What Factors Should You Consider when Applying for a Home Loan?

Buying your ideal house necessitates a significant financial commitment. A house loan can help you buy the home of your dreams. With interest rates at an all-time low, the home loan industry is humming with many appealing offers from multiple banks and financial institutions

Even if an offer entices you, you must exercise extreme caution when choosing a house loan. A minor blunder can have disastrous ramifications for your financial future. Several banks now provide home loans with interest rates as low as 7%. 

However, interest rates will not remain steady indefinitely. Bank interest rates are influenced by a variety of things. In this article, we take a look at all the factors that one must keep in mind when applying for a home loan.

Credit Rating

Your credit score is a crucial deciding factor in whether or not you will get approved for a home loan. Your credit score is a numerical assessment that measures your ability to repay your loan. 

It's a measure of your financial well-being. In basic terms, it demonstrates how diligent you have been in repaying previous bills and credit card payments. Financial companies want to lend to those who have a good credit history. 

A good credit score will help you get approved for a loan more quickly. For obtaining a loan, a credit score of 750 or more is considered good, while anything under 700 is considered bad.

Existing Debt Obligations

You have many loans, and credit card payments due are not an issue. When you apply for a loan, however, consistently missing your EMIs, repaying after the due date, and fluctuating payment of your credit card bills all cause anxiety to the lender. 

Your chances of getting a loan will diminish if the lender notices a pattern. To be eligible for greater sanction amounts at competitive interest rates, it is recommended that you pay your EMIs on schedule and settle any outstanding amounts.

Processing Fees

To process your loan application, the lender will charge you a processing fee. Since most banks and housing finance businesses impose processing fees as a fixed percentage of the loan amount, the processing fee is determined by the loan amount. 

A home loan processing charge typically ranges from 0.5 percent to 1 percent of the loan amount. Some lenders, on the other hand, charge a fixed processing cost regardless of the loan size. 

Because house loan amounts are typically large, even a little percentage change can make a big difference. Make sure to go with the lender offering you the best terms and conditions and the lowest processing fee.

Job Security and the Number of Dependents

Banks pay special attention to applicants who have a higher number of dependents. The more dependents you have, the less likely you are to get approved for a loan with lower home loan interest rates. 

Lenders assume that as the borrower's monthly paycheck is spent more on dependents, the borrower's loan repayment capacity reduces, resulting in late or missing EMIs. Stable employment and consistent income help to create a positive impression.

Type of Interest Rate

When getting a home loan, one of the most significant decisions to make is to carefully choose between the two interest rate plans available in the market: floating and fixed.

In the case of floating interest rates, interest rates fluctuate over time in response to changes in the RBI's base rate and general market conditions. 

Floating rates are typically 1% to 2% cheaper than fixed rates, allowing for long-term savings. If a drop in interest rates is projected soon, this choice is appropriate.

In the case of a fixed interest rate, the interest rate does not fluctuate over time. When the economic climate indicates that interest rates will rise, this alternative is appropriate.

A fixed interest rate is preferable for a loan with a short term (less than 7 years). If the loan is for more than 15 years, it is best to accept a floating rate loan because you cannot forecast changes over such a long time. Finally, based on their suitability, an applicant must pick between floating and fixed interest rates.

Insurance for Home Loans

Home loan insurance, also known as loan cover term assurance, is a form of insurance plan that protects your family financially in the event of your untimely death. 

In the unlikely event that something goes wrong, the insurance provider will return the outstanding loan amount for which the insurance cover was obtained. This assures that your family will not be burdened financially by overdue dues. 

Many banks and home finance businesses require the purchase of a loan cover term assurance plan to avoid defaults in the event of a disaster.

Understand the Laws Regarding Foreclosure

Keeping a close eye on the shifting RBI rules could benefit you on several levels. You avoid paying any additional fees by foreclosing your home loan by repaying the outstanding amount shorter than the agreed-upon deadline. The sooner you pay off your debt, the better your credit score will be.

Before applying for a house loan, it's critical to double-check your eligibility and other criteria. If you plan to apply for a loan, we recommend keeping the above factors in mind as this will help you close the best home loan deal.

5 Ways to Improve Your Credit Score and Save Money

A credit score refers to a vital number that moneylenders use to determine if they will grant you credit and the terms and interest of the loan or credit. If your score is low, then you have lower chances of your loans getting approved. If approved, you might have to repay higher interest. 

