Mistakes You Shouldn’t Make When Shopping For Loans

Debt is not necessarily a dirty word. Most of us make use of it, whether responsible or not. In fact, it can be a highly valuable tool to help you when it comes to planning for your financial future. However, debts can turn bad when you don’t think hard enough or plan meticulously enough when it comes to getting out loans. Here, we’re going to look at some of the mistakes you should ensure that you avoid when you are looking for, applying for, or paying off loans.

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Not knowing how much you need and what for

The first thing you should do is make sure that you’re getting a loan for the right reason. If you’re borrowing simply for the sake of having some extra spending cash or as a debt management strategy, then you should probably take the time to look for other options instead. You should also get an idea of how much you need to borrow, in particular. For instance, if you’re borrowing so you can buy a house, then use a mortgage calculator to see how much you’re likely to need. You don’t want to borrow more than you have to, after all, or to borrow less than you need.

Failing to budget for those loans

One of the most important steps of managing your finances is building a budget. Your budget is the structured approach to expenses that makes sure you have enough to pay off all of your essentials, enough for some discretionary expenses, and some put aside for savings goals. Get a thorough understanding of what you’re going to be paying back each month and make sure that you put it into your budget. If you see that you don’t have room for it, you need to consider other options.

Not paying attention to the fees

You should not be looking at only the interest that you have to pay on your loan, nor even how much you’re going to be paying monthly. Depending on the kind of loan that you take out, you might find that there are all kinds of one-time or irregular fees that you have to pay. This can be at the start of the loan, once a year, or even at the end of the loan. Consider the loan type, look up some common fees, such as common mortgage fees, and get an idea of how much they might add. Do your research so you can tell when lenders are adding fees simply because they can, rather than because they’re necessary. This can help you weed out those greedy lenders that you don’t want to work with.

Not getting your credit in order

Your credit score is going to determine the kind of loans you have. A low credit score is going to equal higher interest and less control over your loan terms. The higher your credit, the less likely you’re going to have to pay back and the more flexibility that lenders will offer you. No credit history is almost as detrimental as bad credit history, too. Low credit options like direct lender loans can help you start building your credit history. Otherwise, make sure that you’re taking steps to address any black marks on your credit report, such as paying any late fees, lowering your credit utilization rate, and tracking down and fixing any errors.

Not having your financials at the ready

When you apply for a loan, you should make sure that you have your financial details available to share with them. This can include bank balances, as well as reports of income, and the value of assets that you might have. The more information you can provide, the surer the lenders will be about how much you can responsibly borrow. Not having your financial details to hand can urge them to be more cautious since they don’t fully know your financial situation. Estimates can be bad, as well, as you might over-estimate or under-estimate, either taking on more debt than you can handle or shooting yourself in the foot so you can’t borrow as much as you need.

Not letting your credit “rest” for a while before

Lenders take a look at your credit report to help them judge whether or not you are a reliable partner in a credit agreement. Not only do they want to see that you’re able to manage a loan with them, but they want to make sure that you don’t like you’re making erratic or rash decisions or that you are already too deep into existing credit agreements. For that reason, even if you have accessible overdrafts or credit cards, you should avoid using them for a while, just while you’re applying for a loan. In fact, if you pay them off somewhat and lower your credit utilization rate, that can even help by bumping your credit score.

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Applying for too many loans at once

You don’t want too much activity on your credit report when applying for loans. When someone performs a credit check, you want to make sure that everything looks nice and calm. When you apply for a loan that results in a hard credit check, your credit report is going to keep a record of it. As such, if you’re applying for five loans at once, each of those lenders is going to be able to see that. Someone applying for a lot of loans at once isn’t going to look very reliable and, as such, you’re more likely to get rejected. Not only that, but when you get rejected after a hard credit check, it can drive your credit score down. As such, apply for one loan at a time and only after you’re reasonably sure that you’re in a good position for an accepted application. Don’t expect or put plans in motion based on that acceptance, but just put yourself in the best possible position for it.

