Help on Dealing with Debt

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Once we find ourselves struggling to pay for our expenses that include our debts, it is time we need to decide on how we can deal with our debt. There are two aspects in which we need to be able to deal with debt properly. We need to make sure that these two aspects are present when we try dealing and coping with debt.

  • Self-Help
    Image result for Dealing with Debt Self-HelpThe first aspect that we need to address when we try to deal with debt is identifying self-help actions that we can do. Hiding away from your creditors can only worsen the situation you are in. But when you are aware of the actions that you need to do such as getting in touch with your creditor, this will help you get yourself out of the situation. Self-help are actions you can take which are within your control. A few self-help actions that you can use below:

Develop a budget – this first step can help you make a conscious decision and effort to help you from getting yourself out debt. Being able to know your finances will start putting you ahead of your situation.

Calling your creditor – this self-help action is one of the greatest action that a debtor can take. It is the most often task that is neglected when a borrower gets involved deep in debt. Unaware, they can provide an opening for you to re-negotiate your debt that will benefit you and the lender.

  • Help from a third party
    Image result for Help from a third partyGetting help from a third party is not always an aspect that can be taken by debtor. Often, borrowers can deal with debt through the “self-help” aspect. But when a borrower becomes indebted to a point where it becomes difficult for the borrower to pull themselves out, these debt counseling agencies can often help. With proper screening of who you can collaborate with, you can have a credit counseling agency to help you lift you from the debt you are in.

Always remember that you need to be careful when choosing a debt counselor. There are organizations that exist to offer great deals for debt management and debt settlement but brings you more debt. These debt management frauds exist and scrutiny of the organization is necessary.

Difference Between Guarantor and Cosigner

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Proper risk management is taken by a lender when a borrower makes a loan application. Risk management is a process that a lender takes to ensure that the borrower is worthy of granting a credit or a loan. Any borrower who starts to default on payments will become a bad credit for the licensed moneylender. And in some instances, losing the capacity to collect becomes a receivable that needs to be written off. This will now be considered as a loss by the lender.

There are several ways that a lender can minimize this risk of loss. One way is through securing an asset that a lender may sell once the borrower defaults payment. Another way is binding a third person to the loan who will take responsibility over the loan at a certain period or through an action (or inaction) of the borrower.

This third person can be referred to as a “Guarantor” or “Cosigner”. A guarantor is a person who promises or “guarantees” to pay for a borrower’s payday loan if the borrower is no longer able or decides to stop paying for the personal loan. A cosigner on the other hand is a person who agrees to be bound by the loan as a primary borrower. Below are a few points that define the difference between the two:

Cosigner Guarantor
When Required? A cosigner is requested when the borrower does not meet all the requirements that is needed to be granted a personal loan. A cosigner’s financial background is essential as if the cosigner is the one making the loan. A cosigner’s financial standing is used in place of the borrower’s deficiency. A guarantor is required when a borrower meets all requirements for being granted a loan but the lender is not fully convinced that borrower can pay. This may be due to non-financial reasons (ie. Being abroad for a long time due to nature of work which may lead to difficulty in collecting)
When Liable? A cosigner’s liability begins at the onset of the loan agreement. Soon as the agreement takes effect, the cosigner has an equal liability as the borrower. A guarantor becomes liable depends on the agreement. Often, they become liable when a borrower starts to default on their payments.
Benefits? Creates additional value to the loan amount because of the better financial standing of the cosigner compared to the borrower. Creates a higher chance of approval but does not create additional value to the loan amount.
Risk? Risk of the cosigner extends to his assets and income as he is liable as a primary borrower. Risk of the guarantor on the liability is when the lender has exhausted all means to collect from the borrower.

Getting Yourself Ready for a Business Loan

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There comes a time in business where additional funding need arises. It may be for expanding the market, purchasing an asset, or even increasing inventory. Whatever reason a business may have, the need for outside financing arises. Businesses often rely on financing from third parties when operating. But when the need for a third-party financing comes, it often becomes a hurdle to convince a lender to grant you a business loan. A lender may be critical in evaluating for risk management that may affect your chances of getting approved. In these cases, here are a few points that you need to focus on when getting yourself ready for a business loan singapore.

