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Category Archives: Finance

Rules for Credit Protection

Credit safety: lock down with credit freeze or place a fraud alert

If you consider identity theft as a serious threat to your finances and you want to ensure that no shady activities are going on without your knowledge, you can opt for a credit freeze or fraud alerts. Credit freeze works by freezing your credit reports, which means that creditors cannot extend credit to you unless you “unfreeze” your account. Fraud alerts, on the other hand, are automated notifications that alert you when someone is using your credit or is making inquiries about you. It can be requested from your financial institutions or the major credit companies. So, if you don’t want to have a tarnished record and be vigilant with your credit, fraud alerts and credit freezes are a good choice.

Consider credit monitoring

A credit monitoring service is a more advanced way of checking your credit files. It’s like an early warning signal that alerts consumers whenever there are changes in their accounts. The most common reasons that trigger an alert include changes in address, opening a new account or updates in major loan interests. Whether the inquiry is done by you or a criminal, credit monitoring can help you spot it immediately. This service comes at a cost, but it’s affordable since most companies that offer credit monitoring also provides insurance coverage, which is very beneficial in the event of a theft.

Use some inexpensive techniques

Minimizing the accessibility of your personal information is one good way to safeguard your identity. You can do this in a number of ways.

  • Invest in a cross-cut shredder that you’ll use to destroy bills and mails with your financial information on them. This is worthy considering there are thieves known to “dumpster dive” through your waste baskets just to obtain any information about you.
  • If necessary, you can also invest in a cheap household safe where you can keep all your important documents locked at home. Important identification documents that you shouldn’t always bring, like SS numbers and passports, can be stored in the safe.
  • Minimize the number of cards you regularly use. Aside from the fact that your spending pattern can go out of control because of owning too many credit cards, this can also cause some serious damages and inconvenience if in case they get lost or stolen. Also, keep a list of the contact numbers of your credit card companies, because you’ll need this in case of emergency.
  • Always think about the consequences of sharing information over the internet. Not all websites are safe places to hang out and this includes your favorite social media platform. Be extra careful about what you share online and, as much as possible, limit the personal details you give out to others.

Avoid Bad Credit

If you ask them whether they want to be free from this bondage, be able to live to a standard that doesn’t give them sleepless nights with repayment stress – they are likely to say YES PLEASE where do I sign. But if that journey began with them cutting up their prized possession – the card – you would literally hear them gag on their saliva.You see regardless of the x amount of pounds they owe, the FEAR of not having this piece of plastic and the access it gives to funds far outweighs the mountain of debt it represents.

I know this because I’ve been there. It’s that fear of ‘not having enough’ of ‘being ‘caught short’ of ‘ needing something’ that my card would buy and which puts fear in your heart. And that’s really what the system relies on. Money is handed out freely, the more you borrow, the more you spend. A vicious but highly lucrative venture (for the lender), but a surefire way of losing everything for the borrower.

The question is how do you beat this FEAR? I would love to say that there’s a support circle you could attend that would help you to go cold turkey, or a drug you can take to medicate your issues – but there isn’t – it’s a bit like ripping the plaster off a wound, in order for it to heal properly you have to rip the plaster off; you have to expose it to air and allow the natural process of regeneration to begin. Yes I know it hurts, yes I know it’s not comfortable – but hey what’s the alternative?… You keep spending money you don’t have; you keep waking up in a cold sweat; you panic at the sight of a demand letter and you almost pass out every time there’s a knock on the front door.

In order to start the healing process you have to rip the plaster off… you have to RIP THE PLASTIC UP. There’s a book I once read and the title has served me well on numerous occasions – Feel the Fear and do it Anyway. There has to come a time when YOU have to make the decision to ‘Feel the Fear and do it Anyway’ and move towards financial freedom.

About Commercial Debt

The business debt is collected through forced sale or auction of assets like building, land, equipments and even business accounts. Situation of corporate veil is applied when a company or business is viewed as a detached legal unit than the organization’s stakeholders and owners. The company or business is then legally responsible for its debt and not the persons who own it.

LLC only provides liability and monetary protection when the corporate veil is not penetrated. Corporate veil is actually pierced if a person uses limited liability corporation to pay personal expenses or does not have complete and valid LLC papers. The limited accountability of LLC can be challenged by creditors. These creditors can easily sue private individuals for outstanding commercial debt. Business debt cannot be remunerated through garnishment of wages when compared with personal debt. Though, creditors can put liens against the company’s land, property or equipments.

