When it comes to home improvement, you have to be aware that it is strongly based on your current financial situation. This is the case just because this segment is considered as an investment. So, you have to take suitable measures that will help you cover all of the costs that home repair might cause you. These things often call for unpredictable situations where you have to be extra prepared for every possible situation. But how can you actually achieve this? Well, this is where home improvement loans come into play. This way of financing is proven to be a common solution for the majority of people when they want to repair or renovate their homes.

There are so many things that you have into consideration if you want to successfully deal with this type of loan, so, in order to help you in this process, we have created this guide that will walk you through every single point that is crucial for understanding these loans. So, without any further ado, let’s get right into this.

Finding the Right Loan for Your

This is probably one of the hardest tasks you have to deal with because it will determine the following course of things. Understanding that owning a home is expensive, and if you add on the repair costs, you will definitely have to look for other sources to finance your project. You can see what the experts at bestinstallmentloans.com say regarding the best types of home repair loans that are best suited for your particular needs. Taking this step will allow you to make a well-informed decision that will be crucial in the long run because dealing with loans is a complex responsibility that has to be done the right way.

Doing complete research before you sign your contract will be of a great benefit as well. Further on you can look for the most popular loan options that people are choosing like personal loans, home equity loans, and home equity line of credit. These types of home repair loans are best for a bad credit score.

This approach will definitely help you find the right loan for your specific needs.

How Do Home Improvement Loans Work?

One of the things that you have to pay extra attention to is the fact that you have to qualify to get a home improvement loans. If you are a qualified candidate, then a lender will lend you money that you can use in the home improvement or better-said home repair project that you have been working on. Because it is a loan, you have to repay the money that you have borrowed over a designated period of time.

When dealing with this type of loan, you should take into consideration the interest rate and other possible fees that you should cover over the repayment period of the loan. Another crucial technique that will be of great help in this process is learning to calculate the monthly loan repayment that you are obliged to do.

This is a great tool to incorporate in the beginning stages even before you apply for a home improvement loan qualification. By calculating the monthly rate you will be able to determine whether you are capable of proceeding with the home improvement or home repair services.

When Is a Good Time to Get a Loan?

Well, to deal with this segment you have to think about all of your specific needs in the first place. This refers to what type of improvement are you considering, some minor repairs or a complete home renovation, what is your current financial situation and that what are your financial capabilities.

Further on, you have to think for the long run and as well as your current credit score and history. These factors might determine the loan rate you will end up paying off in the following years. Take into consideration every minor detail regarding your financial situation and the actual state of your home because these factors might end up determining the interest rate and the loan terms you will be offered.

The Bottom Line

When you apply for a home improvement loan you have to be aware that the major deciding factor ends up being your current financial situation and the urgency of your request. Here you should also pay attention to your overall cred score and credit history and also the condition of your home which includes the age of the house and the location.

Another thing that has the power of determining whether you will get higher or lower rates is your equity. Before you make the final decision you have to carefully explore all of the available options regarding this subject.

When it comes to taking your loan the starting point should be doing complete research regarding your options. This also includes understanding your current financial situation that plays a major role in this whole situation. When it comes to defining the term collateral, the best definition that grasps the meaning is that you own something that the bank can take if you fail to pay off your initial debt or loans. Any asset or property that the borrower has can be promised to the lender as a secure option for the loan. To put this in other words, the lender of the loan has the ability to take over the asses if the borrower does not repay the loan according to the previous contract.

Taking into consideration the definition, we have constructed this article to help you understand the basic functions of this type of loan so that you are familiar with the possible opportunities you have. We are going to take you through understanding what collateral is and how does it actually work. So, continue reading.

What Is a Collateral Loan?

As mentioned above, a collateral loan is a form of secure plan where the lender can take an asset from the borrower if he or she has not completed the repayment of the initial loan. For all of this to be possible, there has to be a form of a contract where both parties agree upon this route. Because without any contract the collateral loan cannot function.

To put all of this in other words, or as bestpersonalloans.com covers it here, collateral simply indicates an alternative form of payment. Usually, the lender, in this particular situation can actually sell the collateral so that he or she can cover the losses that were made during the period of the initial loan.

Types of Collateral Loans

There are several types of how a lender can compensate for the unreturned borrowed money, which is commonly referred to as a collateral loan. No matter if you are a borrower or a lender, you should really make sure that you have everything in order and you are familiar with the most popular types of collateral loans which consist of: real estate, auto loans, and personal loans.

The nature of the loan usually determines the type of collateral and often falls under the categories mentioned above. So make sure that you have every necessary information regarding the debt you have to repay so that you can determine whether you will have to deal with a collateral loan. This also goes for the borrower, if you are in this position then you should also be familiar with the types of collateral loans so that you can sign the contract without any further complications.