That is why you want to score very high if your plan is to get a car or personal loan, a credit card, or make a mortgage application to purchase a home. Discussed below are five ways you can use to increase your credit rating and save cash.

1. Manage Your Debt

Since the second most important factor in your credit rating is the total debt, it is significant to keep your loans under control. In case you presently have a substantial amount of unpaid debt, your main concern should be to avoid having another loan and work to reduce the figures.

This is not always easy; however, the only means to enhance your debt condition is to stop utilizing credit cards or borrowing and continue making well-timed payments that minimize your balance.

You must also consider the amount of available credit. For instance, if you have several credit cards that have reached the maximum or are close to the bounds, it will negatively affect your score. Dual credit cards, which have a limit of $5,000 and a balance of $1,000 each, look better than one card with a limit of $2,500 and a balance of $2,000.

Use notifications to inform you of fresh purchases with a debit or credit card to better track your balance and expenses. You may also establish a split alert to notify you when the credit card amount hits a certain value. Consider scheduling biweekly or weekly payments to the cards to lose some interest and lower your debt balance faster.

2. Pay Promptly

The most significant thing you should do to maintain or improve your credit score is to pay promptly. Disbursement history is the single most important factor used to calculate your credit rating. Payments past due one month or more will point up on the report and affect your credit rating negatively. These negative numbers typically stay on the report for around seven years.




Consider scheduling automatic overheads from your current account to make it easy to pay on time. If you are not at ease with payments automation, you may set up prompts with your billing agent or through the account to inform you when the due day is approaching.

3. Use Different Forms of Credit

A minor portion of your credit rating is according to the kinds of credits you are using at a given time. Moneylenders would like to perceive your responsibility for returning credit, that is, loans and credit cards. If you do not possess a credit card, consider having one. In case you do not have a loan on your report, you can apply for a small individual loan to build credit.

4. Keep Your Old Accounts Activated

Credit history length is another significant creditworthiness factor, so keeping old accounts open can be an advantage. While you need to keep all your accounts manageable, it can sometimes be harmful to your score if you close the old account. 

Locking the old account while you still have a balance may also affect your score, as it directly upsets your credit use. For instance, if you want to purchase a credit mortgage and have a low score, consider using a bad credit mortgage broker instead of closing your old account.

5. Be Cautious When Opening Fresh Accounts

Although fresh credit is not a significant feature in your credit rating, it is an essential concern. If you are looking for a credit card or new loan, make your purchases quickly. You do not want your credit report to display that you always look for credit.

Also, you do not want to apply credit accounts that you don't want to utilize. It can be luring to get the extra 10% off for opening a new loyalty card; however, the little cash you save can be negligible when several new accounts like this lower your score. 

Also, loyalty cards can regularly have a greater annual cost compared to the conventional credit card. If you fail to immediately reimburse the balance, the greater APR may offset the savings you get when you open the account.

Conclusion

Improving your credit rating can save you money. Use the above methods to build your score.

Building A Good Credit Score

It’s a happy occasion when you’re securing a mortgage! Maybe it’s your first home, or maybe you’re moving to a better location. It’s all smiles until the topic of credit score comes up. Your credit score is a numeric representation of your creditworthiness. 

If you pay your bills on time, avoid opening too many credit cards at once and maintain your old accounts, your credit score should be in the “good” to “excellent” range. Events like bankruptcy, or having chronic debt will negatively affect your credit score. 

A good credit score puts you in an advantageous position when negotiating loans, approval for a new residence or securing auto insurance. Read on to find out how to get the best possible credit score.

InfoGraphics from http://www.mortgagesmortgages.ca/good-credit-score/

Your credit score can be a thorn in your side, or it can be your secret weapon. Your credit score speaks volumes about your financial history, but it can always be improved! Pay credit card balances in full and try not to carry any debt. A good to excellent credit score is powerful proof that you are financially responsible. 

That makes you an ideal candidate when negotiating a loan, mortgage, insurance rate or new residence. Keeping your credit score high is a matter of paying all your bills on time, not initiating too many credit cards at once, and keeping your oldest accounts open. 

You’ll be in great financial shape, and have a solid credit score to help you out in your travels! Having a high credit score will make you an ideal candidate when it comes to securing a mortgage, loan or insurance policy.

Credit Score in the Dumps? How to Uncover it’s True Potential

A less than ideal credit score can limit your ability to make larger purchases. There are things that you can do now that will help to improve your credit rating. Here are some of the steps that you’ll want to take in order to uncover the true potential of your credit score.

