Getting approved for a loan has always been easy and simple for someone with a strong credit score. It is easier to choose the right lender, set your repayment duration and even negotiate on the interest rate applied to the whole amount. However, it used to be very difficult for people with poor credit history and bad credit ratings to get a loan. No one really thought about solutions for them, despite their poor financial situations.
The current financial sector is more considerate when it comes to people with low credit score. There are countless short term loans, small loan amount packages and private lenders willing to help you out in times of financial difficulties and urgencies. There are also no credit check loans, logbook loans, payday loans and guarantor loans.
In fact, there are now so many options that it has become hard to choose the right one. The two most popular borrowing options for people with poor credit ratings are logbook loans and guarantor loans. Although the two are relatively the same, there are some differences between them. Before choosing the right one for you, read their specifications here!
Since logbook loans are functional, they are the most popular among people with bad credit history. All you need to do is transfer the ownership of your car to get the loan. You will get it back once the total amount of loan has been repaid.
However, there is a huge risk involved as you can end up losing your vehicle if you fail to make the repayment in time. Other than this, the interest rates for logbook loans are also extremely high. In the long run, you will lose far more money than you borrowed. They can also be risky as there is hardly any certification or registration for borrowers. However, if you are in desperate need of money, you can opt for logbook loans.
This is also a popular lending choice for people with bad credit score. The risk for guarantor loans is also comparatively low as you will not need to use your assets as collateral. Other than this, the interest rates for guarantor loans are also relatively lower as compared to other short term loans. All you need to do is to find a guarantor and get the lending and repayment agreements signed and approved by them. This is a great option for short term loan payment if you don’t have any significant assets such as a car or home.
Choosing the One: Logbook Loans Vs Guarantor Loans
Choosing the ideal one between these two options depends on your circumstances. If you manage to find a guarantor, going for a guarantor loan is a good choice. Usually though, people who cannot get a loan by any other source go for logbook loans. If you have a really bad credit history, it is much easier to get a logbook loan than a guarantor loan. However, in case of any credit default, guarantor loans have less risk as compared to logbook loans.
A payday loan can be the only potential option for many people when they have already exhausting all of their financial resources but still need more before the next paycheck. Many people rely on payday loans because they want to avoid asking for money from their friends and family. Although it is quite unwise to rely on a taking payday loan for making various purchases. There are times when payday loans can come in handy, especially when you have no other options left.
For instance, you are driving to work on a Monday and all of a sudden your vehicle breaks down. Now you won’t be receiving your paycheck until Friday, and your car needs urgent repairs and you don’t have cash in the bank to deal with the repair bill. In such a situation, a payday loan can come in handy by letting you avail the funds needed for the repair. Hence, in this way you can have your vehicle working and your monthly income would be saved from getting deducted if you had not been able to show up at work.
It’s natural to fall behind on bills in today’s economy, but if you are ever late on your utility payments, you will have to face a service disconnection. For example your electricity connection could be cut off which could also be a cause of embarrassment in your neighborhood. If something like this happens, your utility company might even force you to pay the due amount and can include various other costly additions like a reconnection fee and a security deposit, these extra expenses could get very difficult for you to recover. In such a situation, a payday loan can help you get the funds you need helping you avoid these costly fees.
Boost in finance
Falling behind on your rent could be another various issue to deal with because you might face eviction, which not only will be troublesome for you, but also the reason for your humiliation in the neighborhood. If you get evicted this will ultimately go on your permanent record too and later make it hard to rent at other places. An emergency payday loan can give you the extra boost in finance and ensure you don’t get evicted by paying your due rent on time.
In the examples given above, a payday loan represents itself as a last resort. One should make an effort to save as much as possible, which will keep you prepared for such emergency situations. If ever forced to take a payday loan, you should borrow only the amount severely needed. These loans come with very high fees and a short turnaround time to repay.
All in all, payday loans are best suited when you need urgent cash for emergency situations. These small unsecured loans are basically intended to fill the gap in between the pay period and come in handy for unexpected situations, continue reading this.
For many people the age of cash ended with the introduction of credit cards. There are many people who are not using cash at all; they pay everything with credit cards. And some people avoid credit cards, and they consider them to be ultimate evil. But in reality, credit card is a tool, and it comes down to you, how you use it. If you know how to do it then it will be one useful tool in your hands, if not, then they will be your doom.
If you don’t have any self control you will find that credit cards are not for you. Credit cards can go in red, and you can end up with a debt, if you can’t control your spending.
Pay attention on terms and conditions
Many people hate credit cards because they don’t understand them and some people hate them because they know everything about credit cards. Before you get a credit card you should read terms and conditions of that credit card. It will tell you everything about that card, its APR and how that APR changes. And you should know that the issuer of the credit card can change those terms whenever they want (they must comply with the law).
