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New Credit Card Laws Result in New Credit Card Concerns

New Credit Card Laws Result in New Credit Card Concerns

In the past year, credit limits have been reduced while interest rates have been raised for tens of thousands of credit card users. The new laws meant to protect the public passed in 2009 but did not take effect until February of 2010. That left a big window of opportunity for lenders to position themselves to protect their profits under the new regulations and credit lenders used that time period effectively.

Perhaps the most important change for consumers this year is that cross default is no longer allowed by lenders. Prior to 2010, if you made a late payment on any account you could find all of your credit card interest rates skyrocket to over 30% for your entire balance of debt. The laws were so forgiving that lenders could use almost any excuse to raise your interest rates. This practice became widely used in the past two years especially and has driven many people into bankruptcy.

The big problem with cross default was that the total balance on the account was subject to the interest change. It didn’t matter if you had paid that account faithfully on time for years – if you had a late payment on another account your rates could be doubled or tripled. Sometimes it was an immediate change from 10% to 33% (which would more than triple the monthly payment due) but it could also be a small increase month after month.

Under the new laws lenders cannot permanently change your interest rate on past purchases. However, they can change that interest rate on a temporary basis as a “penalty” payment if you make a late payment. This has not been widely mentioned and many consumers are not aware of this risk.

One big change in current lending is to impose annual fees for credit card holders. Not all banks are doing this but the number is increasing. Annual fees were common years ago when credit cards were available only to those with excellent credit and were often not used frequently. If the annual fee card also offers a significantly lower interest rate, the fee may be in your favor. However, carrying a wallet full of credit cards will not be a good option if you must fees annually for each of those accounts.

The most dangerous change for consumers in current credit lending practices is that lenders no longer tell you what the interest rate will be on your new account. Instead, there is a range of interest rates that may be, for example, 13.24%, 17.24% and 22.24%. On the application, the lender states your Annual Percentage Rate will be based on creditworthiness.

Large lenders such as Chase Bank are still offering 0% introductory APR for new accounts but until your account has been approved you will not know what the actual interest rate will be. The lender offers a carrot of free transfer of existing balances and 0% APR for up to twelve months. That’s an attractive offer but consumers cannot afford to use credit accounts if the interest rates will be exorbitant a year from now.

Unfortunately, the new laws do not required lenders to state what the levels of creditworthiness are. You may know what your 3-digit credit rating is but unless it is very high you will not know whether you can qualify for the lowest rate of interest on a credit account.

The new credit card laws will protect consumers from the worst predatory practices that became common in the past few years. At the same time, new fees and strategies will continue to be found by lenders in an attempt to constantly increase profits. As a consumer using credit cards you cannot afford to make assumptions or ignore the fine print on your credit statement.…

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Of Marriages, Finance and Insurance

Of Marriages, Finance and Insurance

What do people know about finance and wealth management? You will be surprised if you ask the general public what they are planning for future. You yourself might not get the answer you want from them. Maybe we are living in the sheep follow sheep mentality. After all, conformity is a powerful nature of being a human.

1. Your house has to belong to you

Of course, it is more expensive to own a house. But in the long-term, you must know that it is more effective in terms of cost. Renting is like showering money down the toilet drain. There are exceptions where you are the master over your landlord. Still, do not get tempted to mortgage a loan for a house, unless you are sure you could handle it for at least a few years. But owning your own home is the way to go.

2. What is insurance? How about broad insurance?

Many people are not aware of the many types of insurance. Broad insurance protects you from financial disasters. You are advised to research on this topic thoroughly for your personal needs.

3. Even when you are in a marriage, plan

Time affect goals. You have to understand the monetary habits of your spouse. The key is compromising and great management as a couple. Some people even say marriage is all about the money.

4. If you can read the future, you are financially safe

This advocates living below or within your own means. If you could see things coming at you, you can be better prepared to handle finance and emotions. In life, things can be unpredictable. When you have the power to foresee these changes, you are in control.…

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Steps to Securing a Bridging Loan

Steps to Securing a Bridging Loan

Obtaining financing can be difficult at times, especially when there’s two properties involved. Whether it’s residential or commercial, if the existing property is still on the market, it makes it difficult to obtain conventional financing when you’re ready right then to move on a new property quickly. Don’t lose hope, you can still find what is called bridging loans to finance your new deal. These loans are fairly flexible and funds can even be accessed quickly. Along with that flexibility, it is costlier and has shorter terms. When selecting who to work with, keep in mind you have a significant amount of money in this transaction, so it’s wise to be very selective. Here the steps below are shown for obtaining bridging loans are outlined:

1. Determine what your loan amount is and what length of time you will need.

2. Find and compare bridging finance lenders. It is recommended to work with a lender who specializes in these. They will be able to give a good selection of lenders. It’s recommended to first go with a referral from a trusted source. That is usually the best way to find a reliable one. Here are a few items to consider when comparing:

• Loan volume (how many they do yearly)

• Subjective issues like reliability, dependability, and professionalism

• Experience

3. Talk with a few clients who’ve worked with them in the past. Check to see if the product they were offered was the actual one the received. Also look to see if the costs were what they expected. And very importantly, inquire how the closing went and if it went smoothly. Understanding their entire experience will better help you to know what to expect.

