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Archive for the ‘Loans’ Category

Introduction.

With so many people struggling now to take out personal loans - it has been almost inevitable that some unscrupulous lenders would try to worm there way into the market. As the High Street banks become less inclined to offer loans especially to low credit score borrowers - the more people turn to online loans providers to get hold of the cash they so desperately need. For most people, most of the time, this is not a problem at all and there are many great offers out there to be had in online loans. However, if a personal loan provider wants to charge you an up-front loan fee before giving you any of the loan cash - you’re better off refusing them and seeking your loan from another online lender.

Bogus loan companies.

The idea is they lend you money - not you give them your money!

Even if you have the worst possible credit score imaginable, there really is no reason for a finance company to ask you to pay a fee up-front before deciding whether or not to offer you a loan. Any company that insists on you making a payment before giving you the cash should be treated as at best suspicious - if not a downright bogus loans company who have no intention at all of lending you any money. A typical scenario is for you to work through the application procedure only to find that before the company can process your application you have to pay an ‘administration fee’ of anything around $100 to well over $1000!

3 reasons not to pay an up front fee for a loan.

The simplest possible of reasons here is that there is no guarantee that having handed over your cash - that they’ll then agree to your loan request at all. The chances of you being ripped off like this are quite high from companies demanding up-front payments - it really is just a scam for them to get money from you. Second, OK so the company you’re borrowing money from wants to make a profit itself - fair enough they’re not a charity, but if they need you to pay them for a bit of administration in advance - then you really should worry as to whether they can afford to lend you the money in the first place. Third, even if a loan company says you’re a bad risk to lend money to - that’s no reason to get you to pay them for giving you a loan before you’ve seen the color of their money, they’ll soon enough recoup any expenditure they make through the interest rate they charge you anyway.

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Introduction.

Following months of uncertainty regarding the economy, the general consensus of opinion now seems to be that it is finally time to start buying again. We’re not talking here about things like electrical goods for the kitchen, furniture or TVs etc - but the bigger items that we tend only to buy when we think our jobs are secure, our finances are sound and the national economy is stable. Such bigger items are things like a new car or home, things most of will need to take out a loan for like an auto loan or a mortgage.

Are you ready to start buying again?

Having gone through an economically unstable period you’re probably one of the millions of American’s that haven’t been spending money of things that were not seen as essential. Instead, and rather than banking spare cash with the interest rates having been so poor, that was the time to pay off debts like credit cards and personal loans so that now the economic climate is brighter - you’re no longer saddled with those old debts and can start applying for new loans confident that your credit score is good. However, when starting to spend money again on big items - should you protect yourself against another downturn in the economy?

Protecting your new purchases.

Look for redundancy insurance cover online.

Let’s face it nothing could be worse than starting to pay for something like a new car only to lose your job, fall behind with the payments and end up having the auto repossessed. The solution to this is to take out redundancy cover on an auto loan or new mortgage - to make sure that if your job does fold your payments will be covered. When taking out redundancy cover do make sure the contract you sign is exactly what you need and take special care to check with your boss that your job is safe. The reason for this is that quite often redundancy cover insurance can be ruled invalid if, at the time of taking out the cover, your job was under threat. Also, be aware that mortgage redundancy cover will rarely pay off the whole mortgage if you should lose your job, but will more likely agree to pay your mortgage for a fixed period giving you breathing space to find a new job.

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Introduction.

It’s a fact, but worldwide financial instability and political uncertainty is once again wreaking havoc with USA money markets, quite apart from our own ‘home-grown’ financial problems. One result of these problems has been a rise in the rate of inflation from -0.4% in 2009 to nearly +2.4% already this year, or put another way in less than a year inflation has risen 3%. The net result of this is that interest rates on loans will be rising - something that can hit anyone paying off their student debts really hard.

The cost of graduating.

Can’t believe where all that student debt’s come from?

