Several Options Available For Personal Financing

by : Jim Brown

Most people are so busy earning incomes that they fail to consider all personal financing options that are available to them to save some of the hard earn dollars they work for. People use credit cards to purchase many things in life but rarely think about the debt they are accumulating by doing so. Most of the paycheck goes to paying those bills but rarely do people personally finance their futures by placing money in a savings account.

Money saved can be used to finance many business ventures and personal pleasures. Large luxury items could be true luxury when there is no bill to pay at the end of the month. People could then afford gas to put in sports boats and recreational vehicles. Pleasure purchases have top priority in people's lives but the pleasure disappears when these items are repossessed because the person did not have personal financing selected to pay for it if loans at the bank went unpaid. Planning for those purchases using a budget and a verifiable repayment plan would be wise choices.

The personal financing options for small purchase amounts are easier to plan. People can pay for those purchasing with a loan from a bank or save money and own it outright. Obtaining a bank loan might require a review of the applicant's credit history if the amount is over $500. Signature loans can be obtained for lesser amounts and the repayment options on those loans are negotiable. Banks will consider payroll dates when determining the date payment is due, but most banks would expect payments to be made according to the terms of the loan contract. Most contract terms on signature loans specify payment within a 30-day period.

Personal financing can be arranged for utility service to be activated. Many electric utility companies will charge fees of $100 or more to establish service, and at a customer's request, they will split the payments into thirds. This type of personal financing works well if payments are on time each month. It could also be costly if the account becomes delinquent at anytime because utility services will often ask for additional deposits to be made on the account to continue service past the cut-off date. Utilities will return interest earned on the deposits after a year of service.

Some financing needs are emergent and require immediate payment. People have the option of borrowing money from family and friends and arranging a repayment plan that is tailored to the family budget. If the money is used for medical care, then loan givers are usually more amicable to waiting for repayment. Using friends as a money source can ruin relationships because some people assume that this money will never have to be repaid. Future requests for cash will be denied and that is when friends realize that a friendship loan is a contract signed with a handshake.

Many people will use personal property as collateral for a personal loan. The title of an automobile serves as collateral for a loan with a title loan company and the owners benefit from this style of personal financing because they are allowed to drive the car while the loan is active. The value of the automobile will determine the amount of money that can exchanged for cash amounts. Repayment plans for title loans are once a month until the balance is paid. High interest rates will apply to title loans and only a portion of each monthly payment is applied to the balance.