Closing your credit cards before applying

You might think “I don’t want to look like I have too much debt on my plate” before applying. This is a good notion. However, this doesn’t mean that you close open credit agreements. Even if you are a little bit into your credit card and haven’t fully paid it off, keeping it open is better than closing. Keeping your credit card open or keeping an overdraft shows that you are able to reliably maintain a credit agreement. In a similar vein, you shouldn’t pay loans ahead of time to close them earlier. Rather than showing how good you are at paying the money back, it shows that you can’t stick to pre-planned terms of the agreement so it can actually hurt your chances of a successful application a little. Of course, too many open credit cards and loans can hurt your credit score, so you need to balance it.

Making late payments on other loans

This one is relatively simple. Make sure that you are current with all loans before you apply for new ones. Even being temporarily late on other loans can give lenders justified cause for concern. You can mitigate the damage done to your credit score, at least, by catching up with what you owe ASAP. There are plenty of payment reminder apps that you can use to make sure you know what you have to pay and when you have to pay it, which can make it easier to keep current with loans, bills, and other regular payments.

Personal Finance Tips for Business Owners

Being a business owner means balancing your business’s finances and your personal finances. As well as making sure your business is bringing in enough money, you need to keep your own finances healthy. If you’re not personally doing well financially, it will make it difficult for you to continue running your business. Entrepreneurs can face some unique challenges because they take on a lot of risk, and they don’t have any support from an employer. If you’re trying to run a business while also fulfilling your own financial goals, there are a few key moves that you can make.

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Have an Emergency Fund

An emergency fund is the savings that you can rely on when you have unexpected expenses. Everyone should have one to help cover costs, such as home repairs or medical expenses. It’s even more important for entrepreneurs to have an emergency fund if they rely on income from their business. If your business has a slow month or anything starts to go wrong, you might be unable to pay yourself your usual salary. An emergency fund will help to keep you afloat. Building a fund worth at least three to six months’ expenses will give you a strong safety net.

Be Careful with Credit

It’s important to manage your business credit, but you also have to pay attention to your personal credit. It’s best to stay out of debt if you can and to balance any credit that you do have to make sure you’re not borrowing too much. Keeping your credit utilization ratio below 30% is smart. You should try to maintain a clean and solid credit record, so keep up with any payments and avoid missing any, even if you can only pay the minimum payment. This will help you if you want to secure any long-term debt, such as a mortgage, which can be tricky if you’re a business owner.

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Prepare for Your Future

Many entrepreneurs don’t think enough about their financial future. They might feel they can’t afford to save for the future or simply don’t consider it because they don’t have the benefits they might get from an employer. But by accessing some advice on retirement planning for entrepreneurs, you can start getting set up for your future. You can still be prepared for your future and ensure you will be able to retire, even if you don’t have help from an employer.

Give Yourself a Pay Raise

As your business grows, you can consider whether you can afford to pay yourself more. At certain times, it could be the right moment to give yourself a pay raise. Of course, you don’t want to do this too soon, when it’s also important to have money to invest back into your business. However, as your business grows, make sure that you are rewarding yourself for your hard work too. You deserve to benefit from the growth of your company.

Although you need to spend a lot of time working on your business, don’t forget about your personal finances. It’s important to pay attention to them too.


Here’s How You Avoid Debt on Your Credit Card

If you know that you have a lot of debt on your credit card then you will know how frustrating this can be. You will also know how hard it can be to try and pay it off before you accumulate more debt and this can put you in a very dire situation. Luckily, it is very easy for you to avoid debt and if you make the effort to follow these simple tips then you should have no problem getting on top of your debt once and for all.

Always have an Emergency Fund

So many people manage to create credit card debt because they were forced to pay an expense that they did not have the money for. They have absolutely no room for savings but if you were to have an emergency fund then this can really help you to avoid credit card debt. You can easily use the cash to pay for any emergencies that arise and this is a fantastic way for you to really stay on top of everything. Of course, if you are struggling to save then one thing that you can do is put some money away every single month. When you are able to do this, you can then accumulate a savings fund without having to struggle or manually put the money away. There are also many apps out there that you can use to try and really save on your expenses so these are well worth looking into.

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Charge What You Can Afford

You have to avoid the mistake of using one of your credit cards to buy things that you cannot afford. You can easily avoid debt by purchasing the things that you know you can afford or even things that you have the cash for. If you cannot afford to pay with cash then it is important to know that you can’t charge it to your card. If you do have to charge to your card then try and look up www.luckyloans.co.uk as this is a great way for you to find out if it is possible for you to get a lower interest rate when compared to the one that you have on your credit card.