The overall debt collections are controlled by Fair Debt Collection Practices Act. Debt collectors looking for payment should provide complete billing of the arrears owed in order to avoid any type of confusions or errors. At the same time, full interest and applicable fees must be included in the final bill. Debt collectors should have valid authorization to collect the debt.

In an economic world where outstanding debt can make the difference between a successful business and bankruptcy, it has become very important to pursue debtors for sums owed. Most businesses are unable to recover the lost income at a profitable margin, spending too much time and money on the recovery process

Debt recovery specialists take away the risk by removing the company’s name from the debt collection effort up front. There is less chance of negative press affecting the bottom line, and at the same time, these agencies are more aggressive in their recovery, which allows them to collect the majority of outstanding debt for the business.

Be Money Smart

Credit card and personal loan consolidation into your home loan can certainly take the sting off monthly repayments, but careful! You can find yourself actually paying more interest in the long term, if you’re not money smart about how you do it.

Let’s use a credit card which is maxed out at $10,000 as an example, so we can compare some numbers:

  • The maxed out card would cost you approximately $175 per month in interest alone (at a 21% credit card interest rate) let alone trying to pay back the $10,000!
  • If consolidated into a home loan at say 6.3%, your monthly interest cost plummets to $52.50!
  • If you simply lump it in with your home loan & make principal & interest payments, it adds $62 per month to your costs

Great!!! Let’s do it, you say! But not so fast…

It’s all very well to save on interest & lighten the burden on your pocket, but how much will it actually cost you in the long run?

Do you realize that if you do the latter & simply pay $62 per month, it will cost you over $12,000 in interest alone over a standard 30 year home loan term? Plus the $10,000 principal!

However all is not lost! It’s just a matter of being a bit money smart. Have a look:

You can consolidate into your home loan & save on interest charges, but choose to pay the $175 it would have cost you in credit card interest towards it. That means the $10,000 is erased in just under 6 years and cuts your interest charges down to about $1,900 You’ve just saved $10,000!! The credit card company wouldn’t just let you pay the interest either. Monthly minimum payments would’ve been approx $250. If you choose to pay that amount towards the consolidated debt, you’ve paid it out in under 4 years and saved $11,000 in interest!

Some helpful hints:

  1. Consider consolidating debts, but only as a means to help you pay them off faster
  2. When consolidating, keep up the same repayments as you were making before
  3. Never just ‘consolidate and let it sit’ • Get Money Smart & learn how to plan ahead!

Incidentally, we see this all the time and people sometimes complain how long it will take to pay back a ‘measly’ $10,000 credit card debt when they already have a home loan to worry about.

Isn’t it interesting how quickly we’re prepared to spend it, without giving consideration to long it may take us to pay it back?

$10,000 is no ‘measly’ amount. It’s a lot of money! This example is very common in our office and unfortunately we often see it compounding – a person will consolidate $5,000 now, another $5,000 in 6 months, maybe another $10,000 in a year’s time.

Bridge Loans

A case in point: A company has been sanctioned a loan for USD 1 million from a bank. Now, the loan will be provided to this company in a period of six months. Meantime, suppose the company needs cash. Then, what will I do? It’s simple-the company should head to bridge loan lenders.

Being a short-term financing option, a bridge loan will be given to a company with a repayment period of six months to two years. Now, that’s exactly how a bridge loan works. If you’re more concerned on exploring the way such a financial solution benefits you, you should head toward a bridge loan financing expert.

Why short term loans matter and have grown in popularity in today’s conservative markets?

Now, you’re part of a hyper-competitive business environment where you’ll have to make a lot of critical decisions. Some of these decisions, doubtlessly, have to be financial in nature. For example, you have to buy a parcel of commercial real estate immediately; you have gone to a trusted commercial real-estate consulting player, and even the land looks pretty good, but you lack the cash.

Now, what has to be done? The answer lies in you securing loans. This financing format will let you access high-quality, much-needed funds in a short span of time with minimal due-diligence. These funds will be necessary while you’re arranging for a conventional commercial loan or waiting for a loan to be processed with a more traditional financial institution which typically takes an excess of 120 days in most markets due to the several third party inspections and internal quality assurance reviews.

A few key points to remember while applying for a bridge loan

Here are a few points that you should remember while you apply for a loan.

Eligibility criteria

Just like any other financing format, lenders will have to look at a borrower’s payment history and credit worthiness. In this case, you’ll have to pledge collateral that can be a commercial, multifamily, development land or any other valuable real estate asset. A business that’s applying for this specific fund can even pledge intangible ones such as an intellectual property. A few financial institutions may even require you to reduce your operating expenses while the repayment is made.