Schedule Your Payments

Late payments work against your credit score. One solution that will help you to avoid having late payments is to schedule your payments. There are online tools that will help you to achieve this goal. 

The caution with automatic payments is that you’ll need to ensure that you have enough money in your account to cover your expenses. Missed or delinquent payments are just as detrimental to your credit score as late payments.

Stop Revolving Debt

You may have heard the term revolving debt used and wondered what it meant in relation to your situation. This is more commonly seen with the type of debt that you collect by using credit cards. The balance that you carry on these cards adds to your debt load.



If you have too much debt, you’re considered higher risk and this can lower your credit score. Paying off your high interest loans and limiting your use of credit will help to get your credit score back on track.

Learn the Tricks

As with anything, there are tricks that you can learn that will help to improve your credit score. Work with a fast credit repair company so that you can learn these tricks a little faster. 

For example, overextending yourself can lead to you having trouble paying your debt down. You may find yourself making minimum payments and accumulating more debt in order to eliminate your other debts. Over time, this can cause your credit score to drop.

Apply Judiciously

Every time that you apply for credit, it counts against your credit score. This may not seem like such a big deal until you want to apply for something that really matters. Applying for credit judiciously will help you to get the things that you really want. 

It will also serve to improve your credit score if you can show that you can handle your financial situation without having to take out more credit to get it done.

A good credit rating can quickly be lost and take a lot of time to rebuild. Consider these tips if you want to get your credit score back in shape.

How To Score With FICO

When it comes to getting a loan for a new car, new home, or new business, you've got to be fully prepared. This preparation involves many things, but the biggest issue at hand is having a credit rating that will enable a bank or lender to judge you as an acceptable prospect for a major loan. 

If you don't have a good enough score to back up your claims, you'll quickly find yourself rejected and out of luck. So, before you even think of applying for a loan, it's an excellent idea to know exactly what you need for a good credit score. 

What Exactly Is Your FICO Score?

FICO is an acronym that stands for Fair Isaac Score, the company that created this credit scoring system. This is the system by which your credit score will ultimately be calculated. Banks and lenders will use your FICO score as the primary means of judging whether or not you are a good risk for a loan. 

If your score is anywhere from average to high, you'll have a good chance of securing a loan. If your score is less than average, you're going to have to do some serious repair work before you can even think about getting a loan in the near future.

 

How Is Your FICO Score Calculated?

The components that go into measuring your ultimate FICO score can be broken down in the following manner:

• Your payment history will count for 35 percent of your score. This includes all of the payments you have made via the medium of credit, as well as a complete record of whether you have made all of these payments in a timely manner.
• 30 percent of your FICO score will be determined by the amount of money you still owe via the medium of credit.
• 15 percent of your score will come from the length of your credit history. A person with a long history of paying by credit in a timely fashion will have an advantage over someone who has a bad credit history, or very little credit history.
• 10 percent of your score comes from what is termed "credit mix in use." This term covers the mix you may have of credit cards, credit accounts from retail stores, any loans you may be paying off via installment plans, whether or not you are currently paying off a mortgage loan, and any open accounts you may have with a finance company. 

The final 10 percent of your score will come from whether or not you are considered "new credit", i.e., whether you have a very recent and limited credit history, or whether you have taken out credit with a variety of sources in a very short and recent amount of time.

What Is In Your Credit Report?

The best way to get an accurate look at your FICO score and overall state of credit is to apply to receive your credit report. This credit report will consist of the following items:

• All of your basic information (name, address, Social Security number, date of birth, employment history).
• Trade lines. These are all of your credit accounts, including a full history of when you opened your account, your credit history, all of your outstanding payments, your maximum line of credit, etc. 
• Credit inquiries. A complete list of everyone who has accessed your credit report within the past two years. You authorize this inquiry when you apply for a loan.
• Public Record and Collections. Credit reporting agencies are authorized to collect information from state and county courts concerning bankruptcy proceedings, property foreclosures, wage attachments, settlements of lawsuits, foreclosures, liens, and other related matters.

Get Your Credit Report Today

If you have any doubts about the accuracy or the overall strength of your credit, it's an excellent idea to obtain your free credit report today. The sooner you do so, the sooner you can settle all doubt on the issue and get a realistic, accurate assessment of your credit. 

This way, if there are any areas that you care to dispute, you can do so in a timely manner. If there are other areas that are accurate, but definitely cast your credit in a bad light, you can work to improve them before applying for a major loan.

