Hi folks, I recently had to go for a personal loan and I had great difficulty to prove my pay back capacity. The first and foremost thing the banks and financial institutions asked for is the credit report,
I was so worried that I was told that the more and more credit reports seen by different financial institutions will result in the reduction of the credit score. For gaining a good credit score, I had gone through a lot of hardship and losing in no time was a nightmare for me. I was so confused that I browsed for information on credit scores and the facts related to it,
To my surprise I found out that if the credit inquiries for a loan is made in a shorter span the system ignores how many ever inquiries made within a month prior to the day of the credit score computation.
I also found that a credit score rating is unaffected if multiple inquiries are made within a 14 day period and it was considered as a single inquiry. Also I read lot of articles related to ways of getting free credit report, how to boost the credit score and also how to get a clean credit report and its importance while getting a loan etc. The website offers excellent info on getting a better credit score.
Get a free quote if you want to find out how you can get rid of your debt problems. When you have taken more than one loan, you have a multiple debt burden. Then not only must you make more than one payment every month toward clearing the debt, but you also need to pay more in terms of interest. If you default on payment, you attract further penalties. Most people need debt consolidation credit help for credit card debts, which are caused by overuse of multiple credit cards. Apart from credit cards, other loans taken for education, renovation of home and other expenses can add tremendously to your debt burden.
Get A Free Nonprofit Debt Consolidation Quote
You can get a free nonprofit debt consolidation quote online. The Internet is a fast and cheap way of looking for free nonprofit debt consolidation quote. You can look up the websites of several voluntary groups that offer debt consolidation help and select the one that works best for you. You can also approach non-profit organizations for help. You can even approach the debt consolidation cell of your credit card company to seek help in consolidating your debt.
When you think you have selected the cheapest free nonprofit debt consolidation quote from all the quotes you requested, you should get down to finding a little more about the company. Find out if it has good credentials. Be careful of fly by night operators who will pocket your fee and vanish. Almost all companies offer free nonprofit debt consolidation quote; if the company asks you to pay in order to get a quote, it’s probably a scam.
Getting A Loan
In case you find it difficult to pay your debts even after consolidation, you might have to think about an additional loan. Remember that a debt consolidation loan should only be the last option. If you cannot find a way to repay the loan even after saving and increasing your income, you can get a loan to pay it.
There are two kinds of loans you can go in for – secured and unsecured. Unsecured loans carry a higher interest since they are riskier for the lenders. Secured loans include a second mortgage. You can request a free nonprofit debt consolidation quote to know the interest rates on loan consolidation.
Get the best possible advice after selecting a free nonprofit debt consolidation quote that matches your needs. You can make positive changes to your situation by getting proper debt help.
A is the best way to find help for your unmanageable debt problem. You can get in the form of advice, debt consolidation counseling and . Debt consolidation credit help can even help repair your credit record.
so housing affordability can be a concern to someone with less-than-perfect credit. In some instances, home ownership might not be ideal depending on a person’s financial situation.
A prospective buyer whose credit score is not high is seen as a higher lending risk and might only be eligible for a subprime loan.
“Most subprime borrowers should never be buying in the first place,” Cahalan said.
He said subprime loans are for those who have had credit problems in the past, have a good job and are turning their credit around. He said less than 25 percent of subprime borrowers fit that mold.
“I don’t think anyone with a 580 credit score should be buying a house,” he said.
Randi Livon, a mortgage banker with in Minnesota, said that a 680 credit score would be really good, and a score of at least 620 would leave buyers with options that “aren’t dangerous.”
Cahalan said most subprime borrowers want to buy homes to make money.
“Now they are looking like the victim of the big, bad lender,” he said. Teaching About Lending
Colin Robertson, chief writer for , stressed that because lenders are in the business of getting loans funded, borrowers must educate themselves.
“Any bank or lender can overcharge you or throw you for a loop,” he said. “It’s up to the borrower to educate themselves to ensure they make informed decisions and avoid the typical traps inexperienced borrowers fall into.”
Robertson suggested deciding what loan programs work for them before meeting with a lender. Otherwise they will likely see products that fit the loan officer’s personal agenda.
