Getting Financially Stable: Everything You Need to Know About Taking Out a Loan

Being optimistic about your finances is only natural. Most people have high hopes concerning their job prospects, lifelong earning capacity and financial management skills. But, reality might have another plan.

Getting Financially Stable: Everything You Need to Know About Taking Out a Loan - financially stable image

What Is Financial Stability?

 Financial stability is both an objective and subjective quality. The objective standard is having an income that is higher than your expenses. You must make more money than you spend.

But, the subjective character is based on your financial status. Most people will admit that rich people have a different life style than others. For many of them, they can coast for a while before the day of reckoning arrives.

But inevitably, it will arrive. Everyone pays the piper. So, even though the wealthy have a higher income, they also must develop wise management skills. We will discuss a few of these.

Make a Budget

 Musicians practice, athletes practice … pretty much anyone who wants to succeed practices and prepares a plan. How can you control your expenses, when you don’t even know what your credits and debits are? You need to start by making a budget.

Some people don’t want to face financial reality. They want to believe that they are wealthier than they are. We see this a lot with athletes and celebrities. When their salad days are over, they might file for bankruptcy.

If you fail to plan, you plan to fail. = Benjamin Franklin.

Create a budget. If you are continually dipping into your savings, then you know you are not making ends meet. And, something that cannot go on forever, will not go on forever.

Write down your expenses and income. Then, see what your surplus or deficit is. Decide how you are going to make up that deficit.

You might try to add more hours at work. Or, you might consider taking out a personal loan. Saving money requires having higher income than expenses.

Balance Your Cheque Book

 Once you have a planned budget, see how you are doing each month. Balance your cheque book. Many people assume that bankers are never wrong. But, they do make mistakes.

After balancing your cheque book, you can identify any errors made by your bank. This also gives you a better understanding of your spending habits. You need to know how you spend money before you can improve your money-spending habits.

Count Pennies

 Remember the parable of the grasshopper and the ant. The grasshopper liked to visit the grocery store in the middle of the week and throw large parties. He had a great bar-be-cue, but didn’t produce anything of note.

While, grasshopper partied, ant was working hard, storing up food for winter. Grasshopper wondered why ant worked so hard. Ant told him that when winter arrived, those who stored away wealth would survive. Eventually, winter arrived and ant had plenty of food stored up while grasshopper starved.

How will you reap, when you have not sown? 

Those who save money, count their pennies. If you need help calculating your pennies, then you can use the Acorns App. Financial management has never been easier.

This money management app helps you earn found money, grow your knowledge, invest for your future and spend smarter. It is like having a financial assistant with you all day long. Sometimes, people need a little nudge to improve their saving habits.

Cut Corners

Paying off debt requires both a physical and spiritual commitment. Physically, if you don’t have enough credit, then you need to reduce your debt. You need to cut corners.

Enjoy some home cooking and reduce your visits to five-star restaurants. You might want to watch an old movie on date night. Reduce your expenditures to create a better threshold for your budget.

Find New Income Sources

 Sometimes, debtors need a little financial boost to help them regain their composure. When you are priming a pump, you introduce a similar liquid to draw out the liquid. Find new income sources to increase your cash flow.

After you learn more about personal loans, you can find the best financing means. Use the new funds to pay off the bills with the highest interest rates. Compound interest can quickly drag you underwater, like a drowning swimmer.

Create Rainy Day Fund

 You wear a seat belt just in case you get in an accident. A rainy day fund can help you overcome little glitches in the budgeting process. For example, your rent is probably due the beginning of the month, while your pay cheque arrives every two weeks. Sometimes, these two periods of time don’t mesh perfectly.

Instead of incurring late fees, create an emergency spare cash fund. You might even include a full month’s rent. This ensures that you are always on time.

Landlords and bankers expect you to pay your bills on time. They have a very fine-tuned system that will deposit the funds into their bank accounts immediately. There is a “Domino Effect” when they’re not paid – managers ask where the money is.

A rainy day fund smooths over many rough edges. It can be used to keep everyone happy. Toss a $20 therein when you get paid.

Healthy Financial Management Skills

Changing bad financial management habits can take some time. Psychologists believe that the development of good skills might take at least two weeks of constant repetition. Send yourself an alert from your smart phone, urging you to save more every single day.

After two weeks, there is the hope that this new habit will be well-ingrained. Use a multi-dimensional strategy for regaining financial stability: make a budget, cut costs and find new income sources. Develop healthy financial management skills to pay off your debt. Then, you can sleep better at night.

Getting Your Finances in Order: 5 Reasons Why You Should Consider Debt Consolidation

With all of U.S. household debts combined, Americans together owed a skyrocketing $13.21 trillion in 2018, hitting a record high. However, the amount of debt the average American might owe depends on their financial status, level of education, current employment, age, lifestyle, among other factors.

