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Loan Modification Procedures
When you are in a period of extreme financial difficulty, it may be best for you to look into a possible loan modification procedure.
While it is not initially easy to be approved for a loan modification procedure, it may be in your best interests to try to at least obtain some information from your bank. Many banks are more than willing to work with you and your financial needs, especially since they want to ensure that you will continue to make your scheduled monthly payments on your loan.
The first step in the loan modification procedure is approval. In order to be approved for a loan modification, you have to prove that you are currently experiencing a period of extreme financial difficulty. Possible reasons for financial difficulty may include:
Accidental Injury
Unexpected Medical Expenses
Unemployment, Company Lay-Off
Death of family member
General Financial hardship
No matter what the reason is for your financial situation, it is very important that you document your financial problems with paperwork. If necessary, bring copies of your payment receipts, medical receipts, written documentation of your financial situation, bank statements, etc. These documents will aid you greatly in proving to your bank that you are currently unable to make your scheduled monthly payments.
Once the bank has approved your request for a loan modification, there is a period where they may communicate with you on acceptable terms for the modification of your loan. It’s very important that you thoroughly examine any changes that your bank may make to your loan, as it is sometimes common for the negotiated payment amount to be higher than the initial amount.
This may be an attempt from the bank for you to pay off your balance sooner, since you are now regarded as “high-risk” because of your financial situation. It’s very important to let your bank know exactly what you can afford each month, as this will ensure that a beneficial decision is reached for both you and your bank.
In some cases, you may have an existing loan with a company that does not offer loan modification procedures. If this is the case, you may have to either prioritize your other finances around this loan payment, or let the company know that you are no longer able to make the payments. Since most companies prefer to receive their money without the aid of collection agencies, this may help them to negotiate a decision to work with you and your finances.
UK Pawnshops: Traditional Vs. Modern Way Of Lending
As the recession continues to hurt the economy, we will continue seeing shops close left and right. However, there is a particular industry that is booming and has since expanded to become one of the most promising industries.
Since last year, the National Pawnbrokers Association has reported an estimated 8% growth in the pawnshop industry in UK as more and more middle to high class individuals turn to pawnshops as a way to get money in exchange of personal assets.
Through the years, it has long since evolved from a simple street corner business to a sophisticated and high end contract between a borrower and creditor. Pawnbroking services can vary depending on the pawnshops. There are those that accept wine collections or premium aged cheese as collateral.
Currently there are two types of pawnshops operating in UK:
Brick and Mortar The traditional way of doing business. A borrower goes to a pawn shop to have their valuables appraised. Transactions are done on a face to face basis where both parties agree on a specific contract. The benefit of doing business with a brick and mortar pawnshop is that the borrower can build a relationship with the lender that can be beneficial for both. A borrower can easily get an extension on the due date or a lower interest rate if he has shown credible payment history and is considered as a regular by the owner. Lenders can get additional clients through referrals made by the borrower. It can also build reputation and increase clients in the long run. The downside of doing this kind of business is that you cannot easily expand and have immediate access to other clients and clients have to personally go to a store to have an item pawned.
Online – With the evolution of technology, pawnbroking can now be done through online transaction. Borrowers no longer need to go personally to a shop to have their valuables appraised. By doing online transaction, appraisal and delivery of pawned items and exchange of money can be done with a simple click of the mouse. It is all about convenience and making it easier and faster for the client. Furthermore, it gives access to a wider market as it makes it easier for other people to try borrowing from a pawnshop. The downside of doing this kind of business is that it does not go beyond a professional service.
Although service can be impeccable, it strictly follows certain policies and rules that can be a bit stifling and irritating for clients. Another cause for worry is that vital information such as address and name is being sent online, which makes it vulnerable to hackers and other internet savvy individuals.