“Some loan programs tend to carry higher commissions; you better bet they’ll be the first ones you see,” Robertson said.
For consumers who are determined to shoehorn a mortgage into their budget to get a home they can’t afford, know-how might not help.
“Unfortunately, the mortgage industry rarely advises against buying more house because they use the product to get you into the house instead of asking first: Is this the right thing to do?” Cahalan said.
He said the problem is that if lenders don’t help buyers get a loan, they will simply move on to a different lender to get what they want.
“Most don’t say, ‘Is this the loan for me?’” Cahalan said. “They say, ‘Can you get me into this loan?’”
Borrowers Shouldn’t Get Too Aggressive With Mortgage
n fact, borrowers could lose big. It’s up to borrowers to figure out their financial situation, know how much house they can afford and not use a mortgage as an excuse to overspend.
Part of that process involves getting finances in order, finding a lender and getting matched with a loan product that suits that person’s financial picture.
In the fourth quarter of 2006, 1.19 percent of 43.5 million outstanding loans were in the foreclosure process, according to the Mortgage Bankers Association. That’s up 20 basis points over the fourth quarter of 2005.
Mortgage Bankers Association Chairman John Robbins said only a small percentage of delinquencies occur because borrowers don’t manage their credit well.
He cautioned that there is a lot more to home ownership than a monthly payment, such as taxes and maintenance costs.
Once prospective borrowers figure out how much they can spend on a monthly payment, then they can think about getting a mortgage.
“I would recommend they start with a 30-year fixed mortgage,” Robbins said. “It’s the safest because you never have to worry about whether the interest rates are going to go up.You’ve eliminated any upsided risk.”
He said consumers should start with the most conservative product and then, depending on their income, they can move to products with more risk.
Choosing a loan
Call at least five lenders.
Shop for the specific loan product you have chosen.
Ask for the exact interest rates and the total commission and fees for the loan product.
Find a mortgage with the best rates and fees.
If it’s a no-fee loan, ask what the yield spread premium is, which is the markup on the interest rate of the mortgage brokers can earn above the lender’s rate.
Lock in the loan for 60 days.
Thirty-year fixed mortgages might not always be borrowers’ first choice.
“Fifty to 60 percent of borrowers should use nothing but a fixed-rate mortgage,” said Ron Cahalan, author of ‘Lenders Are Liars.’ “If they’re using anything else, they’re buying more house than they can afford.”
Cahalan said he’s worked in the mortgage industry for 26 years and that 30 percent of loan officers don’t counsel borrowers on the risks.
“You, as a borrower, need to ask all the right questions. Will the payments go up? If so, what’s the worst case scenario?” Cahalan asked.
Questions to ask your lender
What’s your expertise?
How long have you been in the business?
Once you’re comfortable talking to a lender, ask about specific products.
What products do you recommend and why?
What are the risks?
What’s the worst-case scenario?
More people become millionaires through real estate investments than any other method. Investing in real estate is a great way to accumulate wealth quickly. Don’t miss out on it as it is one of the best investments around. Just learn how to invest. Designing an investment portfolio that fits your needs is always a complex process. Unfortunately, many people neglect real estate as one of the most attractive ways to diversify their investments because they aren’t aware of the variety of ways it can be included. In the past few years, the real estate market has exploded and the opportunities to invest in it either directly or indirectly has grown to keep pace. Individual investors should always consult a professional if they want to design a portfolio that properly balances the opportunity for greater gains against possible risks. This will vary depending on where you are in life, what your retirement plans are and a host of other factors. However a few simple things should be kept in mind:
• Diversifying is always essential to design a good investment portfolio. That is, you should never have more than a third of your investments tied up in any one form.
• Learn as much as you can about the individual categories and the risks involved in each. Generally speaking, stocks and bonds are somewhat safer, but show a slower return, although it does tend to be steady. Commodities (precious metals, oil, natural gas, etc.) are riskier but offer greater return.
• Mutual funds can provide you with the power of group purchasing when investing, while spreading the risk over a larger group of investors.
