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There are many reasons why it can sometimes be a good idea to borrow money. It can make it possible to invest in assets in a way that makes financial sense – for instance, taking advantage of a discount on a new sofa that’s really needed, where the saving amounts to more than the interest on the loan. It can be about consolidating debt, using one big loan to pay off several smaller ones, which often results in lower overall interest payments and better terms and conditions. In some situations, it can be necessary to meet ordinary household expenses whilst waiting for a salary payment, especially if one has a variable income or creditors that are slow to pay. Getting a loan to pay for transport costs can also make sense by making it possible to stay in work and thereby keep bringing some money in. Whatever the reason, it’s something that should be approached with caution – and with a clear plan for paying the money back firmly in place.

Borrowing options

The simplest way for most people to borrow money is by getting a loan from the bank, but rates can vary a lot and people with poor credit records may struggle to do this at all. Social fund and credit union loans can be a good bet but what’s available can vary by location. The Citizens’ Advice Bureau can provide guidance on this. Credit card loans can sometimes be a good way to borrow, within agreed limits, but can be very expensive if not paid back on time. Payday loans with dedicated lenders work for many people but should not be taken on without a careful assessment of what their interest rates really mean if you are late in paying. Store card loans are sometimes worthwhile when they also offer deals or discounts, but can be very expensive and should be treated with caution.

Generally speaking, loans are easier to get if secured against an asset like a house or car. These are known as secured loans. It is important to be aware that the asset could be at risk if the terms of the loan are not met. When taking out a loan it is a good idea to avoid the comfortable assumption it will be paid off on time and make a back-up plan for what can be done if that doesn’t happen.

Borrowing on a car

Thinking about the assets they have available, many people are quick to say “I’ll borrow money on my car!” As with all loans, there are good and bad ways to approach this.

Various different types of loan can be secured against a car, so it’s wise to shop around for a good interest rate. The most common type, logbook loans, mean that the lender technically owns the car whilst the loan is outstanding, but it’s still available for the borrower to drive. A good lender will not simply take the car if things go wrong but will work with the borrower to come up with a workable repayment plan.

Although they can be expensive, loans against cars generally provide a reliable way to get a large sum of money in just a few days, regardless of credit history. They’re generally cheaper than payday loans as the existence of collateral lowers the risk for the lender.

That is a very good question. How do you finance your small business? How small is your business? Do you dare go to a bank and try for a traditional loan? Well…. You can try. If you have immaculate credit and it screams good risk, you are likely to get that loan. But if you are under 700 in the credit score, forget about it!

Here are some other options to look at:

• You can try a pay day loan, but you may go broke trying to pay it back.
• Of course, there is a loan on your house. Do you really want to risk your home if the business fails? NO!
• You can try a loan shark. Do you like your legs? They are quick to loan and quick to ask for it back. Better hide the family too.
• How about a cash advance on your merchant account? What? You don’t know what I am talking about….. Well, let’s get you some information.

Loans for small businesses

When the market crashed and banks decided that the very people they were bailed out by should not be getting help, the merchant account servicers heard the cry. They put together packages to help anyone in need. All you need is a merchant account to make payments.

It’s really rather easy

Depending on the business you have, you adjust the kind of account you process credit and debit cards through. With that, you ask for a cash advance or loan. They will help you out up to $250,000. So let’s say you borrow $5,000 and you agree to the terms of 5% interest.

How it works

The Merchant account servicer has bought your credit and debit purchases at a reduced rate. Every day that you get paid with the cards, that five percent is taken out of the daily totals. If you have a bad day, they have a bad day. So, if you have $500 in sales that day and it was on the cards, your total payment for the day is $25.00. In the grand scheme of things, that’s not bad.

You will have the loan paid off in 200 days, or 6 months. Some merchant account servicers will do a traditional pay back program. You just have to ask to find out the best options and what programs they use.

For every good guy

Just like anything, for every good business is one that is a fraud. So, when you go about this, take the time to insure they REALLY are a business. Be sure they are one of the good guys. Check for online forums and their names. See what people are saying about them. Do several places; don’t give up. The right one is out there for you. It’s no different than trying to find the right boots. You have to keep looking to get them to fit correctly.

Anyone who currently rents a home or flat, or lives with their parents, may need to search for alternative forms of credit if they wish to take out a new loan. Fairly or unfairly, anyone who is unable to display a good credit history to a potential lender will struggle greatly to successfully apply for a loan due to strict lending policies. Fortunately tenant loans and guarantor loans have filled this gap in the market and are ideal for any tenant who has adverse credit, arrears, filed for bankruptcy, County Court Judgements (CCJs), debt issues or anyone who is self employed and has no proof of income.

Many high street lenders simply refuse to issue loans to people with a bad credit rating, regardless of the reason, and therefore turning to specialist loans to help counter this problem is the only realistic option for many people.

What Exactly is a Tenant Loan?

Tenant Loans have been created specifically for council tenants, private tenants, housing association tenants and anyone who still lives with their parents/relatives and hasn’t had a chance to build up a suitable credit history.

Whatever your circumstances as a tenant, even if you have a bad credit history, CCJ’s, defaults or payment arrears, tenant loans may be a viable option for you.

Who are Tenant Loans designed for?

Tenant loans should be viewed as the primary option for any council tenants, housing association tenants, most private renters, and for people living with their parents or relatives. Because this type of loan is unsecured, it guarantees that you will not need to secure your property against the outstanding balance of the loan.

Can Anyone Apply For a Tenant Loan?

In short, anyone who doesn’t own their own property is eligible for a tenant loan.

What Are The Alternative Options?

