Choosing A Better Budgeting ProgramChoosing A Better Budgeting Program

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Choosing A Better Budgeting Program

About a year ago, I could tell that things weren't going my way when it came to my money. I was having a hard time paying my bills, and it was really stressful. I knew that I needed to make things right, so I started looking into different budgeting programs to see what could help. I was able to find a plan that also had a smartphone application so that I could take care of my bills no matter where I was. The difference that it made in my life was amazing. Before I knew it, I was able to climb out of debt and save a little money. This blog is here to teach you to do the same thing.

Personal Loans: Not Out Of Reach For Teenagers

15 June 2016
 Categories: Finance & Money, Blog

For a teenager who has a limited or no credit history, getting approved for an unsecured personal loan generally isn't easy. But while it's not easy to get the money you need to buy a car, help fund your college tuition, or finance a large purchase, taking out a personal loan can help you build good credit and start you on your way to a healthy financial future. Although you need to know what to look for in a loan, you also need to be aware of what a lender looks for in you.

Shopping for a Loan

  • Fixed rate. You will have the same monthly payment with a personal loan that offers a fixed rate throughout the life of the loan. Payments are easier to budget if you know how much you need to pay each month, and you choose a repayment term that works for you.

  • Loan fees. Look for a loan that has no origination or closing fees that add on to the total cost of the loan. Some lenders don't charge loan fees provided that you always make your loan payments on time. Ask if you'll be charged a prepayment penalty if you decide to pay off the loan early.

  • Loan discount. If you already have a checking or savings account with the financial institution to which you apply for a loan, you may qualify for a discount or lower interest rate.

  • Disbursement. Many lenders will tell you whether you are approved the same day on which you apply. Once you accept the terms of the loan, often you can receive a check for the loan amount or have the money deposited in your bank account by the next business day. The maximum loan amount you can get varies by lender.

Loan Requirements

  • Steady, part-time job. When you apply for a personal loan, you will need to provide your date of birth, social security number, employment history, and a recent pay stub. Approval of the loan is pending income verification proving that you earn enough money to repay the loan.

  • Bank account. Many banks and credit unions will extend personal loans to teenagers who qualify, but they must have an active account with that financial institution for a minimum number of months. Most banks offer checking accounts to teens, but many require an adult co-owner on the account. Student checking accounts often don't require a minimum balance, offer free direct deposit, and charge a low or no monthly maintenance fee.

  • Cosigner. Some lenders require that a parent or guardian cosign for the loan, making that person responsible for repaying the loan if you don't. But if you don't have a cosigner, you still may be approved if you have collateral, such as a certificate of deposit (CD), to secure the loan. With collateral, you may qualify for a lower annual interest rate too.

  • Financial counseling. Some lenders require teen borrowers to complete a financial counseling session with a loan officer prior to loan approval. It's important to be responsible about your finances; therefore, financial education that stresses the importance of making credit payments on time is one step in teaching you how to manage money.

Contact a business like Union State Bank to learn more.