Should You Help a Family Member in Debt? – SmartAsset

Should You Help a Family Member in Debt? – SmartAsset

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your financial details.

Watching loved ones struggle with their personal finances is never fun, especially when you’re doing relatively well yourself. But before you rush to the aid of your mother, your brother or your favorite cousin, it’s a good idea to consider how that might impact your own financial situation. Check out some of the pros and cons of loaning money to a family member in debt.

Check out our personal loans calculator.

The Pros

Being able to support a family member who’s facing a financial difficulty can make you feel good about yourself. You’ll have the opportunity to work together to implement good financial strategies and in the process, you might learn something that can help you manage your own money more effectively. And since you can never be completely sure about your own financial future, helping your relative get back on track might provide you with a safety net that you can rely on if you need help from that same relative later down the line.

It’s important to take the time to sit down with your relative and discuss what has worked well for you financially in the past. You can help him or her create a tighter budget (with loan repayments to you built in) and connect him or her with a professional financial advisor or credit counselor if need be. The more comfortable your family member is with talking about money, the better the experience is likely to be.

The Cons

When it comes down to it, helping family members out of debt is a big deal financially speaking. Before you make that move, it’s best to think about how it could affect your relationship. You run the risk of turning your personal relationship into a business transaction, and you might feel like money is all you talk about. Eventually, it might create tension or lead a serious disagreement.

You could also make yourself financially vulnerable by lending a family member a portion of your wealth. If you choose to let someone borrow your money, keep in mind that you don’t want to lend any amount that could get you into trouble.

Related Article: 5 Tips for Lending Money to Friends or Family

Important Questions to Ask Yourself

As you weigh the advantages and disadvantages of lending money to a relative, there are several things you’ll need to clear up. Will this be a temporary situation or an ongoing arrangement? A gift or a loan? Can they afford to pay you back at some point? What will you do if they can’t?

You’ll also have to consider whether providing someone with a loan is a good use of your money. Instead of relying on you, could your family member turn to debt management, debt settlement or bankruptcy? Are there other ways you can help?

Related Article: 4 Signs It’s Time to File Bankruptcy

Final Word

Deciding how to assist a family member in need isn’t easy. As an alternative to becoming your relative’s sole source of financial support, (or turning down his or her request) you can always offer to fund part of the debt repayments. Managing your expectations and finding a happy medium that won’t jeopardize your chances of achieving financial success are key.

Photo credit: ©iStock.com/Ocskaymark, ©iStock.com/Christopher Futcher, ©iStock.com/SoumenNath

Liz Smith Liz Smith is a graduate of New York University and has been passionate about helping people make better financial decisions since her college days. Liz has been writing for SmartAsset for more than four years. Her areas of expertise include retirement, credit cards and savings. She also focuses on all money issues for millennials. Liz’s articles have been featured across the web, including on AOL Finance, Business Insider and WNBC. The biggest personal finance mistake she sees people making: not contributing to retirement early in their careers.
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Source: smartasset.com

Should You Help a Family Member in Debt?

Should You Help a Family Member in Debt? – SmartAsset

Tap on the profile icon to edit
your financial details.

Watching loved ones struggle with their personal finances is never fun, especially when you’re doing relatively well yourself. But before you rush to the aid of your mother, your brother or your favorite cousin, it’s a good idea to consider how that might impact your own financial situation. Check out some of the pros and cons of loaning money to a family member in debt.

Check out our personal loans calculator.

The Pros

Being able to support a family member who’s facing a financial difficulty can make you feel good about yourself. You’ll have the opportunity to work together to implement good financial strategies and in the process, you might learn something that can help you manage your own money more effectively. And since you can never be completely sure about your own financial future, helping your relative get back on track might provide you with a safety net that you can rely on if you need help from that same relative later down the line.

It’s important to take the time to sit down with your relative and discuss what has worked well for you financially in the past. You can help him or her create a tighter budget (with loan repayments to you built in) and connect him or her with a professional financial advisor or credit counselor if need be. The more comfortable your family member is with talking about money, the better the experience is likely to be.

The Cons

When it comes down to it, helping family members out of debt is a big deal financially speaking. Before you make that move, it’s best to think about how it could affect your relationship. You run the risk of turning your personal relationship into a business transaction, and you might feel like money is all you talk about. Eventually, it might create tension or lead a serious disagreement.

You could also make yourself financially vulnerable by lending a family member a portion of your wealth. If you choose to let someone borrow your money, keep in mind that you don’t want to lend any amount that could get you into trouble.

Related Article: 5 Tips for Lending Money to Friends or Family

Important Questions to Ask Yourself

As you weigh the advantages and disadvantages of lending money to a relative, there are several things you’ll need to clear up. Will this be a temporary situation or an ongoing arrangement? A gift or a loan? Can they afford to pay you back at some point? What will you do if they can’t?

You’ll also have to consider whether providing someone with a loan is a good use of your money. Instead of relying on you, could your family member turn to debt management, debt settlement or bankruptcy? Are there other ways you can help?

Related Article: 4 Signs It’s Time to File Bankruptcy

Final Word

Deciding how to assist a family member in need isn’t easy. As an alternative to becoming your relative’s sole source of financial support, (or turning down his or her request) you can always offer to fund part of the debt repayments. Managing your expectations and finding a happy medium that won’t jeopardize your chances of achieving financial success are key.

Photo credit: ©iStock.com/Ocskaymark, ©iStock.com/Christopher Futcher, ©iStock.com/SoumenNath

Liz Smith Liz Smith is a graduate of New York University and has been passionate about helping people make better financial decisions since her college days. Liz has been writing for SmartAsset for more than four years. Her areas of expertise include retirement, credit cards and savings. She also focuses on all money issues for millennials. Liz’s articles have been featured across the web, including on AOL Finance, Business Insider and WNBC. The biggest personal finance mistake she sees people making: not contributing to retirement early in their careers.
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Source: smartasset.com

The Best Cities for Motorcycle Owners – SmartAsset

The Best Cities for Motorcycle Owners – SmartAsset

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your financial details.