The Difference between Collateral and Security

The confusion begins with the statement that a collateral loan is a secure plan when the borrower fails to complete the repayment. So, to avoid the confusion of these two terms you should take a look at the differences explained below.

A collateral loan can be a property asset that is given by the borrower to secure the loan. This is a way of assurance that the lender gets for the possibility of a significant loss. Security loan, on the other hand, is often referred to as any financial asset that functions as a collateral loan. The best way to draw a distinction between these two terms is to think of parcel of land, a car, or a house as collateral, and bonds, swaps, and stocks as a security loan.

The risk regarding collateral that concerns the borrower is the chance of possible failure of repayment. This is where the lender can take an asset in order to cover the financial loss in this particular period.

If you could use some cash to resolve some kind of pressing financial issue, you have plenty of company. Many people face this situation on any given day. That’s fine if you have excellent credit and can obtain a loan with relative ease. What about those who have credit that’s not so great? Do they have not choice but to seek out a payday loan lender? The answer is no. An unsecured personal loan will accomplish the same end and provide some benefits that a payday loan could never provide. Here are some examples.

A Lower Rate of Interest

There’s no doubt that an unsecured personal loan offers better conditions than payday loans. One of the first things you will notice is the difference in the interest rates that come with each financing option. Simply put, a personal loan will have a more competitive rate of interest than any payday loan.

What does that mean? Over the life of the loan, you’re likely to save a tidy sum in terms of interest payments. That’s especially true when you opt for a personal loan with a shorter duration. As a way to get the money you need now without creating a greater financial burden, the unsecured personal loan comes out ahead.

Longer Repayment Period

The nature of a payday loan is to repay the borrowed amount plus interest within a short period of time. Even with the most liberal payday loan terms, borrowers are typically expected to repay the obligation over the next one to two pay periods. The most likely scenario is that the debt becomes due when your next payday rolls around.

By contrast, an unsecured personal loan could allow you anywhere from a couple of months to a year or more. Instead of having to pay everything in such a short time, you can structure the loan so that you have a series of manageable monthly installment payments. Thanks to this approach, it’s easier to repay the debt without putting stress on your household budget.

Fewer Fees and Additional Charges

Payday loans are certainly convenient, but there’s a price to pay for that convenience. Along with higher interest rates, there are likely to be a number of fees and charges bundled into the mix. Some of them may be easy to understand. Others will take some research to figure out.

With personal loans, there are still some fees and charges. The difference is that they are usually fewer add-ons and it’s easier for the average consumer to understand them. If you’re the type of person who values clarity when it comes to entering into binding agreements, the personal loan is easily the better choice.

Your Timely Payments are Often Reported to Credit Bureaus

If there’s any payday loan lender that reports payment histories to the major credit bureaus, rest assured that lender will be difficult to find. The industry standard is to not report activity to any of the credit agencies. That means the money you repay to the lender will do nothing to help you improve your credit score.

With unsecured personal loans, it’s not difficult to find lenders who will report your timely payments to at least one of the major credit agencies. Some lenders will report to both of them. Along with offering you better interest rates, more manageable repayment terms, and loan contracts that are easier to understand, this type of lender will also help you boost your score by a few points.

The bottom line is that there is no real benefit to choosing a payday loan over an unsecured personal loan. If you’re in need of some financing, take a look at what personal loan lenders can offer you. If you compare their terms and conditions with those offered by the typical payday loan lender, it will be easy to see which solution is in your best interests.

Moving currency across borders is far more expensive than most suspect. That’s because banks and money transfer providers charge more than the wire fees you see upfront.

These businesses make money in three different ways. Their wire fees are the most visible charge. However, two other categories often fly under the radar – commissions, and the exchange rates they offer.

To calculate how much you’re paying in foreign exchange fees, you need to account for all three factors. Below, we’ll show you how to create an Excel spreadsheet that will evaluate the fees charged by money transfer providers.

The easy part: accounting for wire fees & commissions

Let’s get the basic stuff out of the way first. The first two factors – wire fees and commissions – are absolute numbers that don’t change much from day-to-day. That makes them incredibly easy to account for.

After creating the outline of your spreadsheet (as shown above), enter the institutions you’ll be comparing in column A. Then, enter your transfer amount in column B. Next, find the fees these institutions charge upfront. $30 is our default for the banks, as it’s the lowest amount many American institutions charge for international outbound transfers. Enter what you find for each service in column C.

Then, if you can track it down, enter the commission percentage in column D. Enter it as a decimal (e.g., 0.02, not 2%), so it will work in our equation. However, we’ll acknowledge that this figure is hard to find in the public sphere. For instance, Western Union pays agents a commission for the transfers they process. However, to protect itself against competitors (and from public scrutiny), it treats these figures as a trade secret.

