Life happens, and when it does, how many of us are prepared to take on an expense of $400 or more at the drop of a dime? Flat tire? Maybe. TWO flat tires? For a lot of us, not so easy. 

We know the importance of having a "rainy day" savings account, something separate from the "vacation fund" account of course. What do we do when it's depleted? 

We can't control when life throws you a curve ball. But when it does, a personal, emergency loan could potentially be the best option to get cash in your hand the soonest possible. Before you start desperately filling out loan applications, however, let's look at the pros and cons.

1) For one thing, personal loans can be super flexible, making them useful for many reasons. Emergency loans can be especially flexible when it comes to paying them. Loan terms are in months (12, 24, 48, etc) with extended terms typically meaning a lower payment. Keep in mind though that the longer it takes you to pay back ANY loan, the more you typically pay in interest.
2) Personal loans don't require any type of collateral. In a pinch, you can get yourself a personal loan and not worry about having to give up your home, for example, if you happen to default.  However, if you are confident you can pay it back, you might want to consider a secured personal loan for better interest rates.
3) The application process typically is quicker than most other loan types. They also require less documentation. Most reputable lenders even offer online applications making it a lot more convenient to apply.

1) Since unsecured loans are based on credit and ability to repay, the interest rates tend to be a little higher than those loans backed by an asset. Obviously the better your credit, the better the rate. During an emergency, you might not have enough time to shop around for a good rate, this is why repairing and rebuilding credit is crucial when it's NOT necessarily needed; this way you're prepared for when you DO need it.
2) Since these types of loans are risky for lenders, they tend be a lot more picky about who they lend to. There are many factors that affect whether or not you get approved including: (mainly) your credit score, credit history, income, and your total debt.
3) If someone is considered higher risk for this type of loan, lenders might limit the amount being borrowed. Fortunately there are plenty of ways of improving your credit score to avoid limiting your borrowing power. 

In a time of crisis, an personal emergency loan might be your best bet. Weigh out the pros and cons however it makes most sense to you in your current situation and be sure to understand the terms and conditions to ANY agreement before signing. 

Find a reputable lender who can offer you advice and explain every step of the application process to you. 

If you're looking for someone you can trust, let us introduce to you our preferred partner, 

PersonalLoans.com offers a wide range of options that can help you find funding from anywhere between $1,000 and $35,000. They'll shop for you within their network of lenders and find the best rate and term for what you need it most, whether it's home improvement, debt consolidation, medical expense, or anything else. The application process is simple, easy, and in most cases, once you're approved, your funds are available the next business day!They serve people of all credit types and continue to be one of the best  when it comes to providing excellent customer support.

Moneyunder30.com gives them a rating of 7/10 and badcredit.org says 4.4 out of 5 stars! 

Check out PersonalLoans.com

News about COVID-19 seems to change every hour and people are doing everything in their power to make health and safety their #1 priority. Along with the obvious health risks, countless people are also being affected financially due to the impact this pandemic has had on our economy. As we all prepare ourselves for what's to come, we encourage all of you to be proactive when dealing with your credit during these trying times.

We've put together this list of actions you can take to ensure that you stay financially healthy while we fight COVID-19.

1. Be super vigilant about security and protecting your identity.
Especially during times like these, scammers, thieves, and criminals alike capitalize on innocent, vulnerable people. If you suspect identity theft or fraud in any way, you can place a security freeze on your credit reports. This prevents people from accessing your information and applying for credit using your name.  (Ask us what our clients have been using to protect their identity)

2. Frequently check you credit reports.
During these stressful times, anything can happen. Checking your credit reports can help you catch any inaccuracies or fraudulent activity that might be reporting. We recommend you checking all three major credit bureau reports (Experian, Equifax and TransUnion) and reaching out to them if you see anything that needs to be corrected.

3. Dispute any items that are inaccurate.
Whether it's a fraudulent item sowing up, or a simple typo, disputing directly to the credit bureaus will help clean up your credit reports. Put those credit bureaus to work, it's why they exist in the first place!

4. Make a budget, plan for the worst, and expect the best.
Stay positive and be proactive about your budgeting. We've already established that anything can happen during this time. Budgeting in general is already a sound strategy, but now even more so. If after looking at your budget you feel that you might need to tighten things up, do it. Make sure you can cover expenses and still have some emergency funds left over. 

5. Pay your bills on time.
We get it, times are tough. A lot of us can't go back to work and are quarantined at home. The best thing you can do is to at least pay the required minimums set by your banks and other creditors. There are some other things you can do to avoid late payments such as balance transfers for credit cards and home equity loans/lines of credit which you can use to pay off some debt. Keep in mind, however, some of the benefits of either can be temporary and might impact you in other ways. Contact us if you have any questions on either option!

6. Reach out to your lenders and creditors.
Ideally before you miss a payment, contact your lenders and creditors about some options they might have during times of hardships. Many of them are now putting policies into place that may allow for lowering of interest rates, pausing of payments for a period of time, and deferment or forbearance. They may also reach out to the credit bureaus on your behalf and issue a statement indicating that you have been affected by a natural disaster, protecting you even further. (Note: If you contact your creditors, you may be able to delay your upcoming payments. But you need to get in touch because payment waivers are not automatic.)

