Tag Archives: Loans

Mar
28
2023

How A Farm Loan And A Rural Loan Differ

These types of loans have differences between them that are crucial to understand, yet so many people looking for loans start out on the wrong path because they don’t understand that these two types of loan aren’t the same.

A rural loan is made to those who want to purchase property in the rural United States. Rural areas are places in the US that are far away from highly populated towns and cities and the government wants to encourage growth in more rural areas. These loans are typically offered through a government agency like the USDA.

If you decide to go with the USDA for your rural loan, however, be advised that they have strict regulations on what areas qualify as a rural home loans area. The agency has broken down the United States into qualified rural areas where these loans can be used generally the area has to have a population of less than 25,000 and the agency keeps track of this areas population. This is to ensure areas have proper status. You should check at local rural development offices for lists of lenders that offer USDA rural loans.

A Farm Loan is very different type of loan that is designed only for farms and farm equipment. You would get a farm loan most likely through a private lender. Some examples of farm loans are operating loans. Operating loans cover things like crop needs, labor and family living expenses, livestock purchases or other farm-related needs.

There are also equipment loans that cover things such as Grain Bins and facilities, farm and home improvements, farm trucks and vehicles, new buildings of all types, farm improvements (like tiling), livestock facilities and breeding livestock. Farm Loans also cover real estate purchases and do not have the same sorts of restrictions as a rural loan has such as population and location restrictions.

A lender can talk with you further about your specific requirements for a loan, or you can look online for information defining specifics for your situation. You should look online first and play around with a mortgage calculator to get a general idea about what payments will be like for someone with your credit profile and cash for down payment. Also, look around at different interest rates there are many ways to pay back farm loans and rural loans terms and conditions vary greatly on length of time to pay back a loan and the interest a bank will charge you to borrow the money.

If you understand the difference between a rural loan and a farm loan before you seek your options, you will have an easier time getting the financing you need for your new home and/or equipment.

Copyright (c) 2012 Farm Credit Services of Mid-America

May
17
2022

$5,000 Unemployment Loans: Securing Loan Approval Without An Income

On the surface, it seems ridiculous, but there are lenders who are willing to grant loans to the unemployed. Surely, this is foolish, since the unemployed obviously have no source of income, but the fact remains that it is possible to get a $5,000 unemployment loan when most needed.

How can this be possible? Well, let us be honest and admit that $5,000 is not a huge amount of money. It means that lenders can easily create terms that can see them benefit but in a way that, should the borrower default, will not hit them very hard. Getting loan approval without employment depends on the same faith that students get.

Lenders will offer even unemployed applicants a chance to secure a loan, because there is a strong chance that unemployment is temporary. Granting affordable installment loans are therefore considered a viable decision rather than a major risk.

Why The Unemployed Are Accepted

So, why are the unemployed accepted by lenders? Well, the lenders are not ignorant of the risks involved and are not willing to grant loans to everyone who is without a job. But there are some cases where the chances of defaulting are quite low, so granting a $5,000 unemployment loan is fine.

There are two separate types of jobless. The long-term unemployed have been without a job for several years, so the chances of them finding work again have become very slim. This type of unemployed individual is not going to be considered for a loan.

Those who can hope to get approval without employment will have been recently made redundant, but it is understood that at least 6 months will have passed before the application can be made. The reason why an affordable installment loan may be on offer is that some form of employment is likely to be found within the next 12 months.

Unemployment Loans Explained

If approval on a $5,000 unemployment loan seems contrary what might be deemed logical, understand that the loan itself is used to keep on top of existing loan repayments and bills. For this reason, there is an understanding that the loan is a stop-gap.

However, it is the fact that the borrower is still considered highly employable that attracts the attention of the lender. It is similar to a student loan where the loan is granted in the faith that the borrower will graduate and get a good job.

Similarly, lenders have faith enough to grant approval without employment because the borrower will get a new job. Of course, they must also offer affordable installment loans because at this moment in time, the means to meet normal repayment terms does not exist.

Terms To Look Out For

It may seem that giving a $5,000 unemployment loan is more social charity than business. To an extent that is true, but it is also a business arrangement, and lenders expect the loan to be repaid in full and on time. But what are the terms that should be expected?

The key terms are the interest rate and the repayment period, just as with any other loan. However, because the lender is granting approval without employment, the interest rate is higher to cover any potential losses, while the repayment term is longer.

The longer loan term is what ensures these affordable installment loans are, in actual fact, affordable. For example, a loan of $5,000 repaid over 12 months is more expensive than over 5 years.