Above, we’ve entered a figure of 0.02 for the banks. This figure is a standard rate many airport exchange desks in airports earn on every transfer they make. We use 0.06 as a conservative estimate for Western Union’s agent commission – however, some rumours state that some can earn up to 30%!

The math-intensive part: calculating the exchange rate margin

So far, putting together our spreadsheet has been an exercise in data collection. Here’s where it starts to get “mathy” (yes, we’ve just invented that word… deal with it.) You’ll need to find two exchange rates – the one your institution charges, and the interbank (aka the “wholesale”) rate.

Some banks make this data readily available, like Toronto Dominion Bank in Canada. However, many American institutions aren’t fond about making this info public. To be fair, Bank of America kind of does it, but only for inbound transactions (e.g., they’ll show you their CAD/USD rate, but not USD/CAD.) As a result, you may have to call your local branch.

Next, find the interbank rate. For decades, XE.com has been the web’s trusted source for this data, a purpose it continues to serve. Plug in the amount you want to transfer, your desired currency pairing (e.g., USD/CAD), and click the arrow button. You’ll get the interbank rate, as well as the inverse for the pairing you chose.

Now, take your bank’s rate and subtract it from the interbank rate. Repeat this for every money transfer provider you’re analyzing, and input the result in column E.

The hardest part: Calculating your total cost

Time to find out how much each money transfer provider is charging you in fees. We put the “Total Cost” column to the right of the others to add emphasis – we advise you do the same.

Begin the formula creation process by clicking the first cell in Column G, and entering the equal symbol (=). Start with the easiest component – wire fees. Click on the first cell in Column C, then enter a plus sign (+).

To calculate the commission, we’ll need to make a bracketed equation. Open a bracket, then click on the first cell in Column B (your initial transfer amount.) Then, enter the multiplication symbol (*), followed by clicking on the first cell of Column D (the commission percentage.) Remember to keep this figure in decimal form, or you’ll break the equation.

Close the bracketed equation, and enter another addition symbol. Then, start the second bracketed equation – this one will determine the exchange rate margin. After opening the bracket, click on the first cell of Column B. Follow it with a multiplication symbol, and then click on the first cell of Column E.

Close this bracketed equation, and hit enter. If done right, this should calculate how badly your bank is ripping you off. According to the spreadsheet we’ve made for this article, your equation should look like this:

=C3+(B3*D3)+(E3*B3)

Your final step: Duplicate these results for the remaining entries. Hit CTRL+C  (Command+C if you’re a Mac user). Then, highlight the remainder of the cells in Column G and hit CTRL/Command+V. This step will copy the formula to each row, giving you data on the remaining money transfer providers.

Not an Excel wizard?

If you can’t be bothered to craft your own spreadsheet from scratch, we don’t blame you. However, you shouldn’t allow money transfer providers to take liberties with your money.

Over on MoneyTransferComparison.com, they have an international money transfer fee calculator. Enter your initial transfer amount, and the amount sent. In seconds, you’ll know whether you got a killer deal, or if you got fleeced.

One of the recurring type of requests that I receive through managing this blog is trying to calculate a commission or bonus structure, especially by managers that have a sales force. I did touch on the subject a bit but I thought I’d do a quick review of the different type of commissions and how I’d calculate them in Excel. I am also providing an Excel file that you can view here if you can’t wait:) Here a few types of commissions and how I’d do them:

Flat Commission

In this structure, a sales person would get a % of sales no matter what. This is the most simple case:

Flat Commission With A Floor

In this structure, a sales person would get a % of sales but only under the condition that they reach a minimum of sales:

Flat Commission With A Ceiling

As much as companies like to reward star employees, some are worried about the idea that a sales guy would end up making more than the president so they end up adding a maximum/ceiling that someone can earn:

Brackets

Here is a common system that is used. If you generate 10K in sales, you will earn X%. If you earn 25%, you will earn X% of your sales, etc. Here I will use the Nested If excel function:

=IF(A10<$A$2,$B$2*A10,IF(A10<$A$3,$B$3*A10,IF(A10<$A$4,A10*$B$4,A10*$B$5)))

Scaling Bonus

The scaling bonus looks similar but is different in the sense that if you look at the same chart:

This time, if you make $25K in sales, you will get 3% of the first 10,000 and 8% on the next 15,000. This is slightly more complicated. Here is how I will do it, step by step:

First I will determine the amounts you would make at each number of the scale:

Then, I will determine the appropriate “level” and add anything incremental by using nested if conditions:

=IF(A11<$A$3,A11*$B$2,IF(A11<$A$4,$C$3+(A11-$A$3)*$B$3,IF(A11<$A$5,$C$4+(A11-$A$4)*$B$4,IF(A11<$A$6,$C$5+(A11-$A$5)*$B$5,(A11-$A$6)*B6+$C$6))))

As is always the case, you can Bonus_Commission.