According to the U.S. Department of Transportation, as of 2012 there were at least 8.4 million registered motorcycles in the United States (a number that has likely risen in the past four years as the economy has strengthened and auto sales have ballooned). That’s a lot of hogs – about one for every 37 people in the U.S. 

Need a boost to get that bike? Find out what loan options are available to you.

In some states, the concentration is even greater. South Dakota, for example, has one registered motorcycle for every 11 residents.

There are numerous factors that might make some places better for motorcyclists than others. Weather is an obvious one. Going for a ride is a lot more pleasant if it isn’t pouring rain.

Likewise, frigid temperatures can push even the most die-hard motorcycle owner to consider an alternate means of transportation. For many motorcyclists, access to the open road is also important. A few hours of traffic can suck the fun right out of an afternoon joyride.

So what are the best cities for motorcycle owners? To answer that question, SmartAsset analyzed data on every U.S. city with a population of at least 150,000. Along with the weather and traffic congestion in these cities, we also looked at such metrics as the state max speed limit on highways and the number of registered motorcycles per capita. (Read our full methodology below.)

Try SmartAsset’s personal loan calculator to find out how long it would take you to pay off a personal loan.

Key Findings

  • Best rides out west. With its many natural wonders and its long stretches of open road, the American West is something of a playground for motorcycle enthusiasts. It probably comes as no surprise that seven of the top ten cities in SmartAsset’s analysis are out west.
  • Southern California has best motorcycling weather. Seaside cities like Oxnard and Chula Vista have weather that is warm and dry year round. Incredibly, San Diego records zero days a year in which the average max temperature is less than 40 or higher than 90.

1. Fort Collins, Colorado

Why is Fort Collins the best city in the U.S. for motorcycle owners?

First, take a look at the location. Along the Front Range of the Rocky Mountains and 40 miles south of the Wyoming border, Fort Collins is surrounded by breathtaking scenery and opportunities for great rides. For instance, a loop through the Roosevelt National Forest, up to Laramie, Wyoming, and back down to Fort Collins would cover 220 miles of mountains and valleys in about four and a half hours.

Next, check out the traffic (or lack thereof). Motorists in Fort Collins spend an average of less than 20 hours per year sitting in traffic, making it one of the 20 least-congested cities in SmartAsset’s analysis. Colorado also has some of the lowest gas taxes in the country, with a state tax of just 22 cents per gallon.

2. Sioux Falls, South Dakota

South Dakota, which is one of the top states for an early retirement, may also be the best state for motorcyclists. Drive along I-90 on any summer day and you are sure to see numerous packs of motorcycles zipping along. The state is home to what may be the world’s largest annual gathering of motorcycle owners, the Sturgis Motorcycle Rally, which in 2015 drew an astonishing 739,000 people.

While that rally is located across the state from Sioux Falls, there are plenty of reasons motorcycle owners will be happy in South Dakota’s largest city. (Sturgis and nearby Rapid City were not included in SmartAsset’s study as their population is less than 150,000.)

The average motorist in Sioux Falls spends just 15 hours per year in traffic, ninth-lowest among the cities we analyzed. Likewise, given the city’s strong economy and low housing costs, motorcycle owners should have some spare income to spend on the upkeep and improvement of their motorcycle collection.

3. Boise, Idaho

Located in central Idaho’s Treasure Valley, Boise is within a day’s ride of many of the country’s most beautiful regions. It is less than eight hours from Yellowstone National Park, less than eight hours from Lake Tahoe and less than eight hours to Oregon’s Cannon Beach. Utah’s Arches National Park is about eight hours and 15 minutes away from Boise.

4. Santa Clarita, California

Santa Clarita is located in Los Angeles County, but unlike in the City of Angels, traffic in Santa Clarita is not a major problem. In fact the average commuter in Santa Clarita spends less than 15 hours per year sitting in traffic. (LA motorists, in contrast, spend 80 hours in traffic.)

While bypassing the bad traffic, motorcycle owners in Santa Clarita still get to enjoy Southern California’s scenic mountain roads and warm weather. The city averages just 23.9 days per year in which precipitation exceeds 0.1 inches.

5. Overland Park, Kansas

Overland Park is the second largest city in the state of Kansas. Of the 171 cities in SmartAsset’s analysis, it has the 14th highest income after housing costs (like mortgage payments and insurance). That means motorcyclists should have spare money to spend on motorcycle repairs and improvements.

Overland Park also has the 16th lowest property crime rate of the cities in SmartAsset’s analysis. There were just 279 auto thefts in the city in 2014, 1.5 for every 1,000 residents.

6. McKinney, Texas

McKinney is about 30 miles north of Dallas, but when it comes to traffic it is a world apart. In fact, the average motorist in McKinney spends just nine hours a year in traffic congestion, according to the Texas A&M Transportation Institute. That is lowest of any city in our study. For motorcyclists, it means less time waiting for the car ahead to move and more time on the open road.

Thinking about borrowing money? Here are a few things you should and shouldn’t do.

7. Santa Rosa, California

Located in the heart of one of America’s top wine regions, Santa Rosa is surrounded by beautiful scenery. Motorcyclists have numerous options, whether they want to go for a quick afternoon joyride or take a longer weekend tour. Potential destinations include the Pacific Coast Highway, which is less than an hour away, and Redwood National Forest, which is about four hours away.

8. Oxnard, California

If you love the beach and love your motorcycle, Oxnard may be the place for you. It is located along the Pacific Coast, west of Los Angeles. The city’s weather is stunning. Average maximum temperatures never fall below 60 or exceed 80. In fact, on average the city has just one day a year in which the temperature gets over 90 degrees.

9. Cary, North Carolina

This North Carolina city is the number one city on the East Coast for motorcycle owners. Like the rest of the East Coast, it is wetter than most cities in the west, averaging 76 days per year in which it receives at least 0.1 inches of rain. On the other hand, the climate in Cary is fairly temperate. Maximum temperatures fall below 40 degrees an average of 15 days a year, and rise above 90 degrees an average of 33 days per year.

The area is not lacking for beautiful routes. For instance, the Blue Ridge Parkway, “America’s favorite drive,” is located about three and a half hours from Cary. The North Carolina coast is less than three hours away.