Real estate is often neglected when designing a portfolio unless the individual is purchasing property himself. Actually, the best way to invest in real estate is often through what is called a Real Estate Investment Trust (REIT). This is an entity set up specifically to invest in large properties such as hotels, high rise properties and malls.
You can also invest directly in real property without becoming a part of an REIT. After all, the need for real estate will never go away, and land generally increases in value over the period of time, so its a relatively good investment strategy. Its a low-risk strategy that historically has shown to be quite profitable in most cases.
When adding real estate to your investment portfolio, be sure to do the research and legwork to educate yourself. Study the market in your area, learn all you can about any property you are considering and decide whether becoming a landlord or flipping properties will be more lucrative in the long term. Its important to know if you have enough available cash flow to be able to keep your property until it’s value has reached the point where selling makes the most sense. To include real property in your portfolio, you need to periodically check the market and make sure the property is working for you in the most profitable way possible.
A Solution to those Payday Loansharks
San Francisco has come up with a way to help low-income people who’ve been preyed on by payday loansharks. Bank On San Francisco is a group effort by the mayor, the city treasurer and the Federal Reserve Bank of San Francisco.
Whether it’s a bad credit history or the sky-high minimum balance required by most banks, about 50,000 San Francisco households don’t have a bank account. This leaves them at the mercy of sleazy check-cashing services and payday lenders (or worse). A $30 check-cashing fee is a lot of money for somebody on a fixed income. If this money can be spent on groceries and other necessities, it stimulates the local economy as well as helping the individual.
Under this program, fifteen local banks and credit unions are offering free or low-cost checking and savings accounts. They’re specifically targeting low-income neighborhoods where the residents are the most likely to be preyed on by sleazebags. They’re also accepting alternate forms of identification (e.g. consular identification cards) so that (legal) immigrants are able to open accounts.
So far San Francisco is the only American city with a program like this for getting low-income paycheck-to-paycheck people into the financial mainstream. A few other cities — Seattle, Boston, Atlanta and Los Angeles — have made noises about creating similar programs. Let’s hope they do. When thousands of low-income people are able to open bank accounts and start saving, everybody wins.
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There’s a lot of negative talk in the personal space about pay day loans. In general it’s justified as many people get trapped in loans with high interest rates. The rates are so high that sometimes people can only pay the interest on the loans. They can’t pay the principle and get themselves out of the loan.
It’s with this thought in mind that I thought, “Why not open up a pay day loan company of my own?” Excusing the ethics of such a thing for a second, wouldn’t seem like a fantastic way to get rich quick and easy. It turns out that it’s not quite that easy. If it were really easy, there would be tons of entrepenuers entering the field and undercutting them by a few percentage points to make the money for themselves.
Of course that doesn’t happen because numerous payday loan companies exist still charging tremendously high rates. I believe they need to charge these rates because a large number of their clients never repay their debt or interest at all. It may sound like conjecture on my part and in some ways it is. However, I’ve had a little experience . From that experience, it is necessary to charge an outstandingly high price to some people with lower grades. It seems that I lose money when I lend money to people of grade E at 29%. I can’t imagine the rate I’d have to charge to make money on high risk or no credit borrowers.
I can’t recommend that people get payday loans. It’s too easy to get trapped into a hole you can’t dig out of. Still, I think that payday loan companies aren’t nearly as predatory as they are made out to be. I think they are just charging what needs to be charged. If people were more responsible they wouldn’t need to charge such high rates.
Financial institutions are really pushing remortgaging as a debt consolidation option. The financial benefit to the institution is clear, they now own a bigger chunk of your debts. This means that they will make more profit from your debt. They do this in two ways. First, they now own more of your debts. Second, they convinced you to turn your personal loans arranged on a 2 – 5 year period into 10 – 20 year loans.
At first the lower APR makes them look attractive. However, if you look at the total cost of borrowing the money over a longer period, then you’ll realize that for the first half of the mortgage you are doing nothing but paying the interest. That means, for as much as ten years, you are not paying off your mortgage. All you are doing is helping the banks profit.
