Money makes the world go round...

This blog can help you about the right management of your finances, tips on staying how to stay away from debt, and so many more.

Money makes the world go round…

This is an old saying that people believe and so people have jobs to suffice their daily needs and wants. However, people just keep on spending money and sometimes it is spent on what it is not intended for. Good thing that there are people who are financially educated, especially in personal finance management. They want to share their thoughts on things and they want to educate and inform others as well.

This blog can help you with the right management of your finances, tips on staying how to stay away from debt, and so many more.

What We Do

Personal finance is an important thing that every person should know; however, it is one of the ones that is usually neglected. Some people have not found its importance because they do not know its importance.

This blog aims to help those people who do not know how to manage their personal finances. They will be reading about tips on how to budget, how to save, and even how to stay out of debt.

The author of this blog is a financial adviser who was also lost to spending too much on clothes and shoes. This time, she is willing to share what she has learned and she is willing to guide people to the right financial path.

Latest Articles

The Ins And Outs Of Car Loans

One of the best and cheapest ways to purchase a car is with a personal loan. This is especially true as the rates on these financial products have decreased dramatically over the last couple of years. However, is it the right option for you?

In the the following post we will look at the ins and outs of car loans to give you the basics on these financial products, how they work, as well as the pros and cons of them.

Car Loan Options

So, you want to buy a car, but (like most people) don’t have enough money to buy it outright. You need to buy one using a loan of some description this may be from a company such as www.toploancompanies.com. Whether you are looking to buy a brand new car or a used one, there are two main car loan options open to you-

  • Hire Purchase Deal
  • Personal Loan

Hire Purchase

Hire purchase or leasing is when you pay some money upfront and then make regular monthly payments for a car, that you can use while keeping to those payments. At the end of the leasing period, you can simply return the car or pay to buy it (which is an option many people take if its a very new car that is in good condition). This is not nearly as popular as the loan method of purchasing a car – though it has become more common in recent years. The key thing to remember is that, even during the lease term, you are not the actual owner of the car. This means if you ever want to modify your car, you can’t if you are leasing. Normally, the leasing company will require that you have your car serviced annually, and at an official and authorised garage.

Personal Loan

This is by far the most popular and common method for buying a car – arranging for a personal loan to cover the cost of the car through a bank or other financial organisation. Obviously, as loans are a money making business and not charity, you have to pay interest along with the pre-arranged monthly repayments.

It makes sense when looking for personal loans that you choose one with as low a rate as possible.

How Do They Work?

If you have a good idea of what car you want to purchase, you can work out the amount of money you need to borrow. This is normally the price the car is for sale, subtracting the deposit the car dealership or trader requires upfront.

You borrow a fixed amount and agree to a fixed monthly payment rate and are normally expected to pay the loan back over anything from 1 to 5 years. The interest rate, as with most financial products of this kind, depends on how much you wish to borrow.

For example, if you are looking to borrow a fairly small amount such as £1,500, the interest rate will be high – around the 8 to 13%. Whereas, if you want to borrow a considerably higher amount of money, like £15,000 for instance, you may only have to pay interest at a rate of 2.8%.

Before you head to the lender and sign up for one of these deals, particularly if you are basing it on figures that were advertised, you need to note that these figures are ‘representative APR. On average, only around 51% of all people accepted for loans will get these lower rates, while 49% of borrowers are given loans at much higher rates.

The Pros and Cons of Car Loans

Although personal car loans are very appealing and getting one may be the right option for you, there are so many options out there that it can be tricky to choose. Obviously, the sensible approach is to shop around and look at a wide variety of available car loans.

With this in mind then, it is worthwhile looking at the various pros and cons of car loans, before you decide on whether they are best option to help you buy a car or not.

Pros

  • They are one of the simplest methods of financing the purchase of a car to understand and organise.
  • They are flexible and have repayment terms from 1 to 5 or even 7 years. The longer the term though, the more interest you will have to pay over time.
  • There are eligibility calculators available online that can help you find loans you will be accepted for
  • As soon as you have transferred cash to the trader or dealer, you will own the car and are able to modify and carry out work on it (something you can’t do when you purchase hire/lease a car)
  • As you are buying with cash, you could barter for a better price
  • Dealer finance rates are higher than personal loan rates, unless you are able to find a 0% finance deal

Cons

  • You won’t be accepted for a car loan, unless you have a healthy credit score and history
  • Car loan monthly payments are often higher than the repayments amount of other forms of financing
  • You will be responsible for any repairs or maintenance required for your car, as you are the owner
  • The value of a car depreciates quickly over time, so when it comes to selling it, you will get less money when you first bought it.

