Personal Finance—Make Your Own Budget

When people hear the word “finance” mentioned, their mind goes into business and corporate matters. However, the bare truth is that finances start at your piggy bank at home to your plastic money in the wallet to your bank account. 

 

This is what personal finance is all about. You should be a manager of your own finances, or else you will end up in disaster sooner or later. Finance experts say that if you cannot save at least ten percent of what you are earning, then you are in financial disaster. This means that out of ten thousand dollars, a thousand should go into the savings account. This rule applies regardless of how much money you are earning, and it does not apply to the rich and wealthy, as many people think. 

 

Personal finance management cannot be done verbally, and therefore there is need to write down the plan so that it will be easy to implement it. It is natural for human beings to forget that they swore never to overspend especially when they are looking at an item that is flashy and exciting, and more so when this item has been their dream item. 

 

Therefore, a personal finance budget is the way to go. This will keep you accountable, and if you are strict enough to stick to it, then you can be sure to get to the level where you are financially free. Financial freedom is not a point when you get more cash than your bank account can hold; it is that point when your finances are no longer in control of you – you are the one controlling them. 

 

As you make your personal finance budget, use actual figures. It is wrong to use estimated figures, unless it is quite inevitable. When it is not possible to have the actual prices, make an estimate but ensure that it is on the higher side. 

 

However, even this is not the best way to go, because you may put unnecessary strain on your budget. Find out the current prices of food items, clothing, entertainment, leisure, beauty, health, and every other need that is predictable. 

 

Health needs are not easily predictable, but they can only be accurately predicted when you have a member of the family that has a certain chronic illness that requires a certain amount of money every month. However, the 10% named above that should not be spent is what covers any unexpected needs and it also stands to meet any future expenses like a holiday, a car, long term further education, a new house, etc. 

Protect Your Personal Finances

What is the present status of your personal finances? The best way through which you can review this status is by first checking your personal savings. You should have constant and consistent saving habits. Also, your dependability on plastic money should say a lot about the status of your personal finances. 

 

Your personal finances are okay if you can survive for about three months without even looking at your credit cards. If you have accumulated a lot of credit card debts, you need to strategize a way through which these debts ca be aid in the easiest and cheapest way. Consider consolidating your debts, because this will ensure that you pay the debts using a cheaper rate of interest, and this will save you money in the long run. 

 

The reason why you need to protect your personal finances is because of the insecurity in the people’s financial future. One thing that can make you aware of the need to protect your personal finances early enough is the rate at which jobless people are increasing, the rate at which prices of food and energy are raising and the rate at which inflation is occurring. The interest rates on almost everything are increasing at an alarming rate, and this is very worrying. Therefore, you need to secure the future of you and your family and loved ones by putting in order your personal finances.

 

You should watch how you manage your debts. One thing that really wastes your cash is the interest rates. Most of the times, one usually ends up paying for more than double of what they actually owe, and this is all because of the interest rates. It therefore is very detrimental to the health of your personal finances when you are paying more than five credit card debts. The best way you can manage these debts is by doing consolidation. You can approach any financer, say a bank, and ask for a debt consolidation loan. When they accept, they pay off all your debts and consolidate them into one, and you therefore end up paying only one financer, meaning that the interest will be much lower.

 

Personal finance budgeting is also a must in securing your finances. Budgeting does not only apply to those who earn five hundred dollars every month; it applies to the multibillionaires too. There is absolutely no way your personal finances can be secure if you do not have a good personal finance budget. A budget acts as a guideline to your spending and it ensures that the money is fairly and appropriately distributed among all needs.

Car Finance–3 Great Financing Options

If you’re thinking of buying a used or new vehicle, there are a few different ways in which you can finance your purchase. 

 

Although you can pay cash when you buy a car, almost 80% of the people buying cars today use a car financing option. This is more affordable because you are able to break the car payments down into monthly expenses, instead of having to spend a big amount of cash at once.