You can apply to observe your credit report today. It will give you a complete look at all of the above listed components that make up your FICO score. The sooner you have this information, the sooner you can make all of the necessary adjustments in order to render your score as strong as possible. 

Getting your credit report is the first step toward positioning yourself for success in all of your future financial and business pursuits.

5 Mortgage Problems You Want To Avoid So You Don't Lose Money

They say we learn from our mistakes, so that means it's a good idea to make them in the first place. What they really mean is that it's good to make a spelling mistake so the teacher can correct you. They're not telling you to make a terrible mistake when you're half way through the biggest purchase of your life. You'll still learn from the mistake, but it could cripple you. Let's look at a few things you don't want to mess up when it comes to your mortgage.

Don't go crazy with credit

Before you apply for a mortgage you don't want to have too much credit in your name. That means any big purchases you're thinking of making should be put on hold until your future mortgage is wrapped up. Even if you have the best credit rating in the world it's going to scare companies away when you owe lots of money to different people. What would happen if your circumstances changed and your finances were hit? Everyone who has lent you money would have to compete with each other to get theirs back.

Don't hide from your lender

A lot of people hate hearing bad news so they don't open their mail when it comes in. If they can't afford to pay their mortgage it gets worse because they stop answering their phone. Lenders find it impossible to reach people, but I'm sure you realize this will never make the problem go away. It could actually make it worse since lenders have a few options at their disposal and they could maybe save your home, but unfortunately this is never going to happen when they can't even contact you.

Don't skip the inspection

It's easy to fall in love with a beautiful home as soon as you walk through the front door. Sometimes they just 'feel' right and you know you want to buy it. Unless you can see into the future you don't know what is going to go wrong. The only way you can find any unknown problems is by getting a home inspection and you need one carried out before your offer becomes official. Your perfect home might look beautiful to the naked eye, but you don't know what is going on behind the scenes.

Don't lie on your application

At the moment you might not have the greatest income in the world and you could even owe some money to credit card companies, but you still have to tell the truth when you're filling in your mortgage application. It's even harder when you know you're due a big pay rise within the next year because you'll have to settle for a much smaller loan at the present moment. If your lender finds out you've lied to them you could end up in a lot of trouble and it could also be a federal offense.

Don't pick the wrong mortgage

I know it's easy to change your mortgage these days and everyone swaps around like crazy, but don't pick the wrong mortgage in the first place and you'll save yourself so much hassle. You might still need to change it further down the line, but at least you'll save yourself a few years of wasted money. People only choose the wrong mortgage in the first place because they choose the wrong people to help them, but you can take care of that by making sure you speak to a skilled financial adviser.

You only get one shot

Once you mess up you'll lose money and there is no getting away from it. You can always take out another mortgage, but your money will never magically appear again. Take your time if you're buying a home for the very first time because you don't want to regret something even if it only affects you negatively for a few years.

Author Byline:
The author of this article, Ian Andrews, is a freelance blogger, currently writing for First World Mortgage, well-known mortgage lenders in Connecticut. Ian loves cooking and on weekends he provides lessons to the underprivileged youth.

5 Ways to Destroy your Credit Rating

Loans (Photo credit: zingbot)

A credit rating is a tool used by banks to determine whether to loan money to you or not. Your credit rating is calculated based on your credit history, which is contained on your credit file. Your will have a credit file if you have applied for anything involving credit in the past such as: credit cards, mobile phone or internet plans, personal loans, mortgages or interest-free store loans. In order to keep your credit rating high, to increase the likelihood of loans you should avoid these five things.

Credit Defaults

Credit defaults occur when payments for loaned money are not payed back on time or at all. The most commonly credit defaults are: missed mobile phone bills, missed credit card payments, and missed personal loan payments. All missed payments are listed as defaults on your credit file and result in a lower credit rating.

Self-Employment

Unfortunately, people who are self-employed can have a hard time winning favour with banks and other money lending organisations. This is due to the fact self-employment is viewed by these organisations as unstable and risky. If you are self-employed it is important that you keep track of your tax returns and profit-and-loss statements, so when the time comes you can prove that you have sufficient income to make payments.

Discharged Bankruptcy

Discharged bankruptcy is the term used to describe an individual after they have paid off, otherwise settled, all previous debt. After settlement has been agreed upon, the bankrupt individual should then apply for a discharge certificate ordained by the court to prove their freedom from bankruptcy. Technically, a person who is classified as having a discharged bankruptcy, is allowed to take out loans again, very few institutions will take the risk for several years after the bankruptcy.