This rise in inflation and interest rates means that all but the best paid graduates, with large loans to repay, will be particularly hard hit as the re-payments will rise completely out of proportion to their wages; with the risk that whereas last year they were making great in-roads into paying off their student loans - they will now find the gains they made last year wiped out and even reversed this year. As if that’s not bad enough, with many graduates having to take out personal loans on completing their courses to afford things like the clothing they’ll need for their new jobs, fitting out an apartment to live in or even just needing an auto loan to buy a car so they can get to work - having all of these loans whilst struggling to establish yourself in a new job can seem just too much.

Consolidate your debts.

If you’ve recently graduated and are struggling to repay your loans the solution is to seek a debt consolidation loan; putting all of the separate loans together - meaning that you have one repayment to make, to one company and at one interest rate. As student loans traditionally have lower interest rates than other types of unsecured loans, you will need to make sure that the actual student loan you’re repaying isn’t better left as a separate loan and then just consolidate the other ones. Either way, the fewer companies you have to deal with when clearing student debt the better.

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Introduction.

I guess it was only a matter of time before Mohammed Yunus’s Nobel Peace Prize in economics, for his pioneering work in micro-loans, - started to draw attention from the big banks and finance houses. The problem is quite simple really, what started out as a system whereby one person lent a relatively small amount of money to someone else for the purpose of, say, improving their sewing business in a developing country - has blossomed into a $60 billion a year loans industry.

Micro-Loans in the beginning.

As mentioned above the idea of micro-loans was originally very straightforward and low key. Rather than leaving any spare cash you had in a bank, instead you made micro-loans to individuals or small organizations and  businesses - who when they then repaid your loan had to pay a small amount of interest; often as little as 10% and way below commercial loan interest rates but generally higher than savings interest rates too. This made the micro-loan business more akin to a charitable system than a business one. However, to the people making the loans that didn’t matter as, by and large, they were as interested in their money doing ‘good’ as they were in turning a profit.

Micro-Loans today.

A loan for a very small amount of money into a sewing business for a machine, can transform someone else’s business life.

Fast forward a few years and the demand for micro-loans now by far out-strips the supply. Yes there are a lot of people out there that want to ‘do good’ with their spare cash; but there is only a finite supply of it. Needless to say the big banks and finance houses are stepping in to fill the void, ever keen to turn a dollar and even if it is to a high risk venture in somewhere like Nigeria. The sad part of this is, however, the interest rates that they are choosing to charge. No longer set at the charitable 10% - some of these big banks and finance houses are charging as much as 100% interest to high risk projects - as bad as if the borrower had gone to a loan shark. Ironically, they’re saying the high interest rates are because of the high demand for micro-loans in the first place! If you have some spare cash but do need to make a small profit on it and yet are basically of an altruistic nature - then providing micro-loans is something to consider. To get involved in micro-lending, look for a social lending website that is transparent about giving loans to poorer people to help them - rather than to just simply make a profit out of them.

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Introduction.

Everyone wants to find that elusive way to make money without any risk or too much hard work. Well the fact of the matter is that anyone with some spare cash can make even more money from it - if they’re prepared to be a little bit patient and take a small risk with it. The answer is quite simply to invest your spare cash in a business that’s either in need of a loan or looking for partners to perhaps finance a new project.

Considerations for investing in a business.

It’s not just Wall Street traders that can invest for profit.

Quite simply with bank interest rates being so low at present - you might as well put all your cash under the mattress for all the money it will currently earn in the bank. So, instead of waiting for the day to come when the banks finally start to pay you a decent return on your savings - why not get that cash earning more money for you by investing it instead? If you’ve never invested in a business before this might seem like a big step to make, the key thing to do here is not just to randomly pick a business to invest in. Instead, find one that meets your values and ethics and, perhaps even more importantly, think about the people you’re investing your money with rather than just the business. If one business might seem to offer a fantastic return on your investment, but you don’t like the people you’re dealing with; your gut instinct to invest in  another company even if it offers a lower return might well be the best one to make.

What about social lending networks?

If you’re still not too sure about dealing face-to-face with someone to invest your cash in, why not look into social lending groups. Social lending groups have been around for a long time and now invariably operate through the internet.  Individuals, or small businesses, needing to borrow money advertise on social lending websites for potential investors. You can choose the type of businesses to invest your money in and, if the required loan amount is beyond your personal capability, you can join a group of lenders who together can make up the full loan amount.