 

Of course, there are pros and cons to each different option of car financing. You should consider these carefully before you decide which one you will use. 

 

0% financing is one of these options. 

 

0% financing allows you the option of extending the amount of time in which you can pay the car finance loan back. This is without the interest that you often have to pay when you take out a loan. This option is what the car retailers like to use to interest customers and bring them in. 

 

It’s difficult to qualify for this loan though, as your credit score needs to be quite high. Also, the amount of time in which you are expected to pay the loan back is a lot less then with some of the other car financing options. You could be asked to pay the whole loan back in 36 months, instead of making smaller payments over a longer period of time. 

 

The second option is one which offers you a cash-back incentive. When you look at the two options, the 0% APR financing option and the cash back offer, you can compare which one is more suitable for you. 

 

You do this by working out the amount of interest you will have to pay during the whole length of your loan when you choose the cash-back option. If you find out that you would have to pay more interest than the amount of cash-back you would receive, you would be better off choosing the 0% APR deal. 

 

The next car finance option is having the opportunity of getting into your dream car without putting any money down.

 

For many people a great incentive is not having to pay a down-payment. Many people simply do not have a lot of extra money to put towards a down-payment. 

 

You may end up paying much more in interest in the long run, and monthly payments will of course be higher, but the advantage to this option is that you can get your car without paying as much upfront. 

How Many Steps Are You from Getting Car Finance?

It is a pretty easy process to get car finance approved, but it can seem complicated if you don’t know what to expect. Many people don’t get the car that they wanted because someone else got money together and bought it first. This can be a big disappointment. 

These 5 steps should help make the whole process run more smoothly for you and help you get a quicker settlement. 

 

Step 1: Find Your Car

 

If you haven’t yet decided on which car you want, you should try to at least have an idea of what you. This is because finance companies base their final approval on the car you buy. If you find a model that is similar to the car you will eventually buy then it won’t matter if the car you actually do buy is just a bit different.

 

Step 2: Be Prepared

 

No matter what finance company you choose, you will need to give them a lot of information about yourself if you want them to approve your loan. You should make sure to bring all the necessary information with you. This includes; your address details, your employers/work details and driving license numbers. You will also be asked whether or not you have previously borrowed money. If you there is a partner involved, you will need to produce that person’s information too. 

 

Step 3: Be Available

 

You might be asked to send papers or documentation. At this point, the only person who could slow the process down is you. You should try to have a scanner or a fax machine at your disposal so you can send the necessary papers immediately. Be sure that you are available to sign any documents if need be. 

 

Step 4: Read Carefully

 

It is important to read everything very carefully. You should watch out for that small print, but also remember that these are legal documents, you have to be sure to sign and put the date at the right places, otherwise the document becomes invalid and you’ll have to make a whole new one. 

 

Step 5: You Are Approved

 

Now that you are approved, you can see the amount of money you have borrowed. It’s time to act. If you haven’t already found the car to buy do it now. You can use the fact that your loan has been approved as bargaining leverage. Certain documents from the car dealer are also required to be sent to your finance company. Then comes settlement. 

 

If you work well with your finance company and follow these steps, it should be a pretty easy and quick process. 

How to Choose a Car Finance Broker

Buying a car is one thing, but financing it is another thing. The financing part is the most important. As a matter of fact, financing of cars has gone to the next level with the introduction of finance brokers to the trade. These individuals have made the whole process easier than it was in the past. To start with, they help people acquire secure car loans. Secondly, they help one budget when planning to purchase a vehicle. Generally, finance brokers help car buyers have an easy time when buying a car as well as acting as consultants.

 

A good finance broker is one who gives you tips on how best to approach loaning institutes when applying for a car loan. He or she should have experience in this particular sector in order for him to know how to go about the whole process. As a matter of fact, experienced finance brokers have built good relationships with loan lenders. Therefore, lenders can even give you advice on a particular finance broker, his qualities and if he is as open as he claims to be. However, there are other key factors that one should critically look at when choosing a finance broker. Remember that fraudsters are all over the place and it is important for you to consider these factors.