10. Chula Vista, California

Take a ride through the Sonoran Desert or down the Coast of Baja California. Check out Cleveland National Forest or Joshua Tree National Park. All of these destinations are just a few hours from Chula Vista. The city also has some of the best motorcycling weather of any city in the U.S. It ranked in the top 15 cities in our study for both its limited rainfall and lack of extreme temperatures.

Methodology

To reach these results, SmartAsset analyzed data on 171 U.S. cities with a population of more than 150,000. Specifically, we looked at the following seven metrics:

  • Precipitation: the average number of days per year in which precipitation exceeds 0.1 inches.
  • Temperature extremes: the number of days per year in which average maximum temperatures are either lower than 40 degrees or higher than 90 degrees.
  • Traffic: the average hours per year lost to traffic congestion for auto commuters.
  • Property crime: the annual number of property crimes (including but not limited to auto theft) per 100,000 residents in each city.
  • Discretionary income: the median income after typical housing costs in each city.
  • Maximum speed: the maximum speed limit on highways of the state in which each city is located.
  • Motorcycle registrations: the number of residents per registered motorcycle for the state in which each city is located.

We ranked each of the 171 cities in our analysis according to those seven metrics. (For state-level metrics, cities in the same state received the same ranking.) We then averaged those rankings, giving half-weight to the two measures of weather and full weight to all other metrics.

The overall index was calculated based on that average ranking. The city with the best average ranking received an index score of 100, while lower average rankings correspond with lower index scores.

Data on temperature and precipitation comes from the National Oceanic and Atmospheric Administration. Data on traffic congestion comes from the Texas A&M Transportation Institute. Data on maximum speed limits comes from the Governors Highway Safety Administration. Data on the number of motorcycle registrations comes from the U.S. Department of Transportation. Data on property crime rates comes from the Federal Bureau of Investigation and local law enforcement agencies. Data on discretionary income comes from the U.S. Census Bureau.

Questions about our study? Contact us at blog@smartasset.com

Photo credit: ©iStock.com/pick-uppath

Nick Wallace Nick Wallace studied Economics at the University of Washington. He enjoys getting people thinking about finances by looking at the numbers. Nick is a freelance journalist and data analyst living in Michigan. He still lends his economic and analytic expertise for SmartAsset’s studies.
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How Interest Rate Hikes Affect Personal Loan Investors

How Interest Rate Hikes Affect Personal Loan Investors – SmartAsset

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In December 2015, the Federal Reserve raised the federal funds rate by a quarter of a percentage point. That was the first time the Fed had raised rates in nearly a decade. While federal funds rate changes don’t directly impact peer-to-peer (P2P) loan interest rates, lending platforms may begin increasing their rates. If you’re investing in peer-to-peer loans, it’s important to understand how that may impact your portfolio.

Rising Rates May Mean Better Returns

Personal loan investors make money by claiming a share of the interest that’s paid on the loans, in proportion to the amount that’s invested. If the platform you’re using raises rates for their borrowers, that means you’ll likely see higher returns.

That’s especially true if you’re open to funding high-risk loans. Peer-to-peer platforms assign each of their borrowers a credit risk rating, based on their credit scores and credit history. The loans that get the lowest ratings are assigned the highest rates. For example, Lending Club’s “G” grade loans (the loans that go to the riskiest borrowers) have interest rates of 25.72%.

Assuming borrowers don’t default on their payments, these investments can be more lucrative than lower-risk loans. Using Lending Club as an example again, F and G grade loans historically have had annual returns of 9.05%, which is nearly double the 5.22% return that investors earn from low-risk “A” grade loans.

The Downsides of a Rate Increase

While rising interest rates may put more money in investors’ pockets, there are some drawbacks to keep in mind. For one thing, it’s possible that as rates rise, borrowers could decide to explore other lending options. If that happens, there would be a smaller pool of loans for investors to choose from.

To compensate, peer-to-peer lenders may resort to issuing lower-quality loans as rates rise, but that could be problematic for investors who prefer to steer away from riskier borrowers. If the platform you use no longer offers the kinds of loan products you want to invest in, you’ll have to reallocate those assets elsewhere to keep your portfolio from becoming unbalanced.

Finally, rising interest rates could result in a higher default rate. Increased rates mean that borrowers have to pay a lot of money for taking out personal loans. If the personal loan payments become unmanageable, a borrower may end up defaulting on their loan altogether. Some platforms refund the fees that investors have paid, but they usually don’t refund their initial investments after borrowers default.

What Investors Ought to Consider

If you’re an active P2P investor or you’re thinking of adding P2P loans to your portfolio, you can’t afford to overlook the risk that’s involved. Financing the riskiest loans is a gamble, so it’s important to consider the consequences of putting money into those kinds of investments.

A good way to hedge your bets is to spread out your investments over a variety of loan grades. That way, if a high-risk borrower defaults you still have other loans to fall back on.

If you want more help with this decision and others relating to your financial health, you might want to consider hiring a financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with top financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Photo credit: ©iStock.com/Ondine32, ©iStock.com/Tomwang112, ©iStock.com/xijian

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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The Millennial Guide to Getting a Personal Loan – SmartAsset

The Millennial Guide to Getting a Personal Loan – SmartAsset

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Personal loans have made something of a comeback over the last few years thanks to the rise of online lending. According to TransUnion, the number of consumers who are using personal loans jumped by 18% between Q3 2013 and Q3 2015. Millennials, in particular, are increasingly relying on them to consolidate debt or finance big purchases. Here’s a rundown of what 20-somethings need to know about applying for a personal loan.

Online Lenders and Traditional Banks Aren’t the Same

In the past, if you needed to borrow money you had to head to a brick-and-mortar bank to do it. The online personal loan industry has changed all that and millennials have more choices when they need loans. There are, however, some differences to keep in mind.

Because online banks tend to have fewer overhead costs, they can often afford to offer the most credit-worthy borrowers lower interest rates than traditional banks. They may also charge fewer fees. With a regular bank, however, you’ve got the advantage of dealing with a loan officer face-to-face, which may come in handy if you have a question or a problem later on.

Many online lenders also take a different approach when it comes to underwriting. Upstart and SoFi, for example, cater to millennial borrowers and both consider not just your credit score and your income but your long-term financial outlook when making lending decisions. With a traditional bank, your personal merits are less likely to factor into whether or not you’re able to get approved.