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Introduction.

With the stakes being raised at the Climate Change Copenhagen conference, and there seemingly being even more imperative behind us all doing our bit to help ‘save the planet‘; now is that time to think about how you can fund some changes toward reducing your carbon footprint by making your home more energy efficient, and saving money at the same time.

Insulating your home.

If you haven’t already installed wall or roof space insulation - now really is the time to do it. Insulating your home is not only the least expensive thing you can do but it is also the one that you will most quickly be able to recoup your money by making savings on those expensive fuel bills. If you have a cavity, air-gap, wall then special foams can be injected into the gap forming an insulating layer, on single-wall buildings you could externally fit an insulated faux-stone layer or internally insulated rock sheets. In the ceiling space there are loose materials, foams and blanket like materials you can add. With wall insulation costing as little as $1000 and ceiling insulation only a few hundred dollars, you could be seeing the benefit of your lower fuel bills before you’ve even paid off the loan you take out for them.

Alternative power sources.

Wind, Solar and Geothermal alternative energy supplies could help you save money and the planet.

You’ll need to take out a slightly bigger loan for these options and be prepared to take a longer term approach to the savings you’ll make - but the following will really mark you out as being committed to becoming ‘greener’ when it comes to heating and powering your home. Depending on whereabouts you live in the USA, and how much land you have around you, you could alternatively fit solar panels, wind turbines or even geothermal units to produce ‘clean’ electricity for you and your family to use, without any CO₂ emissions at all. You’ll need to think in terms of a personal loan over $5000, which will take some time to recoup. However, if you’re planning on moving home soon you can add the cost to your selling price, whereas if you’re intent on staying put and not looking for a new mortgage - you can reap the rewards of your clean energy. Finally, don’t forget also that any excess electricity you produce you can sell on to the power utility companies!

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Introduction.

As the run up to Christmas closes in is there really a way that you can make using a credit card pay for you? Unfortunately Santa Claus, or Father Christmas if you prefer, doesn’t include his own brand of special Christmas credit card - but that’s not to say that you can’t find one to match the type of spending power you’re likely to need.

Holding credit card balances.

Are you getting a good deal from your credit card this Christmas?

It’s a fact that the majority of credit card holders keep a balance of some sort on them. Of course this is not an ideal situation to be in as you are always owing at least some money to the credit card company and, if you at least don’t keep up with the minimum repayments, the interest you get charged can start to mount up leaving you with an absolutely huge bill. What you have to remember is that every time you use your credit card you are in effect taking out a small personal loan; so it’s not just the cost of whatever you buy that needs repaying, but that cost plus interest. It is therefore absolutely essential that you apply for a credit card with the lowest APR (interest rate) that you can find. If you have a good credit report, especially when applying for a new credit card, then use that as a bargaining tool with your credit card company to reduce your APR. Alternatively, if you have a high APR credit card, look for a company willing to give you a lower APR one and transfer your outstanding credit card debt.

If you regularly clear your credit card balance.

For those that can afford it the very best way to use a credit card is to buy things with it - but then always clear the balance as soon as the credit card bill comes through. If you are such a customer you should be able to negotiate a great APR, even though you rarely need to worry about it. Also, as a good credit card customer you can expect to pay no, or at least, reduced annual credit card or transfer fees that some of the credit card companies charge for.

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Introduction.

Being in need of a quick loan in the pre-Christmas rush can make some people just a little bit sloppy, about where they’re getting a personal loan from or what interest rates they’re being charged. Quite frankly, December can be one of the worst times to get caught out when looking for some cash to spend on your Christmas preparations, so we hope you’ll find the following couple of things helpful.

Search, think, take!

Whether you’re looking for an online personal loan, applying for one over the phone or even walking into a local finance office - always do some searching around for the loan offers and then have a think about them before you take one out. For example, we all know how easy it is to search for and find an internet loan; however, you should never just accept the first offer that you come across. Always seek one or two other offers to compare it to - to make sure it really is the best deal. The advantage of searching online for a personal loan is that you can take your time searching around, unlike with a phone application or being in an office with a sales-person constantly trying to tell you how marvelous their offer is.