4. Once you’ve made your selection, decide the following:

• Bridging loan amount needed (depends on your credit, you may not get the full amount)

• Collateral to be used (this is usually either the old property or new one or both)

• How soon will you need the funds for your purchase

5. Determine the details of the bridging loan you are applying for. You will be able to review several choices when it comes to the following such as:

• Loan to value ratio (this is lower than conventional as it is a riskier deal)

• Interest rate

• Length of term (usually 12 months, but you may find other terms)

• Points

6. Fill out an application. You’ll also need to have the following:

• Extensive details on your exit strategy (this is very important as they will look at this information as to whether they’ll be able to receive the full amount when it is due)

• Payment for fees associated with the funding

7. Once you’ve completed, you’ll just need to wait for approval which can be as quick as within 24 hours. Funds can be made available 1 week up to 3-4 weeks.

Bridging finance is a great way to fund a deal that may not be done with traditional ways. It is very risky and should be carefully considered. But if you’re prepared, you can make it work for your situation.…

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Why Get a Car Loan Financed?

Why Get a Car Loan Financed?

Car loan financing is very important, because most of us can’t afford to buy vehicles outright. Most of the time, some sort of car loan financing is needed in order to make the purchase possible. This does two things: first, it helps build a positive reputation that will matter to other lenders; second, it makes a vehicle expenditure possible when it is otherwise too large to accomplish.

Everyone knows that reliable cars are expensive. The only ones that don’t cost so much that such loan financing is a good idea will either be unreliable or not run at all. Since it’s easy to see why vehicles are so necessary in American society, having one that can’t be counted on is not an option. Only the valuable, dependable ones are worth having.

Of course, paying off auto loan finance is helpful, too. It is a good way to improve one’s credit score, which opens up other possibilities, such as home ownership. In fact, as much as American society has come to depend on credit for buying everything, having a good score is of real importance. So, getting things started is a good thing, even when it seems intimidating.

Both of these are very important considerations. They demonstrate the importance of auto loan finance, and why it is something to appreciate. However, actually getting one is the first step. Without it, no benefits can ever take place. So, it is important to take that first step, find a decent loan, and apply for it.…

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Temporary Resident Home Loans

Temporary Resident Home Loans

It is a dream for many to take a trip to Australia to stay a while and enjoy the scenery, the environment, and the culture that most can only admire from afar. But if you’re looking to stay a while, whether you’re on a 457 working visa or a spousal visa, you can apply for a temporary resident home loan and have a mortgage-financed home while you stay!

First off, make sure you have your visas properly squared away. Obtain the correct visas for your situation, whether it be a 457 visa sponsored by an employer in Australia, or a spousal visa. There are four different kinds of visas, including residence, temporary residence, migration and visitor, so make sure that you have the proper visa in order to obtain a mortgage finance or home loan for property in Australia. Once you have your visa taken care of, it’s time to apply for approval through the Foreign Investment Review Board. The Australian Government understands that foreigners traveling from abroad enjoy purchasing property on their land. In turn, the Australian Government wants to ensure that if a foreign citizen is buying property in Australia that it is of benefit to the surrounding area, neighborhood and community. Whenever a foreign citizen is applying for a real estate loan or non-resident home loan during their stay, it must receive Foreign Investment Review Board approval in order to pass. This review by the Foreign Investment Review Board can take around thirty to forty days to be processed and approved, and this process does not need to be done if you are buying the property from a developer in Australia that has the FIRB approval letter to show foreign citizens are allowed to purchase the property.

