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How It All Works: Are Secured Loans Better Than Unsecured Loans?

October 3rd, 2018 Posted in Credit and Debt, Money Tips
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Money, money, money! Everybody wants some more, but unfortunately, it isn’t always there when you need it. Whenever you have some kind of emergency, you may have to consider getting a loan. According to statistics, more people are seeking personal loans than ever before.

But before you go out and sign up for one, it’s important to understand the differences between the two types of loans – secured and unsecured loans.

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Unsecured Loans

This is a type of loan where that does not require any kind of collateral. All the lender will ask for is a bank statement and an agreement to repay the debt. If you fail to pay, the lender cannot take the assets you bought with the money. The lender also has no right to dictate how you use your assets. Thanks to the simple documentation required, these types of loans are widely available to everyone. The whole process is very short because you can get fast approval. This is much more convenient than seeking a loan from a bank and the terms of repayment are often quite flexible.

However, there are some disadvantages. Since there is no security for the loan, the lender carries a higher risk in case of default in payment. Unfortunately, this means that you will have to pay a higher rate of interest. Examples of unsecured loan include retail credit cards, personal loans, and student loans.

Secured Loans

This is the type of loan where you are required to provide some kind of collateral. The lender will ask you to pledge some kind of asset that you own as a way of guaranteeing repayment of the money. This collateral is usually something that has value, for example, cars, real estate, stocks, personal belongings, money, or even livestock. If you fail to pay back the loan as stipulated, the lender simply sells the collateral to pay off the debt. Examples of secured loans include car loans, home equity loans, and mortgages.

A secured loan has certain advantages. Firstly, it has lower interest rates. This is because the lender isn’t taking much of a risk due to the availability of collateral. Secondly, these loans have a more relaxed credit requirement. Finally, a secured loan enables you to borrow a larger amount of money. The disadvantages of secured loans include potential repossession of your assets in case of default. The lender can also restrict your usage of the collateral, thus preventing you from altering, depleting, or relocating the asset.

As you can see, an unsecured loan is a much more convenient way to get access to cash whenever you need it. However, there are a few things you must keep in mind. An unsecured loan should be taken out only for emergencies. Another factor to consider is the high rate of interest. Always make sure that you can actually pay back the loan on time. At the end of the day, knowledge is power. You need to understand what you are getting into before signing on the dotted line. Examine the pros and cons and decide the best kind of loan that will suit your needs.

  http://credit-n.ru/offers-zaim/dozarplati-srochnye-zaimi-online.html

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The Best Ways to Overcome Financial Stress

October 3rd, 2018 Posted in Money Tips
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Many people these days end up in financial problems. There are many reasons one could end up in financial difficulties, such as poor money management, lack of planning, loss of employment and so on. However, one thing is certain, everyone faces immense stress when faced with financial struggles. The main reason is that financial problems are one of the most difficult things to overcome. Once you’re in too deep, it becomes a lot more difficult to get back on track.

Still, if there’s a will, there’s a way. When faced with financial stress, one must keep their head cool and strategize instead of panicking. Yes, that’s a lot easier said than done, but panicking won’t get you anywhere. If you analyze the situation correctly, you’ll soon find the main cause of your problems. And, when you know what’s causing your financial stress, you’ll be able to fix the problem. Therefore, here are a few of the best ways to overcome financial stress.

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Develop a budget

Developing a budget will give you a clear picture of what your financial status looks like. Having a budget assessment helps you determine how much you earn and how much you spend. It’s the easiest way to find loopholes in your finances and close them up. You’ll be able to reduce stress levels when you know what’s causing your finances to leak and when you know you can fix the issue.

For example, calculate your earnings and deduct all the necessary expenses, such as utility bills, maintenance, taxes and so on. Now, this will show you how much money you’ll be left with once the expenses are covered. It will also help you notice if any of the bills cost more than they should. If you have a budget plan, it becomes simpler to manage your finances and reduce costs so that you can avoid financial difficulties.

Maintain a good credit score

Many people neglect their credit score. The main reason is that a lot of people aren’t even aware of bad credit score’s negative implications and impact on your finances. Late bill payments, outstanding debt, exceeding your card limit and more all contribute to a bad credit score. A bad score means you’ll have more fees and more expenses on your back.

For instance, being denied a bank loan, being charged with high interest rates on loans or being unable to get a better credit card deal are just some of the consequences of having a bad credit score. What’s more, you must read your credit report regularly. The main reason is that even a simple accounting mistake could hinder your credit score.

