Posts tagged: financial advice

Things To Look Out For When Applying For A Credit Card

deal with your cardsIf not managed properly, a credit card can have a massive negative impact on your credit rating. For this reason, you shouldn’t just apply for credit cards on a whim; You need to weigh up all the pros and cons and all the benefits before making any decisions. Shopping around to get the best deals on your credit card is always a sensible option, so here is a list of things that should look out for when you do.

1. Annual Percentage Rate (APR)

This is the cost for using the card if you don’t pay off the balance in full every month. Have a look around for credit cards with the lowest APR, so that you have to pay less interest back if you can’t pay the balance off in full for a month or two.

2. Credit Limit

This is the amount of money that the credit card issuer has agreed to let you borrow. This amount will vary depending on your credit score, current financial situation, and other facts. Because of this, you could be offered anything from a couple of hundred pounds to thousands. Regardless of your credit limit, you will want to avoid spending anywhere near your credit limit, as this will negatively impact your credit score.

3. Annual Fee

Some cards add a fee on top of your balance each year for the use of your card. Like with the balance, you will have to pay interest on this fee unless you can pay the full balance at the end of the month.

4. Charges

Ensure you know of any possible charges for using the card, going over your credit limit, spending money abroad, or making late repayments to avoid any nasty surprises. You can check this on your credit agreement.

5. Minimum Repayment

Even if you can’t afford to pay the full balance each month, you will still be required to make a minimum repayment. This doesn’t tend to be more than around £5 or 3% of your balance, but you should try to pay much more than this otherwise it will take longer and cost much more to pay off your debt.

6. Cash Back

Some credit cards will refund you a percentage of your spendings back onto your card. Even if a credit card advertises cash back, you will want to check the small print, as they may only offer this for customers who spend less or more than a certain amount, or ones who have paid off their balance in full at the end of the month. Websites like compare the cash back offers from a range of different credit cards, as well as other benefits.

7. Points & Rewards

Some credit cards offer points every time you spend money which can later be converted into different types of rewards. These rewards can include vouchers, loyalty points for supermarkets, or even football merchandise.

Be sure not to apply for many credit cards in a short amount of time, as this will harm your credit score. Instead, compare the benefits and see which one fits you best, and ensure you make your repayments if you are accepted.

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A Guide To Getting A Mortgage When You’ve Got Bad Credit

mortgage for youIf you’re wanting to purchase a home, but have missed paying a few mobile phone bills or have been bankrupt, you may think that you’ve got no chance. Although it’s certainly difficult to get a loan when you have a bad credit score, it’s definitely not impossible. Getting a mortgage with bad credit isn’t easy, but that doesn’t mean you should just give up. Here are a few options for you to consider before throwing in the towel.

Increase Your Credit Score

If you have a bit of time before you actually want to put down a down payment, then you should definitely consider trying to raise your credit score. This will mean that not only will you find it much easier to secure a mortgage, but you will also generally have to pay less money in the long run, as the interest won’t be as high. Checking your credit report for mistakes is one possible way to do this, as you could have been a victim of fraud in the past. Ensuring that you’re on the electoral roll is also important, as you are unlikely to be accepted for any kind of credit unless you have this as proof that you are who you claim to be and live where you claim to live.

Increase Your Down Payment

Whether you have a bad credit score or not, mortgage lenders are much more likely to approve you for a mortgage if you provide a down payment that is much larger than usual. If you have some extra money saved somewhere, whether this be in a savings account or under your mattress, then you are halfway there. If not, then you need to find a way of securing these funds. Asking family and friends is a possibility, but isn’t always an option. Even if it is possible, you may not want to ask for large amounts of money from your loved ones. Here is when you need to start thinking about a bad credit personal loan. What are personal loans for people with bad credit? Well, they’re exactly what they say on the tin. A bad credit personal loan is there to help people with bad credit secure a personal loan, for things such as making a down payment on a new house.

Have Some HOPE

If you don’t have a large enough income to make a big down payment, then the HOPE program is something you may want to consider. Hope will allow borrowers with bad credit get approved for loans, sometimes with as little as a 0% down payment. This is a great option for someone on a low income, with bad credit, as it will help you to improve your credit history when you start to make your repayments.

