Archive for May, 2011

Secured and unsecure loan types

May 13th, 2011

People will go to many lengths in order to survive, there is no stronger evidence to prove that people have the strongest will to survive in difficult times. This couldn’t be any truer when it comes to finances. Many people have at some point in their life come to the brink of losing everything or close to it. A lot of people turn to loans for help with their finances. There are a ton of loan options out there, no matter who you are or what your situation is, there is a place for you to borrow. From secured loans such as, car loans, mortgages, home equity loans, secured car title loan to unsecured line of credits, personal loans, student loans, credit cards etc… The questions is should you?

Secured loans, are loans that are given to you against an asset. Essentially, a company or bank will give you money for an asset of value as collateral. That way, if they don’t get their money, they will take your property. Typically, the interest on a secured loan should be at prime rate and rather low, this is of course depending on what your credit rating is, but usually if you are able to get a loan of this type, it’s because you have a decent standing. A car title loan, which I mentioned as a secure loan, is not a typical bank loan, but a separate private lending company that would lend you money against the title of your car. This kind of loans are not typical, but are an option for people who can’t get a bank loan or credit card. The interest on these kind of loans are typically higher than traditional secured loans.

Unsecured loans on the hand, are not secured against anything. If you happen to not pay back your loan, collectors will take over the account, as they have nothing to take from you. The loan is approved based on your credit rating an history, as well as income level. Interest rates are typically a little higher on an unsecured loan, therefore you will pay a slightly higher interest rate than a secured loan option.

People need different kind of loans for different reasons; some opt for a long term loan while others for a short-term payday loan. Your job is to do the research and find out what option is best for you. You may find in the end, that all you need is a credit card with a small balance to protect yourself in the case of an unforeseen emergency. Or you may need a larger loan in the form of home equity to get much needed renovations on your house. If you have bad credit and no one will lend you money, turn to a title loan. Whatever your fancy, there is something there out for everyone. The trick is to be able to determine the best choice for you and your situation. Taking out a loan can be a large responsibility, being prepared and strong willed is necessary to avoid over spending unnecessarily,  and making sure that you don’t fall into debt further more.

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Posted in Loans

Invest your savings

May 10th, 2011

If you understand inflation, then you should understand why investing your money is better than simply saving it. In case you aren’t familiar with the basic of economics, inflation is the rise of prices over time. While saving your money in cash might seem like a wise thing to do for many, consider the translation between the inflation of prices each year and the cash money you have been saving.
Let’s just say that you have finally paid for all of your debts and cleared any credit card and payday loans you may have owed,  and you are now ready to begin saving money for for your future. Now, let’s move forward to thirty years later, you are 68 years old and you are ready to retire and enjoy your life. Let’s say, for the sake of the example that you had put away $1000, today( 30 years later) it would only be worth around $400, because of inflation, you have less than half of what you could have bought with your hard earned money.

Investing your money is a great way to beat the effects of inflation and probably a good reason to consider it seriously. Many people shy away from investing because they think it is too risky.  But when you consider inflation, investing will actually help to preserve the value of your money over time. When you invest right, you can instead help your $1000 investment grow faster and beat the rate of inflation, making it worth more in the long run. There are two things you can do in life to get paid, everyone no matter who you are, has the opportunity and the access to both. The primary way that most people make money is through a typical job, which pays you in exchange for you time, this unquestionably will limit the amount of money that you can make over time. The second way to make money, is by taking the money you saved from that paycheck and turning it into investments. This way you will make your money work hard for you, just as you worked hard to get it. Invest your money in things such as stocks, bonds, mutual funds, or real estate, all of these things involve some risk, but can and most likely will make you a lot of extra money to play with in the future.

Saving your money is the first step to take toward your future as an investor. Take care of any unpaid debt, or student loans and begin to take the necessary steps toward making your money work hard for you. Remember that although you may think that saving cash is a safe way to guarantee your money, you will only lose value over time. Investing will allow you to beat the adverse affects of inflation and allow you to maintain or multiply the value of your hard earned money.

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Posted in Payday loans

When should I seek debt advice?

May 6th, 2011

Most of us will come up against some kind of financial difficulty at least once in our lifetime. Whether that’s an overdraft you can’t seem to clear, a missed bill, payaday loan payments or problems with your mortgage payments, it can be worrying – but at what point do you decide that help is needed?

There is plenty of help out there, for varying degrees of difficulty with debt and for all kinds of personal circumstances. Even if you have debts you don’t think you’ll ever be able to repay, there are solutions available that might be able to help you.

You probably don’t need telling that you should get debt advice as soon as you realise you’re struggling with your debts. However, even if you’re not really struggling now, there may be signs that you could benefit from a bit of advice.

Early signs of a debt problem
Here are some of the things you should look out for.

- You’re always in your overdraft before the end of the month
- You have credit card debts that are taking a very long time to repay
- You frequently have to ‘borrow’ money from next month’s pay to get by
- You don’t have much money left after paying for bills and other commitments.

If you can say yes to any of the above, then you should be careful. A sudden change in your circumstances could make it very difficult to manage your debts. But rather than waiting for it to get to that point, why not do something about it now?

Getting back on top of your finances
As long as your situation hasn’t become too serious, there may be a few things you can do to set yourself on the road to clearing your debts.

Budgeting
Sometimes, people get into trouble just because they haven’t planned their finances properly. But by ensuring you always set enough aside for your essential expenses, a well-planned budget could make all the difference.

Creating a budget is simple: just add up your essential expenses and subtract the total from your take-home pay. Make sure you include your debt repayments in your expenses. If you find that your outgoings exceed your income, get expert advice immediately.

Cutting back
Cutting back on a few things you don’t need could leave you with a lot more room for repaying your debts. For example, cancelling that unused gym membership or getting rid of an unnecessary TV subscription could free up a lot of cash.
If necessary – get debt advice
If none of the above advice helps you, it may be a good idea to get debt advice from an expert. There are various debt solutions available to help people in all kinds of circumstances, and by talking to an expert debt adviser you can find out which one might be right for you.

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Posted in Debt