Credit cards differ in that they go by credit or credit cards. Charge cards are supposed to be paid off at the end of the month. Credit cards on the other hand, allow balances to accumulate and be charged interest. While standard credit card rates are about 15% and up, cash advance loans can go from 20% and up.

The main advantage of this strategy is that it’s so easy and fast. Go to an ATM, insert the card, enter your pin, out comes the cash. Many small business owners who know they will never get financing any other way, get 10 credit cards and get $1000 cash advances to come up with the $10,000 they think they need to get going. It’s not cheap money and you have to have credit that is good enough to qualify, but it’s definitely one way to raise cash.

Once you are done adding up the fees to get the cash advance, the high credit card interest rates, and the possible ATM fees, you’ve got one very high priced source of quick cash. Pay careful attention to exactly what fees the credit card company charges are. For instance, some charge a percentage of the transaction, others charge a flat fee. Many charge both for a combined fee.

The other thing to remember is that some credit card transactions have a grace period in which you can pay them off without interest or penalties. There is generally no such period for the cash advance.

Also credit card companies apply your payment and order they prescribe. They may apply your payments to the other debt you have on the car before they pay off any of the cash advance. So if you can’t pay off the whole balance, you may wind up paying the higher interest rate on the whole balance you’re carrying. Only if you don’t have any other debt on the card, and you’re sure you can pay off the whole balance within the month, are these good sources of quick cash.

A loan modification is defined as “the modification of an existing loan agreement between a borrower and a lender, whereby the lender agrees to either; lower the payment amounts by spreading the loan over a longer term, lowering the APR (annual percentage rate – interest), combining the loan with other loans in a debt consolidation loan. Sometimes all three of these modification scenarios are made on the note(s).

Loan modifications are generally carried out with borrowers who have mortgages that they are defaulting on, or will soon be defaulting on. However, mortgages is not the only loan product that can be modified. Many borrowers do not understand that loan modifications can be applied to any type of loan

When Are Loan Modifications Carried Out?

Loan modifications are carried out when a borrower is defaulting, or in danger of defaulting on an existing loan, OR when the borrower needs to “free up” cash (or capital).

Loan modifications are used when business investors need to free up capital for other investments, and loan mods are used when consumer borrowers need relief on their existing loans, and/or mortgage terms.

An example would be:

Home buyer needs a $250,000 loan on a home that is worth $270,000 dollars. Divide $250,000 by $270,000 [250000/270000] and you get 0.9259 which would be rounded up to .926 and then to .93 – so the LTV (or Loan To Value) is 93%

There are some banks that provide 100% LTV loans but they’re far and few between these days. Still, borrowers look for 100% LTV loans all the time in hopes of getting approved for a high risk mortgage.

The highest LTV you can get these days seems to be around 90% depending your credit rating and the bank’s, or private lender’s, risk assessment.

Many disagree with this statement but I have rarely seen the good old 100% LTV HELOC approved in the last year and a half – I have yet to see a 90 percent LTV HELOC approved either.