If you’ve got major debt problems – you
might think your only option is to file for bankruptcy. It can be a hard step
to take, but for some, it’s the only option. However, that isn’t always the
case. Did you know that there are a number of different options for you even if
you think that filing for bankruptcy is inevitable? In this article, we’re
going to look at them. Make sure you’ve exhausted every possible option before
you decide that bankruptcy is for you.
1. Get a debt consolidation loan
While it might not be the best idea to take
out more debt in order to pay off other loans – this could be a viable option if you really believe that your
money-issues are only short-term. A debt consolidation loan could help you by
giving you one large loan to pay off all your smaller debts. This can work well
if you can arrange a new loan with better interest rates and lower monthly
repayment amounts which will help you clear other debts that are causing you
more trouble to pay off. When you can shop around for different loans with more
favourable payment plans and interest rates, this could be a good option.
This option will only really work for some
people, and especially those who are only having short-term money issues.
2. Come to an agreement with your lenders
You might be able to come to an agreement
regarding specific payment plans, extension periods, or a reduction in your
total debt by discussing it with your lenders. Many of them will want to get
some back rather than nothing if you file for bankruptcy. So give them a call
and discuss your options, and make it clear that you are considering bankruptcy
seriously. You can try sites like this for more information: www.debtconsolidationnearme.com/florida/index.php.
3. Get an administration order
An administration order ties up all your
debts into one package to make the situation slightly easier to manage. Then
you can make one single monthly payment to a court. These are normally for
smaller debt amounts and are good for people who can afford to pay something
back. After an initial period, the rest of the debt will be written off.
4. Get a debt relief order
The final of our alternatives to bankruptcy we will consider is the debt relief order. If you’ve got debt and don’t own a home, then you could be entitled to a debt relief order. These are normally granted to people who don’t have many assets and cannot repay their debts. When you get a debt relief order, lenders will not be able to take action to recover money owed for at least a year, unless they get specific court permission. This leaves you with a bit more room for movement without having to worry about having debt collectors taking any of your things away.
When you have one of these relief orders in
place, you’ll still have to pay normal bills like your utilities. After this
initial period, your debts will be written off. To qualify for one of these
orders, you must not be able to pay any debts, but the debt needs to be a
smaller amount. You also must not have many assets.
No matter how careful you are with your finances,
unexpected expenses can sometimes hit you completely out of the blue. A medical
bill that appeared from nowhere, home renovations, a sudden urge to take a
vacation to avoid suffering a burnout… and the list goes on. Understandably, no
one should just jump into applying for a loan without a solid ground on how
things work in the financial realm, so in that spirit, here are 8 things to
know before you proceed:
1. Have a plan on how to repay it
Not having a steady stream of income and trying to apply
for a loan is a bad idea. Not only will you not be able to repay it on time,
but it’s also highly unlikely you’re going to get approved in the first place.
Even if you do have one, you’re going to need to gather all the necessary means
of proving it before you apply. Usually, a letter from your employer will
suffice. For those of you who are self-employed, it gets a bit trickier, but
it’s still doable – just dig up the tax returns for the past two years and that
should be it. If you have money coming in from other sources (such as part-time
work), you’re going to have an easier time paying back the loan.
2. Minimize the lender’s risk
Your finances can be examined from a purely mathematical
standpoint. The lender will take a look at your assets and subtract your
liabilities; that’s how your net worth is determined. The former is a sum of
what you own – such as your property, and the latter is a sum of your
obligations – such as your mortgage. Understandably, the lender is running a business, and
as such, looking for ways to minimize the risk is of paramount importance. So
do what you can to present yourself as a financially stable individual and
gather all the evidence necessary to back your case.
3. Know there are different
types of loans
Depending on your needs, there are different types of
loans you can choose from, with personal loans being the most popular ones by
far. While some lenders have tighter requirements than others, there arepersonal loans guaranteed approval. Otherwise known as secure loans that are backed
by collateral, these are particularly suitable for people with no credit
history whatsoever. Then again, if your interests are of commercial nature,
consider getting a business loan; once again, there are plenty to choose from.
Lines of credit, term loans, equipment financing loans, and so on. There are
also specialized loans you can apply for such as auto loans or student loans. When
it comes to loans in general, there is no one-size-fits-all solution – it
always depends on your needs.
4. Interest rates are one of the
most important considerations
Interest rates have a great deal of influence on how much
you’re going to end up paying in total. It’s hard to give any general advice on
the subject because these can greatly vary from lender to lender. In fact, they
can be anywhere between 5% and 35%, which can make quite a substantial
difference, especially over the long term. Note that interest rates may not be
the only fee you’re going to end up paying. Some lenders will charge you
processing fees and some of them even impose a penalty for paying off the loan
early, costing them valuable interest rate earnings in the process. Bottom line:
every lender is different so always make sure to do your due diligence.