Exit options

While exiting this financing option, you may pick from any of these three options:

  • The first option is to repay the full amount.
  • The second one includes applying for other financing options or loans.
  • The last one will include you to sell your collateral.

Reduce Debt With Proper Budget

CREATING A BUDGET

This process takes time and honesty with yourself. The more you can accurately determine what you are spending and where it is going, the better you can commit to active changes.

BUDGETING LIST

The first step is to determine how much money you spent the previous month and where that money went. Do your best to gather a detailed list of all expenses from your bank statements, credit card bills, household bills, mortgage payments, etc.

BUDGETING: BASIC EXPENSES

You need to now separate your basic expenditures which are necessities, such as your mortgage, groceries, utilities, insurance, etc. Be honest with yourself in determining what is “required” and what is “desired”. We will look into this list later in time to help with this determination and suggest further trimming or advice on how to further reduce payments/interest rates, etc.

BUDGETING: EXTRA EXPENSES

You now need to look at all the other expenses that you are left with after eliminating basic expenses. Many consumers are surprised to discover that this can be as high as 30% or more of total expenses. This is the first list that needs to be addressed once our plan is utilized.

BUDGETING: LISTING CREDIT CARDS/CONSUMER DEBTS

Prepare a list of all your current credit card, high interest loans and merchant accounts. List your current balances, monthly payments, available limits, and your interest rates in descending order. We will then address these debts according to interest rate, payment and balance, in that order, and so should the client.

BUDGETING: SAVING

A progressive financial debt solution should not only be focused on debt. Saving money should be a primary concern and you should pay yourself first(it’s easier to do once you have reduced your out of pocket monthly expenses to debt repayment). A realistic debt management plan should see 10% of your after tax earnings being dedicated to a combination of short and long term savings. This will provide for unexpected expenses as well as long term security. This is best accomplished with a fixed amount being withdrawn from your account monthly to a savings vehicle.

Repair Damaged Business Credit

You might have already heard of the FCRA. The Fair Credit Reporting Act outlines consumer’s rights to dispute inaccurate information on their credit reports. But it’s essential to know that this law does NOT apply to credit repair. There are currently no laws which outline business owner’s rights regarding credit disputing. The FCRA also requires credit issuers to notify you of what bureaus they pulled your credit data from to determine your denial for financing. In the business credit world this is not the case, you rarely ever know the source that pulled your business credit or the reporting agencies they pulled it with.

If you see accounts or details you don’t recognize or you feel are inaccurate, request a debt validation for that account using a debt validation letter. A debt validation is where you solicit the creditor for verification of the account details they are reporting. They will typically send you back details of your account that they are reporting. The FCRA and the fair debt collections practices act apply to consumer debts, not business debts. So you can send a debt validation letter, but the creditor is not required by law to respond to your dispute.

When sending a debt validation request, your request must be sent to the creditor in writing. Also insure you dispute the debt with the credit agencies if the creditor doesn’t respond to your request. If no response is received within 30 days of mailing the letter directly to the creditor, then you should then dispute the account with the business reporting agencies.

Based on how you pay your bills. If you pay the majority of reported accounts on time or early, you will have a good score. Most business owners have little to no credit reporting. So, even one negative account can have a BIG impact on their business score. It is essential that you continuously build your credit profile just as you do with your consumer credit. One of the best ways to battle negative information on your report is to offset it with LOTS of positive information. So continuously build your business profile just as you do with your consumer credit.

Credit Spreads

In loose terms, Z spreads is a compensation for credit risk of the issuer. Because of the credit risk, the Z-spread to Treasuries for a corporate bond tends to be positive. This reflects the fact that corporate bonds are worth less than treasuries with similar maturity and coupon. The higher the credit risk the higher the Z spread to Treasuries. A positive Z spread indicates that the security has an investment value and a negative Z spread indicates that the security is rich compared with treasuries.

Option Adjusted Spread is a measure of the credit risk for callable or putable bonds. For bonds with embedded options, the Z spread is often not meaningful. This is because it is usually not appropriate to value a these bonds simply by discounting its scheduled payments. To value bonds with options, one must take into account volatility in interest rates so that the risk of the bond being called can be considered.

Asset Swap Spread compares the present value of the series of fixed payments from the bond and the present value of the floating payments. It is the spread that investors receive for swapping a fixed annual coupon against a floating payment. The floating rate received from such swap is generally considered as less sensitive to interest rate movements, as the payment flows are reset every quarter according to market conditions. Investors receive a higher coupon if rates increase or a lower coupon if rates decline.

