Archive for January, 2010
Get Rid of Bad Credit Card Debt
January 29th, 2010 | 
Author: Bad credit card debt whether $10,000, $25,000, or more can really hurt your financial health. High credit card balances on your credit report can hurt you when you want to make a big purchase like a car or home by preventing you from receiving the loan you need. As you near your credit limits on your cards and have a hard time making payments, your creditors will increase your interest rates. This will make your minimum payments increase with a greater portion of that going just to pay interest.
If you find yourself in this situation, you need to find help. Unless you anticipate your income dramatically changing in the near future, you will want to find help. A good place to start is to discuss your situation with an accredited credit counselor. The counselor can discuss what option you may have including a debt consolidation loan or a debt management plan.
Debt consolidation loans can be beneficial for those who still have good credit. One type of loan that can consolidate debt is a home equity loan. Homeowners can use the equity that they have in their home as collateral for the loan. They can then use the loan money to pay off their credit card debt. This can be helpful because home equity loans usually have a lower interest rate than credit cards. However, if you do not pay the loan, you now may lose your house.
If you do not own your home or if you are not willing or able to get a home equity loan, than you might consider a debt management plan. With a debt management plan you will be able to pay all your credit card bills with one payment to the debt management company. They will then distribute your funds to your creditors. The benefit of this plan is that the debt management company will work with your creditor to lower the interest and fees that you’ll owe. This will allow more of your money to pay off your actual debt each month, speeding up the payoff process.
There are other possible helps for your bad credit card debt situation. Consider different options that you may find the right one for you.
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Student Debt Should not Hinder Mortgage Chances
Newly graduated students are often concerned that they will struggle to get a mortgage once they start their first graduate job due to the large sums owing to the Student Loans Company. Whilst the debt has to be declared as a financial obligation on any mortgage application, underwriters do not pay great attention to it. The reason for this is the low levels of repayment required by the Student Loans Company.
Student loans are not recorded on your credit file, so there is no record of your repayment history, good or bad! This may be a bad thing if you are apply for credit from a high street bank or mortgage company for the first time as they may have no credit information on which to base their decision on.
Graduates in certain disciplines, such as medicine and law, have an advantage in that a number of high street mortgage lenders will let them take out a mortgage with a 5% deposit, rather than the 10% deposit the lenders will ask for from other first time buyers.
In recent years there has been an increase in the number of student mortgages taken out. Normally they are arranged on the basis that the property purchased will be let out to other students who live with the mortgage holder and the rental income will cover the monthly mortgage payments. The author had a student mortgage while he was at university and the balance he had to pay after the rent was collected was very small. Due to interest rate fluctuations during his studies there were periods where there actually was a small surplus each month.
Due to the fact that the interest rates charged on Student Loans are closely linked to the rate of inflations, these loans stay at the same level in “real terms”. Having a student loan outstanding is a far cheaper debt than having to take out a personal loan or mortgage from a high street lender, and an awful lot cheaper than borrowing on credit cards.
The credit crunch has had an effect on the student mortgage, and graduate mortgage, market with few lenders now vying for this type of business. But do not let all the negative press publicity put you off as there are still plenty of mortgages lenders in the market, with over 8000 different mortgage products available in the UK to all types of buyers or remortgagers.
As will all mortgage decisions, it is worth approaching a whole of market mortgage broker who will be able to advise on which mortgages fit your circumstances the best. They will also know which mortgage lenders take a softer line than others regarding student debt. This is helpful if it cuts down on the number of lenders you apply to, as a large number of mortgage credit file searches on record can be off putting or suspicious to some mortgage companies.
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Asset Finance In A Credit Crunch
Adapting to the credit crunch
For many years banks and lending institutions have dominated control over business/Asset Finance. Over recent times new choices have become readily available which have never existed before; one of those is the availability of money through non-traditional sources.
Banks and conventional lending institutions lend on specific criteria. The variation cost fluctuates from one lender to another on a daily basis and more recently due to the credit crunch lenders are differentiating themselves by wanting to operate in different marketplaces and by funding various types of equipment and funding structures.