5. It’s a good idea to exhaust
your other options first
There are alternatives to getting a loan, all of which
should be considered before applying. If you have friends or relatives who
could be lending you some money, it’s always better to ask them for help first.
After all, no one will offer you as favorable terms as them; in fact, they may
not even ask you to pay them back (but make sure to have a clear dialogue about
the topic at the very beginning, otherwise you may jeopardize your good
personal relationship with them). But if they insist on repayment – which they
have every right to – it’s good practice to formalize the agreement in one way
or another. Even so, there’s no need to be a burden to your friends and family,
as there are other options; credit unions are one of them, and if the situation
is suitable, you may even turn to your local church or get in touch with a
charity.
6. Every loan comes with its own
set of requirements
Depending on the type of loan you’re after, there will
always be some requirements you need to comply with. But the following
requirements universally apply to all of them:
– You need to be at least 18 years of age.
– You need to be a resident of the country.
– Your financial circumstances need to be proven.
– You need to have a steady stream of income.
Bear in mind this is the bare minimum – depending on the
lender, other requirements and restrictions may apply.
7. Know the common loan terms
You’re probably familiar with the interest rates already;
basically, this is a portion of the repayment the lender collects each month.
The loan term is the total number of months you’ll be paying it off. The annual
percentage rate is what the lender will charge you in addition to the interest
rates. Finally, the principal is just a fancy way of describing the total
amount of money borrowed. This is the basis on which the lender charges you
interest rates. As you keep pacing back the loan, the principal decreases, and
so do the interest rates.
8. Make a couple of price
comparisons
Don’t just dive right in and pick the first lender you
see. If you take a little bit of extra time to do some in-depth research which
includes comparing prices online, chances are you’ll be able to find a much
better deal in general. While you’re at it, it’s good to check up on their
online reputation by visiting customer review portals and social media. As much
as the lenders can afford to be picky in regards to who they take on board, you
– as the loan taker – must be at least equally as careful and only work with
the ones you can trust.
Conclusion
Based on these valuable pieces of advice, applying for
your next loan should be a breeze, as long as you’re aware of your options. So
make sure to do all the research necessary and only apply for a loan when
you’re completely comfortable with it.
When money is tight, there’s one thing you can rely on – a personal loan. Banks are usually happy to accept an application as long as the applicant is deemed trustworthy. Then, you can use the cash to rebuild your finances and steadily get out of debt one step at a time.
But, what if a lender won’t process your file? What are your options?
You can try other creditors, such as a family member, yet they might not be able to help. The best option is to make sure you don’t get rejected, and here are the tricks of the trade which will help.
Check Your Rating
Lenders use credit ratings to figure out whether a loanee is eligible for a loan. If yours is bad, there’s a good chance it will get rejected very quickly. By checking it beforehand, you can decide if it needs some work. Should it require rebuilding, there are things you can do to ensure it goes up in the future. For example, paying debts on time, even if it’s the minimum amount is a basic yet effective hack. Money Facts UK has nine more steps you can follow if you need extra advice.
Provide Basic Info
And as much of it as possible. As well as a credit score, lenders use things such as names and addresses to perform a background check. Therefore, a lack of information won’t go in your favour. Also, double check the application before sending it off for appraisal. Banks, in particular, reject stuff out of hand if they don’t have the correct details at the time of filing. This means anything from a new address to a new job. It also includes spelling mistakes, so make sure they are zero. If you can verify them with references, that’s a bonus.
Try Non-Traditional Lenders
Banks have a strict policy which they follow to the letter. As a result, securing a loan can be tough if you have a few things which don’t look good on paper. Fast Loans UK is different as it says yes where others say no. Don’t worry because it isn’t a scheme. They have quality control managers to help accept applicants others might find risky. A credit union is another option. Created to help people in debt, it won’t turn its back if your credit is poor and you struggle to get through the month. Of course, always avoid loan sharks as they are dangerous and unscrupulous.
Offer Security
The definition of an unsecured loan on Money Supermarket is: “Unsecured personal loans are available to would-be borrowers… you do not have to be a homeowner to apply.” Therefore, there is no need to provide an asset as collateral. To a bank, this is a risk and they might reject your application. By filing for a secured loan agreement, such as a mortgage, it gives them more security and means they are likely to accept your offer.
Valuables to consider securing against a loan include a house, a car, or jewellery.
