Does the reason for a personal loan matter?
I just got approved for a personal uncollateralized loan (This is NOT a small business loan or a car loan) and the reason I gave them for why I was taking out the loan is completely resolved so I no longer need the money for that. However, I would still like to take out the loan to invest in the stock market. Should I tell them that or does the reason for the loan not even matter. I do not want to be committing fraud or anything like that. And please do not give me a lecture about how it is dumb to invest with borrowed money. Thanks
Help! Personal Loans?
Well, without income, you will not qualify for a loan. But for your future reference, you would select option A for an automobile loan if you want the vehicle your purchasing to be used as collateral for the loan. The bank would then place a lien on the vehicle until it was paid off. This would be a secured loan, which is secured by the equity of your vehicle that was purchased. Option B could be for a unsecured or secured loan for pretty much any purpose. An unsecured would have a higher interest rate whereas a secured would have a lower. Using this option you could possibly get a unsecured loan to pay for the vehicle and there would be no lien placed on the vehicle and nothing would be used as collateral. Since the loan is for 2,000, this may be possible because unsecured loans are typically limited to a lower amount of funding. A secured loan would be anything you could use to secure the money the bank would lend. You could use cash in a savings account, the equity in your motorcycle or really anything. If the cash was used as collateral they would place a hold on this cash until the loan was paid off, if a motorcycle was used they would place a lien on it until the loan was paid off and similar for any other item deemed valuable. On a side note, you will need to check your credit to see where you stand. Qualifying for dish or direct tv would not be a good indicator of your true credit history. It would be important to check your credit and see where you stand before you apply so that you can determine whether there are errors, or whether you need to improve certain things. And on another note, because you do not have a source of income you would not qualify for a loan as I stated already, but I am sure even if your husband has bad credit, if the loan was secured and he had sufficient income, some bank may give him the loan. They may let you slide without having income yourself if he was on the loan also, because of his source of income. Sadly, most banks I am aware of do not have the option to declare household income. I suppose you could try, some banks usually dont even ask for income proof, but thats usually if you credit score is quite high. The best thing you could do is call the bank and ask if they are okay with you declaring your husbands income because you are married.
Does the reason for a personal loan matter?
Worst case scenario is if I lose ALL of the money which is highly unlikely since I am not trading derivatives I will still be able to make the monthly payment since I have a job. I would not just default on the loan if I lost everything. A Personal uncollateralized Loan is literally just a loan that is based on what the bank determines is the borrowers ability to pay back the money (which is based on credit score, income, etc) So if they think I am able to pay back the loan then what do they care what I do with the money? Also some of the pre filled in reasons on the application were "Major Purchase", and "Vacation". A vacation is literally just throwing money down the drain with nothing to show for it in the end so I figure investing would be considered safer than that.
What are some examples of consumer finance companies?
It depends on what you mean by "consumer finance" and in which country you live.One broad definition of consumer finance is this: the financing of goods and services for consumer.That definition brings a lot of product into play:- Uncollateralized personal loan, such as Credit Card or Cash personal loans- Payday loans- Ownership loans is a type of loan where a Financial Service company finance the purchase of an item: car financing, property financing. You don't own a car, you want to own it, the bank help you.- Refinancing loans is a loan type where a Financial Service company provide cash with an item being pledge as collateral: car refinancing, property refinancing. You already own a car, you want cash and you're willing to put the car as collateral.Looking at the above product, most banks certainly fit the bill as "consumer finance" company. Other example of consumer finance company would be specialist lenders. They are what is often cited as "consumer finance" company in the narrower term of the word.The difference between banks and these specialist lenders are the source of funding, which is the money the bank or specialist lenders provide to people who borrow money.Bank get their funding from depositors, individuals or companies that expect nothing funny will happen to their money.Specialist lenders get their funding from their shareholders, banks, or the capital markets. Specialist lenders are often prevented from taking money from depositors. In some country, that privilege is only given to banks.This restriction exist because many depositors are deemed less financially savvy than investors and thus have to be protected; mainly by puttig safeguards into banks and how banks handle deposits.It doesn't mean individual can't put money in specialist lenders. They can do it by buying share or bonds from the specialist lenders, but it comes with higher risk for the individual investor.Some asset type (e.g. car) have large value that most customer can't afford to pay in one single payment, and thus is natural object of financing.Thus for car, it's typical for automotive companies to also own specialist lenders to finance the purchase of their car.Some example of consumer finance company:- CapitalOne- Santander Consumer USASo, consumer finance companies are those that help consumer finance a purchase or receive loans for various purposes. Example of such companies are banks and specialist lenders.
What's the purpose of a AAA loan?
There is a difference between liquidity and solvency. Solvency is - simplified - the financial standing of an entity in terms of substance. That includes the value of its assets in comparison to its obligations and its cash flow and its sustainability.Good solvency does not mean, that there is enough liquidity, so even someone who is very solvent may be short on liquidity and may take out a loan.Example: You’ve inherited a large condo building worth 5 million dollars with no debt on it, but you want to buy a car. While your net worth is 5 million, you have no funds to do so. So you’re solvent but you’re not liquid - unless you don’t sell the building. A bank would gladly lend you the money for your car, because it knows you’ll be able to repay as your asset generates an income stream available to service your debt.And for your plans: Besides certain sovereigns, there are hardly any AAA rated borrowers left on this planet. So I’m not sure where your investment strategy is supposed to go, but it doesn’t sound it will reduce much yield.