 

First, check for his credentials. He or she should be a member of COSL (Credit Ombudsman Service Limited). Alternatively, he or she can also be a member of FBAA (Finance Brokers’ Association) or even both. This applies to those based in Australia. These are the leading finance brokers associations. To check if you broker is a member of any of these associations, simply go through their list of members. WA Finance Broker License is another very important credential document for any good license broker. This license just proves that the broker has reached the required education limit plus is a recognized broker.

 

Accreditations are also a considering factor for finance brokers. Preferably, go for a broker that has a wide range of accreditations since this gives you a wide variety of lender options. Another very important factor is experience. Look for a finance that has several years of experience. As they say, experience is the best teacher. An experienced broker offers quality services. Lastly, look for one that offers services outside the box. This simply means one that is quite versatile in the finance field and can help you in each and every step of the process. 

Diversification Is Important

“Do not put all of your eggs in one basket!” You have in all likelihood heard that again and again over your life... and when it comes to investment, it is really true. 

 

Diversification is the key to successful investment. All successful investors build up portfolios that are widely diversified, and you ought to as well!

 

Broadening your investitures may include buying assorted stocks in a lot of different industries. It might include buying bonds, investment in money market accounts, or even in some real estate. The key is to invest in a lot of different arenas – not simply one.

 

Over time, enquiry has shown that investors who have broadened portfolios commonly see more reproducible and stable returns on their investitures than those who simply invest in one thing. By investing in a lot of different markets, you'll in reality be at less risk too.

 

For example, if you've invested all of your revenue in one stock, and that stock takes a substantial dip, you'll most likely discover that you have lost all of your revenue. On the other hand, if you've invested in 10 different stocks, and 9 are doing well while one plunges, you're still in fairly good condition.

 

A good diversification will commonly include stocks, bonds, real estate, and hard currency. It might take time to broaden your portfolio. Depending upon how much you have to initially vest, you might have to begin with one sort of investment, and invest in additional areas as time passes.

 

This is all right, but if you are able to split up your initial investment among assorted types of investments, you'll discover that you have a lower risk of turning a loss on your money, and over time, you'll encounter better returns.

 

Experts likewise hint that you spread your investment revenue evenly among your investments. Put differently, if you begin with a hundred thousand dollars to invest, invest twenty-five thousand in stocks, twenty-five thousand in real estate, twenty five thousand in bonds, and place twenty five thousand in an interest carrying savings account.

Why You Ought To Invest

Investment matters have become more and more crucial over the years, as the time to come with social security benefits turns unknown.

 

Individuals would like to guarantee their futures, and they know that if they're depending upon Social Security benefits, and in a few cases pension plans, that they might be in for a crude awakening when they no more have the ability to take in a steady income. Investing is the answer to the unknowns of the time to come.

 

You might have been laying aside money in a low interest savings account throughout the years. At present, you would like to see that money grow at a quicker pace. Maybe you’ve come into money or received a big windfall, and you require a way to make that income grow. Once again, investments are the answer. 

 

Investing is likewise a way of getting the things that you wish, such as a new house, a college education for your youngsters, or expensive ‘playthings.’ Naturally, your financial goals will influence what sort of investing you do.

 

If you wish or need to bring in a lot of income fast, you would be more interested in higher risk investments, which will give you a bigger return in a shorter sum of time. If you're saving for something in the faraway future, like retirement, you would want to make safer investitures that grow over a longer time period. 

 

The total purpose of investing is to produce wealth and security, over a time period. It's important to recall that you will not always be able to take in an income... you'll eventually prefer to retire.

 

You likewise can't count on the social security system to do what you anticipate it to do. As we have seen with Enron, you likewise can't necessarily depend upon your company’s pension plan either. So, once again, investing is the key to guaranteeing your own financial future, but you have to make wise investments!