Check Your Credit Before You Apply

Even though online lenders may be a bit more flexible, they’re still going to take a look at your credit score when you apply. Considering that some online lenders charge interest rates as high as 36%, you need to know what kind of deal you can expect to get.

Take a look at your credit report from each of the three credit reporting bureaus – Equifax, Experian and TransUnion – to make sure your accounts are being reported properly. If you see an error, it’s best to dispute it as soon as possible. Otherwise, it could pull your score down and you could end up with a higher interest rate on a personal loan.

If you’re still in your 20s and you don’t have a substantial credit history yet, you might face an uphill climb to getting a loan. Paying your student loans and other bills on time each month and applying for a secured credit card with a low limit are two effective ways to establish credit. Payment history accounts for 35% of your FICO score so it’s a good idea to focus on that area if you’re aiming to get a personal loan with the best rates.

Crunch the Numbers on the Payoff

Personal loans aren’t open-ended, which means you have a fixed amount of time to pay them back. Depending on the lender, the loan term may last anywhere from one to five years.

If you’re in your 20s and you’re not making a lot or you’re balancing student loan payments, you need to be sure that you can afford the monthly personal loan payments. Missing a payment could do serious damage to your credit. Doing the math is also important where the interest is concerned.

For example, let’s say you want to borrow $5,000 to consolidate credit card debt. Bank A offers you a 3-year loan with a 12% simple interest rate while Bank B is offering you a 5-year term at a 10% simple interest rate. On the surface, the lower rate seems like the better deal but if you go with Bank B, you’ll end up paying at least $700 more in interest.

If you’re on the lookout for a loan, using our personal loan calculator can help you figure out the true cost of borrowing.

Photo credit: ©iStock.com/Lorraine Boogich, ©iStock.com/filo, ©iStock.com/GlobalStock

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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The Best Cities for Motorcycle Owners

The Best Cities for Motorcycle Owners – SmartAsset

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your financial details.

According to the U.S. Department of Transportation, as of 2012 there were at least 8.4 million registered motorcycles in the United States (a number that has likely risen in the past four years as the economy has strengthened and auto sales have ballooned). That’s a lot of hogs – about one for every 37 people in the U.S. 

Need a boost to get that bike? Find out what loan options are available to you.

In some states, the concentration is even greater. South Dakota, for example, has one registered motorcycle for every 11 residents.

There are numerous factors that might make some places better for motorcyclists than others. Weather is an obvious one. Going for a ride is a lot more pleasant if it isn’t pouring rain.

Likewise, frigid temperatures can push even the most die-hard motorcycle owner to consider an alternate means of transportation. For many motorcyclists, access to the open road is also important. A few hours of traffic can suck the fun right out of an afternoon joyride.

So what are the best cities for motorcycle owners? To answer that question, SmartAsset analyzed data on every U.S. city with a population of at least 150,000. Along with the weather and traffic congestion in these cities, we also looked at such metrics as the state max speed limit on highways and the number of registered motorcycles per capita. (Read our full methodology below.)

Try SmartAsset’s personal loan calculator to find out how long it would take you to pay off a personal loan.

Key Findings

  • Best rides out west. With its many natural wonders and its long stretches of open road, the American West is something of a playground for motorcycle enthusiasts. It probably comes as no surprise that seven of the top ten cities in SmartAsset’s analysis are out west.
  • Southern California has best motorcycling weather. Seaside cities like Oxnard and Chula Vista have weather that is warm and dry year round. Incredibly, San Diego records zero days a year in which the average max temperature is less than 40 or higher than 90.

1. Fort Collins, Colorado

Why is Fort Collins the best city in the U.S. for motorcycle owners?

First, take a look at the location. Along the Front Range of the Rocky Mountains and 40 miles south of the Wyoming border, Fort Collins is surrounded by breathtaking scenery and opportunities for great rides. For instance, a loop through the Roosevelt National Forest, up to Laramie, Wyoming, and back down to Fort Collins would cover 220 miles of mountains and valleys in about four and a half hours.

Next, check out the traffic (or lack thereof). Motorists in Fort Collins spend an average of less than 20 hours per year sitting in traffic, making it one of the 20 least-congested cities in SmartAsset’s analysis. Colorado also has some of the lowest gas taxes in the country, with a state tax of just 22 cents per gallon.

2. Sioux Falls, South Dakota

South Dakota, which is one of the top states for an early retirement, may also be the best state for motorcyclists. Drive along I-90 on any summer day and you are sure to see numerous packs of motorcycles zipping along. The state is home to what may be the world’s largest annual gathering of motorcycle owners, the Sturgis Motorcycle Rally, which in 2015 drew an astonishing 739,000 people.

While that rally is located across the state from Sioux Falls, there are plenty of reasons motorcycle owners will be happy in South Dakota’s largest city. (Sturgis and nearby Rapid City were not included in SmartAsset’s study as their population is less than 150,000.)

The average motorist in Sioux Falls spends just 15 hours per year in traffic, ninth-lowest among the cities we analyzed. Likewise, given the city’s strong economy and low housing costs, motorcycle owners should have some spare income to spend on the upkeep and improvement of their motorcycle collection.

3. Boise, Idaho

Located in central Idaho’s Treasure Valley, Boise is within a day’s ride of many of the country’s most beautiful regions. It is less than eight hours from Yellowstone National Park, less than eight hours from Lake Tahoe and less than eight hours to Oregon’s Cannon Beach. Utah’s Arches National Park is about eight hours and 15 minutes away from Boise.

4. Santa Clarita, California

Santa Clarita is located in Los Angeles County, but unlike in the City of Angels, traffic in Santa Clarita is not a major problem. In fact the average commuter in Santa Clarita spends less than 15 hours per year sitting in traffic. (LA motorists, in contrast, spend 80 hours in traffic.)

While bypassing the bad traffic, motorcycle owners in Santa Clarita still get to enjoy Southern California’s scenic mountain roads and warm weather. The city averages just 23.9 days per year in which precipitation exceeds 0.1 inches.

