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June 6, 2012

Solve your emergency financial needs -Opt for payday loans

Payday loans, as the name indicates are loans that you may want to take when your pay day is a few days away but you are in need of cash immediately. These are the times when you face with emergency situations like meeting medical expenses, paying college fees or expense on house repairs. The need may be anything but what is important is that it needs to be catered to immediately else the situation may worsen. In such circumstances the instant payday loans can be of great help.

Payday loans can provide you with instant cash facility to take care of your emergency needs. You can repay the loan when you get you next pay check. It is a simple process and does not involve much hassle. So if you are thinking of applying for instant payday loans to meet any of such needs, here are some basic things that you should know:

1. If you want to opt for a payday loan make sure that you are actually in need of that money. If the situation can be delayed for a few days taking a payday loan will not be a good idea. This is because you will also need to pay a high interest along with the loan when you repay it. So make sure the need for taking such a loan is justified.

2. Instant payday loans are generally unsecured, short term loans and the time period allotted on such loans is till your next payday. It is meant to meet your expenses like medical bills, credit card dues, college fees, car breakage, and electricity bills so on. It generally covers those expenses that cannot wait till your next salary arrives.

3. If you want to get a payday loan you need to submit certain documents to your lender. The documents consist of proofs regarding your job as a salaried person (past 3 months payslips), your valid bank account details and your age certificate. Without these basic details you will not be eligible for instant payday loans.

4. After you have submitted the documents they are checked by the lender your loan and if there are no issues your loan is approved. The loan amount gets transferred to your account which you can use as per your requirement.

5. Design a budget plan and spend accordingly so that you can repay the loan as soon as you get your pay check without adding any extra expense.

6. Do not default on the payment dates. The payday loans come with a high interest rate so if you default with the payments you are likely to accumulate a debt on your account which would be difficult to pay back later.

7. Do not fall prey to scams or fraud deals. Always check the background of the lender before you enter a deal. You must make sure that you are not charged more than the market price and are not falling prey to any loopholes.

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May 24, 2012

4 Important Things to Consider Before You Consolidate Your Debts

Many people think that consolidating debts is a quick and easy way to solve their debt problems. It is easy and quick to get the loan and set it up, but there are still many dangers involved if they haven’t fully thought it through.

It happens all too often: John borrows $10,000 to consolidate his multiple credit card debts only to use his credit cards again when he feels the pinch. Before he knows it, John now has the $10k loan and a balance of $5k on his credit cards. He’s in more debt now than when he started.

To avoid this nasty debt cycle, you need to consider some important points before you make a decision. Here are the top 4 things you need assess:

  • Do you spend more than you earn? A common reason for using a consolidation loan is to help with cash flow. But just like a vitamin supplement that will only help if you have a good diet to begin with, a consolidation loan will only help if your budget is cash flow positive. The worst thing you can do is take out a loan and they use your credit cards again when you feel the pinch.
  • Can you afford the repayments? This comes after you consider your budget and based on that analysis, can you afford to repay the loan comfortably? The whole point of debt consolidation is to make the payment slighter lower and more affordable. If this isn’t the case, or you may struggle to meet the payments each month then you might need to look for another solution – like a debt management plan, for example.
  • How long will the loan last? Sometimes, consolidating your debts to a lower monthly amount means you will pay for longer. This might be a positive if it means you aren’t struggling every month, but you need to be aware that you will be in debt for longer whereas most people are trying to get out of debt as soon as possible.
  • How much will you repay in total? Another effect of paying the loan for longer is that the total repayment might be more than it would have been if you continued paying the previous amount. This might not be the case if you had high interest credit cards, and it gives you the more affordable repayment you might need, but you need to be aware that you might pay back more with a consolidation loan because it is taken over a longer period.

Hopefully these points will give you more information about whether a consolidation loan is right for your situation and you will know exactly what you’re signing up for.

They can be an excellent debt relief tool when used appropriately but many people think they are a magic bullet and get a nasty shock when they don’t change their spending habits or thinking and end up further in debt.

If you’ve taken out a consolidation loan in the past, share your experience with us in the comments below.

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May 8, 2012

Good Credit Score: Why does it matter?

If you’re striking out on your own for the first time or trying to recover from a bad financial spell, you should start with a good look at your credit report. Your credit rating can either be an imaginary financial halo deeming you a consummate consumer or it can be like a scarlet letter, branding you as a high-risk bet for creditors. To find out which one of these you are, keep reading.

Credit scores: Who needs them anyway?

Your credit score is more than just a number. It tells companies and financial institutions how much of a gamble they are taking by lending your money or credit. Because your credit score is a formula that includes factors such as how much debt you currently have, how well you have managed your debt obligations in the past, and what kinds of debt you have, every potential creditor from the phone company to the mortgage lending institution you’ll rely on to finance your home will base their decisions on your rating. Most of the things that you have or wish to have someday — a car, a home, and the financial opportunities you’ll need to enhance your quality of life — depend on those three digits.

The consequences of a bad credit score

You may think that a bad credit score will simply keep you from opening up that second credit card account, but in reality it can affect every area of your life. For example, when you go on a job interview, there’s a good chance that your potential employer will plan to run a credit check on you to determine how responsible you are. Add that to the long list of methods that employers use to weed out the thousands of applicants that they get for each job position.

You’ll also have to shell out more for necessities like insurance and rent. It is common knowledge that your credit score can affect your chances of buying the home that you really want someday, but it can also affect your chances of renting, as well. Many landlords deny leases to would-be tenants based on their low credit scores, and even if you do win that lease with a bad credit score, you’re likely to pay more of a security deposit. A low credit score can make changing addresses more financially draining in other ways, as well. For example, you may find yourself paying higher deposits for basic services like electricity and telephone service.