Many people who opt for this type of wonder, at a later date, whether they are prone to seizures. Something made their brain stop working.
It is one thing to take equity from your home to repay debts that threaten to drive you into insolvency. But, to remortgage for 10 years to pay for a car that you won’t have in 5 years, or worse, to pay off your store cards, boarders on lunacy.
The APR of the second mortgage may only be 8%, instead of the 30% the store cards are charging. The monthly payments may also be something that fits your monthly income without stretching it to the limit. If that was all that you needed to restructure your finances then it may be a good move.
Unfortunately, most people obtain a debt consolidation loan to lower their monthly payments on ‘current debts’. Then, next Christmas when they are on a spending spree, they sign up for more store cards and run the debt up again.
Or, more blatantly, they take some of the debt consolidation money and go on a vacation, without repaying the loan. In the short run these may seem like the borrower is outsmarting the financial institution and getting some ‘free money’ but you are not playing with monopoly money.
The purpose of a debt consolidation loan, even a second mortgage, is to prevent bankruptcy. It is not free money. And, it is not an opportunity to extend a shopping spree or holiday.
When used for its original purpose, a debt consolidation loan can help people restructure their finances, and help them out of a serious financial problem. Ask yourself a few questions before consolidating your loans.
Do You Need a Loan?
Your answer is probably yes. Now, sit down and write out all your debts on a piece of paper. Put a red line under all the ones that can be paid off in less than a year. Put two red lines under credit cards and store cards.
This gives you a visual image of your loans. Now, cut up your credit cards. Next, write down how much extra money you will have after the year is up, and after the credit cards are paid.
If you can repay all your debts within two years, than remortgaging is not a viable option, unless you can find a company that will let you have a second mortgage which you can repay early without paying an early repayment fee.
Credit Card Trap
Many people have two or three credit cards and store cards. These bills are the source of their problem. The minimum payment doesn’t repay the capital, it just pays the interest. Many people pay a few hundred pounds off their credit card each year without ever touching the capital.
Unfortunately, a debt consolidation loan will not solve your credit card problems it only compounds them.
IVA
IVAs work well when used by the business community, but they fail miserably in the private sector. The garnishes your wages. All your wages, leaving very little for you to live on. If you try to work overtime, the IVA is automatically updated to the new income. If you stop working overtime, the IVA is not instantly adjusted. This means that, until you readjust the IVA, your payments are in default – enter the default fees.
These ‘substantial’ default fees are attached to the end of the IVA term. A few months of problems can extend an IVA for several months.
The sign up fees, default fees, and high percentage of the client’s income garnished drive many people into bankruptcy.
It is also important to remember that you still have the 1 year bankruptcy period to wait after the IVA ends.
Debt Consolidation Loans
In many cases the debt consolidation loan is the best choice. It may be secured against your home, but if you are looking at debt consolidation – instead of just paying your debts off – then your home is probably at risk already.
A debt consolidation loan will take several debts with high interest rates and pay them off with a lower interest loan. The loan is often 2 – 5 years long, often comes with attractive early payment options. This makes life easier by creating a win-win situation.
Standard Chartered, which earns most of its profit in Asia, is negotiating for a stake in UTI Securities to increase its retail banking business in India, said Murali Natrajan, regional head for consumer banking.
The British bank, which started its private banking business in India on Friday with 200 clients with assets of more than $1 million each, expects the number to increase to 1,000 by the end of next year. The bank also plans to double the number of relationship managers in India to 50 from 25, he said.
“Equity broking will be an important product in our wealth management and private banking, and we need to complete the gap,” Natrajan said Friday. “It’s a strategic initiative, and at this stage, we can’t say anything more.”
Banks in India, including Standard Chartered, Citigroup and Merrill Lynch, seek to offer services to the rising number of affluent people in the world’s fastest-growing major economy after China.
India’s $854 billion economy has expanded by an average 8.6 percent in the past four years, the fastest pace in six decades.
Today in Marketplace by Bloomberg
Standard Chartered, which has almost doubled its number of retail banking employees in the past three years to 5,600, expects sales in the segment to continue to grow at more than 25 percent each year. The bank also plans to open private banking units in four other cities by the end of next year, he said.
