5 Situations When Personal Loans Can Save the Day

With a rock solid credit history, you can successfully apply for personal loans and expect a swift processing of the same for meeting temporary financial glitch in life. Personal loans are all-purpose loans that can be availed as secured or unsecured loans. These can be used for multiple reasons and the purpose need not be disclosed ever to the lender.

The interest rate of loan depends on the tenure and credit score of the borrower. These can be drawn for a few months to several years as per your requirement.

5 situations when you can use personal loans as a smart financial move:

  1. When you have immediate cash needs: It is practical to use short-term personal loans to bridge the shortage of funds in your life. You can use the funds to support any of the sudden cash emergencies like medical expenses, home repair or funding a foreign trip. The purpose of loan doesn’t affect its interest rate, however your income and duration of loan does. All you need here in a planning stage is to have a strong back up plan for repaying the loan. The repayment will improve your credit score and add to your future worth at the same time.
  2. To avoid bad credit situation: In case you have lost a job or face a sudden spurt of personal expenses such as a wedding or some other expense in your life, you can take recourse on personal loans. Bad credit is a situation you should always avoid. If you have shortage of funds, rather than missing a loan repayment you can borrow some funds. The idea is to not let the score fall for temporary financial challenges.
  3. Consolidate multiple payments: When you have multiple payments to be made every month, it is better to simplify the process by consolidating the loan into one personal loan. By consolidating loans, you just have to pay a single repayment and that will pay for other loans. Availing short-term loans for bad credit is a practical means to mend mounting debts and save a financial mess.
  4. Additional funding for students: Being a student it is not always easy to keep a track on your expenses. Sometimes you need funds for reasons that your education loan misses to pay for. Herein you can apply for short-term loans for students as these are readily available. The short-term loan can also be used as a right way for building a good history.
  5. Business funding: Every new start-up or a business entity needs positive inflows. You need to maintain adequate supply of funds for maintaining sound terms with your suppliers and business associates. The short-term personal loans can be used as business loans to keep the flexibility of operations in your business.

In all of the above cases, personal loans can be used to better manage your finances. However it is prudent that you carefully read terms and conditions of a loan agreement and do not sign a very expensive loan. In case you find yourself unable to make a mind on the loan terms, you should contact a loan broker for a financial advice. He would guide you on the ways to manage your funds and keep your credit score healthy.

What You Should Know Before Committing To A Secured Loan

The loan is secured by the lending company by way of ‘second charge’, which is a different regime compared to the main mortgage that holds the property on a ‘first charge’ basis. The latter is a legal arrangement in which the property securing the loan is registered with the Land Registry.

A homeowner loan obtained through this process can be used for anything the borrow wishes safe for illegal activities or purchases. However, second charge mortgages are usually restricted to funding home improvements or funding huge purchases such as car buying. Alternatively, second charge loans can be used to consolidate existing loans and help reduce the debt obligation of a struggling borrower.

With this arrangement, the borrower is expected to make regular monthly repayments throughout the life of the loan, which can run up to 25 years. The process of selling and administration of first charge secured loans is regulated by the Financial Conduct Authority (FCA) for a considerable length of time.

Today, second charge loans are now exclusively regulated by the FCA and are expected to conform to the same regulations, rules and procedures of ordinary mortgages. What this means is that borrowers will be expected to demonstrate that they can pay back both first charge ad second charge mortgages.

Who is Eligible for a Secured Second Charge Mortgage?

Do you have an existing secured loan(s) or mortgage loans that are currently running? Do you wish to borrow a huge amount of loan than what standard personal loans can provide? If your answers to the foregoing questions are the affirmative, then you are the right candidate for second charge mortgage loans. These loans can go up to £250,000 and are suitable for borrowers who have accumulated sufficient equity in their homes to guarantee the security needed for the loan.

What to Look for Before Taking Out a Second Charge Mortgage

There are numerous things that you need to know before taking a second charge mortgage loan. Here are some of the things to look out for:

By second charge, it means that any default can mean the lender taking you to court and instituting repossession procedures. When this happens, the first lender recoups his or her money back while the second lender gets thee remaining out of the sale of the repossessed home.

