If you’re planning to apply for no credit check business loans to fund your plans, there are some things you need to consider first.
1. A loan is a loan—yes, that’s what many people often forget
It’s not some sort of free money that you wouldn’t have to pay in a month or after a few weeks. Whether you like it or not, debts have huge impact on your future finances. And, it will change your budget.
2. You can use personal loans for a variety of things
Here are some of the smartest ways to spend your personal loans:
- Start your own business. If you like to pursue your passion and interests, and earn at the same time, getting a loan to start a business is a good idea. You can work your own hour (though you may tend to overwork yourself when starting out), set the rules—the ones which you think would best work for you and your business, and make more money than what you are currently making. While you may use the loan for short-term fixes, like paying for overdue credit card bills and utilities, or buying food or paying for a car repair, investing into something lucrative will eventually pay off. Aside from setting your own deadlines, networking with the right people, and becoming financially independent (yes you can finally sign your own pay check)—starting out a business can give you so much more. You can become an expert in your filed, contribute something good to the industry and help other people—by giving them the right products or services providing jobs and helping out in the community.
- Debt consolidation. If you’re tired of paying several creditors each month, why not apply for personal loans to consolidate your debts? You can roll all utility bills and your credit card debt payments into one monthly payment. This means lower interest rates, convenient monthly bill payment and less creditors to bother you when you fail to pay on time.
You can also save money because the interest rate applied to personal loans compared to credit cards and other consumer debts is much lower. You will reduce the interest rates and have more money fro your other needs. Or, you can sue the free cash for some profit generating investments—like a small share ion stocks or mutual funds.
- Fix your credit. Taking out personal loans to pay off other high-cost loans, or to save your home from foreclosure will not only save your credit, it will also give your credit score a boost. You can also consolidate your loan to avoid credit damage and stay out of bankruptcy.
When you pay off your outstanding debts, your credit utilisation will go down, and your payment history—the record of whether you’ve paid your debts on time or not, will also improve. It’s because when you max out your credit, you are more likely to miss payments—and when you do, your credit history will be damaged, other potential creditors can see it, and even your potential utility providers and landlords. And before you ask–yes, credit score matters. If you want to obtain low –interest, easy to pay loan, from mainstream lenders, you need a good to excellent credit rating.
3. Your income and assets matter
How much do you own, compared to what you really have? Lenders look at your debt to income ratio to assess whether you have the capacity to repay the loan. A person who earns $2000 a month, but has to make debt repayments of $1500 a month may have a hard time paying off a new loan, It’s because he still has other needs to attend to—and when sudden financial emergencies come up, he may still dip into the other $500, leaving nothing behind to pay for the new loan.
So, if you are applying for a personal loan, make sure that your debt to income ratio is at least 36 or lower. That means, your debt is only 36% compared to your income. You still the other 64% to meet your other needs.
The monthly debt obligations included in the computation of the debt to income ratio are your recurrent debts, such as:
- car loans
- credit card( minimum monthly payments)
- home equity loan payments
- student loan
- other loans (monthly dues)
Include all sources of annual income on your list as well as your assets that you can attach as a security to loans. These include:
- Average amount of tips received each month
- Business profits (if sole owner/share from the profits if a partner)
- Child support
- Part-time income
- Social security benefits
Business Loans offers one of the most affordable loans with easy and convenient repayment system for people with bad credit. Make an enquiry today to learn more about our loans.