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Cash Advance Loans: Loan Sharks In Disguise?
You have seen them on the corner and in the poorer parts of town with names like "Quick Cash", "Quick Loan", "Payday Loans", "Car Title Loans". They are starting to sprout up all over the country and will soon rival Starbucks for sheer number of...
Refinancing with Home Equity Loans
If you have lived in your home for a reasonable amount of time,
you may be considering refinancing.
Refinancing can be done in a few different ways. One of the most
popular recently has been the home equity loan.
A home equity loan is a...
Secrets Behind Interest Only Loans: Lower Payments, But Are They Right for You?
Interest Only loans gained widespread popularity in 2003 when FannieMae, the largest purchaser of secondary market home loans, provided guidelines to wholesalers for purchasing them. FannieMae calls it Interest First also known as Interest Only...
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...
Unsecured Loans – Substituting Secured Loans
Watching more and more people fall in the trap laid down by the secured loans, you resolved never to take debt help from the lending organisations. Nevertheless, as and when need arises, the lending organisations do have to be approached for help....
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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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