Being on a Debt Agreement

A debt agreement is legally binding agreement between a debtor (the loaner) and their creditors. In this agreement, creditors will accept a sum of money, which the debtor can afford in order to make up for an unmanageable debt. Proposing a debt agreement is considered an act of bankruptcy and will severely lower your credit rating.

Getting Declined by Banks and Other Creditors

Often an institutions willingness to give loans is influenced by past creditors opinions if the individual in question. If past creditors have deemed the individual to be reliable, then they are more likely to agree to a loan. Alternatively, if past creditors view you as a credit risk, then you are less likely to get a loan in the future, so it’s best to leave a good impression from the start.

Although it is important to avoid doing damage to your credit rating, sometimes it is inevitable. Getting a car loan while you are struggling with a bad credit rating can be difficult, but it’s not impossible. Nowadays there are many options for those searching for bad credit car loans.

Barclaycard® Rewards MasterCard® Review for 2013

The best-selling credit card is the Barclaycard® Rewards MasterCard®, which provides a 0% opening APR on balance transfers and purchases. 

It also provides speedy collection of points with bonus points after the cardholder’s 1st purchase or balance transfer, and double points while utilising the card for the grocery store*, gas, and utilities.

The Barclaycard® Rewards MasterCard® offers 3 other variations, depending on your credit rating:

• average credit (no intro. APR or balance transfer benefits)
• good credit (this review is focussed on this version)
• excellent credit (with 0% APR for 12 mo. & up to 10,000 bonus points!)

Note: all the "Apply Now" buttons and other BarclayCard® links on this page take you to the good credit version.

APR for Purchases

The Barclaycard® Rewards MasterCard® comes with a 0% introductory APR that's in effect for the 1st six months (12 months for excellent credit version) the account is open. After that period, the rate adjusts to a variable APR that is presently tiered at 14.99%, 17.99%, or 24.99% depending on creditworthiness & reward benefits. When the introductory APR expires, the minimum interest payment on cards carrying a balance is $2.00.

The opening APR can be eliminated early in the event from a late payment, in which case a penalty APR of up to 30.24% may be applied. Even during the introductory period, it’s important to make all payments promptly.

Balance Transfers

For balance transfers, it's 0% APR for the first 6 months. Likewise, after six months, the interest on balance transfers moves to the same three levels as for purchases: 14.99%, 17.99%, or 24.99%. 

Fees

This card has no yearly fee. It does charge a fee for balance transfers: the greater of $10 or 3% for the first 15 months, and the greater of $10 or 4% after that. Cash advances come with a fee equivalent to the greater of $10 or 5%, along with an APR of 25.24% on that portion of the balance.

Either a late payment or a returned payment brings a fee of “up to” $35.

Reward Points

Barclaycard® Rewards MasterCard® offers two Rewards points for every dollar spent on “day-to-day purchases,” such as gas, groceries, and utilities*. It also offers one point per dollar on everything else, and 5,000 bonus points awarded after the first purchase or balance transfer. Points can be saved for statement credits; they're applied to any purchase on the previous statement of $25 or more, at a rate of 100 points per dollar redemption. The bonus 5,000 points are worth a statement credit of $50. Rewards points don't expire, so long as the account remains active and in good standing.

My Take

The Barclaycard® Rewards MasterCard® provides a fantastic 0% APR opening period of a full year on purchases and 15 months on balance transfers. The reward redemption choice is limited to purchase reimbursement, and the interest after the opening period is rather high, but the card remains a good option for consumers who want to use the introductory period to pay down balances and can pay off the balance in full every month after the first year.

Apply for Barclaycard Rewards MasterCard

Quick Loan Advice Pros and Cons of Log book Loans

If you don’t own property and you suffer with a poor credit rating it can often be very difficult to obtain credit. Some people choose to opt for payday loans or their doorstep alternative, but these solutions can leave the lendee with truly extortionate rates of interest. Thanks to a new wave of logbook loan companies, this is now becoming less of a problem. 
This guide will tell you all you need to know about logbook loans, including both their pros and cons retrospectively. 

So What Is A Logbook Loan Anyway?

Basically, a logbook loan covers any type of credit issued against the value of a motor vehicle. You can generally apply online and receive a decision in minutes, which certainly saves a considerable amount of precious time and effort. Mobile Moneys logbook loan service is currently the most popular option around, and many people choose to opt for it every month.