5. Overland Park, Kansas

Overland Park is the second largest city in the state of Kansas. Of the 171 cities in SmartAsset’s analysis, it has the 14th highest income after housing costs (like mortgage payments and insurance). That means motorcyclists should have spare money to spend on motorcycle repairs and improvements.

Overland Park also has the 16th lowest property crime rate of the cities in SmartAsset’s analysis. There were just 279 auto thefts in the city in 2014, 1.5 for every 1,000 residents.

6. McKinney, Texas

McKinney is about 30 miles north of Dallas, but when it comes to traffic it is a world apart. In fact, the average motorist in McKinney spends just nine hours a year in traffic congestion, according to the Texas A&M Transportation Institute. That is lowest of any city in our study. For motorcyclists, it means less time waiting for the car ahead to move and more time on the open road.

Thinking about borrowing money? Here are a few things you should and shouldn’t do.

7. Santa Rosa, California

Located in the heart of one of America’s top wine regions, Santa Rosa is surrounded by beautiful scenery. Motorcyclists have numerous options, whether they want to go for a quick afternoon joyride or take a longer weekend tour. Potential destinations include the Pacific Coast Highway, which is less than an hour away, and Redwood National Forest, which is about four hours away.

8. Oxnard, California

If you love the beach and love your motorcycle, Oxnard may be the place for you. It is located along the Pacific Coast, west of Los Angeles. The city’s weather is stunning. Average maximum temperatures never fall below 60 or exceed 80. In fact, on average the city has just one day a year in which the temperature gets over 90 degrees.

9. Cary, North Carolina

This North Carolina city is the number one city on the East Coast for motorcycle owners. Like the rest of the East Coast, it is wetter than most cities in the west, averaging 76 days per year in which it receives at least 0.1 inches of rain. On the other hand, the climate in Cary is fairly temperate. Maximum temperatures fall below 40 degrees an average of 15 days a year, and rise above 90 degrees an average of 33 days per year.

The area is not lacking for beautiful routes. For instance, the Blue Ridge Parkway, “America’s favorite drive,” is located about three and a half hours from Cary. The North Carolina coast is less than three hours away.

10. Chula Vista, California

Take a ride through the Sonoran Desert or down the Coast of Baja California. Check out Cleveland National Forest or Joshua Tree National Park. All of these destinations are just a few hours from Chula Vista. The city also has some of the best motorcycling weather of any city in the U.S. It ranked in the top 15 cities in our study for both its limited rainfall and lack of extreme temperatures.

Methodology

To reach these results, SmartAsset analyzed data on 171 U.S. cities with a population of more than 150,000. Specifically, we looked at the following seven metrics:

  • Precipitation: the average number of days per year in which precipitation exceeds 0.1 inches.
  • Temperature extremes: the number of days per year in which average maximum temperatures are either lower than 40 degrees or higher than 90 degrees.
  • Traffic: the average hours per year lost to traffic congestion for auto commuters.
  • Property crime: the annual number of property crimes (including but not limited to auto theft) per 100,000 residents in each city.
  • Discretionary income: the median income after typical housing costs in each city.
  • Maximum speed: the maximum speed limit on highways of the state in which each city is located.
  • Motorcycle registrations: the number of residents per registered motorcycle for the state in which each city is located.

We ranked each of the 171 cities in our analysis according to those seven metrics. (For state-level metrics, cities in the same state received the same ranking.) We then averaged those rankings, giving half-weight to the two measures of weather and full weight to all other metrics.

The overall index was calculated based on that average ranking. The city with the best average ranking received an index score of 100, while lower average rankings correspond with lower index scores.

Data on temperature and precipitation comes from the National Oceanic and Atmospheric Administration. Data on traffic congestion comes from the Texas A&M Transportation Institute. Data on maximum speed limits comes from the Governors Highway Safety Administration. Data on the number of motorcycle registrations comes from the U.S. Department of Transportation. Data on property crime rates comes from the Federal Bureau of Investigation and local law enforcement agencies. Data on discretionary income comes from the U.S. Census Bureau.

Questions about our study? Contact us at blog@smartasset.com

Photo credit: ©iStock.com/pick-uppath

Nick Wallace Nick Wallace studied Economics at the University of Washington. He enjoys getting people thinking about finances by looking at the numbers. Nick is a freelance journalist and data analyst living in Michigan. He still lends his economic and analytic expertise for SmartAsset’s studies.
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The Dos and Don’ts of Borrowing Money – SmartAsset

The Dos and Don’ts of Borrowing Money – SmartAsset

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Taking on debt is a thorny subject. Signing on an affordable mortgage is one thing. Racking up credit card debt on unnecessary purchases? Quite another. Any time you borrow money, you put your finances at risk. That’s why it’s important to do your research before committing to new debt. If you’re not sure whether to borrow money, read our list of dos and don’ts. And if you need hands-on help managing your financial life, consider linking up with a financial advisor.

Do: Comparison shop when deciding where to borrow

Thinking of borrowing money? Don’t just go for the first credit source you can find. Look around for a loan that meets your requirements and leaves you with monthly payments you can actually afford. If you’re not happy with what lenders are offering you, it may be best to take the time to build up your credit score and then try again.

Don’t: Just look at the interest rate

Comparing loans is about more than searching for the lowest interest rate you can get. Look out for red flags like prepayment penalties. Stay away from personal loans that come with pricey insurance add-ons like credit life insurance. These insurance policies, particularly if you decide to finance them by rolling them into your loan, will raise the effective interest rate on the money you borrow. Approach payday loans and installment loans with extreme caution.

Do: Go for “good debt”

Good debt is debt you can afford that you use on something that will appreciate. That could be a home in a desirable neighborhood or an education from a reputable institution that will help your future earning power. Of course, you can’t be 100% sure that your home will appreciate or your advanced degree will pay off but you can take leaps based on thorough research.

Don’t: Go overboard with consumer debt

Consumer debt is generally considered bad debt. Why? Because it’s debt taken out for something that won’t appreciate. You’ll spend the money and get fleeting enjoyment but you’ll be making interest payments for months or years. In other words, it’s generally better to save up for that new tablet or vacation than to finance it with consumer debt.