Buying your own home, even with a bad credit score, is definitely not impossible. You do need to do a lot more research, and often have to pay more than others with a better credit score, but it will all be worth it when you’re falling asleep in a house that you own.

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How To Be Frugal Without Being Cheap

couponNobody likes to spend more money than they need to on things, and saving money where you can is always a wise move. However, there is a difference between being frugal and being cheap. When you are frugal, you watch your pennies and make wise, thoughtful financial decisions. When you are cheap, you skimp in order to save money, but you may sacrifice quality or even your reputation for the sake of saving money. Frugal people recognize the value in an item and may find a way to save money on it, such as by using coupons or promo codes to buy smartphones or other items. Here are some tips to help you avoid being cheap while still saving money on your purchases.

Plan and Save

Frugal people are those who make thoughtful, informed buying decisions. In order to accomplish this, it is necessary that you think ahead and plan for your purchase. You want to research the different product options well ahead of time and avoid buying impulsively. More than that, you want to save money to make large purchases. When planning for purchases, keep an eye on your budget. Always pay attention to how a purchase will affect your budget and your bottom line. If you are comfortable with the affect that a purchase will have, have saved money for it and have comparison shopped to find the best deal, you can make your purchase with confidence.

Consider Older Models

For many types of products, new models are introduced on a regular basis that have more bells and whistles than predecessors. The older models may have slightly less functionality, but they may be entirely functional for your needs. More than that, once new models are available, the older models are often available at a discounted price. A great example of this is cell phones. New models seem to come out on a yearly basis, if not more often. The new models may have slight benefits, such as a slightly longer battery life or better image quality in the on-board camera. However, in many cases, the older model may be $100 or more less than the new model. Which one is really the better deal? If you decide that you must have the latest model, consider waiting a few weeks to buy a gently used model when someone else who snatched it up initially has become disenchanted with it.

Watch and Wait

Even after you have planned for your purchase, saved money for the purchase and comparison shopped between older and newer models, take one additional step. Almost everything will go on sale at some point. In some cases, discounts are available via holiday sales or end of season sales. In other cases, you can find coupons and promo codes that can help you to save money on your purchase. There is rarely ever a reason to pay full price for an item, and you can save a lot of money over the course of time when you adopt the philosophy of never paying full price for anything.

Learning how to be a smart, frugal shopper can help you to save a considerable amount of money. By following these tips, you can save money on purchases without developing a reputation for being cheap.

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How Do I Know Which Loan To Choose?

equity-rate_how-to-choose-the-best-home-equity-loans_1-3When selecting the right loan for your situation, it’s necessary to look at a range of different factors; these range from the types of loans that are generally available, through to the importance of understanding interest rates and your how much your credit score determines what you can borrow. It’s also important to think about what the loan is for, and what options there are if you have bad credit.

Types of Loans

Loans can be divided into several broad categories, which include secured and unsecured loans. A secured loan is generally taken out against something valuable that you own, whether that be a piece of property, a car, or jewellery. The lender can choose to repossess an asset or sell it in order to pay off the loan. Secured loans do produce low interest rates and longer contract terms than unsecured loans, but with a higher risk of losing valuable assets.

Unsecured loans, then, represent forms of credit that don’t use assets, but are instead valued through their rates of interest – this might include a personal loan from a bank, a credit card, or an emergency or payday loan – these loans are worth considering if you need money quickly, and if you can take out a loan off the back of a positive credit score.

Interest Rates and Your Credit Score

How much you can stand to borrow and repay on a loan will depend on interest rates and your credit score. The base rate of interest is set by the Bank of England in the UK, and is currently at 0.5 per cent – most lenders will charge above this for loans, although mortgages can be taken out to match the base rate. In terms of an average loan, you can might pay 5.2 per cent on a £3,000 payment, with 1 year to repay – this 5.2 per cent interest will mean you repay around £230 a month to cover the loan.

Credit card interest rates are also variable, and can go from very low introductory offers to about 18.9 per cent and higher in interest charges per year. Payday loans, which are easy to apply for, but come with the understanding that you make a full repayment with interest at the end of a month, can charge up to 1400 per cent in interest for their quick lending.