Tell Me About The Pros

With a logbook loan the benefits are endless. Usually credit checks are not performed, allowing people with less than desirable credit scores to receive the cash they need in troublesome times. Also, once an application has been processed and accepted, logbook loan companies will usually be in a position to release the money instantly, meaning you could have cash in your pocket on the very same day - a truly useful tool for those unforeseen emergencies.

Because logbook loan companies don’t usually perform credit checks, proof of employment is often needed to process a successful application, although even this can sometimes be avoided. Repayment schedules can also spread over a much longer time period than their payday or doorstep counterparts allow, meaning that monthly bills can work out to be considerably less.

Okay, So What About The Cons?

As with any form of credit, certain risks are involved with taking out a logbook loan - mainly the possibility of default. If you miss a payment with logbook loan companies, you risk losing your car, so this is something seriously worth bearing in mind. Although this is the worst case scenario, if you default, expect collectors to take this very seriously. Obviously most lenders will allow you some leeway, but if you’re not certain you can make the repayments, don’t take out the loan.

Interest rates can be well over 300%, so the more time it takes you to pay the loan off, the more money it will end up costing you, but if you have no other option, you really have no other choice. Be sure to read the contract carefully, paying special attention to the small print, and never take out any loan without first working out how much you will end up paying back.

So there you go, thats the lowdown on logbook loans. Depending on your personal financial situation, this solution could be perfect for you, but be careful as some lenders will purposely avoid telling you the final repayment amount, and if you haven’t worked it out for yourself, you could well be in for a nasty shock come payday.

How Credit Makes the World go Round

Wipe our Debt (Photo credit: Images_of_Money)

Way back before everyone carried little plastic cards in their wallets instead of cash, the saying was money makes the world go around; not so anymore. You and I are not the only ones who seemed to be enslaved by credit. The biggest user of debt is the US Government itself.

How it Works

Just about everybody is aware that our country is trillions of dollars in debt, but not everyone knows how our government keeps functioning under that debt load. Creating more money is not the answer. If our government creates too much money inflation runs rampant. Instead of paying four dollars at the market for a gallon of milk you end up paying 24 dollars instead. Our government keeps working because of their ability to borrow from other countries, primarily China and Japan. 

If not for the trillions of dollars borrowed from these two countries our country would indeed come to a complete halt. We borrow money by issuing US Treasury notes and bonds. China, Japan, and other countries buy these debt instruments for the interest we pay them every few months. When the bonds and notes mature they’re either rolled over into new Treasuries or we pay the principle amount back in cash. Most Treasury Securities mature every 5, 10, 20, or 30 years. In most cases our government strives to roll the debt over into new long term debt so they don’t have to come up with the cash to pay out.

The Cost of Bad Credit

Most people now days are familiar with their credit score and how it impacts your ability to borrow and the interest rate they receive. If you have poor credit the amount you are able to borrow suffers, and the interest rate you can borrow at rises. The same goes for our country. For many decades our countries credit rating has been the very best; AAA. That makes the US just about the safest country in the world to borrow from. Due to our current economic problems our country’s credit rating has suffered. 

Standard and Poor’s, one of the primary credit rating agencies in the world downgraded the United States debt from AAA to AA with a poor outlook. They have since changed the outlook to stable but have kept their rating at AA. So what does that mean for our government? In order to attract enough investors (like China and Japan) our government has to be willing to pay a higher interest rate due to the increased risk of borrowing from a country in financial and economic turmoil.

Just like the average citizen, as their credit score improves or disproves, the interest rate they are able to borrow at rises or falls. The amount of money you can borrow will also go up or down depending on your credit score.

What if You Can’t Borrow

If your credit score falls too low you lose the ability to borrow money at any rate because the risk is considered to be too great. If you can’t borrow what do you do when there is a financial emergency? Fortunately for most people there are finance companies that give payday loans, personal loans, and car title loans, to name a few. Those are all high interest rate ways to borrow money no matter how bad your credit may be. 

Unfortunately for our government it’s not so easy. It is vital to our country’s economy that our government is able to borrow what it needs to keep functioning and hopefully one day someone will come up with a way to significantly reduce our country’s debt.

Smith is a professional blogger that provides financial information on savings and loans. He writes for InstaLoan.com, a leading title loan lender.