Do: Keep a budget

Real talk: Anyone who has debt should be on a budget. Budgets are great for everyone, but those who owe money to lenders are prime candidates for a workable budget. Start by keeping track of your income and your spending for one month. At the end of that month, sit down and go over what you’ve recorded. Where can you cut back? You can’t be sure you’ll be able to make on-time payments unless you’re keeping track of your spending – and keeping it in check.

Don’t: Be late

Speaking of making on-time payments: Making a late payment on a bill you can afford to pay is not just careless. It’s also  costly mistake. Late payments lower your credit score and increase the interest you owe. They can also lead your lender to impose late-payment penalties and increase your interest rate, making your borrowing more expensive for as long as it takes you to pay off your debt.

Do: Seek help

If you’re having trouble keeping up with your debt payments or you’re not sure how to tackle a handful of different debts, seek help from a non-profit credit counseling organization. A credit counselor will sit down with you and review your credit score and credit report. He or she will help you correct any errors on your credit report. Then, you’ll work together to set up a debt repayment plan. That may mean you make payments to your credit counselor, which then pays your lenders on your behalf.

Don’t: Throw good money after bad 

Why a non-profit credit counselor? Well, there are plenty of people and companies out there that want you to throw good money after bad. They may offer counseling or they may try to sell you on bad credit loans. At best, they’ll charge you an arm and a leg for advice about debt repayment that you could be getting for free. At worst, they could lead you further into debt.

Do: Automate

If you have debts to pay off then automation can be your friend. Setting up automatic transfers for your bills and your loan payments will remove the temptation to overspend, to make only the minimum payment or to skip a payment altogether. If you can afford it, set up automatic savings while you’re at it. The sooner you start saving for retirement the better. Just because you’re still paying off your student loans doesn’t mean you should defer your retirement savings until middle age.

Bottom Line

Most of us will borrow money at some point in our adulthood. These days, it’s easier than ever to borrow money online and take on debt quickly. The choices we make about when, how and how much to borrow? Those can make or break our finances. Before you take on debt, it’s important to ask yourself whether that debt is necessary and how you will pay it back. Happy borrowing!

If you want more help with this decision and others relating to your financial health, you might want to consider hiring a financial advisor. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with top financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Photo credit: ©iStock.com/placidusanimus, ©iStock.com/Justin Horrocks, ©iStock.com/Squaredpixels

Amelia Josephson Amelia Josephson is a writer passionate about covering financial literacy topics. Her areas of expertise include retirement and home buying. Amelia’s work has appeared across the web, including on AOL, CBS News and The Simple Dollar. She holds degrees from Columbia and Oxford. Originally from Alaska, Amelia now calls Brooklyn home.
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5 Things to Consider Before Getting a Personal Loan

Consider This Before Getting a Personal Loan – SmartAsset

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It’s a new year and if one of your resolutions is to get out of debt, you might be thinking about consolidating your bills into a personal loan. With this kind of loan, you can streamline your payments and potentially get rid of your debt more quickly. If you plan on getting a personal loan in 2016, here are some key things to keep in mind before you start searching for a lender.

Check out our personal loan calculator.

1. Interest Rates Are Going Up

At the end of 2015, the Federal Reserve initiated a much anticipated hike in the federal funds rate. What this means for borrowers is that taking on debt is going to be more expensive going forward. That means that the personal loan rates you’re seeing now could be a lot higher six or nine months from now. If you’re planning on borrowing, it might be a good idea to scope out loan offers sooner rather than later.

2. Online Lenders Likely Have the Best Deals

The online lending marketplace has exploded in recent years. With an online lender, there are fewer overhead costs involved, which translates to fewer fees and lower rates for borrowers.

With a lower interest rate, more money will stay in your pocket in the long run. Lending Club, for example, claims that their customers have interest rates that are 33% lower, on average, after consolidating their debt or paying off credit cards using a personal loan.

Related Article: How to Get a Personal Loan

3. Your Credit Matters

Regardless of whether you go through a brick-and-mortar bank or an online lender, you  likely won’t have access to the best rates if you don’t have a great credit score. In the worst case scenario, you could be denied a personal loan altogether.

You can check your credit score for free. And each year, you have a chance to get a free credit report from Experian, Equifax and TransUnion. If you haven’t pulled yours in a while, now might be a good time to take a look.

As you review your report, it’s important to make sure that all of your account information is being reported properly. If you see a paid account that’s still showing a balance, for example, or a collection account you don’t recognize, you’ll need to dispute those items with the credit bureau that’s reporting the information.

4. Personal Loan Scams Are Common

As more and more lenders enter the personal loan arena, the opportunity for scammers to cash in on unsuspecting victims also increases. If you’re applying for a loan online, it’s best to be careful about who you give your personal information to.

Some of the signs that may indicate that a personal loan agreement is actually a scam include lenders who use overly pushy sales tactics to get you to commit or ask you to put up a deposit as a guarantee against the loan. If you come across a lender who doesn’t seem concerned about checking your credit or tells you they can give you a loan without doing any paperwork, those are big red flags that the lender may not be legit.

Related Article: How to Avoid Personal Loan Scams

5. Not Reading the Fine Print Could Cost You

Before you sign off on a personal loan, it’s best to take time to read over the details of the loan agreement. Something as simple as paying one date late could trigger a fee or cause a higher penalty rate to kick in, which would make the loan more expensive in the long run.

Photo credit: ©iStock.com/DragonImages, ©iStock.com/Vikram Raghuvanshi, ©iStock.com/MachineHeadz

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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How Does Cash Back Work?

How Do Cash Back Credit Cards Work? – SmartAsset

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Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the issuer.

Credit card companies typically offer a plethora of rewards options for their cardholders to take advantage of. But cash back has long been a favorite of many, as it gives you the chance to earn cold, hard money for making everyday purchases. If you’re confused about how cash back works, read on for a full explanation.

How Cash Back Works

At its core, cash back refers to a predetermined percentage of a purchase you make being returned to you as cash rewards. Cash back rates typically range between 1% and 5%, though there are some outliers to be mindful of. Credit card issuers will usually clearly label what types of purchases earn what level of cash back. But like anything in the credit card industry, you must read the fine print.

