Tag Archives: debt
Futureproofing Your Finances: A Graduate's Guide (Page 1 of 2)
With every passing year, employers place more and more importance on the ‘right’ degree, even for entry-level positions, so it is little wonder that more school leavers than ever before are choosing to continue with Higher Education.
Since the UK government abolished means-tested maintenance grants in 1998 and introduced tuition fees soon afterwards, the cost of getting a degree has increased exponentially, with an alarming proportion of new graduates leaving university tens of thousands of pounds in debt. The future looks bleak for the current generation of graduates. The ‘job for life’ has become the stuff of legend, and state pensions are at risk of being phased out.
It’s easy to put off getting your finances properly on track, especially if you’re working full-time and managing to keep your head above water, but those loans and overdrafts that were so easy to get when you were a fresh-faced eighteen-year-old need to be dealt with now if you want to enjoy a decent lifestyle by the time you are middle-aged.
We’ve identified some of the key things you can do to get on the road to financial freedom as soon as possible.
Make a plan
List your short-term and long term life goals. Do you want to be able to afford a new car or invest in property? Start a business? Get married or have children? Having a rough idea of the direction you want your future to take will provide the framework on which to base many important decisions.
Kill your debts
This one is vital! As long as you owe people money, you will feel like they own you. If you have outstanding student loans, bad credit cards, unpaid bills or similar debts, ignoring them will only make them grow bigger, and if all you can afford to pay is the minimum charge every month, all you will be doing is paying off interest without ever repaying the original loan. It’s important to break out of the cycle of debt, but it can also be a very daunting prospect, especially if you are being harassed by many creditors. If you can’t find enough hours in the day to organise repaying your debts properly, or simply feel you don’t know where to start, it’s worth finding a personal debt management firm to help you get back into the black. As long as you are in debt you will not be able to save any money, which brings us to:
Start Saving Now
We’re not saying that you shouldn’t spend money on consoles, new stereos and so on but at least make sure you put aside 10% of your salary in a savings account for use in future emergencies. We don’t want to sound fatalistic, but there will always be future emergencies!
Cut Day to Day Expenditure
The internet offers hundreds of ways to save on all manner of products and services. There are price comparison websites, sites that collect discount voucher codes that you can use when ordering all manner of things online, from new PCs to take-away pizza. If you find a voucher online that saves you some money, put that money into your savings fund as well. Sites like MoneySavingExpert are dedicated to helping consumers claw back as much money as possible from the corporations.
What is a Secured Loan and what are the risks? (Page 1 of 2)
A Secured Loan is a loan secured on the homeowners property very much in the same way as a Mortgage is. A Mortgage on a property is known as the 1st Charge a Secured Loan therefore becomes the 2nd Charge. If a Secured Loan is never paid then obviously the Homeowners home is at risk. With the Mortgage company having the 1st charge they therefore reclaim their money first. A Secured Loan Lender would then follow as they are the 2nd charge. It is worth remembering that a Mortgage and Secured Loan Company would only ever repossess a property as a last resort.
A Secured Loan is ideal for Homeowners who are looking to raise finance by using their home as security. Traditionally a Secured Loan can provide Homeowners with a lower APR than that of an Unsecured Loan. Obviously a Loan Lenders APR varies depending on the personal circumstances of the applicant. A Secured Loan can be used for a variety of purposes. The most common Secured Loan purposes are for Home Improvements and for Debt Consolidation.
Home Improvement Secured Loan
A loan that is secured on the applicants home address for the purpose of Home Improvements. The loan can be used for a new conservatory, renovations, extension or simply for double glazing. Almost any form of home improvements can be funded by a secured loan. You may find that some secured loan lenders will require proof of what you will be using the funds for. This can be provided by simply gaining a written quote from someone who you are looking to have the work done by. Chances are a Home Improvement Secured Loan will actually increase the value of your property so it will be money well invested.
Debt Consolidation Loan
A loan that is secured on the applicants home address for the purpose of Debt Consolidation. The loan is generally used to consolidate (pay off) all existing credit by putting it into one secured loan and this generally reduces the monthly payments and therefore frees up more of your monthly income to use for more exciting purposes than clearing credit cards, store cards, loans or hire purchases! Sometimes the only way in which the monthly payments can be reduced is by taking the Secured Loan over a longer period than what the existing credit is currently on. This can increase the amount in total that you will pay back but customers who take a Debt Consolidation Loan generally are more interested in the reduced monthly outgoing on credit.
A Secured Loan can be used for other purposes besides Debt Consolidation and Home Improvements. They can also be used for a Car, Holiday or Wedding. Generally Secured Loan lenders do not raise finance for Business. For a Business Loan it may be a better route to contact your local Bank or Building Society. Why would I want a Secured Loan instead of an Unsecured Loan?
There are many reasons why.
Repayment Period A Secured Loan can normally be taken over a longer period than that of an unsecured personal loan. Unsecured Loans can normally only be taken over a maximum of 7 or 10 years. Some Secured Loan Lenders will allow the applicant to take the finance over a 30 year period and most will allow the finance to be spread over 25 years worth of payments. Obviously by taking the loan over a longer period reduces the monthly payment to the applicant although you must remember the longer you take the loan over the more interest you will pay.