How to build or improve your credit score

The best way to build or improve your credit score is to pay all of your bills on time. This may seem like a simple enough task, but it is often the mishaps that we don’t plan for that keep us from doing so. To make sure that you can stay financially current, don’t wait until the due date to pay your bills, and remember to save for unexpected emergencies like home and car repairs so that you don’t sacrifice a monthly payment to cover it. You can also improve your credit score by practicing restraint. Don’t open too many lines of credit at once (or at all), and try to keep your debt load low. If you keep these tips in mind, you’ll make financial viability easier to attain.

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April 23, 2012

Credit Cards – Shoulder Angel, or Shoulder Demon?

You are an adult now.  18!  You made it!  Unfortunately, that means that people start bringing up adult-like things.  Such as credit cards.  Now, you might spring for one of those cards, after all, who wouldn’t want to spend money they don’t have yet?  But, before you sign that slip of paper or call the authorization number, take just one second and think if this is really a step into adulthood that you really want to make right now.

Read The Fine Print: Credit cards are not all equal.  Especially cards which are “pre-approved” tend to be pretty sketchy.  You need to read the fine print that you see on the 12 pages behind that first page.  You don’t need to know all of it, a lot of it will never crop up, but pay attention to things like “APR” and whether or not it is fixed.  APR really means the amount of extra money you are going to pay in interest on purchases.  So, the bigger that number, the more that card is going to cost you.  Of course, in college you are not really going to have the credit score to be able to get a really low rated card, but get the lowest you can.

Weigh The Extra Benefits:  It’s hard to find a normal credit card these days.  They all offer cash-back, airline credits, or money donated to important causes.  However, a lot of those cards can afford that because of the money that you are donating to the card themselves.  Extra benefits are going to come at a higher cost – usually factored into the APR.  So, a card that gives you 1% cash back, and charges you 25% interest is really not as great a deal as it sounds.

Different Type Of Debt: Although it may feel like your credit card debt is just like your student loans, or the car loan that you got, this credit functions differently, and it isn’t just your APR.  Monthly payments on a car loan are figured to help you eventually pay off that debt.  Credit card monthly payments are geared to pay off your gaining interest.  Credit companies also evaluate that type of debt differently.  While 20 Grand in student debt raises your future value, 20 grand in credit card debt takes you down.

All of that doesn’t mean that you can’t get a credit card – just that you have to be careful when you do.  Signing on to one that you can afford is a good start.  Keeping on top of it is another important thing.  Keeping a credit card, and paying it off in full every month, actually raises your credit.  But, that means that you can’t ever swipe the card for more money than you have in your bank account.  Credit cards give you the feeling of magic money, and it can be tempting to spend, spend, spend.  But, if you budget around your credit card and are careful to not misuse it, you could find yourself in a better place than you were before.

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April 10, 2012

3 Excellent Tips For Credit Settlement

Well, this might not qualify for “sweet little nothings”, but the truth is that almost all of us feel most comfortable in paying out the lowest possible credit card payment every month rather than making an endeavor to settle credit card debt all at once. It is also not untrue that receiving calls from the debt settlement department is a suffocating experience and when that happens, we have this sudden urge to have access to unlimited amounts of cash to throw in the face of the collection officer and give him an earful for disturbing or otherwise peaceful lives!
Well, in reality such stuff does not happen, as if we had access to unlimited amounts of cash we most likely wouldn’t be in debt in the first place. So if you are in debt and the threat of collection is hanging over you the following tips are going to help you make a credit settlement effectively and hopefully without much hassle:

  1. Talk to people who really matter – Most of the times it is either the tele-callers or the recovery agents that try to negotiate credit settlement with us and almost always the propositions that we get sound unreasonable to us. These people are literally willing to leave no stone unturned to pull us into an unprofitable proposition and if you have the habit of making the lowest credit card payment every time you get the credit card bill, the chances are you would not even think of raising your voice in the apprehension of getting ridiculed by them.
    The truth is, you should stop wasting time talking to these people as they usually cannot decide stuff for themselves – is actually a better idea to try to talk to some supervisor and if possible even to people higher up in the chain of command and urge them to help you out. You would be quite amazed to see that in most of the cases, these people are more than willing to help and if you can clearly make them understand that you have at least been making the minimum credit card payment every month and are actually serious about getting out of credit, chances are you will be offered a more manageable deal.
  2. You should talk about your problems – In most of the cases, the recovery agents and credit collection officers would make you listen to hour long stories about how they almost stopped the earth from spinning in a bid to get you a 1% discount on your credit – but you really shouldn’t be very patient and listen to them because you will already know for sure that the discounts offered are not going to do you any good.
    The answer here is to actually talk about your own problems and let them know the very reason that has been preventing you from clearing your credit. Stick to your point and make sure it gets across properly to people sitting in the higher ranks to get the best deal possible.
  3. All communications should be documented – If you have been in credit for quite some time, chances are different people have dealt with your account at different times. In reality, most financial institutions have very flexible rules as far as credit settlement is concerned and different people dealing with your account will give you their own versions of such rules to make them look lucrative to you.
    Always make it a point that all communications from the financial institution are documented so you can refer to them before taking any decisions.

Robb Biggs is a financial expert working in the debt recovery team at Payday Loans UK. His focus is on helping customers with debt problems and often writes for finance publications and websites giving practical advice on how best to manage a debt problem.

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