This is mainly because all purchases and cash back rewards are governed by merchant category codes, or MCCs. Credit card companies ultimately determine these designations, with Mastercard, Visa, American Express and Discover calling the shots. Some common codes are “restaurant,” “department store,” “airline” and “entertainment,” among others. So if you earn 5% bonus cash back at restaurants and you go to Burger King — which has a restaurant MCC — you’ll get that 5% back.

But what these limiting MCCs sometimes don’t take into account are businesses that could fit into more than one category. Included in this group are hotels, superstores like Walmart, tourist attractions like museums and other multi-faceted establishments. In turn, you could lose out on cash back if you’re confused about which category a purchase you made falls into.

As an example, let’s say your family orders room service while on vacation in The Bahamas. You pay with your credit card thinking you’ll get the advertised 3% cash back on dining. When your credit card statement comes in the mail, however, you’ve only received the base 1% earnings. This is because the MCC of your hotel is just that, a hotel, which leaves your credit card issuer blind to what you really bought.

Unfortunately situations like these often offer very little recourse, as your card’s issuer has no ability to change these codes. In fact, only the major credit companies can change their own code selections.

New cardholders will often receive cash back promotions and bonuses. These offers can either be recurring — monthly, quarterly, yearly, etc. — or simply for just one period of time, usually at the beginning of your account’s life. Hypothetically, a recurring bonus might look like this: “Earn 3% cash back at supermarkets and wholesale clubs, up to $1,500 in purchases each quarter.” On the other hand, a one-time promotion might allow for 5% cash back on airfare purchases made during the first three months you’re a cardholder.

Depending on your card, cash back may be capped or it could expire after a period of time. While some cards feature both an earnings limit and expiration dates, others may have no restrictions. All cash back cards have their own, unique system surrounding them. So it’s important to refer to your documentation whenever you have a particular question.

Using Your Cash Back Earnings

The vast majority of cash back credit cards offer variations of the same choices for redeeming rewards. Most often, you’ll see statement credits, checks, bank account deposits, gift cards and charitable donations available to you.

  • Statement credit – Instead of receiving your cash back in-hand, you can apply it to your upcoming monthly bill, saving you money in the process.
  • Check – As one of the more direct ways of redeeming cash back, checks allow you to basically do whatever you want with its value.
  • Bank deposits – Eligible accounts usually include checking accounts, savings accounts or investment accounts.
  • Gift cards – With this option, you can convert cash back into retail credit at a store or website at which you want to shop.
  • Donations – Many card issuers have open relations with charities. These partnerships open the door for you to aid your favorite causes with real money.

It’s by far the easiest to redeem cash back through your card issuer’s website that it provides. Here you’ll not only see your rewards status, you will also know every possible redemption you could make. If you’d rather talk to a real person, most companies still have rewards phone lines you can call, as well.

Those who’d rather not have to worry about where their rewards currently stand will find that a redemption threshold might be helpful. Not all cards offer this feature. But if yours does, set a threshold at which your cash back is automatically redeemed in any manner you desire. Additionally, some cards require you to attain a certain amount of cash back before redeeming is possible.

Cash Back With Each Major Credit Card Company

There are tons of different cash back cards, depending on your credit score you may be eligible for some but not others. While it’s impossible to give universal specifics for each credit card company, below we’ve provided overviews of some of the most popular cash back cards.

Citi Double Cash Card (Mastercard)

Cash Back Rate: 1% at the time of purchase, 1% when you pay them off

Limit or Expiration: No limit; Expires if no eligible purchases are made for 12 months

Redemption Options: As a check, statement credit or gift card

The “double cash” nature of the Citi Double Cash Card means you effectively earn cash back twice: first when you make the initial purchase and again when you pay your credit card bill. The 12-month expiration is fairly standard and the lack of limits on how much cash back you can earn is generous. Statement credits, checks and gift cards are three of the most common redemption choices, so it’s no surprise to see them offered here.

Bank of America® Cash Rewards credit card (Mastercard)

Cash Back Rate: 3% in the category of your choice, 2% on purchases at grocery stores and wholesale clubs, 1% on other purchases

Limit or Expiration: Cash back on choice category, grocery stores and wholesale club purchases is limited on up to $2,500 in combined purchases each quarter; No expiration dates

Redemption Options: Once you have $25 or more, you can redeem as a statement credit, a check or a deposit to an eligible Bank of America® or Merrill Lynch® account

Take note of the combined $2,500 quarterly limit on 3% and 2% cash back in category of choice and at grocery stores and wholesale clubs, respectively. The Bank of America® Cash Rewards credit card also requires cardholders to have a minimum of $25 in earned cash back before they can redeem.

Blue Cash Everyday American Express Card (American Express)

Cash Back Rate: 3% on U.S. supermarket purchases, 2% on U.S. gas stations and select U.S. department store purchases, 1% on other purchases

Limit or Expiration: 3% rate at U.S. supermarkets is limited to $6,000 a year in purchases then drops to 1%; No expiration dates

Redemption Options: After earning at least $25, redeem as a statement credit in $25 increments; Gift cards and merchandise redemptions from time to time

Amex offers some of the strongest rewards cards around, and the Blue Cash Everyday American Express Card is no exception. It does come with some limits; namely the 3% cash back rate on U.S. grocery store purchases is capped at $6,000 in purchases a year. At that time, cardholders earn 1% in cash back on groceries.

Discover it® Card (Discover)

Cash Back Rate: 5% in rotating categories like gas station, supermarket, restaurant, Amazon.com and wholesale club purchases, 1% on other purchases; Full cash back match at the end of your first year

Limit or Expiration: $1,500 cap on purchases that earn the 5% rate each quarter; No expiration dates

Redemption Options: Statement credits, deposits to a bank account, gift cards and eCertificates, pay with cash back at select merchants and charitable donations

Discover cards offer great first-year cash back matches and distinctive cash back categories. These traits are on full display with the Discover it® Card. This includes 5% cash back on purchases ranging from dining to Amazon.com. However, there are limits for this rate and you have to opt in to categories each quarter to qualify. This card also offers five redemption options — the most on this list.