4 Smart Tips to Using Credit Cards

Plastic money, which comes in form of credit cards, is really loved and highly used. There is nothing you cannot purchase with one swipe of the credit card. Credit companies make a multi-billion dollars kill every year on credit card users. This kill is made when they deduct their charges and when they fine you for late payments, transfers and over-limits. However, a credit card can be a good servant if used wisely but a bad master when used unwisely. As a matter of fact, you can even get bonuses when you learn how to wisely use your plastic. The following tips will be of great help to you.

• There are many credit card companies to choose from; choose the best. The best credit card you can have is one that has good rates of interest and an open bonus system. Some credit cards usually have rewards for you, if you use it wisely. The rewards range from cash back to college fees for your kids. You can have a look at the customer reviews on a credit card before choosing it to be your plastic. Such reviews will give you the best image of the credit card, and the experiences of other customers will help you make the right choice.

• Avoid carrying balances on your plastic. Credit card companies reward those who have a clean record when it comes to having balances in their credit cards. Paying off the balances usually relieves you of the burden of paying huge amounts of interest. Make it your aim to pay off any balance in your credit card ever month.

•  Learn how to communicate with your credit card company. When you have a balance that has been forwarded to the next month, pick up your phone and talk to your credit card company and see whether it is possible for the interest rate to be cut down. However, you can only benefit from such a step if you have previously kept a clean record of clearing balances with the company.

• Avoid cash advances like plague. As a matter of fact, use cash advances only when you are faced with an emergency and there is no other way out. It is very easy to ask for a cash advance, because when you get it you feel as if you have been given free money. However, such advances usually attract heavy interests and charges when you delay payment. 

Use these smart tips when you use credit cards and then you will not feel them to be the monster that they are usually touted to be.

Debt Consolidation and Debt Refinancing—Ways to Become Debt-Free

The fact that you are reading this article shows that you have come to the decision that you want to reduce your debts, and this is quite commendable. However, consolidating your debts is not as easy as it sounds; you need strategy and determination.

 

You first need to know the adverse effects that debts have on you. You may be in dire need of property, a car or starting capital for business, and you may need financing. As long as you have a trail of debts after you, then you can rest assured that no financer will look your way. Therefore, your hands become tied. 

 

Debt consolidation is usually the first step you should take in mending your broken credit history. Debt consolidation does not make all your debts vanish into thin air; what this does is that interest rates go down when debts are consolidated. The fact that you pay less interest on your debts means that you are able to pay your debts much faster than you would have if you had not consolidated them. There are many financers who give nice debt consolidation loans, and you should consider getting one. I must mention at this point that the better your credit history is, the easier it is to get a debt consolidation loan.

 

You might want to consolidate your debt by other means except getting a consolidation loan. Well, if you own a home, there is good news for you. You can put up your home for a mortgage refinancing scheme that can be used to pay all other creditors, leaving you with only one – the mortgage financier. 

 

However, if the above options do not suit you because you are limited due to one reason or the other, then all is not lost. You can get yourself a debt management agency to get the consolidation job done for you. The advantage with such agencies is that they can get your debts consolidated without you necessarily having a home or any other form of security. Consider consolidating your debts especially when you have gotten to a point where your debts are unmanageable. 

 

You can do the application online to the relevant agency. Searching for the agencies via the internet is advantageous because you have a range of agencies to choose from. Go through various agencies online before deciding on which one you will choose.

How to Become Financially Free by Year End

Becoming financially free by the end of the year is possible if you take control of your money and life style and stick to your intention as the highest priority. Even if you are in debt right now, with some planning, you can end the year with savings in the bank if you take time to do some financial planning now and make goals to help you achieve your objective.

Begin by taking a personal inventory about the true state of your financial affairs as they look today. Create two columns and in one column list the money saved and assets you have available and your regular salary or other source of income The goal of financial planning is to be able to pay the bills in the second column from what is available in the first column and still save money.