The kind of interest rate you have to pay will primarily depend on your credit score, which is worked out through your past borrowing history, as well as through your employment and address history. A negative credit score can result from defaulting on loans, and from consistent periods of time away from work; this can make it difficult to get credit, and can mean that you have to work to rebuild your score with credit agencies such as Equifax, Callcredit, and Experian.

What the Loan is For

Whatever loan you need, remember to consider how much risk you’re willing to enter into – what is the purpose of the loan, and can you realistically expect to make repayments with interest within a given contract? Also, think about what kind of collateral, or assets, that you can afford to gamble with. If you do have bad credit, it’s similarly worth considering approaches that lower your personal risk – getting a loan with a guarantor can be useful, as they agree to make payments on your behalf if you are having problems. Borrowing against the equity in your home can also represent a calculated risk if you need to raise a significant amount of money in a short period of time.

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Debt Management Plans – First Step To Recovery

Recovery from Debt problemsFalling into debt is a stressful situation for anyone. Due to unforeseen circumstances it can sometimes be an inevitable consequence that we have to come up with an effective debt management plan to combat these perilous financial pitfalls before the situation worsens.

Seeking Help

While we can do our share to cut down on our expenditure, it is not always enough and you should not be afraid to seek outside help should the strain of debt become too much. Seeking expert financial advice from professionals can help to alleviate the strain in ways you had not previously considered.

Planning the Future

Preparing a debt management plan is an essential step on the path to financial recovery and can demonstrate a significant willingness to address your finances for the better, which can go a long way when dealing with your creditors. The peace of mind which comes with the knowledge that you on the way to financial recovery is priceless and can heavily relieve the stress that goes with the heavy burden of repayment obligations.

Every Debt is Different

Each person’s financial situation requires its own personal plan, there is no use seeking generic advice when it may not suit your individual needs. Working with a professional to devise a debt management plan will take into consideration all of your needs and nuances in a way which was previously inaccessible. Putting this plan into action is your responsibility however and can take significant work and effort to ensure that payments are being met. Debt is a serious, crippling threat to anyone’s lifestyle, and one which must be cut out and eliminated as quickly and efficiently as possible. Unfortunately, a debt management plan may mean an increase in your repayment periods, but it is a necessary action when making repayments manageable. There is no point having a shorter repayment period if you are unable to meet these deadlines, which could lead to serious complications down the line.

My Name is – and I have a Problem

Admitting that you might need professional advice to solve your monetary woes is an important first step, with many people choosing to be stubborn to their own detriment. Formulating an effective debt management plan may not have been something you had previously considered, but it is highly unlikely you wanted to be in such a perilous financial situation in the first place.

A non-lending solution from a professional debt management advice agency can be the turning point on your road to getting bank statements back into the black and out of the grisly red. Taking the solo route of attempting to circumvent the road to recovery without professional help can be extremely risky and ultimately damaging to your credit rating.

As the debt management agency will contact your creditors, it can take a major load off your back, as their negotiations will be conducted on your behalf. Of course, the decision is ultimately yours and all avenues should be explored to find the best way for you to resolve your monetary issues – there is no need to feel pressured into agreeing a deal you are not comfortable with. Comfort with a debt management plan is paramount to its success, so be sure to find an agency and a plan that is perfect for you. It is your money and ultimately, your future livelihood you are trusting them with, so be sure to consider all options before committing to anything.

Get them Working for You

Debt can be devastating, so correctly managing your repayments is extremely vital. Having a debt management agency on your side can be advantageous when dealing with creditors, with many choosing a debt management plan in order to receive the additional support and security a specialised debt management company can offer.

Getting your life back on track without the daily worry (and hassle) which debt brings about is an obvious plus point, the sooner your finances are under manageable control the sooner the anxiety will pass. Nobody wants to be in debt, but with the correct management, it is possible to make the transition into a positive bank balance a smooth and painless one. Signing up for the correct debt management plan for your circumstances is but the first foray into a debt-free lifestyle, but once you are out of it, you will never want to look back.

Clint Hazard is a writer whom believes strongly in planning when it comes to your finances. Before committing to a debt management plan, remember to consider all possible options and whether the deal is right for you.

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