’re handed with any document, take the time to thoroughly read everything – and not just skim through it – and make sure that you understand everything that was written there. If you see terms or charges which are unclear to you, never be hesitant to ask your lender. You might trust the lender but all of your agreements will boil down to your signature, being used in the supporting documents.

● You don’t check your credit report: Your credit report plays a vital role in the approval or disapproval of your personal loan. Since personal loans do not require any collateral before the lender can allow you to borrow a certain amount of money, your credit report might be one of the strongest determinative factors for a lender’s decision. This will be an evidence of whether you have a good credit standing and if you still have enough finances to pay for another loan. If you want your personal loans to be approved, religiously check your credit report and get necessary corrections if needed. You don’t want to check your credit score the moment you apply for a loan as this might delay the entire process, check this for LendingKey reviews.

If the concept of personal loan is still new to you, you might have endless questions of how this works. While personal loans can give you the financial salvation you need right now, you should also be careful in managing it because failure to do so might damage your financial standing in the long run. Since you know what mistakes to avoid when getting a personal loan, you’re now a step closer to securing that seal of approval for your personal loan application!

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September 5, 2017

Why property investment should be a key part of Estate Planning?

plan for your estatePeople underestimate the importance of property investments within estate planning until it’s too late. Estate planning is your declaration after you pass away. You may not want your family to receive money and other assets you intended for your wife and children. Molly McCollough found out how essential property investment within estate planning is the hard way.

Meet Molly

Molly McCollough is a 54 year old woman who is the founder of Theature Company. Molly thought she and her husband has everything figured out. They never thought they needed life insurance or a strategy for financial planning because they were married and didn’t have children, so everything would be left to Molly. After her husband, Joe died, Molly found out being his wife didn’t carry much weight in collecting his estate.

The Issue

Molly’s husband didn’t have a will, and the money he left behind was in a foreign bank account that did not have her name on it. Because Molly’s name was not on any of the accounts, she didn’t have access to anything.

Molly was afraid and mourning the death of her husband. Molly needed to figure out a way to gain access to his estate before his family tried to claim any part of the estate. Molly felt her husband was hiding secrets, and she didn’t know where to turn or who she could trust.

Molly said, “There’s just something about death and greed and money and long-buried resentment that bubbles to the surface when there’s any substantial inheritance. It tears families apart. People lie and steal and cheat.” In her situation, she was right. Joe’s family did just what Molly hoped they wouldn’t. They came and took all of his estate and left her with nothing. Inheritance drama is something no one wants to deal with and it can cause years of frustration, and put a rift between families.

Life insurance, financial planning, and estate planning are things you need to discuss with your partner before it’s too late. Make sure you and your partner have a will whether you have children or not. If these things are not in place before you pass away, the state will do what they see fit, and most of the time, it’s not what you wanted.

The Solution

At Unified Lawyers, we work tirelessly to help people who don’t understand wills, trusts, estate planning, and similar assets. We understand the urgency in these situations and always put our best foot forward. We are not a traditional law firm. We believe in helping people instead of collecting a check. All our fees and costs are straightforward so each of our clients know how every cent of their money was spent. We are here to help you get your situation resolved.

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