• The second step is to create a weekly budget. Base your budget estimate on your weekly income.

• Begin by estimating your weekly income before you pay bills or do anything else with your money.

• Put a minimum of 10- 20% of your weekly income before bills into a savings account.

• Then work out how much you expect to need to pay in bills this month. Include all debts as well as utility and other bills you may have or expect to receive. Ensure you budget to pay more than the minimum amount on your debts. If you only pay the minimum required you will not achieve your goal of being debt free. 

• Divide that amount by four and this will give you a weekly amount you will need to subtract from your income to cover your end of month bills. 

• Allocate any remaining money for personal use, to increase bill repayments or to increase savings.

The third step is to look for alternative income sources if your expenditures (not including personal use money) are greater than your income. This may mean taking a second job or looking for a higher paying job. Short-term pain will equal long-term gain. 

Stop using any credit cards and never use them to pay for food or clothes or utility bills. Repay them as soon as possible to reduce interest on repayments. 

By focusing on these steps, your financial freedom by this year’s end is very achievable. 

Managing Festival Expenses—Celebrate without Feeling the Pinch on the Wallet

Festive seasons come every year, and these are seasons in which retail traders make a killing. TV and radio stations make a lot of money on advertisements in such festive seasons. The online sites are flooded with advertisements that are very glittery and catchy to the eye. Everybody is caught up in the festive mood of the season, and the cash in their pockets starts to itch. When this happens, people start buying whatever they set their eyes on and they spend even without thinking; after all, tomorrow has its own shares of trouble, doesn’t it? So why deprive yourself of today’s pleasures for a tomorrow whose materialization is not even guaranteed?

 

Well, festive seasons will always come as long as there is a year and a calendar. Therefore, do not get too fussy with them. Be very practical and sensible as you spend during a festive season. Do not buy what is somewhat unnecessary; why invest $200 on a decoration that will be used for a few hours only to be disposed off the next day? Be very innovative and creative so that you will not have to buy everything. Consider going for a one-day lesson on making nice ice cream, yoghurt, ketchup and hot sauce. This way, you will never have to worry about such things when you are hosting your guests during a festive season. 

 

It is an all-time practice to exchange gifts, say during festive seasons of Easter and Christmas. However, it is not necessary to do so. Okay, before you kill me, let me explain why and show you how. You have a family of say seven (dad, mum and kids). You have short term and long-term goals as a family, say moving into your own home or getting a new car or starting a business. If this is so, what is so hard in having a family discussion and deciding that you will not do the religious exchanging of gifts for the sake of your family long term goals? 

 

It is not easy to resist spending on the glittery and expensive wares for the festive season, especially when you know that you can use your credit card to make purchases. However, resist over spending as much as you can. This way, you will be able to enjoy the whole year without paying debts you never budgeted for in the first place. Delayed gratification is the secret.

What Financial Freedom Actually Means

With the cost of living constantly rising and people’s personal debt on the increase, the question of financial freedom is in most people’s minds. How to achieve it and live a life that is debt free, or at the least, where the ability to pay every day expense’s and provide for the family without needing to go into debt is the goal for most people. 

 

Achieving financial freedom need not be difficult. People with a poor credit rating can turn their lives around and achieve a better rating simply by making financial goals for their life. Financial planning is not just for the rich and famous. Anyone who wants to achieve financial freedom must and should engage in financial planning. 

 

Financial planning is about taking control of your financial situation instead of allowing it to control you. It is about creating goals and then committing to them. The reward for this action is the financial freedom you are craving. It will enable you to be debt free and saving money regularly, while also having money to spend on the things you enjoy most in life. 

 

Achieving financial freedom involves three major steps that you should plan on.

 

Creating a budget

 

Creating a budget means ensuring income does not exceed expenditure and the goal of the budget is to create a life style plan that covers all expenses and provides extra for saving and personal spending. It involves not only listing the current income sources, but potential other sources to increase income if required. The interest paid on debts is a constant drain on finances. While it may seem logical to pay out small debts and then focus on the large ones, in fact paying off the larger debts first will save money in the long term. 