Great Tips on Dependable Credit Card Usage

In order to get a good deal on your credit card, it’s very important to know few things about credit. But if you ignore to know then it might be very costly for your finances as well as your credit ratings. Even if you know the minimum of the basics then that will also help you a lot. If you have the knowledge on how credit and credit card works then it will be easy for you take the right decision on selecting and using your credit card. In this article we’ll present few great tips which will help you to select the right credit card for you and also guide you through the usage.

Types of Credit Cards:

Though all the credit cards look similar, but as far their terms and conditions are concerned they are different from each other. Many varieties of cards include standard or plain-vanilla cards that contain only standard components. These types of cards don’t offer you cash-back, rewards etc. Student credit cards are intended for young college students. Reward credit card for those people who buy most of the things on a credit card and clear the balance each month. Secured credit cards are for those people who have got into credit card trouble in the past and not eligible to quality for the traditional credit card. Once you are familiar with the different types of credit cards then it will be very easy for you to choose the right credit card for you.

Stick to a budget

The ease of using a credit card could result in the economic downfall since you may wind up paying more than you possibly can afford. That’s why it is very important for you to stick to a budget. If you have started to use a new credit card then, maintain a regular monthly control for the expenses.

An alternative way to monitor the paying would be to register the contact number while using credit card. Each time you swipe the card, you will get a notification in your cell phone, stating your expenditure amount and your remaining balance in your card.

Monthly statement of credit card:

Every month you’ll receive a billing statement of your credit card. Billing cycle is normally between 21 to 29 days. Each month your bank issues a transaction statement and sends the detail to you of that current billing cycle. If there is an outstanding balance in your account then you need to make a minimum payment to reduce the balance or else you can clear the total outstanding balance as well. If you don’t use your credit card for several months then you might not get a billing cycle.

Start with a minimum credit limit and don’t increase:

When a bank provides you with a credit card, it will eventually set a credit limit based on your pay. You may tend to boost this limit to advance more costly expenses. But it's preferred not to do so, at least till the time you are more confident on credit card usage. Though bank may increase your credit limit but at the end of the day it's you who have to pay the amount.

So, unless your monthly earning is increasing stick to a minimum credit limit. Once you realize that you have reached the credit limit then it’s preferred to use cash rather than using your credit card.

Pay back the amount on time:

It is very important to pay back the full credit amount on time. Excellent credit rating is made on on-time payments along with excellent financial debt management. Hence, you should use your credit card to a certain extent which you can easily afford to pay back.

The above mentioned great tips will surely help all the credit card beginners to know about the credit cards and its usage.

Old Fashioned Solution to a Current Problem

Loans (Photo credit: zingbot)

Mounting debt is an increasingly common issue for people throughout the UK and one of the most effective methods of getting debt back under control is something that has been around for a surprising period of time. Guarantor loans are a different type of loan which involves utilising a third party who guarantees to continue making repayments should the borrower fail to do so. Often, guarantor loans are chosen when an individual has a bad credit history or no credit history at all as they would generally be viewed as high risk by financial institutions.
However this risk is significantly reduced if a guarantor is willing to take the responsibility of repaying the loan in the event that the borrower defaults and often the lender will agree to grant a loan. 

What are Guarantor Loans?

A question that we are often asked is what actually are guarantor loans? Widely regarded to be an innovation in the financial world, it is understandable that people may have doubts or queries regarding how they work but in the details below, we hope to outline exactly what they entail.


When it comes to applying for a guarantor loan from a lender such as UK Credit, the key difference between this type of loan and standard unsecured loans is that the applicant needs to nominate someone who will support their loan application - this person is called the guarantor. The guarantor can literally be anyone including family (not spouse or partner), friends, work colleagues etc who know the borrower well and will be willing to support their loan application.


It is essential that the guarantor satisfies a number of criteria, such as being a homeowner with a regular income of their own and a good credit rating. Assuming these criteria are satisfied, the application looks far more favourable to the lender and this is what makes an application much more likely to succeed when compared to a normal unsecured loan.


If you opt to apply for a guarantor loan, it is important that you discipline yourself. Not only because you were provided with a loan despite your current credit rating but also because defaulting on the repayments could make your credit rating even worse.


You should be disciplined to ensure all of the required monthly repayments are made on time with any type of loan but in the case of guarantor loans, you must take into consideration that if you fail to pay the loan, it is your guarantor who will be asked to cough up the money. Although they have been put in place to act as a safety net should things not work out, it is not a good practice to let your guarantor pay for the loan when they offered huge help with your loan application!