Reduce costs

As mentioned before, having a budget plan helps you spot anything that stands out with your expenses. That way, you can even reduce the costs of your bills and utilities. For example, are you paying 50$ for a landline you almost never use? If that’s the case, cancel it or switch to an emergency only plan. Moreover, do you pay a fee on your checking account? If so, switch to a bank that offers no checking fees.

Another example of cutting costs on bills is avoiding using air conditioner or heater when you’re not home or leaving the lights on when you’re not in the room. All of these bad habits cost money and by simply changing your approach, you can save yourself a lot of money in the end.

Seek additional funds

If you find yourself in a particularly difficult financial situation, you can always seek additional funds to help you cover the expenses. For instance, you can apply for a loan at your bank. However, banks tend to be picky when it comes to allowing loans, especially if your credit score is low.

In that case, you may get denied or charged with very high interest rates that aren’t suitable for your current financial situation. If that’s the case, you can seek out alternative lenders for more flexible personal loans. These loans are particularly handy when you want to consolidate your debt and get your finances in order.

Pay your bills on time

Avoiding financial stress means avoiding financial difficulties. Paying your bills on time can save you from such difficulties. Many people are late with bill payments, yet they become frustrated with extra late fees and additional costs. That way, you still pay your bills with extra expenses. All that it takes is for you to be a bit more organized, in order to pay your bills on time. As a matter of fact, even a single late credit card payment can cost you up to $300 annually.

There’s no reason for you to pay additional fees and risk yourself ending up in difficult situations, as well as stressing over expenses that could have been easily avoided. Furthermore, you can even leverage technology to help you pay bills on time. For instance, you can schedule automatic payments or set reminders to make sure you don’t miss out on paying the bills before they’re due.

Financial stress isn’t uncommon these days. Many people fear what they’ll do if they lose their job or if they end up in financial trouble. Stress makes people see the worst in every situation. The truth is that with a bit of good planning and organization, you can avoid financial issues and save yourself from stressing over a situation that seems impossible to overcome.

  http://credit-n.ru/offers-zaim/ezaem-zaim-online-za-15-minut.html

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Is Debt Always A Bad Thing?

October 2nd, 2018 Posted in Credit and Debt
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Is Debt Always A Bad Thing? - celebrating financial freedom image

Could debt actually improve your life? Image licensed under Creative Commons.

Is debt always a bad thing? Many of us automatically assume debt is a hugely negative state of affairs, and while it’s true that unmanageable debt is frightening, it may surprise you to learn that some debt is actually positive. Often treated as a dirty word, most of us can’t avoid having some form of debt, while some try to actively avoid it.

And yet not all debt is created equal. There are some positive forms that could help you reach your goals quickly. You just have to know how to use it. Here’s how the right kind of debt can get you ahead of the financial game…

Debt Can Help You Make Money

It may sound hard to believe, but the right kind of debt really can help you to make money. The key is not to go into debt for consumer items you couldn’t otherwise afford, like that designer bag or new iPhone. Instead, use debt as a powerful tool to help you reach your life goals. Invest in an asset – like a house or apartment or even for something like doing an MBA and you’ll be channelling money into something that will pay you back. If you’re clever about the property you buy – selecting an up and coming area, negotiating a good purchase price armed with data from sites like MousePrice– then the value will rise over time. When you’re ready to sell, you will have accumulated a profit, even with the mortgage balance to settle. If you go into debt knowing that you’ll get greater value out of it further down the line then it’s a positive investment.

It Can Be Cost Effective For Purchases

Interest rates are at historic lows right now, so if you want to do something like buying a car, it’s actually better to use credit to make the purchase than dipping into savings and investments. If you have money in tax free savings like ISAs or even stocks and bonds, it doesn’t make sense to cancel out the returns you get from them in order to make a purchase. Considering your overall financial picture, you’re better off using credit to pay – especially if you lose tax benefits by liquidating an asset.

You Can Fill In Cash Flow Gaps

For those who have a portfolio career, are self-employed or starting their own business or work in a job that is highly dependent on commission, life often involves a fluctuating income. When used responsibly, short-term loans can get you through time periods where cashflow is lean – provided you use the boom times to pay them off. This regular repayment schedule will also help to build a really good credit rating, as lenders can see a history of responsible borrowing. You will then be offered better rates, reducing the overall cost of borrowing. This creates a virtuous circle of good credit that benefits your financial situation.

Debt doesn’t have to be an intimidating or shameful prospect- if you learn to use it responsibly, it can really be a force for good in your life.

  http://credit-n.ru/offers-zaim/glavfinance-online-zaymi.html

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