Easy Installment Loan

Some Questions that May Disturb You

Now you might be wondering which kind of loan alternative comes easily? What about getting the installment loans? Will you consider these loans when it actually comes to borrowing funds without any hurdle? Interested to know more about how such loans can help you out of the crisis? Before you proceed, it does make a sense to know that the funds are acquired on certain factors and your past credit record is one of them. But the need for funds can pop up anytime even if you have a poor credit score. Financial emergencies never ask about your credit score before entering your life. Fortunately, you can easily borrow the money with these loans irrespective of your poor credit score.

There is no denying that the installment loans for bad credit borrowers offer quick financial assistance. No matter how you want to use the money, the loans ensure that your adverse credit score will not stand in the way of your financial well-being. As your credit score is not satisfactory, the loan works effectively by providing you with the cash and also give you a chance to boost your credit rating. The loan is unsecured and you require no collateral to qualify for. If in case you desire to borrow a large amount, then the lender will ask for security. In fact, there are a few lenders, who are ready to serve these loans on better terms and this is what matters in the end.

More about the Loan Features

After clearing your doubts, you might be excited to avail the loans. To meet your purpose of having a financially satisfied life, it seems vital to know a little more about the features of this credible financial resource. Every loan alternative has different features and qualities. The first thing that you should know about the loan is that the lenders do not usually prefer to verify your credit record and this is what provides instant financial respite to those who have been denied for money. If you are in a struggle to win over the situations that increase financial burden, there is good news for you that you are not obliged to convince any person to act as your guarantor. Providing collateral is also not obligatory if you are planning to avail loans for the short term emergencies.

Now guess what feature is going to surprise you next? One of the great features of such loan alternatives is that you can apply in both secured and unsecured format. The loans are multidimensional and can be used to meet short term expenses as well as your long term desires. The loans are the best alternatives to payday loans as they are offered with the flexibility and a simple repayment schedule that do not put an extra burden on your monthly budget. For securing guaranteed approval on these sorts of loans, you are not actually supposed to undertake any stress.

Help Yourself by Finding the Right Lending Company

Since your repayment schedule is fixed, you can easily make your budget and pay back the borrowed amount in scheduled time. To qualify for the installment loans, you only require to be employed, have a valid number and have an active savings account. Now you do not need to stress over where the instant cash flow will come from and start searching online for the right lending company.

Applying for the loans is quite easy since the entire process is online and you do not need to take off from the work. The online application will proceed quickly and you can receive the exact amount of money that you need on time. Look for the genuine lender, who is interested in assisting you to meet your borrowing needs and brings you the desired financial relief.

Consumer Debt

Settling debt is a good choice than declaring bankruptcy and is now very known in America. Negotiation became the way to settle it with creditors openly. An unsecured debt of 50% can be settled now

Decrease or increase in consumer debt can have both positive and negative financial effects. One benefit of consumer debt is money multiplier effect. The overall theory behind money multiplier effect is that enhancing consumer spending increases income for several different types of businesses and companies. According to experts, additional consumption funded by debt actually produces more money for businesses and companies selling the product.

On the other hand, employees, suppliers, lending organizations and other related individuals benefit from this additional consumption. Federal Banks or Central Banks regulate consumer debt according to the current market situation and consumer spending.

Customers spending less on goods and services indicate reduction in consumer debt. Central Banks or Federal Banks actually reduce the federal fund rate to increase borrowing, investing and spending. However, this can easily have a spillover effect on the country’s economy. Interest rates can have an influence on home buying, investing, higher education and even business start-ups.

Consumer debt is totally unproductive according to some finance experts. This debt does not make a profit or income for the borrower. Low levels of this debt can translate into higher levels of consumer debt. If an individual is caught in costly credit card payments every month, he will save very less money to invest in property or a 401(k). This pattern can easily shift demand in the financial system from industries like real estate, financial services to consumption-driven businesses like entertainment, hotels and fast food.

You must select a credit card financial debt settlement agency which has verifiable credentials or a card credit debt settlement agency that you know has a good reputation. Often you will find ads that promise not possible items and ask you to call a phone variety which’s a premium line.

If the card credit debt settlement agency is not a respected one, you would not be capable to rely on them; and rely on is quite important here normally you should neither be capable to tell them the full narrative and nor stick to their assistance. That mentioned, it’s important to observe that no credit card consumer debt settlement company will be able to improve you if you are not prepared to improve yourself. So, stick to the suggestions given by credit card financial debt settlement agency and practice great spending habits.