Ask questions.

Finance companies - the modern day Ebenezer Scrooge!

Whether you opt for an online loan or get one from somewhere else, always ask questions about the deal you’re being offered. Don’t forget that modern day finance companies are simply the Scrooge of today. It is always worth asking if they can lower the repayment interest rates, remember - if you don’t ask, you’ll never find out! If a loans company thinks they can charge you 20% interest they will, but, and especially if you’ve got a good credit report, they’d probably agree to charge you 15% rather than lose your business. Also, an absolutely vital question to ask is, do they have a ‘cooling off period’. This means if you change your mind about taking out the loan within say a day or two, it can be cancelled without you incurring any penalties.

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Introduction.

There seems to be a new craze spreading through all sorts of companies that most of us ‘regular’ folk have financial dealings with - that of charging us for being good customers! If you’re the sort of person that always pays their bills in full, always repays your credit card balance in time, doesn’t have a personal loan from the bank etc; or in other words never owes money to anyone else, then be warned you could be in line for good finance penalties - just so the finance companies can get some money out of you.

They might as well ‘mug’ you.

You'll be shocked at some of the good finance penalties you can be charged.

In what amounts to little more than daylight robbery or being mugged, finance houses, banks and credit card companies are starting to impose ‘low use’ and ‘inactivity’ fees to accounts that are either not used or are very rarely used. Why? Well the answer is surely too simple - simply to boost their profit margins in the recession. The answer to this is, of course, also very simple. If someone tries to penalize you for not using an account, simply apply for a new credit card or loan account elsewhere. Some of the ‘dormancy’ charges being quoted at present are $50 on AMEX card accounts if you don’t use their Platinum cash-back credit card within a period of 12 months. Being charged non-usage fees by telecoms companies if you don’t make a certain amount of calls a month, not to mention stock-brokers slipping in exorbitant fees - even if you don’t ask them to do anything for long periods of time. However, the worst part of all this is that the companies concerned won’t send you a bill for these hidden charges - but will just add a few dollars to a bill here and there; so if you don’t scrutinize your bills for such covert charges you’ll never know you’re paying them!

Avoiding financial penalties for being a good customer.

Always read the small pint of any financial or loan agreements you enter into. Also, always read the small print on your credit card bills and other financial statements. If you only get your bills/statements online - always check them. Forgetting a user id or password is a poor excuse for not checking you’re not getting ripped off! Always read any letters or emails about changes to your account, if you don’t challenge any sudden changes you are in effect compliantly agreeing to them. Finally always remember, if your free credit report says you’re not in debt to them - you have no debt of loyalty to them either.

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Introduction.

Life and debt is becoming every bit as much of a reality for most folk as the inevitability of life and death. No matter whether you’re on one of the lower wages, comfortably off on a middle income or consider yourself to be doing quite well, this recession has hit everyone in one way or another. No matter whether that’s worrying over whether you can pay this months rent or worrying that your pension fund seems to be evaporating before your eyes.

Take control of your debt.

The single most important thing for anyone to do if they’re in debt is to budget. Surprisingly, the more income people have the less inclined they are to budget. Unlike people on a restricted income, they think money isn’t in short supply so why do they need to budget? Their problems can then quickly start to multiply when they suddenly need to access spare cash, having been used to spending it all - there’s none available. A simple budget plan can save you hundreds of dollars a month. Just budgeting to only spend a set amount on food or socializing will not only save you money - but might just get you thinking how wasteful you’ve been in the past. Along with your budget keep a spending diary recording all your expenditure, you can then use that information to refine your monthly budget even further.

Still in debt?

If you still find yourself in debt then you should think about seeking expert advice. You can do some things for yourself like getting your free credit report, so you can check up on exactly how much debt you have. The more debts you have on personal loans, mortgages or credit cards the more money you have to pay out in interest. So you could see what online financial advice you can gain about how to reduce the amount of interest you’re paying, so that you can then concentrate on paying off the capital and clear the debts.

No use sitting on the dock of the bay thinking the tide will wash your debt away.

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