Once you have the Foreign Investment Review Board approval, you can now finance your new property investment in Australia. Now, in regards to financing your property purchase from afar, you can take care of your mortgage from outside the country, but you can also take care of it once you get to Australia as well. If you’re doing so, be sure to bring a copy of your credit report and history, along with any letters of recommendation from your current bank and investment companies. This will not be fully relied upon by Australian or UK banks, but it can definitely help your case for a mortgage finance in Australia. Financing mortgages no matter where you live can be confusing, and it is especially important to know your numbers before applying for a home loan in Australia and fully understand the terms that may be brought up during your application. For example, it’s a good idea to understand the term LVR, or “Loan to Value Ratio.” Mortgages can range from 75% LVR to 95% LVR, with percentages in-between. Let’s say your LVR with the bank you are applying for mortgage finance with is 90% LVR. This means that if you are financing a mortgage on a property that is valued at $100,000, the LVR would be $90,000 of the $100,000, hence 90% LVR.

It’s also a good idea to do your research before you leave for Australia and when you arrive to make sure that you know your numbers, know what you can afford, and have all the correct paperwork in order to buy a home during your temporary residence in Australia.…

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Are Your Finances in Order? Time For a Checkup

Are Your Finances in Order? Time For a Checkup

With so many things having a yearly checkup, such as your pets at the vets, your car at the service centre and a health check for private insurance, it’s about time you thought about something that gives us all a grey hair too many, your finances and did a financial checkup. After all surely you would want to know if everything is alright and if you are on the right path?

A checkup of your finances will enable you to see if you are on the way to delivering your personal objectives and goals. For example you may be saving for a new car or a deposit on a house or paying off a loan, this is the perfect time to see if you are achieving this and if not, what changes you need to make to combat this and take control.

A good time to do your checkup is before the end of the tax year in the UK which is the end of march, so any time from the start of the year to end of February are good times for doing this. It will also help if you need to do a self-assessment or file any company returns as well.

First, get your plans out from last year and review the objectives you set. Did you reach your goals? If you are not there, then why not and what happened to prevent you? It may be a good idea to re-timetable your goals and think about what you can actually achieve this year. For example you may have had to start paying for an unexpected expense which has hindered your ability to pay off a loan. Think about what you can do to achieve your goal of paying your loan off. Can you make savings elsewhere, like on takeout or expensive gym memberships which you are not using? Write these goals down and even list milestones that will help you on your way to achieving your main goal. Rome wasn’t built in a day remember!

You also need to look at your personal circumstance, what has changed? Have you had a new baby? Did you move jobs, or get made redundant, retire, get married or divorced? These events on their own can quickly change your goals and financial dreams, you may need to re-address your budget and goals and look over your investments such as your ISAs in light of your circumstance. For example if you got married you and your spouse may be saving for a new home and so this may be your main financial consideration.

It is also good to look over and amend your insurance policies such as your car, home, health and life insurance. Ensure that major changes to your circumstance are reflected in them. Most people don’t think to do this, for example if they buy new furniture or assets then their home insurance should rise. Shop around if you are not happy with your insurance company’s new premium.

Look at your existing debt, such as credit cards and loans. Have you managed to decrease your debt, according to your plan or has it increased? If it has got worse then ask yourself why, have you indulged yourself? Look at 0% balance transfer credit card deals to help ease the payments for example.

When you review your finances you will be surprised at how much clearer you become with regards to your long term goals and your short term actions. Get to work!…

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What Are the Alternatives to Bank Financing For a Car Loan?

What Are the Alternatives to Bank Financing For a Car Loan?

These days there are many alternatives to bank financing when looking to secure a car loan. When thinking about getting a loan, we typically think “The Bank”. But a majority of us just can’t get approved at the bank or have to jump hoops to get the bank to do anything at all. There are many lenders in the market that offer car loans at the same rate or even better. These lenders are normally associated with pre-owned vehicle dealerships and are very strict on their selection of used car dealer partners.

Being part of the business, I have seen multiple lenders come and go. These days, the banks have even setup and purchased existing financial institutions that specialized in car financing. The banks had found that there was a lot of business that they were not retaining and being swallowed up by third party lending companies. Now, when dealing with some third party finance company, you may be dealing with a major bank and not even know it.

Most lenders align themselves with new and used car dealerships. The dealerships have to meet specific requirements to be allowed to offer financing to consumers and even after they meet these requirements, their past track record is also looked at to be able to have an approval from the bank.

If you are looking for an alternate to banks for a car loan, visit some of your local used car dealerships and ask them how many different lenders they have. Typically, a well established dealership with a good history with have about 8 lenders. If they don’t have all major banks, then they may have lost the lender due to activities that were not favored by the bank. Use extreme caution when financing with these dealerships.

In Ontario, Auto Funds has 9 different lenders and work along side reputable dealerships to accommodate all the needs of the consumer. They are considered auto loans Ontario specialists. If you have an questions, their finance professionals are always willing to help!…