Definitions Explained: Collateral, Down Payment, Co Signer
Posted on September 17, 2008
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Loan terms come in great numbers and it seems that whoever came up with them tried very hard to be as confusing as possible. Some of the greatest confusions regarding loans is when it comes to
” collateral
” down payments
” and co-signers
Each of these is important and they all have something to do with getting a loan, but do you have any clue about them beyond that?
Collateral is personal property that you use to secure the loan. That means if you default you give it to the lender. On a car loan the collateral is the car and on a mortgage it is the house but for other loans there might be valuable collateral required.
A down payment is money you put up for the loan at closing. The down payment is like a very large loan payment made before you even get the loan. This applies to many loans for houses and often for vehicles as well. If you have stellar credit you can sometimes get away without the need for a downpayment.
A co-signer is someone you know who also signs the loan agreement and agrees to be responsible of the loan if you default. If your credit is less than perfect a co-signer might be required.
All three can help you get a loan approval and reduce the interest rate on the loan.
Personal Loan Officers
Posted on September 13, 2008
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Most lending institutions offer personal loans. There are personal loan officers that will assist you with the process as well as let you know your options. It is not uncommon for loan officers to be trained in more than one type of loan. If possible, look for a lender that has personal loan officers that specifically deal with that type of loan only. That will ensure they have the latest information available in that area and know exactly what your options are when a personal loan is in the works.
Being a personal loan office involves being able to work well with the public. It also requires excellent processing and organization skills. The job won?t always be easy as there will be many loans you have to deny. I am sure telling that to the applicant is never an easy part of the job. Personal loan offices have to be well trained in the field of such loans as well as willing to keep up with the information that emerges in that field.
Excellent communication skills are absolutely required as you will need to find ways to translate the technical business side of the loan process into simple common language terms for applicants to comprehend. Since personal loan officers have access to applicant?s personal information, confidentiality is very important.
Personal loan officers are often in a line of work similar to that of a salesman. They often talk with those interested in personal loans on the phone or in personal. They work hard to establish good report early on. They also encourage the applicant to proceed with the application. Personal loan officers are often instructed by the lender they work for to tell the applicant the maximum amount of personal loan they are eligible for rather than just the amount they requested. This is to encourage the applicant to accept more money, thus generating more revenue for the lending institution in the form of interest.
Once a loan application has been submitted, the personal loan officer will review the information. They will also verify employment and other pertinent information. If there is additional information needed to finish processing the application, the loan officer will notify the applicant. After all that is in place, it doesn?t take long to access the applicant?s credit score and determine if they are eligible. The personal loan officer will analyze the credit information and the application to determine the amount of risk associated with approving the loan. Once this is done, the entire application and information is passed on to an underwriter. Here the final say on approval is decided as is the amount that the applicant is eligible to borrow.
Personal loan officers generally work 40 hours per week and have weekends off. However, more and more lending companies are starting to offer services on Saturdays to meet the needs of the customers. Overtime many be required of the job if there is a high volume of applications to process. Often volume will increase when rates drop. That will depend on the policies of the lender you work the personal loan officer works for.
Most loan officers are required to have at least a bachelor?s degree in an area of business such as finance or economics. The specific education and work experience needed will depend on the institution. There are no licensing requirements to be a personal loan officer. In some companies, individuals who have worked hard but don?t have a formal education will be trained on the job to be a personal loan officer. The pay for personal loan officers varies by agency and region. However, it is likely to be at least double the minimum wage for that area. This field is in high demand, with over 300,000 loan officers in the Nation.
Personal loan officers have a job that requires organization and communication. Their job is to assist applicants for personal loans with questions as well as the lending process. This can also include assistance with completing the loan application. Most personal loan officers have an educational background in business that they can use to build a solid foundation as a personal loan officer on.
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Debt Consolidation Woes
Posted on September 9, 2008
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Debt consolidation is a great plan in theory. You just have to be careful about our debt consolidation choices. There is a big issue that you have to think over before you go and get a debt consolidation loan.
What To Watch For
The whole point in debt consolidation is to make it easier for you to pay your debts. The problem is that often a debt consolidation loan can lead to further issues and financial problems.
The biggest problem is that a debt consolidation loan can cost you more money and fees. On top of the interest you are paying on your debts you might have fees and high interest on the debt consolidation loan.
You have to consider if the loan is actually the best option. In reality you could be racking up more debt just so you can make a lower monthly payment. You have to decide if the trade off is worth it.
You also need to stop yourself from falling into old traps. Don’t consolidate your credit cards unless you plan to cancel the accounts otherwise your debt ratio will climb higher than ever.
Personal Loan Collection Officer
Posted on September 5, 2008
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Personal loans are a great way to obtain the funds you need to pay for many different financial endeavors including vehicles, home repairs, vacation, and education. It is important to pay back such personal loans as outlined in the terms of your loan. If you fail to do so, you will likely be hearing from a personal loan collection officer.
The job of a personal loan collection officer is not an easy one. They are human, so they will feel bad for the position many borrowers are in. However, it is their job to work hard to ensure the lending institution is repaid the money that was borrowed. It is in a borrower?s best interest to work with a personal loan collection officer from the very beginning. They are willing to help you find a solution that will work for both parties. However, if you refuse to answer their questions or return calls to discuss the reason for non-payment, they can?t help you.
If the personal loan officer and the borrower can work out the issues with the payments, then both will go their separate ways. This may include the borrower catching up on the payments or the loan being re-written with lower payment amounts. Some lending institutions will waive late fees if the borrow agrees to discuss their finances with a financial counselor. This is to help prevent the situation from appearing again down the road. Generally, the financial counseling involves taking a look at your budget and finding ways to reduce spending. These are classes held at no charge through the lending institution.
In situations where the personal loan office can?t negotiate acceptable terms with the borrower collateral on the account will be seized. There will only be collateral associated with the loan if the loan is secured. After the collateral is seized, it will be sold to repay towards the loan. If there is still an outstanding balance, then the personal loan office may move forward with turning the account over to a collection agency or take the borrower to court.
In the event there is no collateral on the loan because it is an unsecured personal loan, the personal loan officer will follow the same procedures above. The account will either be turned over to collections or taken to a court of law. If the borrower had a co-signer on the account, they will be contacted prior to the account being processed further. If the co-signer does not accept the responsibility for the loan then they too will be turned over to collections or taken to court.
Defaulting on a personal loan is a serious issue. It can have grave affects on your credit, affecting your ability to obtain loans in the future. A personal loan collection officer will try to work with those who loans are in default to come up with a logical solution. If one can not be found, further action will have to be taken. To prevent this from happening to you only borrow money when you have to. Budget your personal loan payment each month and stick to it. If you can?t make a payment, contact the lender immediately. They are more likely to work with you if they are kept aware of the situation as it unfolds.
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Dealing With Declined Loan Requests
Posted on September 4, 2008
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Hearing a lender tell you they deny your loan application can be crushing, but it does not have to be the end. You have to realize that there are plenty of fish in the sea and a single “no” doesn’t have to be the end of the road.
Lenders are nearly a dime a dozen. There are so many of them that you can almost never run out of places to apply. So, do not give up when you are turned down for a loan. Instead use it to your advantage.
You can take the information the lender gives you on why you were turned down and learn from it. Go over what the lender has to say. You can even ask the lender what you could have done to get approved. You may be able to come back in six months and try again.
Improve what you can and change what is needed. You can then try a new lender and you may be surprised when hear them say “You are approved.”
You could also go to a higher risk or higher interest lender as an alternative but be sure you can afford the loan payments and be sure the loan really is worth the extra costs.