 

Living by that Budget

 

A budget is only as successful if there is commitment to live within the budget and resist impulse buying and anything that may cause voluntary over expenditure. The exception to this rule is the true emergency, which although not budgeted is covered by the savings plan you have put in place. If you have plans to buy household furniture or other expensive items, delay doing this you are debt free

 

Increasing Savings

 

Allocate a weekly fixed amount of money as savings. Do not compromise on this amount for any reason. It is your key to future financial freedom. 

Small Business Merchant Loans and Other Alternatives

One very common way to begin your business is by becoming a merchant. Being a merchant is by no means easy however. There are always a lot of things which you need to pay attention to. One of these things is the liquidity of your company/business.

 

Often what causes merchants to fail is simply a case of not having enough capital or insufficient access to extra capital. 

 

When you have access to extra capital, it could mean two things; you are either a very rich person or you have learned the different options available to receiving funding for the small business you are running. 

 

It’s clear that the second option is the best. These days it doesn’t matter so much if you have a lot of money today. There may be a time coming when you will have to resort to different types of merchant loans.

 

There are two different types of financing solutions for funding your company/business. Merchant loans and small business loans are some of the popular choices, as they can generally approve you for borrowing a large amount of money. 

 

This is good, because you are able to start your own business or you can buy out a business. Money which you have borrowed from the bank could be used to re-finance some of your other various business depts. It could also be used to buy other kinds of capital such as, inventory, commercial real estate or necessary equipment. 

 

Besides small business loans, you can choose for a cash advance. This is somewhat similar in regards to merchant loans, except you are not required to pay fees upfront. The application process is much simpler then applying for a normal business loan, they typically do not ask for details for credit card agencies. 

 

A business cash advance has the big advantage that there is no fixed collection time and the scheduled repayments are a little more lenient. The money you are borrowing is unsecured, so you don’t have to worry yourself about collateral. With a cash advance you as an applicant don’t need especially good business credit score. 

 

SBA loans generally will satisfy your needs for funding, but it is not as easy to get additional capital like this. That’s why there are other alternatives. It would help you if you turned more attention to the other options. Unsecured loans/cash advances usually cover the higher risk by higher rates; they can still be a good last resort. 

 

It could save your business. Learning more about merchant loans and also funding alternatives will help you understand your options. 

Small Business Franchise Loans

Running your own business, whether it is a big or small business is a lot of hard work. It’s never easy. There are so many things that you need to attend to, and running the whole operation yourself can be difficult. 

 

Thankfully there are some ways to lighten your workload. Besides getting a few business partners another way is to choose to run a franchise business. This will save you from having to develop your business plan yourself. 

 

But it is true that it will always be difficult to finance a small business operation. Even a franchise has its pitfalls and it can be tricky. So how do you go about making it all a bit easier?

 

People would rather run a business through a franchise these days, this means they are already provided with the main things they need to start their business off well. 

 

When you own your own franchise, you are required to make an upfront payment. Besides this, you also need lots of capital in order to fund the marketing and build-out costs.

 

In this instance, you would do well to study a bit more about the different forms of financing which are available to smaller business. But most of the time, franchises will try to qualify for franchise loans. 

 

Some good news here, it is much easier for the banks to approve financing for a franchise then it is for them to finance a new start-up business. The reason for this is that franchises already have a good track record, also with money.

 

The franchisers would also be able to supply the necessary money for the business owner. The type of financing very much differs from one franchisor to the other. The amount also varies between different franchisors. Financial firms also offer funding to smaller businesses by using their retirement funds.

 

This is made possible because of a financial structure which has been developed. This structure enables the franchisors to invest retirement money straight into their own franchise, they can do this without having to pay taxes. 

 

A small business administration person provides the franchises with all sorts of different types of funding. What you should do is learn about the different ways in which you can increase capital. 

