Let’s face it — most of us don’t know what people are talking about when they throw around terms like diversification, compound interest, and inflation. These basic financial concepts prove too difficult for the majority of the country. According to the latest surveys, nearly half of the country fails a basic financial literacy test, placing the U.S. 14th on the world scale behind Denmark, Sweden, and even Canada.
Financial illiteracy harms your chances of making informed choices about the big things in your life, like paying for school, buying a home, and preparing for retirement. It can also prevent you from finding a responsible personal loan. If you aren’t well-versed in the world of finance, the next three facts might just come as a surprise.
- You Don’t Need a Perfect Credit Score to Apply
We all wish we could have an Excellent credit rating (any score of 750 and above), but the average American is about 100 marks below this, resting comfortably in Fair with 689. If your rating falls beneath the average, dipping into Poor or Bad, finding a loan may be a challenge. Many traditional lenders make Good or Excellent credit ratings a requirement for their loans—a practice that disqualifies up to 20% of the country.
When you have a less than impressive score, direct lenders offer an alternative to consumers typically denied by conventional lenders. They will perform credit checks as part of your application like any other lender, but this rating isn’t their only criteria. They use a variety of financial factors to determine your candidacy, each of which takes away some of the influence your rating has over your application. Keep in mind, depending where you live and what kind of loan you apply for, this inquiry will affect you overall score.
- You Can Expect the Same Rates and Fees with Every Loan
There are far too many financial products available in the United States to abide by this rule. Consider all of the mortgages, student financial assistance, auto loans, and cash advances issued every day. Each kind has its own rates, terms, and conditions. Sometimes these conditions differ from company to company within the industry.
When it comes to cash advances from the country’s direct lenders, there is no universal law that regulates every product from coast to coast. There are, however, state laws that standardize the fees and interest a lender is allowed to apply legally to their products. The only way to ensure the lender you’ve chosen bases its rates, terms, and conditions on the law is by confirming they have a state license to lend.
- You Don’t Need to Put up Collateral
While you need to secure some loans against your assets, like a home or vehicle, you won’t need to provide this kind of collateral for small dollar loans from direct lenders. The personal loans and lines of credit offered by a lender like MoneyKey are considered unsecured loans. There’s no need to put up an expensive piece of property in order to qualify for their help. You do have to supply a basic financial profile in order to apply, the details of which you can find at MoneyKey.com. There you’ll see what you need to submit and how to get in touch with a loan specialist in case you have any questions about the application process.
So how did you do through this test? Did none or all of these facts surprise you? If you were thrown off by any of the information shared above, consider it time to improve your financial literacy. Considering how poorly the nation fared, your need to brush up on finances isn’t unusual. At least your task is simple. After all, you’ve already started your education by reading articles like this, and with a few more clicks of your mouse, you can continue to brush up on your finances.
Michael Sanduso lives in Toronto, Canada. He is a freelance writer and editor, tech geek, and stay at home father.