7. Reach out to your service providers.
If you feel that you might not be able to pay your utilities, cable, phone, or other monthly bills, contact your service providers to see if they offer flexible options during this time. 

8. Seek professional help.
Consider working with one of our Credit Counseling Specialists if you feel that you need help managing existing debt. We can help you create a Debt Management Plan and a Budget to better handle your debt and expenses. 
With the fluctuating market and growing concerns about investments and 401-Ks, it would make sense before making any impulsive decisions to also reach out to your financial counselors and investment professionals who can help guide you in the right direction. 

For small business owners, CLICK HERE to read about the U.S. Small Business Administration Disaster Assistance Loans that are helping small business owners during this time of crisis.

Stay safe, healthy, and happy. 

Source Material:
Experian
U.S. News
U.S. SBA

​“YOU DON’T NEED GOOD CREDIT TO BUY A HOUSE!!!"
​
“BUY YOUR FIRST HOME WITH LOW CREDIT!!!"

Sure, but it’s not that simple...
A lot of people have asked about FHA loans when looking to buy a home. Although at first glance it might seem to make the most sense, especially if you don’t have good credit and cash to put down, you should be aware of what it means and weigh out the pros and cons for yourself.

Should I get an “FHA” loan to buy a house if I have low credit?
Well, first off, what is an FHA loan?... A Federal Housing Administration (FHA) loan is a mortgage that is backed up by mortgage insurance and makes it easier for people with less-than-pristine finances to buy a home. The main advantages of an FHA loan are:

• Down payment - FHA loans may allow you to put down as low as 3.5%. For people who don’t have a lot of cash on hand, that’s great news! It means you won’t have to put down 7%, 10%, 13%... you get the idea. 
• Credit Score - With an FHA loan, most people can get approved for a home with a credit score as low as 580! Woah…
• Home Improvement - “FHA 203k” loans allow you to fund home improvement projects and buy a home at the same time!

THIS ALL SOUNDS PHENOMENAL!

​Soo… what's the catch?
Well here’s the thing; low credit and low down payment is a red flag that you might not be financially sound just yet to buy a home in the first place. In reality, buying a home, no matter how great the deal is, with low credit and little cash only adds more debt to your name. You would still have the matter of fixing your credit and finances.

Not to mention:

• Insurance - FHA loans come with two types of insurance. (1) First, anything you put down less than 20% requires upfront mortgage insurance. There’s an upfront charge of 1.75% that may be wrapped into the loan balance.The more you borrow, the more interest you pay. This means you’ll be paying more than 1.75% unless you write a check at closing. A bigger loan also means bigger monthly payments. (2) Second, you’ll be paying ongoing monthly insurance. That cost is usually between 0.80% - 1.05%, although it can be lower with a 15-year loan term. Unlike private mortgage insurance, which can be cancelled once you reach above 20% equity in your home, FHA premiums are paid throughout the life of the loan.
• Term Choices - With an FHA loan, you’re limited to what kind of term you can choose. For most people, a standard 15-year or 30-year fixed loan is a decent choice either way. However, with these 2 options, you don’t have much choice in finding a good fit if an interest-only mortgage or adjustable-rate mortgage might be a better option for you. You don’t have enough options to strategically choose what’s best for your finances. Don’t just go with what gets you a low monthly payment. Think it through.
• Property Limitations - For homes that are move-in ready, and FHA loan might be OK. FHA loans require certain standards to be met, for example, basic health and safety. This makes it impossible to be approved for a fixer-upper or major bargain that otherwise would have been a better option for you.
• Qualifying - FHA loans don’t always get approved. In some cases, you can get away with an even lower score ONLY if you’re willing to put more money down…
• Seller Hesitation - Sellers like to know about potential buyers, and an FHA loan doesn’t exactly scream out “I’m super financially stable!”... Even more, they might fear that the FHA loan requirements might slow down or even ruin the deal whole.
• CREDIT - If you thought your credit-worthiness was bad before, what will it look like now? Your debt-to-income ratio plays a big role when getting approved by lenders. If you had issues getting approved for anything before, having more debt will only decrease the chances of you getting approved for anything moving forward (car, credit card, etc). By acquiring more debt on top of your already weak foundation, you’ve now made it harder for lenders to trust you with anything else.  

So what should I do?
We’re not telling you to avoid FHA loans like the plague. On the contrary, we encourage you to learn more about it. Read more and ask a lot of questions. Find an FHA lender and inquire about getting more information. 

Here’s what we ARE saying; Ideally, having better finances and better credit will give you options. Find a way to improve your credit score and alleviate your monthly expenses to save and afford a bigger down payment. This will allow you more freedom when you truly are READY to buy.

Call 1(888) 460-9440 or email us at info@masscreditrelief.com to find out more about FHA loans and how we can help you improve your credit to prepare for buying a home. Contact us and take advantage of our knowledge and experience. Mass Credit Relief will help you get into the right position to win!

Sources:
The Balance