Once you apply for credit card you will be given the option to choose type of interest rate, fixed rate or variable rate. Fixed rate will not be influences by the change of the interest rate on the market. It will be fixed on average percentage (but read about interest rates to determine whether that fixed rate is good). Variable interest rate changes with interest rate of the financial market. This can be good and bad for the holder of credit card. But in general it is smarter to choose fixed rate and have one less thing to worry about.
Credit cards have limits that are far under the zero which means you can spend money you don’t have. But if you go under zero the APR will increase and you will have to pay finance charges for the money you have taken as a loan.
Once you have gone and spent too much money and you are in red the bank will give you a grace period. In that grace period you will not suffer increased interest rate or other fees that are connected to that loan. If you return the money you own your credit card score will not suffer.
Credit cards promotions
You can also take cash advances beyond the amount of money you have on the account through credit card. But these cash advances have high interest rate and additional fees that must be paid.
Many of these things make people hate credit cards. Many special offers for credit cards involve promotions of loan, extended grace period for balancing your credit card and so on.
And many people will avoid using credit cards because they are not aware of the money they are free to spend.
Going into the red with your credit card might be convenient, but it lowers your credit score which is important for taking loans.
The current difficult economic situation results in the fact that more and more people are forced to borrow money in order to deal with everyday costs. Unfortunately, the results of statistics related to the loans are quite equal in every country regardless of the degree of economic growth. The life of a common man requires more funding than he can afford or earn. The truth is that an ordinary man in today’s society will always have financial difficulties and that he will be forced to deal with them all the time. This fact is not reassuring but, unfortunately, it is the real picture of our society.
Banks and lending companies have a large share in this. They designed credits, loans and other services that will attract even the most determined person. The advertisements that promote these services are glittering and promising as well. They will do everything that is required to obtain new customers who will use their services for life. In most cases, this is the likely outcome.
Types of loans
There are so many different types of loans which are designed to meet different needs. They are able to recognize that the need for money exceeds the sources of earning. A payday loan is probably the most popular one because the terms of these loans are not so strict and the sums of money that can be borrowed seem affordable. We should not forget the power of advertisement that can make it as if this service is created only in order to help people who are in financial emergencies. The possible promising solutions for our financial problems are everywhere, smiling and tempting until we resist despite knowing all the facts about the loans and the lenders. The need for money will likely override any warning. And that’s exactly the fact the lending companies count on.
Today, nothing that has to do with money is not created in order to help but in order to make more money. Thus, the payday loans have the similar role. Even though they can look like they are designed for the customer and that the solution of their problems is their main aim, this is not quite a truth. The amounts of interest rates that the lenders charge on these loans are very high.
Be careful when borrowing
Therefore, the borrower must be careful not to fall into the trap of seemingly bright promises. Before deciding to borrow money, the person must gather all required information that will help them to make them the good decision and to select the best possible lending company.No matter how much we criticize the lenders and the banks, we should be realistic and know that this is only the business. They recognize their chances and they use that. The usury is connected with the loans is another thing. But there is the law that should regulate the amount of interest rates that the lenders are allowed to charge.
Only, in that case, the borrowers will not end up having the new loan in order to repay the current loans.
Everyone’s goal should be to spend less money and to start some kind of a saving plan. But sometimes this can be a hard task, it’s the same when you are trying to lose weight and you like to eat. Many people will fail only few of them will have a success, when this matter is in question. But there are few trick that can help you successfully save money and they won’t effect on the quality of your life, just the opposite, it will help you enjoy more with more security and you will be more relaxed.
Cut down the money, rather than cutting it out is the right way to save money painlessly. You should pay attention on the following areas of your life, where you can restrict the amount of money you spend.
Pay attention on your electricity. Turn down all devices and lights when you are not using them, use candles once in a while when you are having dinner. It will help you preserve electricity but in the same time it will create romantic atmosphere. You should also install programmable thermostat for your HVAC.
Always use a list when you to the shopping and never go to the grocery store when you are hungry. If you get enjoyment when you are shopping large amount of thing, then you should set up a budget of few dollars per week to enjoy in your habit. But make sure that you never depart from the list, because in that case you will buy mostly thing you will not need.
You should always try to buy for less, use sales and coupons for shopping. When you are looking to buy some major item, always compare the prices, before you make final decision, you will never know on which places you can save money.
Set a goal
If you have an appropriate goal, you can turn saving into a pleasure. You can have two general goals, when you intend to save money for some specific item. You should choose an item, for example, a new car, or a plan, if you plan to retire at age 45 and start saving. You should always remind yourself that you are saving money for your own good, there are lot of way to motivate yourself, for example: hang on your chain a fob of AUDI to keep you reminded all the time.
Of if you would like to focus more on saving a certain amount of money, you can always make a plan in your notebook, with your expenses and incomes and how much money you will be able to save each month.