  1. Capacity to payImage result for Finding the right lender
    A lending company will often go through the usual credit analysis to ensure that you, as an applicant, is qualified to be granted a loan. The lender will need to review a few criteria to identify your capacity to pay. These criteria are as follows:

Cash – The lender will check your cash flow. This will show your capacity to pay on immediate requirements to cover your monthly, quarterly, or annual payments.

Business Operations – The lender will check the business operations and identify the financial stability. This gives the lender an idea if the term being granted can be survived by the business. It also shows the solvency of the organization and how it will surpass any business challenge during the duration of the loan term.

Credit Score – This is an essential part that every borrower is reviewed on. A credit score identifies the character of a borrower in financial form.

  1. Transparency
    Related imageMake sure that you are ready with all your documentation and information that should be shared when applying for a business loan or to metrobank direct. Lenders will review your qualification as a borrower. Avoid information being left out that may be critical for the lender to grant you a loan. If there is any information that you think may affect the approval, it is best to share it with the lender rather than keeping the information from them. Chances are, the lender will find ways to work on the deficiency.
  1. Finding the right lender
    Image result for Finding the right lenderWhen going for a business loan, make sure that you shop and compare lenders. Knowing the right lender and the right loan offer will help you maximize and take advantage of the loan. It’s not always about the interest rate. A business may check what is more important to them. It can be the term or even the lowest payback amount.

How Does a Business Loan Work?

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It is very important to plan accordingly when making a business loan. Business loans are essential in protecting or even helping your business grow.

But like any other bdo loans, when a business loan is taken without proper planning and appropriate loan management is not in place, it can be the reason for a business to move to insolvency. There are important things that you may need to know when applying for a business loan. Here are some points that may be referenced when planning to get one.

  • For the benefit a loan can bring comes a liability

Despite of having an amount of cash that you can use at your disposal, every cash loan will be required to be paid. A lender would require a payment scheme to ensure that the borrowed money is slowly being recovered. These payment scheme will form part of the expenses of a company. Without proper management and planning, these expenses may become a burden and cause the business to slowly lose more money instead of earning.

  • Business loans are borrowed money

We need to remember that cash loans are borrowed money. Eventually, the lenders (or owners) would want to get their money back. These lenders often get their money back from revenues of the company. In cases where revenue is insufficient the business is going through a loss, these lenders may opt to recover the money from other sources such as assets used as collateral. In cases that there is no collateral, the lenders may opt to go after the business or even make the owners personally liable.

  • Talking to the right lender

Once a business loan has been approved, a relationship is formed between a borrower and a lender. It is essential to connect with the right lender regarding the loan. In some cases, these good relationships that are formed can save the borrower a lot because of having a good relationship with the lender. It is possible that interest may be lowered and recovery of the loan without charging additional fees may be given by the lender. Building a good relationship will go a long way.

Be sure to plan properly and ensure that the loan is managed well. These two key elements will be your guide to potentially growing your business through a business loan.

5 Things to Know About Financing Your New Car

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When planning to get a new car through financing, there are a few points that you will need to consider. These few points can save you money and get a good bargain for your deal. It is not always good to go unprepared to a car dealer as they may start throwing in stuff that you may not need especially if the deal is through financing. Always be prepared and do your homework on these points to make sure that you get the most out of your purchase.

  1. Shop around and get the best possible prices between dealers.

Dealers often vary prices. Making sure that you compare the prices between the dealers will help you decide on which dealer you may want to purchase your car from.

  1. Negotiate the price with your dealer.

It is important that you negotiate the price with your dealer. When financing a car, dealers often leave room to adjust on how much they are willing to take home from the margin. Negotiating the price can save you money and lower your amortizations due.

  1. Learn the terms of the car loan.

Make sure you are familiar with the terms of the loan. Any car financing will involve a loan agreement which you need to understand and aware of. It can help you with a lot of savings when you are familiar with the terms of the personal loan for foreigners in singapore. You can start avoiding additional finance charges and/or other fees when you are familiar with the terms.

  1. Trade your old car.

If you have an old car that you will no longer need, it would be great to trade it in to ensure lower the loan that you would need to finance the car. This can also help you future additional costs by maintaining two cars.

  1. Know which initial and subsequent costs are part of the financing.

This is an essential action that you need to ensure you know. Being aware of the costs that will be incorporated in financing can help you estimate the amount of amortization that you will be obligated to pay during the loan period. If the costs are something you can pay outside the loan, then it would be best to do that to avoid large monthly repayments.