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Avoid Balance Transfers

Don’t transfer any balances that you have on your card so that you can avoid your payment date. The main reason for this is because if you transfer one of your balances to another credit card then you have to have a good reason for this. You may want to take advantage of a lower interest rate or you may even get a cash incentive. Either way, if you don’t do this then your bank will carry on increasing in debt and this is the last thing that you need when you already have so much going on. Of course, if you want to avoid this then there are so many things that you can do, such as researching the card before you buy and even putting in the work to make sure that you are getting the best deal. http://credit-n.ru/credit-card-single-tinkoff-platinum.html

The Good, the Bad and the Ugly: Teaching Your Children about Debt and Borrowing Money

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Most people don’t get into debt out of sheer stupidity. Most people get into debt because they have not been educated about money – or more specifically borrowing money. They find themselves in a situation whereby they need money quickly, and they borrow it without fully understanding what they are letting themselves into. There are then those who are enticed by all of these amazing promotional offers, and they sign up to a number of credit cards without considering how this is going to impact their rating. The obvious solution may seem simple: avoid borrowing money altogether. However, if you do this, you won’t have a credit history at all, and this is arguably just as damaging as having a bad credit report. So, we need to educate our children about borrowing money responsibly, the impact of borrowing on their credit report, and what to do if they do find themselves in debt. After all, in some cases, debt is unavoidable.


Firstly, you need to make sure your children are aware of the different methods of borrowing money. In general, this can be split into two categories: loans and credit cards. Of course, there are then many different types of loans and credit cards. With regards to the former, you will be given a certain amount of money, which you will then have to pay back to the lender with interest on top. With a credit card, you will have access to a certain amount of money, and you will only be subject to interest if you do not pay the full amount off by a certain day of the month. Credit cards are ideal for those who need access to money to tick them over until they get paid. If you are self-employed, for example, and you don’t know what date of the month your money is going to come in, you can use a credit card to tide you over until then. A loan is more suitable when you are making a large purchase. There are many different types of loans, including bank loans, secured loans, and payday loans. The latter provides a fast loan approval for those in need of money as quickly as possible. However, the APR tends to be very high, so you’ll end up spending a lot of money taking the loan out. A secured loan will be secured against one of your assets, for example, your car or your home. If you default on your payments, the lender can sell your vehicle or your property to cover the payments you have missed. It is important to teach your children about the different factors they need to consider when taking out a loan or applying for a credit card. A lot of people never learn about APR, and so they end up borrowing money without having a full understanding of how much they are paying for it. This is an easy way to get into debt, and it can be avoided with simple education.


The next thing you need to teach your children about is their credit report. Explain that their credit report is something that a lender will view when determining whether to lend them money. This does not only relate to companies who deal with loans and credit cards, but catalogue companies, furniture stores offering financial plans to pay off furniture over the course of a few years, phone contract businesses, and such like. It is, therefore, critical to maintain a good credit score. Unfortunately, a lot of people end up causing damage to their credit report without even realising it. This is why you need to teach your children about the different aspects that do and do not impact a credit score, and the steps they can take to improve their credit score. One thing a lot of people do not realise is that they do not have one set credit score. There are a number of companies that provide credit reports, and most companies and lenders will look at one or several credit reports to gauge whether someone is credible to lend to. People can access their credit reports online, and it is a good idea to do so, so that you can have a general understanding of what your score is, where you are going wrong, and where you are going right.

So, let’s go over the different elements that make up your credit report, and the impact they have:

