There are many financial options that can be used by an individual to aid him in his investments. Some are recommended and some are to be avoided. In this article let us take into account loans such as secured business loans, mutual fund loans, and annuity loans.
Secured Business Loans
Secured business loans can help you put up your dream business or help maintain an existing one. An unsecured business loan also exists and the difference between the two is that secured business loans require collateral, while unsecured business loans do not. Although the risks of losing your assets that you made as collateral for the secured loan is possible, it is still a better option because the terms of the loan are very convenient. Repayments with it are made very make-able because it could last up to 30 years. Loans can amount up to $25,000 to a million dollars. You can choose between flexible interest rates and fixed interest rates. Flexible rates will be up for negotiation while a fixed rate is of course fixed.
Mutual Fund Loans
A mutual fund is a consolidation of funds from many investors and as one they place their funds on investment securities (bonds, stocks, money market, or other mutual funds). Taking out money directly from a mutual fund is technically not allowed. You will need to open a margin account with your mutual fund and then borrow from a brokerage firm with your mutual fund assets as collateral. Although this is one fast way to rescue you from financial mishaps, you should consider that the value of your mutual funds depends on the current market scenario. So, if your portfolio is doing so well at the time that you need cash, it would be best to resort to other types of loans.
Perhaps the more, if not the most recommended, type of loan is an annuity loan. With it you can avoid paying taxes and fees if you repay on time and while at it you can keep your annuities intact. Annuity loans provide tax-free access with your annuities and you can withdraw half of it in a lump sum. Be sure to pay it back at the deadline otherwise it will be considered as a withdrawal. Withdrawals will incur taxes and even early withdrawal fees (withdrawing before reaching 59 ½ years old).
Loans for the Unemployed
With a qualified guarantor you can get unsecured loans even if you are unemployed. Your status would not affect your eligibility with loans for the unemployed, but your guarantor’s would. He or she should be employed, a homeowner, and with good credit history and current credit status. It is very important that a guarantor fully understands his responsibilities because he would serve as the insurance for the lender.
Loan Modification Hardship
In times of distress associated with major financial constraints that may lead to foreclosure of homes or repossession of collateral, a hardship loan modification can be done. Like you, mortgage lenders are more than willing to work on terms that would be beneficial to both parties because for a fact lenders lose a great deal of money with repossessions. With a valid loan modification hardship letter, a loan modification can be made. Interest rates can be adjusted based on the level of hardship that the borrower is in making it still possible for them to settle their debts.Secured Business Loans,