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December 27, 2006

Paying off Credit Card Debt vs. Contributing to a 401k Retirement Plan

Recently, a friend asked me why they should bother contributing to their 401(k) retirement plan rather than paying off their credit card debt. Credit card interest rates are usually pretty high, so, it seems like it should be better off paying down the credit card debt, right? Wrong! In many cases, contributing to a 401k is better- here's why....

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Posted by spotsearch at 03:00 PM | | Comments (0) | TrackBacks (0)

November 09, 2006

Types of Loans for Emergency Cash

Almost everyone needs an emergency loan at some point.  It might be due to a medical emergency, an unexpected home repair, a car accident with costly repairs.  Whatever the need, the choices you make in going into debt are important ones and can make the difference between being manageable and having mountains of debt spiraling out of control.

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November 08, 2006

Retirement Account Loans

Yes, you can borrow from your retirement accounts.  In special situations, there might not even be a penalty.  BUT, the big question is, should you?

 

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P2P Lending

A new way of borrowing and lending is staring to catch on- peer-to-peer (P2P) lending.  Regular people pool their money together to loan money to fund loan requests.  Anyone can be a lender, and anyone can be a borrower. 

 

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Credit Card Debt

If you are in credit card debt, I have just two words for you: Get Out! How bad of a problem is it, and what can or should you do about it?

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Home Equity Loan (HEL)

This is a secured debt loan that is backed by your house as an asset.  If you own a home and have built up equity in it, this is one loan to consider.  It's given to you as a lump sum when you take out the loan.  The rates are usually pretty good, fixed at the start of the loan (unlike the HELOC which has a floating rate), and structured to have regular payments over a fixed time period.   In addition, depending on your situation, there may be tax benefits with using a home equity
loan.

 

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Home Equity Line of Credit (HELOC)

This is a secured debt loan that is backed by your house as an asset. If you own a home and have built up equity in it, this is one loan to consider. The rates are usually pretty good, tied to the prime rate, and float with the market. In addition, you can open this line of credit at any time and just let it sit for emergencies- you are usually given a checkbook or credit card to tap into this loan. Like a credit card, it has a maximum limit, and you pay back what you owe plus interest, and there's usually a minimum payment to be made each month. In addition, depending on your situation, there may be tax benefits with using a HELOC.

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Posted by spotsearch at 04:07 PM | | Comments (0) | TrackBacks (0)

PayDay Loans (Cash Advance)

Payday Loans- Wikipedia:  "A payday loan or paycheck advance is a small, short-term loan (typically up to $1,500 in the  U.S.) that is intended to bridge the borrower's cashflow gap between paydays. ... As a form of sub-prime lending, similar to high interest rate credit cards,  payday lending is the subject of controversy. Some critics claim that payday  lenders target the young and the poor, near military bases and in low-income  communities, who may not understand the time value of money. Others go further, comparing payday lenders to loan sharks due to high interest rates — typically 250% or more when annualized."

My personal opinion on Payday Loans:  Avoid Payday loans or cash advance loans at all cost!!! 

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Posted by spotsearch at 03:19 PM | | Comments (0) | TrackBacks (0)

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