Similar to a tenant loan, in the fact that they have been designed to offer a way to successfully apply for credit even if you would struggle with a High Street lender, guarantor loans are becoming increasingly popular. Although this type of loan has been in existence for many years, confusion still reigns regarding how they actually work and who they will benefit the most.

Guarantor loans are available to more people than loans offered by some banks and other high street institutions because they utilise the presence of a friend/family member who will act in the role of guarantor for the loan to provide an extra level of security for the lender. For this very reason, guarantor loan lenders are willing to lend to those will a poor credit history due to missed repayments in the past, never having credit before or not having lived in the UK for very long, amongst a wide variety of reasons.

Whilst there are a range of other ‘bad credit loans’ available, nearly all have a very high associated APR and are only available in fairly limited amounts. Payday loans, for example, are designed to be paid back on the borrower’s next pay day. Generally this will leave them short of money for the next month and another loan will be taken out. This can quickly become a vicious cycle which is difficult to extricate themselves from. However, as well as being spread out over a longer period of time, your ability to afford the guarantor loan repayments will be factored into the loan application process, significantly reducing the risk of this happening again.

The recent proposal by UAE Central Bank to introduce a mortgage loan-to-value (LTV) cap – 75% for expats and 80% for UAE nationals – is one of the many measures that the government is working on to deter excessive borrowing, check the proliferation of cash buyers in the market who make up the majority of property purchasers in Dubai. Cash purchases have long since dominated Dubai’s real estate market – with cash-rich buyers usually acquiring properties to lease them out or sell them at an immediate profit – in contrast with end users who buy homes to live in.

Today, with sale prices and rents accelerating, people looking to are looking for better value for money – not just lower interest rates, but terms and conditions and exit fees. Mortgage companies are also ensuring that clients are thoroughly vetted before lending to them. While further information regarding the mortgage cap is expected to be announced in the fourth quarter of this year, industry professionals have shown skepticism regarding the negative effects the decree may have on the real estate and mortgage industry. Hence, it is imperative that a balance is achieved between keeping mortgage opportunities attractive enough to encourage end users to buy Dubai property and at the same time act cautiously to keep speculators at bay.

In another turn of events, Dubai Islamic Bank (DIB) announced in August that it would offer UAE nationals mortgages worth 100% of their property’s value with regard to the Mohammad Bin Rashid Housing Establishment for a 25-year period. On a similar note, the government-owned Tourism Development and Investment Company partnered with Abu Dhabi Islamic Bank to offer investors 100% mortgages for luxury residences on Saadiyat Island.

This year also saw for the first time, home financing of select off-plan properties to non-residents who wish to buy a property in Dubai as a holiday home or simply invest in a second home. Mortgage providers have also been extra cautious, examining and checking all aspects of a customer’s credibility and that of the developer’s as well. However, with the number of off-plan property purchases on the decline as compared to figures before 2008, this doesn’t seem to be a cause for concern.

Throughout the course of his year, the government has made tenacious efforts to build checks and balances into the system and arm mortgage providers with the information they need to make sound lending decisions. A good example would be the recent proposal by the Dubai government to set up a judicial panel to oversee the liquidation of stalled property projects in the emirate. Such a move will offer investors a viable alternative to time consuming and expensive court procedures and enhance investor confidence.

At the end of the day, people like to invest in a market where they know their rights are protected. While there is no doubt that Dubai’s property market is maturing and the double-digit growth a reason to cheer, the 2008 downturn has surely taught us that slower and steadier progress is far better than faster, unsustainable growth.

For a long time now, we have become very used to living off credit. This is unfortunate as we may find ourselves out of our depth, having totted up a huge bill and struggling to make the repayments on a monthly basis. And the trouble is it is just too easy to do. Credit card companies are continually offering us card after card and, being only human, particularly if we find ourselves short of cash one month; it takes just a few minutes to apply. OK so our immediate cash flow problems are resolved but what about the bigger picture? Maybe it is time to take a fresh look at our borrowings before our total debt is larger than we can manage.

But if it is not to be credit card, or even bank overdraft, what exactly are the options? Agreed that it is sometimes impossible to manage on our salary alone, particularly when unexpected debts knock our carefully planned budget for six. On paper, it may all look rosy. Our income is in excess of our expenditure and we should even be able to save £50 a month. But like most well-made plans, it doesn’t always work out like that. The £50 gets swallowed up by sundry expenses like lunchtime snacks and trips to the supermarket. The end result is no savings, so that when the car breaks down or the bike needs a service, the funds just aren’t there to cover the cost.

As we can see, credit cards can be a wolf in sheep’s clothing. So how about looking for something different that will not land us with long term, ever increasing debts? An internet search for ‘payday loan’ will bring up the name Wonga. But if you have never heard of Wonga or ‘payday loans’ then you can be excused for wondering what on earth this is all about. It’s a very simple process. Unlike credit cards and similar types of borrowing which let us borrow large amounts and pay back over extended periods, payday loans have to be paid back, in full, within 28 days or less. At first glance you may think that this is not so good. After all, with a credit card you can pay it back over years can’t you? But think again. The longer you borrow the money for the more it costs you. A payday loan can work out cheaper as there is no option to spread the loan over a longer period.

Added to that, a Payday Loan truly is fast and can be in your account within minutes. Once you have repaid it in full, the debt is gone. Wiped out. No horrific huge sum of debt stockpiling into the future. No worrying about monthly repayments. It really is worth thinking carefully before you take out another credit card to shuffle your debt from one card to another. Once you have gotten used to the new way of dealing with your money shortages, you should find it refreshingly simple and easy to use. Bye-bye credit cards!