 

There are many different ways for you to increase the amount of capital you have, for your own personal franchise. It is very important for you to keep watching your finances. That way you can determine whether they are being wisely spent and invested. 

Qualifications Necessary for Receiving a Franchise Loan

These days, people who are in need of money to use for the franchise businesses they are planning take out a franchise loan. Franchise businesses can be very lucrative right now, even despite the fact that they can be very expensive. 

 

A benefit to a franchise business is that you don’t need many promotions or advertising in order to let people know about your services. This is because your business will already have an established name. With a franchise business you don’t have to buy many materials to start with. Ingredients, devices and other materials would be included in a franchise package.

 

Aside from that, a franchise business gives you a head start against your competitors, because your business will be on par with an original business. 

 

But, because of the established name and its popularity, a franchise business will prove to be expensive. It has been said that in this type of business you are just paying for the name and the trademark. But many people still decide to go for a franchise business because it does have good business opportunities. If you decide on a franchise business you can get a franchise loan from a financial institution.

 

It is possible to get funding for a small business, like a franchise enterprise, through a financial institution. These institutions do have specific qualifications which you need to have in order to be eligible for a loan. 

 

The first qualification which the financial institution looks for is whether or not you will be able to pay off a loan like this. Obviously, this is a basic qualification which you need at any financial institution, private lender or bank. 

 

Something to keep in mind is that financial institutions cannot risk losing large amounts of money, such as with franchise loans. As the creditor you have to have good capacity to pay off the loan and a good credit history. This will help your loan to be approved. 

 

The financial institution will pay the most attention to these two things. They consider your capacity to finish paying off the loan and credit history. The financial institution also considers your qualities as an entrepreneur, and whether or not you will be able to make the business succeed. 

 

When applying for a loan, particularly one for a large amount of money, your personal qualifications will be thoroughly checked. 

How to Apply for Commercial Loans

The application process of getting a commercial loan can be quite daunting, especially if you aren’t sure what you’re getting yourself into. People always assume that it’s the same as the process you go through to get personal loans. But it is quite a different process all together.

 

Waiting can be frustrating, there is lots of paperwork coming and going and it’s a long time before you can get your loan approved. 

 

One common way to do it is to use a broker. So read this:- 

 

When you submit your loan application, the reviewer, who is usually called a loan officer, will check all the paperwork you have submitted. He will check your credit history, income statement and collateral. If you need to submit additional paperwork the loan officer will let you know, you will then have to resubmit the application. 

 

Usually loan applicants have to provide extra information when it comes to certain types of loans such as, a loan for purchasing commercial real-estate. For this you will need to submit things like area environmental reports, area maps and appraisals. 

 

When all the necessary paperwork is gathered together in a loan packet, it is sent to a number of leading institutions, who will check the documents and decide if they should be approved.

 

This process can be made easier if you use a broker. A broker may be able to make things proceed more speedily for you. You application will then be checked by loan committees or underwriters. They will provide you (the applicant) with a letter. 

 

This is called the ‘letter of intent’ it is just a preliminary-document which helps you (the applicant) and the potential money lender to decide what exactly is desired by both parties. This is an underwriting process. Extra paperwork might be needed, but it depends on the situation. It usually takes about a week for the decision to be made. 

 

The underwriter is always the best person to contact when you need to negotiate important offers and terms. Things like, interest rates and the repayment period. 

 

After the money lenders make their offer, you will need to go through the offers and choose the one which is the most attractive in regards to your business. Once you have chosen an offer that you like, you will need to sign your name to the ‘letter-of-intent’ from the bank you have decided on. Extra fees and deposits may also be necessary to finish the process of your loan application. 

 

If your loan has been approved a closing agent takes over and guides you through the many necessary formalities in order to close the deal. Once all the paperwork is finished, you’ll get your loan money as a check or it will be made over by direct debit, depending on what you have agreed on.