Running any business has its ups and downs. You will encounter financial challenges every once in a while. Unpredictable emergencies that need to be addressed within the shortest time possible. Maybe you need to replace some equipment to allow smooth operation of the business. Or you could be having an unsettled loan that could make you lose your assets if not paid on time. What would you do? Simple, apply for unsecured loans and forget all these problems. Here’s all you need to know about these loans.
No Collateral Required
Unlike in secured loans where you need to pledge legal property or assets as collaterals, unsecured loans do not require any collateral. So you won’t have to worry about losing your legal property or assets should you default. So, in case you’re having a personal emergency or you need some funds to open or expand your small business, applying for this kind of loan will be much easier. Don’t allow yourself to suffer a financial hiccup just because you have no assets or property to pledge when you can apply for an unsecured loan today. You can check UnsecuredFinanceAustralia.com.au for details.
Less Background Checks
In the case of secured loans, the lender must do thorough checks to determine your credibility which could even include your lifestyle audit. You will also be forced to secure the loan with a collateral, which you’ll risk losing in case you default. But with unsecured loans, your creditworthiness is all that matters to the lenders. And if it’s all good, then what are you waiting for? What if you have no credit score? Again don’t worry, unsecured loans will still be the best way to build your credit score which will increase your loan limits and loan periods. But you must ensure that you pay for the unsecured loan on time.
Real-Time Loans
Perhaps the main reason that you will go for an unsecured loan is that you need some fast cash for your personal use or for the business. And if the loan is to take days for it to be processed, it would cause some inconveniences. You could lose your loyal customers or the good paying contract you might miss because you lack some equipment which is not a good thing. But this is not the case with unsecured loans. The loans are very convenient in that when you apply for the loan, it will be processed within the shortest time possible and you can comfortably sort the financial issue you were facing.
Easy to Apply
Initially, you would be required to go to the lenders and fill multiple pages of papers when applying for the loan. You would then go home and wait for the lender to consider your application contact you if you’re successful. This means you’d go to the bank a couple of times and might not get the loan. But not anymore. The technology is advancing and the lenders are also going digital. A majority of the lenders nowadays have an online presence where you can apply for the loan. All you’ll need to do is to log on to their websites – which are easy to navigate – and you’ll find the online application form. You’ll then fill the form and upload your address proofs, national ID and other necessary details.
Credit Is a Reusable Resource
When you apply for an unsecured business loan, you will be given a set limit by the lender and as long as you will pay for the balance, you can reuse the credit anytime you need to. Despite the fact that the lender will only give you smaller limits because of loan security as compared to secured loans, you can negotiate this limit provided you’ll be willing to meet the additional terms. One main advantage of this option is that it will eliminate the hang-ups usually experienced with cash advances and traditional loans. So you won’t have to stress yourself again about constantly re-applying for funding.
Reasonable Loan Term
The length of the loan you will apply (if awarded) will be used to determine the amount you’ll be paying on a regular basis. If the loan life is longer, the repayments will be lower. Unsecured loans are known for their short-term characteristic. “Isn’t this a disadvantage?” Well, yes you may not be allowed to extend the loan duration to, say 10 years. But to your advantage, you’ll be out of the financial obligation within a very short time and relieve yourself the loan repayment pressure. But of course, this will be so only if you pay for the loan on time. Defaulting will attract more fees and this will mean you’ll have to pay way more and for a longer period also.
Flexible Loans
The amount you’ll get in the case of unsecured loans is significantly less than that of secured loans. But this doesn’t mean you won’t get enough loan for your business or personal emergency. If you have a good credit score, then you will qualify for a much higher loan amount. And the more the amount you take, the lesser and more affordable are the rates charged. And this will be to your advantage, especially if you’re taking the loan to start or expand your small business. You will also appreciate the flexibility in the repayment of the loan.
There are Associated Fees
The unsecured loan that you’ll be awarded will have different ranges of the fees associated with it. You should ensure that you’ve considered all the fees before deciding on the loan amount and loan term to go for. Common fees associated with the loans include early payment, withdrawal fees, servicing fee, insurance, establishment fee, and early exit fee. Establishment fee is charged to your account at the commencement of the loan when it is deposited into your account. Early repayment fee applies if you decide to pay off the loan sooner than the agreed time.
Conclusion
It is very important to understand the essential facts of unsecured loans before going for it. And lucky for you, all the information you need to know about unsecured loans have been clearly explained. And the fact that the loan does not require a collateral makes it the best option for you when you’re having a financial emergency, especially in your business learn more with HJS Recovery. While most lenders can give you the loan even for recreation purposes, do not rush to taking the loan unless you need it to save your business. Or if have a clear and effective plan on how you’re going to pay back. http://credit-n.ru/kurs-cb.html
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.