The majority of businesses require finance for a wide range of assets from traditional wheeled assets, machinery and IT equipment to warehouse racking, mezzanine floors and office furniture but to name a few. In this current economic climate it is crucial for a business to arm themselves with a wide range of asset finance credit lines that can be drawdown as and when they require.
The role of a Asset Finance broker is becoming ever more apparent and is a valuable tool for businesses in this current climate to acquire competitive rates and lending terms. Companies do not have the time available to research and present financial proposals to source additional lines of credit.
A good finance broker will save you both time and money. Consider the huge amount of time alone that would be spent researching and presenting your financial proposals. Many Asset Finance proposals are turned down because they are packaged and presented in the wrong way, and even presented to the wrong lending organisation.
Yellow Note Asset Finance Limited
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Banks and Secured Credit Cards
If you currently have bad credit, you’ve probably found that secured credit cards are probably the way to go when it comes to re-building credit. A popular question that comes to my attention when I discuss secured cards is “What bank should I go with?” Since there are so many banks on the market, it’s hard not to choose just one but we have to keep in mind that they are all completely different.
Some banks want to focus on bad credit and others don’t even want to deal with it. Why? Some lenders truly believe that people who have bad credit will always have bad credit and will never learn from their mistakes. Studies have shown that many people who do start to rebuild their credit learn from their past mistakes and never go into debt again. Then again, there are those few who never do learn though.
What kind of bank should I go through?
With so many banks out there, the first step would be to simply check out the bank you’re banking with. Ask a teller or representative to see what kind of secured card they have to offer. Many of the major banks like Bank or America, etc do offer secured credit cards. They will be able to tell you in person on how you can use this card in order to establish your credit once again.
Are all banks different?
Absolutely. Every bank that you bank with is going to be different especially when it comes to a secured card. These types of cards will require that you put down a down deposit. Whatever you put down as a down deposit will determine what your credit limit is going to be. The more you put down, the more you’re going to get as a credit limit. Some banks will also allow you to collect interest that you have on your money stored in ties with your credit card. These are usually the banks that you want to go with. The major differences that you’ll see though will be the fees. You’ll always find an annual fee with these cards and they range anywhere from $20 to as much as $150. A card with no annual fee is going to be extremely hard to find.
If you’re in the market to repair your credit, this is going to be the only way possible because if you went the prepaid card route, these cards don’t report to the major bureaus since they act like gift cards. On the other hand, always make sure that the secured card that you apply for does report to the bureaus. If it doesn’t, you’ll soon find out that you’re using a credit card for nothing. A bad credit card on the other hand is a little different but will have higher fees. Repairing credit takes some time and as long as you work hard to pay off your debts and use your cards responsibly, you’ll see your credit score rise significantly over the next couple of years.
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Prepaid Credit Cards: the Best You Can Get
Now, by using prepaid credit cards you have a chance to mend your credit score, which of course sounds to be a good idea. The cards meant for those with poor credit or no credit at all, assist the individuals to build a robust credit profile. With an improved credit score, availing future finances will become easy and hassle free. The most important thing is that, you will certainly enjoy the new found financial freedom.
The cards are more or like similar to major credit cards such as visa or master card. But it functions more on the lines of a traditional debit card. These cards can be easily obtained, as all you need to do is to deposit a certain amount of cash as upfront money. After which, you can use the card only up to a certain extent i.e. the amount you have deposited previously. This way, you can keep a tab on your spending habits. Unlike other credit cards, you cannot spend it lavishly, as long as you do not exceed the prepaid amount.
There are numerous advantages which come with these cards. The first thing of course, is its easy accessibility, which means you can qualify for the cards without facing too many inconveniences. Most of the providers approve the cards without any credit check and they are not really interest in your income or repaying capability. This makes it a feasible option for those with poor credit or no credit at all. Besides, it is accepted every where just like any other cards.
Although no interest rate is charged on the cards, the issues to make profit levy a lot of hidden charges in the form of set up fees, monthly fees and annual subscription fees. So it would be beneficial if you undertake a proper research before opting for the cards.
The online availability of prepaid credit cards has made it quite simple for you to obtain the cards. Take your own time by comparing the various cards, as it will help you select the best deal. You will come across a lot of options, but with steep competition among the providers, it is you who get the maximum benefits.