So if you are looking to buy a car and can’t afford one upfront, a personal loan might be the right way to go. Be sure to take on board the information above, before you sign or agree to anything though. You should always make sure you that you can and will be able to afford the repayments for your car loan, not just in the present but also far into the future.

This is a crucial point, as financial problems can arise at any time. However, if you have secure employment and your home life is not likely to change in a way that it will affect your finances, car loans are a great way to get the car you really want.

Is It Time To Remortgage Your Home?

Did you know that around one-third of all loans in the UK are actually remortgages. That’s because a mortgage is often tailored to the needs of your current situation, and so better mortgages can become available as your circumstances change.

So, is it time to remortgage?

Yes, it’s time to remortgage if…

Your current deal is coming to an end. A fixed-rate mortgage only lasts for a couple of years, after which it changes to have a standard variable rate (SVR). If this has happened to you and your mortgage has changed, you may find yourself paying significantly higher interest rates than those you originally signed up for. Thanks to the increase in interest rates, your mortgage will no longer be the cheapest rate available to you. According to The Loans Departement People who chose fixed-rate mortgages often find themselves jumping from mortgage to mortgage, so perhaps you should follow suit and find yourself a better deal.

You want to increase the size of your mortgage. There are multiple reasons why you’d like to increase the size of your mortgage. Firstly, it could be because you’re looking to do home improvements and need the extra cash. Alternatively, it may be because you want to start your own business and need some extra funds to get things going. Depending on your reason for wanting to increase your mortgage, lenders will be more or less comfortable with accepting your mortgage request. It will also impact the terms and conditions surrounding your mortgage and the repayment rate you’ll be expected to pay. 

Another way of increasing the size of your mortgage is by consolidating your debts. This is a great way to avoid late payment fines from multiple lenders and put all of your debt in one place. If you’ve been having difficulty paying off debts in the past, it may be more difficult for you to remortgage as lenders have access to your income and outgoing finances. However, that doesn’t mean a bad credit remortgage is impossible. There are dedicated mortgages available to those with a less than perfect financial history.

 You’d like to have less outstanding debt. If you find yourself in a better financial position than when you initially took out your mortgage, a better rate may be available to you. This could be because you’ve had a pay rise, or one of your dependents (i.e. children) has grown up and is taking care of their own finances. With more disposable income, you may decide that you’d like to funnel this money into reducing the amount of mortgage you have left to pay. Some mortgage providers will let you do this, so you don’t need to remortgage. However, the amount of equity you have in your property will have most likely changed since you first took out your current mortgage, so you may be able to get better rates by remortgaging your home.
Alternatively, it may be that you’ve inherited a significant lump sum and want to put this straight towards paying your mortgage. Some lenders will have a limit on the amount you’re able to pay in one go. Therefore, you may need to go through the process of remortgaging to simply hand your large pile of money to another provider. 

Finances have dropped, so you’d like to decrease payments. When you or your partner retire, it’s likely that you’ll have less income at your disposal. If you still have mortgage, you may need to get a new deal that is more financially viable. You may also need a lower repayment rate if you’ve suffered from a long-term injury that effects your ability to work or if you’ve been made redundant. Some mortgage lenders may be sympathetic to your change in circumstances, but if the amount of equity you have in your property is rather different to what it was when you first took out your current mortgage deal, it may be worth remortgaging.

 No, now is not the time to remortgage because…

You have little mortgage left to pay. If your debts are quite small, the fees involved in remortgaging will be high enough that it’s not worth the hassle of going through the process. Some mortgage lenders won’t even take on a mortgage if it’s for an amount below £25,000. Even if your interest rate is quite high, it might be worth powering through with your repayments if the end is in sight.

 The value of your house has dropped. And if you’ve not made significant headway into paying off your mortgage, it may be that you now own a smaller portion of your home’s value than you did to begin with. You might even be in negative equity, where your outstanding mortgage debt is higher than the value of the property. It is unbelievably difficult to remortgage if this is the case, so you may want to try and wait out the drop and see if the value of your property increases again. 

The early repayment rate is high. If you decide you’d like to remortgage and your incentive period isn’t over, a mortgage lender will charge you an extremely large fee for leaving. It could literally cost you thousands of pounds to change to a mortgage that will only save you a few hundreds of pounds in the long run, meaning you’re worse off after making the change. If you’re really set on leaving your current mortgage provider, speak to the lender and see if you can be switched to one of their other deals, which has a lower early repayment rate. Although the interim deal may not be the best one available to you, this will save you a small fortune when you do then remortgage with a different company.