  • Your personal information – One of the easiest and most effective ways to improve your credit score is to make sure that all of your personal information is up to date. If it isn’t, lenders may struggle to verify who you are, and this can have a negative impact on your rating. Plus, if your personal details aren’t correct, you could miss out on notifications, which could result in you failing to pay a bill, which will, of course, have a bad impact on your credit score.
  • The total balance of your active credit accounts – The total balance of your active credit accounts plays a crucial role in determining your score. If you have a mortgage, this will not be included within the calculations. This includes your credit cards, any purchases you are still paying for, overdraft facilities you are using, and any loans you have taken out. If you owe more than $15,000, this will have a negative impact on your credit score. If you owe more than $30,000, this will decrease your score even further.
  • How much of your available credit you are using – There are a number of factors to consider here. Firstly, your highest credit limit will play a role. If you have a credit card with a limit over $1,000, this will improve your credit rating, as it shows that you are a low risk borrower. However, you also need to think about how much of your available credit you are using. For example, if you are using 95 percent of the credit you have available to you, this is bound to have a negative impact on your score, as it indicates you are relying heavily on credit.
  • Payments – Are you keeping up with your payments? This is the most important factor of them all when it comes to your credit score, as a late or missed payment will stay on your account for roughly six years.
    • The age of your credit accounts – Again, there are a number of factors to take into account here. Firstly, the average age of all of your credit accounts is considered. Having an average age of 33 months or more is considered a positive. Also, the number of new credit accounts you have opened. If you have opened a number of accounts within a three-month period, for example, this will have a negative impact. However, if you have only opened one credit account, this will not have a bad impact on your score.
    • Credit applications – This is where a lot of people have a negative effect on their score without even realising. Many people decide to make numerous credit applications, and then they will accept the best credit card they get approved for. A lot of people also try their luck, applying for cards they are unlucky to get accepted for on the off chance that they will. This will have a negative impact on your score, as credit applications are included in your report. There are soft searches, which don’t impact your score, and hard searches, which do impact your score. The best thing to do is use one of the online services that are available to determine your chances of being accepted. This ensures you only apply for credit cards whereby you have a high chance of approval, so that you don’t need to carry out numerous applications.


Last but not least, it is important not only to teach our children about avoiding getting into debt, but also about what to do if you do get into debt. The problem can easily get worse and worse when someone does not know how to deal with debt. It can seem like the end of the world, but it doesn’t need to be. In fact, you will find plenty of inspirational stories on the Internet about people that have gotten themselves out of severe debt.

Most people agree that the best way to tackle debt is to pay off the biggest debt first while making the minimum payments on all loans and cards to ensure you are not subject to any further fees. You should also ring up your credit card provider or any other lender you owe money to and see if you can negotiate more favourable terms. It is then a case of examining where you went wrong and how you got into debt in the first place. This will help to ensure you do not make the same mistake again.


Getting Over Credit, Debt, And Other Horror Stories

When people think of credit and debt, their minds immediately go to the worse case scenarios of them. We’ve all heard ghost stories of how bad credit can drag you down and limit your options and how debt can become a spiral that can truly be very hard to climb out of. But the problem is that a lot of people focus on the negative consequences of these stories that they fail to consider just how helpful credit and debt can be. Here, we’re going to challenge the phobia and help you use credit and debt better.

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The sooner you come face-to-face with it, the better

There’s a significant portion of adults who have never once checked their credit report. Some of these people might not know to, others have chosen not to because they’re staying well away from credit as much as possible. However, even if your record is immaculate, your report might not be. You might have to repair your credit score by no fault of your own but because there are erroneous accounts on them. For instance, you might be getting bad reports based on accounts that are mistakenly tied to your name but aren’t yours. Or you might be up-to-date with all your payments but your creditors made a mistake in reporting that you missed a payment.

It’s the next step in a better financial life

When used responsibly, credit and debt are the steps you take to make some of the biggest financial decisions in your life. When you get a car, when you buy a house, when you start a business, the chances are you take out a loan for them. With better credit, which is built by taking debts responsibly, you have the chance to get the best discount auto loans and the best mortgages. Having no history of credit isn’t going to help you get better deals. You have no history of being a responsible debtor, after all. Only by building a healthy credit history can you get the best deals.

Credit cards aren’t the devil

Those pieces of plastic might be considered the single most dangerous aspect of credit. Yes, people get themselves into credit card debt they can’t handle by using it to make lifestyle purchases they otherwise couldn’t. But that debt can be used positively to build up your credit so long as you have pre-planned a budget to always keep on top of it. Debt management turns debt from a danger into a simple part of life. You can get rewards cards that turn credit card use into extra purchasing power, whether it’s through air miles or through grocery vouchers.

Wise use of credit and responsibility for debts can be one of the most effective financial tools at your disposal. It can improve your purchasing power and it can help you make some of the biggest financial decisions in your life. In any account, it’s important to come face-to-face with it so you make sure that it’s not marred by errors that could come back to haunt you.