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Bad credit business loans - when your credibility becomes secondary to bad credit
A business stands firm on the ground with the help of funds. Every business man would know that without finances one can't establish or advance a viable business plan. Not everyone is born with the kind of money required for furthering a business...
Balloon Or Reset Mortgage Loans - Understanding The Basics
A balloon mortgage, also called a reset mortgage, offers lower
interest rates with the option in 5 or 7 years to pay off the
balance or resent the loan. Considered more risky than an ARM
since interest rates can jump significantly, it is a...
Home Equity Loans - 5 Useful Application Tips
Obtaining a home equity loan does not have to be a major ordeal. Unlike your first mortgage, you are already in the home, and usually time is not such a major factor. You can close the loan at your own leisure, and take your time researching the...
Mobile Home Mortgage Loans
A large number of prospective homeowners are interested in
acquiring mobile or manufactured homes. Should these homeowners
require financial assistance, they will need to take the
assistance of approved lenders who make the money available...
Sub-Prime Mortgage Loans - Five Ways To Lower Your Rates On A Sub-Prime Mortgage
Sub-prime mortgages don't mean you have to pay excessively high
interest rates to buy a home. By taking time to do some research
and pick the right terms, you can save thousands on your
mortgage. The following five tips will help you get low...
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Self-Liquidating Loans - Fact or Fiction?
FICTION! There is no such thing as a self-liquidating "LOAN." If you walk
into a bank and ask for a self liquidating loan, they'll look at you as
though you were nuts!
You may see ads promising -
- Self-Liquidating "LOANS!"
- Investment Capital Overnight!
- Your "LOAN" has been Approved!
- BORROW Money And Never Pay Back!
- etc.
A self-liquidating "LOAN" is fiction. You will never get a loan that you
will never have to pay back from anybody. You need to be very careful when
you are presented with the opportunity to get "money for nothing!"
A true, self liquidating "LOAN", standing on it's own, is a pipe dream - it's
perpetual motion. A loan that pays itself off is of NO benefit to the lender
-
so, Why Would They Do It? The answer is simple - they WON'T!
Con men typically ask for up-front fees to get people a Self-Liquidating
Loan. "Your "Loan" Has Been Approved" is their typical ploy. Since there is NO
such thing as a Self-Liquidating "Loan" this should be a tip off that all
they want is your money and you will never see such a "LOAN"! Remember the
money MUST come first, and if they can't prove to you how the money will
come first to create such a transaction, you will lose any money you pay to
these con men.
Also beware of the con men that do not charge front fees but want to see if
you qualify for such a "LOAN", then notifies you later that you have been
approved for a "Loan" and want you to pay points, closing costs, advance
interest fees, etc.
But there is a way to use this CONCEPT!
In a Self-Liquidating Loan CONCEPT there are no such expenses! The
money comes first, then the transaction is created using a Roll Account
(Compensating Balance)!
A Self-Liquidating loan actually does NOT exist. I know you see several ads
in many publications advertising such a loan. There has been a mystique
about these loans. Many people believe that to get a so-called Self
Liquidating, Loan one only needs to apply and like magic, there it is! A
multi-million dollar loan with money pouring out of the envelope! Not so -
but the Self-Liquidating Loan concept is done every day and you can learn how!
There is ONE way for a TYPE of self-liquidating loan to exist. Remember, I
said *type* of self-liquidating loan.
A better term for a "self liquidating loan"
would be a Roll Over Loan, Roll
Program or a Compensating Balance Loan.
What is a Roll Over Loan?
Simply put - a roll over loan is a security-based loan that starts out with a
security such as a CD, zero coupon bonds, government savings bonds,
debentures, bank notes, etc. as collateral for the loan and as final payment
for the loan.
These can be purchased at a fraction of their end value and can be used as
collateral for a loan.
Example 1a:
An example would be Government Zero Coupon Bonds. These bonds can
be bought at a discount of normally 33% of the face value. A $1,000 face
value bond could be bought for around $330. The government guarantees
you a return of $1,000 or a $770 profit. Offering this secured financial
instrument to a financial institution as a compensating balance for your loan
creates a form of a self-liquidating loan. Borrow $1,000 and receive $770.
Example 1b:
Another example would be life insurance or annuity. If you have an annuity
that pays a fixed or variable amount it would be possible to instruct this
financial instrument to be used as a compensating balance for the loan you
want to take out. In fact many times the insurance company could be in a
position to arrange this form of a self-liquidating loan via an annuity.
Example 2:
You will need to find an investment group that functions in an offshore
environment. (An offshore environment provides you with higher interest
rates and higher returns on your money along with lower lending rates.) Use this
group to leverage your money, thus creating a compensating balance. This
creates, in effect, a "self liquidating" situation. In this example you not
only receive a "loan" but you will receive a residual income besides!
Final Note.
Remember, if there is no security placed up front, NO lender will even
consider providing a loan under these conditions. However, there are places
where you can find information on how to create a roll program! You just
have to find one that you can trust.
About the Author
Dave Laforge
webmaster@valtechservices.com
Webmaster of the Valtech Services Group
If you are interested in finding out more on how you can create your own roll
program, a good place to get the information you will need is at:
http://www.valtechservices.com
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