However, remortgaging is a costly process. You need to pay an exit fee to your old lender, a joining fee to your new lender, and a couple more people like solicitors and valuators along the way to keep the process going. After weighing up all of these costs, you may discover that it’s actually more cost effective to remain with your current mortgage, at least for the time being. Therefore, you’ll need to work out the actual cost of remortgaging and compare this to the savings you’ll make by changing your mortgage rates.

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Top 7 Tips for Buying Life Insurance

The process of procuring life insurance is a confusing one and is a complicated part of financial planning. After all, when it’s a question of our families, only the best will do. In today’s day and age, there is a vast array of brands to choose from. A lot of variables have to be considered before making your final selection; such as which reliable, trusted company to choose or what quantity of premium to pay that will be more than sufficient for the members of your family. Once you immerse yourself in the buying cycle, you may find that the procedure is not as complex as it is made out to be. Allow us to share a few of our favourite tricks when purchasing life insurance that we hope will ease what is usually deemed a painful practice.

  1. Choose the Right Premium

What are your reasons for obtaining a life insurance policy? Engage in a little soul searching and have a conversation with yourself to analyse your objectives. Once you have a clear understanding, then you can go on to choose an optimal premium volume. Of course, your fiscal condition will have a critical bearing as well.

Premium structures can be broadly classified within two categories: stepped and level. The former increases with time as you age whilst the latter grows until the end of its term. The initial amount for stepped premiums are lower in value than their level counterparts. With level premiums, although you will commence your journey with higher outflows-by the end of the term, your premium expense will be lower than had you chosen stepped premiums.

Be vigilant and watch out for those little extras those savvy salesmen try to fit in to your policy. This will increase your overall cost. To make your life easier, get instant quotes from Life Insurance Guideline.

  1. Buy It Young

The best advice one can give you is to invest in life insurance at a youthful time in your life. Do not wait too long before beginning your research. Statistics reflect that most insurance claims are compensated to individuals between the age of thirty and forty,

  1. Compare Policies

There are many different kinds of policies out there that will catch your attention and potentially confuse you. Do not get caught in the endless web of information clutter and be prepared to wade through excessive data to find what is right for you and your family. Avoid comparing apples to oranges (in terms of life insurance products). Term life policies have a relatively lower cost as compared to a permanent life insurance portfolio. It comes with a lesser initial premium that may capture your interest but will not generate a high magnitude in the long term. On the other hand, cash value life insurance policies can range from variable life, whole life and universal life. There would be a colossal variance between a premium for a $70,000 term policy compared to a $70,000 permanent one. Scrutinize the insurance policy from all possible dimensions and select one based on your present as well as future requirements.

  1. Adapt Your Lifestyle

One way to effectively decrease your monthly premium is to implement positive changes in your way of living. Make healthier, more nutritious choices in your daily decisions on what to eat and whether to exercise or not. If you smoke, consider giving it up as a habit because your premiums will definitely be higher as you come with a higher risk of disease as compared to a non-smoker. We also recommend staying within healthy ranges of your body mass index as it will also have an impact on the financial cost of your insurance premium.

  1. Apply Bravely

A growing pool of life insurance prospects find the overall process to be an overwhelming and complex one. It calls for the open disclosure of your salary, your medical history, your life style and other personal information which you may not be comfortable sharing. However, given the nature of the service you are striving to engage, it is vital for you to be as transparent and as honest as possible. This will allow the insurance company to create an accurate risk profile and ascertain the cost of your premium accordingly. Do not hide any important details as it will eventually come to light. After all, the contemporary inventions of communication technology have narrowed global boundaries and made the world a smaller, highly inter-connected place. 

  1. Review Your Policies Consistently

As you grow older, your expectations and needs will evolve with time. In order to cater to your changing demands, it is advised to review your life insurance policies on an annual basis at least. What you think you may have needed at the age of 35 may not ring true twenty years later. You may want to upgrade or switch policies. Do not delay this process and review your life insurance product every year to evaluate whether it is still at par with your essentials.

  1. Choose A Renowned Policy Provider

The whole purpose of a life insurance policy is to anchor those who are left behind financially and not cause them stress on how to provide for themselves. It is critical and imperative to choose a company that has a reliable, trusted reputation in the market. Conduct a thorough investigation and begin by checking the service provider’s financial solvency. See what the company’s ranking is in a well-known insurance rating list. It will provide you with credible insights on its economic status and competence to pay claims in the future. Rating agencies function on different levels with individual standards and methods. It is advised to review more than one agency’s position on the company of your interest. Remember that as a consumer, you have a legal right to comprehend all the legal jargon and technicalities behind the policy in question before procuring it. Obtain all the information you can from your state regulatory authority that will help you in making a well-informed, optimal decision.

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