Tips to Maximize Cash Back Potential and Minimize Credit Risk

  • Cash back is one of the most prolific perks that the modern credit card market has to offer. But it’s important that you don’t overspend outside of your means just for the sake of rewards. Because many cash back cards come with higher annual percentage rates (APRs), this could force you into large, unsustainable interest payments.
  • Whenever possible, swipe your card for purchases in bonus categories. Not all cards have these to offer, but most do. So make sure you know which cards in your wallet offer bonuses at places like gas stations and supermarkets.
  • Know what types of redemptions — statement credits, bank account deposits, gift cards etc. — work best for you. This will drastically narrow down your card options, making the decision process much simpler.

Photo Credit: ©iStock.com/4×6, ©iStock.com/Pgiam, ©iStock.com/Ridofranz

Chris Thompson, CEPF® Chris Thompson is a retirement, savings, mortgage and credit card expert at SmartAsset. He has reviewed hundreds of credit cards and loves helping people find the one that best matches their financial needs. Chris is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He graduated from Montclair State University where he received the Journalism Achievement Award. Chris’ articles have been featured in places like Yahoo Finance, MSN and Bleacher Report. He lives in New Jersey and is a Mets, Jets and Nets fan.
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How to Start Investing in Peer-to-Peer Loans – SmartAsset

How to Start Investing in Peer-to-Peer Loans – SmartAsset

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Back in the day, if you needed a personal loan to start a business or finance a wedding you had to go through a bank. But in recent years, a new option has appeared and transformed the lending industry. Peer-to-peer lending makes it easy for consumers to secure financing and gives investors another type of asset to add to their portfolios. If you’re interested in investing in something other than stocks, bonds or real estate, check out our guide to becoming an investor in peer-to-peer loans.

Check out our personal loan calculator.

What Is Peer-to-Peer Lending?

Peer-to-peer lending is the borrowing and lending of money through a platform without the help of a bank or another financial institution. Typically, an online company brings together borrowers who need funding and investors who put up cash for loans in exchange for interest payments.

Thanks to peer-to-peer lending, individuals who need extra money can get access to personal loans in a matter of days (or within hours in some cases). Even if they have bad credit scores, they may qualify for interest rates that are lower than what traditional banks might offer them. In the meantime, investors can earn decent returns without having to actively manage their investments.

Who Can Invest in Peer-to-Peer Loans

You don’t necessarily have to be a millionaire or an heiress to start investing in peer-to-peer loans. In some cases, you’ll need to have an annual gross salary of at least $70,000 or a net worth of at least $250,000. But the rules differ depending on where you live and the site you choose to invest through.

For example, if you’re investing through the website Prosper, you can’t invest at all if you reside in Arizona or New Jersey. In total, only people in 30 states can invest through Prosper and only folks in 45 states can invest through its competitor, Lending Club.

Certain sites, like Upstart and Funding Circle, are only open to accredited investors. To be an accredited investor, the SEC says you need to have a net worth above $1 million or an annual salary above $200,000 (unless you’re a company director, an executive officer or you’re part of a general partnership). Other websites that work with personal loan investors include SoFi, Peerform and CircleBack Lending.

Keep in mind that there may be limitations regarding the degree to which you can invest. According to Prosper’s site, if you live in California and you’re spending $2,500 (or less) on Prosper notes, that investment cannot be more than 10% of your net worth. Lending Club has the same restrictions, except that the 10% cap applies to all states.

Choose your risk profile.

Becoming an Investor

If you meet the requirements set by the website you want to invest through (along with any other state or local guidelines), setting up your online profile is a piece of cake. You can invest through a traditional account or an account for your retirement savings, if the site you’re visiting gives you that option.

After you create your account, you’ll be able to fill your investment portfolio with different kinds of notes. These notes are parts of loans that you’ll have to buy to begin investing. The loans themselves may be whole loans or fractional loans (portions of loans). As borrowers pay off their personal loans, investors get paid a certain amount of money each month.

If you don’t want to manually choose notes, you can set up your account so that it automatically picks them for you based on the risk level you’re most comfortable with. Note that there will likely be a minimum threshold that you’ll have to meet. With Lending Club and Prosper, you can invest with just $25. With a site like Upstart, you have to be willing to spend at least $100 on a note.

Should I Invest in Peer-to-Peer Loans?

Investing in personal loans may seem like a foreign concept. If you’re eligible to become an investor, however, it might be worth trying.

For one, investing in personal loans isn’t that difficult. Online lenders screen potential borrowers and ensure that the loans on their sites abide by their rules. Investors can browse through notes and purchase them.

Thanks to the automatic investing feature that many sites offer, you can sit back and let an online platform manage your investment account for you. That can be a plus if you don’t have a lot of free time. Also, by investing through a retirement account, you can prepare for the future and enjoy the tax advantages that come with putting your money into a traditional or Roth IRA.

As investments, personal loans are less risky than stocks. The stock market dips from time to time and there’s no guarantee that you’ll see a return on your investments. By investing in a peer-to-peer loan, you won’t have to deal with so much volatility and you’re more likely to see a positive return. Lending Club investors, for example, have historically had returns between 5.26% and 8.69%.

Related Article: Is Using a Personal Loan to Invest a Smart Move?

But investing in peer-to-peer loans isn’t for everyone. The online company you’re investing through might go bankrupt. The folks who take out the loans you invest in might make late payments or stop paying altogether.

All of that means you could lose money. And since these loans are unsecured, you can’t repossess anything or do much to recoup your losses.

You can lower your investment risk by investing in different loans. That way, if someone defaults, you can still profit from the loan payments that the other borrowers make. But if you don’t have enough loans in your portfolio you’re putting yourself in a riskier predicament.

Final Word

If you’re looking for a way to add some diversity to your portfolio, investing in peer-to-peer loans might be something to think about. There are plenty of benefits that you can reap with this kind of investment. Before setting up an account, however, it’s important to be aware of the risks you’ll be taking on.

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Amanda Dixon Amanda Dixon is a personal finance writer and editor with an expertise in taxes and banking. She studied journalism and sociology at the University of Georgia. Her work has been featured in Business Insider, AOL, Bankrate, The Huffington Post, Fox Business News, Mashable and CBS News. Born and raised in metro Atlanta, Amanda currently lives in Brooklyn.
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