Benefits of Guarantor Loans

Contrary to popular belief, although the guarantor loan is an unsecured loan, they are generally available at comparable interest rates to other unsecured loans.


Guarantor loans are great for people who need to improve their credit rating or to get a positive credit score behind them. The applicant must be certain that they can afford to repay the loan to gain the benefits this loan provides and as with any type of loan, it can always prove to be beneficial to shop around for the best deals.


Bio – Amanda GillamI work as a blog writer for a finance company called Solution Loans which specialises in Guarantor Loans. I hold a degree in financial management and enjoy writing about a variety of topics including finance, transport, travel, sport and business.

How to Get a Loan with a Poor Credit Rating

Whether it was reckless spending that soon taught us a lesson, mismanagement of our repayments or a genuine inability to pay back what we had borrowed, at some point in our lives many of us will find ourselves with a poor credit rating. 

This however does not necessarily mean we can simply afford to forego borrowing any more money, nor that we would not be able to better manage a loan now and though getting a lender to agree to a deal might not be so easy, there are a number of things you can do to increase your likelihood of getting hold of the cash you need.

Expect rejections

Applying to one bank and then giving up upon rejection will get you nowhere. With a poor credit rating, you are immediately a candidate for refusal and should enter into talks expecting the worst while hoping for the best. 

Rejection from one institution does not mean that nowhere will accept your application; time and patience will be required.

Negotiate interest rates

While you still want to get the best interest rate you can possibly get a lender to agree to, you have to understand that the compromise for being accepted with a bad credit history is paying higher interest rates. 

Seeing you as a risky investment means that banks will want a bigger return on their money and as much as it might sting, you have to be willing to accept this if you want the loan application to be approved. 

Be wary of Payday loans

While you are more likely to be accepted for a payday loan, you are also more likely to find yourself in deeper financial trouble if you accept one. 

These short-term loans for small amounts of money are designed to tide you over between pay cheques but they come with huge interest rates and massive penalties should you not pay it off on time. 

So many consumers have found themselves crippled by such loans that there are even investigations underway as to how unfair they may truly be.

Keep it to a minimum

The more you ask for, the more likely a lender is to decline you if you have a bad credit history. Carefully working out the minimum amount you need to borrow and being sure to decline any extras such as Payment Protection Insurance that would boost payments and the investment will seem less risky to the lender, encouraging them to say yes.

Improve your rating

Perhaps the best way to increase your chance of a successful loan application is to actually improve your rating, repair your credit score fast thus making you seem like a safer investment. 

Paying off all other outstanding debts by being punctual and organised with repayments will soon help towards this. Another good tip is to lock away your credit card and try not to use it; as this way you will never exceed your limit or fall behind on payments, allowing your rating to gradually improve without actually doing anything.

Ask elsewhere

Banks may be the traditional source of money but other options are available. Borrowing from family and friends is a great way to get better interest rates and a more lenient repayment schedule. 

Just be sure to write up formal documentation outlining any agreement; the last thing you want is to lose loved ones over squabbles with money if things go wrong.

Bankruptcy Helps You Start Over Again

debt (Photo credit: Alan Cleaver)

When you hear the word bankruptcy you usually think of failure. It's true that when you are going through it you feel like a failure and are embarrassed to have people learn about it. But bankruptcy is a legal and acceptable way to get you out of your financial problems. Bankruptcy is a complicated process and you need a bankruptcy attorney to guide you through it. 

When you got yourself in the financial mess, all you want was to make it go away and start over. With a bankruptcy, you can start over. You can wipe the slate clean and stop getting all those harassing calls from creditors. You won't have to deal with debt anymore. 

The elimination of your debt occurs when you file for bankruptcy. This includes major unsecured debts like credit card and medical bills. With these debts wiped from your credit report you can now start to rebuild your credit rating. Bankruptcy does effect your credit rating negatively for a while but over time your credit rating can be repaired to an acceptable level. 

Along with bankruptcy eliminating your credit and medical debt it also can prevent foreclosure and repossession. If you are behind on your house and car payments a San Diego bankruptcy attorney can prevent you from losing your home and car. 

Going through a bankruptcy is a stressful event but after you complete it you will have a better quality of life. You and your family will come out bankruptcy and live a less stressful life. Your debts will be gone and the worry of losing your home and car will also be gone. You will have peace again in your home.

Remember getting in over your head again can be relatively easy to do. You should attend credit counseling classes and learn all you can about debt and credit. Some people fall back into large debts because they haven't learned to change their spending behavior.