The number of individuals in India with at least $1 million of net financial assets rose almost one-fifth to more than 83,000 in 2005 from a year earlier, according to a survey by Merrill Lynch and CapGemini.
The number of such millionaires in Asia will increase by an average 6.7 percent annually in the next four years to $10.6 trillion, Merrill Lynch and Capgemini said last year. The 6.7 percent growth in millionaires in Asia will outpace the global rate of 6 percent, it said.
UTI Securities, owned by Securities Trading of India, enables investors to purchase shares, bonds, derivatives, mutual funds, commodities and insurance products online. It has 24 branches across the country, according to its Web site.
The bank, which is opening 10 private banking centers in Singapore, Hong Kong, Shanghai, Beijing, Seoul, Mumbai, New Delhi, Dubai and London by next month, aims to double the number of these centers to 20 in about three years, Peter Flavel, global head of private banking, said in Mumbai.
“We plan to open another 10 in two to three years,” Flavel said. “The bank is very strong in the Middle East, Taiwan, Pakistan, Indonesia and Malaysia. So while we may not necessarily grow in these markets, we will be opening on the natural footprints.”
The bank also plans to increase the number of its relationship managers to as many as 450 from 150 in three years, Flavel said.
Standard Chartered operates 81 branches in India, the most for a global bank, and has been present there for 150 years.
India’s cabinet has approved an ordinance that will allow the federal government to take control of the central bank’s 59.7 percent holding in State Bank of India.
The decision to carry out amendments to the State Bank of India Act, 1955, through the presidential decree, was announced by Priya Ranjan Dasmunsi, information minister, following a cabinet meeting Friday.
Legislation to replace the ordinance, valid for six months, will be moved in the coming monsoon session of Parliament, he said.
Every bank or credit union wants to sign up customers like Harvey Watkins. The 83-year-old Phoenix retiree joined a credit union when it first opened its doors in 1947 and never left.
But the factors that brought and continue to bring Watkins and members of his generation into bank and credit union lobbies aren’t so critical anymore. Yes, convenient branches, a broad array of products, competitive rates and in-person service still matter, especially when first attracting people.
These days, however, online checking, direct deposit, automatic bill-paying and other electronic services constitute the mortar that increasingly is keeping a growing number of clients cemented to their institutions.
“Debit and Internet banking really seal the deal,” said Terence Roche, a principal at bank-consulting firm Cornerstone Advisors in Scottsdale, Ariz. “Once you’re doing bill-paying online [with a particular financial institution], it’s really hard to leave.”
Branches aren’t going the way of the dinosaur any time soon. For example, Arizona banks added nearly 28 percent more offices, primarily branches, from 2001 to 2006, with much of that expansion mirroring population growth.
Yet more customers, especially younger ones, are interested in online banking and less likely to visit branches, according to industry reports. Wireless and mobile-phone access promise to take it all one step further.
For example, Bank of America this month completed the rollout of nationwide mobile banking that opens up a range of services to people with cell phones and Internet ties. Customers can check deposit and loan balances, pay bills, transfer money between accounts and view transactions without visiting a branch or sitting in front of a computer terminal.
“We’ve created a pocket-sized bank that can be taken anywhere,” said Sanjay Gupta, an e-commerce official at Bank of America.
Electronic banking offers other benefits, too. If all Americans viewed and paid bills online, it would greatly curb landfill waste and greenhouse gases while preserving an estimated 18.5 million trees annually, according to the National Arbor Day Foundation and CheckFree, a firm that provides electronic commerce services.
Financial institutions probably could sign up even more customers if they offered greater security assurances for Web customers.
A March study by Javelin Strategy & Research and TriCipher Inc., an identity-authentication firm, found that financial institutions would add millions of online customers if they provided downloadable identity-protection software.
But consumers still are more likely to fall victim to financial crimes from stolen mail and lost or stolen wallets, debit/credit cards and checkbooks, Javelin President James Van Dyke said recently in Scottsdale