Regardless of how much you owe and why, getting out of debt is critical in order to take stress off your plate. Clearing debt also means getting to fix your credit score. And as most of us are aware, having an ideal credit score means getting a better chance for renting a home, getting lower interest rates on credit cards, and having a better shot at getting approved for a loan.

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Getting out of debt is hard, but with debt consolidation, some might find that it’s a reliable solution. Debt consolidation is a type of debt refinancing. Via debt consolidation, all of your unsecured debts get rolled into a single loan. In fact, there are multiple reasons why one would consider debt consolidation for paying off their pre-existing debts, such as:

  1. Lower interest rate

With debt consolidation loans, you as the borrower will often get the benefit of receiving a loan that has a lower interest rate, that is, as long as your debt consolidation loan has a lower APR than your current loan. The intention of this is to allow the borrower to pay their dues quicker. Because debts can be paid faster, both the borrower and the lender can benefit in this case.

A lower interest rate means you are forking out less money every month as you pay back your loan. Apart from the short-term benefits, you’re also benefitting long-term as you’ll have overall had to pay back less to your lender interest-wise. As a result, a lower interest rate to pay back your debts can also indirectly help you save more money and better your finances overall.

  1. Only having to pay back in one payment

Apart from the money you have to pay back and the interest rates that are tied to it, what is the next most annoying thing about having debt? Having to pay your dues to multiple lenders through multiple payments. After all, many Americans have multiple credit cards. However, with debt consolidation, you’re simply paying to one lender via a single monthly payment.

Unless you like wasting your time and having to pay what you owe split up in several bills, paying off debt through a debt consolidation loan tends to be the more preferred option. It’s just easier, and quite frankly, it makes more sense to put all of your debts in one pool.

  1. A more convenient way to pay off debt

When we say debt consolidation allows debt holders a more convenient way to pay off their debt, we mean multiple things. For some individuals, a lower interest rate alone may be convenient for them on a financial level. However, debt consolidation is also convenient in terms of the latter point we discussed regarding only having to pay back in one payment.

Having to only pay back one lender with one payment on a monthly basis means less work for you. You’ll have one bill with one payment, making things much simpler and quicker on your end. Thus, there is no need to sift through multiple credit card bills to make several payments to different lenders when you opt for debt consolidation.

  1. More likely to pay back on time

There are multiple reasons why one is more likely to pay their debt on time when they opt for a debt consolidation loan. For one, only having one payment each month means no more having to juggle multiple loans. In turn, you’re more likely to pay your dues that month as you’ll no longer be forgetting to pay back one of your loans if you have too many currently on your plate.

Additionally, you are more likely to pay off your debt on time via a debt consolidation loan considering you will be better able to afford it out of pocket. Coming back to point one on our list, those with debt consolidation often get the benefit of lower interest rates. Therefore, there’s a higher chance that they will be able to afford what they owe when it’s due.

  1. Getting out of debt quicker

There are many reasons why it’s a good idea to get out of debt as quickly as possible. For one, having debt is stressful. Seeing the number build certainly doesn’t help. Additionally, the longer you have debt, the more money you will owe in interest. Also, having a large amount of debt long-term doesn’t make your credit score look too good, affecting the way creditors look at you.

Fortunately, opting for debt consolidation is one way you might be able to get out of debt sooner. With all of the latter benefits in mind, especially a lower interest rate, it makes perfect sense why debt consolidation can help you eliminate your outstanding patients much sooner than you expect. The faster you’re out of debt, the better you’ll reap financial benefits.

Regardless of the various benefits of debt consolidation, it’s vital that you do your own research to decide if this debt refinancing option might be something you want to try. For more information on debt consolidation, head to DebtConsolidationUSA.com.

Conclusion

Debt consolidation means getting to pay back your debt with a lower interest rate, having an easier way to get out of debt, and only having to pay back in one monthly payment as opposed to several. Other benefits of debt consolidation include being better able to remember to pay back on time and getting the opportunity to get out of debt faster.

With the latter said, debt consolidation may save you money short- and long-term and get you back on track to boost your credit score, overall helping you get your finances in order. After all, when one has good finances, they can enjoy an easier, less stressful life. Thus, getting out of debt may be the best thing you do.

Saying Goodbye to Debt: Do You Know These 4 Alternatives to Bankruptcy?

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.

Saying Goodbye to Debt: Do You Know These 4 Alternatives to Bankruptcy? - empty wallet image

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.

Getting the Facts: 8 Things You Need to Know Before Applying for Your Next Loan

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:

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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 are personal 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.

Denied! Advice On How To Get Your Loan Application Accepted

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?

Denied! Advice On How To Get Your Loan Application Accepted - loan agreement image
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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.