Enjoy in life
It is important not to forget, that money isn’t all in the world. Even when you are saving, you can still enjoy in your life. You should always have a sense of fun. For example, if you plan to have a picnic in order to save for restaurant bill, do it with style.
Voluntary pension funds are financial institutions that exclusively serve for pension savings. They represent the kind of investment funds that collect pension contributions, which are further invested to make their value secured or increased. The amount accumulated in the pension fund is then used for the payment of private pensions when such time comes, according to agreements. Pension savings are long term savings. That is why is very important to preserve the value of payed contributions from the influence of inflation and raise it by investing properly in profitable business.
Private pension funds are managed by management companies. Those are companies whose sole activity is to establish and professionally manage the pension fund. Therefore, these companies are staffed and equipped on the basis of adequate analysis and regulatory requirements, to professionally invest the funds of the pension fund. It is good to notice that the fund assets are separated from the assets of the company. It is owned by the fund members, in portion to their share. So, don’t worry, your money is secured. Best professionals are dealing with it, in order to make profit for themselves and for yourself too. Usually, pension funds are never invested in risky projects, so usually investment is investment in securities, with low rate of risk.
Thereby, the law regulates basic characteristics of investing policy of pension funds and the FED is supervising their business activity and investing programs.
Due to demographic changes in almost all modern developed countries, the pension systems based on inter generational solidarity are under pressure. In such systems, which are usually state pension funds systems, where the staff finance the pensions with their contributions. There are no more possibilities to pay out high amounts of pensions. Take a look to Greece situation – elders have high pensions, but unemployment is just „eating“ the yought of the country. They brings the whole system to shaky legs.
So, it is advised that young people to secure some additional source of income when it comes to old days, which will compensate that difference and complement the state pension. Think about how much money you will need when you retire. Then compare it to the state pension that you can count on. If there is some difference, it is time to consider the provision of additional source of income for that days.
Securing the adequate savings for elderly is one of those long term goals. Main key for savings is to start as soon as possible with small monthly amounts invested in voluntary pension fund. This could accumulate serious amounts of funds until the retirement comes.
When it is about choosing the pension fund, there are several things that you should consider. Ask if there is a plan for employed. Find out what are the conditions. It is often the situation that pension plans offer better conditions than individual membership in fund. Gather all those prospects from as many pension funds as possible. There you will find some basic, most important data about every pension fund.
Pay attention to every fee that the fund requires. Fees can seriously decrease the interest you are chasing for. The yields that the fund have made in earlier years are good to know. Consider that it doesn’t have to mean that it will be the case in future deals. Pay attention to examples that funds are representing. No one can clearly say what it is going to be in 20 or 30 years. So ask for yields and figure out if those numbers.
A payday loan also referred to as cash advance, is a very popular product of banks and lending companies which allow people to borrow a specific amount of money until their payday.
This is, therefore, a small amount of money with the high interest rate. Even though they are not as risky as mortgages or business loans, they are anything but harmless if not used considerably.
Of course, these loans have their good sides. They are very useful when we need a quick way to obtain money when we are in such a situation that we cannot borrow money from someone else or we don’t have spare money. If we are ready to pay the price, then this is the best solution that can solve our current financial problems.
Yet, we always have to pay attention to some things. The first thing is to borrow reasonably.
This means that we should be aware of our real financial situation and how much money we are able to separate and yet not to endanger our financial situation the next month, once we repay the loan. No matter how tempting it might be, we should borrow only the amount of money that we really need and that we are able to repay. Everything that exceeds this amount can be risky. So when you are consider borrowing the money and using the payday loan you need to know all the terms and conditions of the contract and to understand them as well. The decision should not be taken if you don’t have all required information. This is your money and you will pay the highest price if you overlook any risk.
In addition, one must fully consider his situation. How the repayment of the loan will influence your future financial situation? How will the debt be repaid? This is especially risky in the cases where there is only one breadwinner.
Unexpected situations happen all the time and it might happen that the employed member is unable to work due to the illness, injury or something else. Is there any other source of income that might help to handle the loan repayment? Every single thing is very important when it comes to the debt repayment.
The available amount of budget reserved for the repayment should be carefully calculated.
Compare all available offerings and see which one meets your needs. The level of interest rate should be the person’s first concern. Compare all the interest rates and select the lowest possible.And finally, be sure that you get clear and understandable agreement and the exact amount of your final cost.
Never borrow if you can save the required amount of money. You might need more time but this is a far better and safer way comparing to any loan, especially if bearing in mind that you will not have to pay the interest rate and that you will be able to spend that amount.
If borrowing is still the best solution that you can find for your financial problem then calculate carefully and select wisely. In this case, the payday loan repayment should not cause you additional problems.