Second charge loans come with variable interest rates, meaning that borrowers need to exercise a lot of restraint, as the rates are likely to go up and down. If you have secured a loan that comes with variable rate, you are likely to suffer most if the rates go up, so it is important to assess your ability to pay before committing to this type of loan.

Debt is often perceived as the last option by most homeowners, but financial experts say it can prove to be the only way a borrower can get out of a financial problem in a short term. When you restructure your loan to increase the repayment period, you certainly lower the monthly repayments but increase the overall payment in the long term.

Compare thee Loans before Borrowing

After assessing your need for money (loan), you need to shop around for the best loans warehouse to understand the affordability and the conditions. You need to schedule an interview with various or selected loans agencies before you sign up. Remember that unsecured loans do not have interest rates similar to secured loan types. Unsecured loans have a maximum ceiling of up to £25,000 but this amount may vary from lender to lender and from borrower to borrower depending on the circumstances.

Make Your Decision

With a wide variety of loans available, it can be difficult to make a decision on which loan suits your needs. However, you need to evaluate your own situation based on income, need, outgoings and your credit scores. You may also need to consider if you have enough equity in your property and whether you need a long-term or short-term loan. Perhaps the most crucial question to ask is why you need the loan in the first place.

Borrowing For Your Own Needs

Almost every person who has ever lived has come up short on some payment or another at some point in their life. Sometimes it just feels like life has too many expenses and not enough income to go around. Knowing this, you should probably know how to obtain a personal loan in the event that you ever need one.

What A Personal Loan Looks Like
A personal loan is the type of money you borrowed based on trust in your word and signature. It is known as unsecured debt because you do not put up collateral to back up the fact that you intend to pay the loan back. The only thing saying that you will follow through on this is your promise to do so. As such, a lender has to have some pretty strong faith that you will pay them back. Either that or they will charge a high-interest rate for lending you the money.

Just about any lender is going to pull your credit history when they decide if they will lend you money or not. In fact, a lender that does not do this is probably going to charge you such a high-interest rate that you will wish you had never borrowed the money in the first place.

Borrowing From A Source You Can Trust
There are lenders who do not charge high rates and yet are still willing to lend personal loans to those that they can verify have a high likelihood of paying them back. These lenders are most often credit unions.

Credit unions are different from traditional banks in that they are not for profit. Instead, they are a group of people from the local community pulling together to create their own bank of sorts. These are a good place to turn to because they tend to have better rates on personal loans than do others. Since they are not concerned with profit, you know that they have your best interests at heart.

Provide Collateral If You Can
There is no question that providing collateral is a sure fire way to improve your odds of getting approved for a loan. There are plenty of things that a lender will consider as potential collateral. It could be a business that you own, a home, a car, motorcycle, or just about anything of significant value. The worst that they can do is say that something will not qualify as collateral with them, but that is unlikely so long as the thing you propose is traditional.

Collateral always gives a lender a little more peace of mind. They then at least understand that if you do fail to pay them back, at least they can take over whatever item of value it is that you have put up. It is the worst case for both you and the lender to have this happen, but it will help nudge them towards getting you approved for the loan. Check your inventory to see if you have something that just might qualify.

No Guarantor Loans: Pros and Cons That You Should Know

The UK online finance market is flooded with thousands of loans of different types. No guarantor loans are one of the most promising unsecured funds that people choose to fulfil their financial needs and overcome various crises. Now the question arises, are these funds viable and legitimate? Well, of course, these financing options are legitimate and approved by the Financial Conduct Authority (FCA). But, the problem is both certified and non-certified direct lenders offer these funds. The applicants have to be highly cautious if they want to get genuine and trouble-free cash.
No guarantor funds have various pros and cons that you should know before you apply:

Pros:

• No tough eligibility criteria. Any 18-75 years old resident in the UK can apply. CCJs, bankrupt, default, and bad credit customers are absolutely eligible.

• An easy and quick online application procedure with no hurdles. The applicants need to devote only 2 minutes to complete the application process. There is no need to go anywhere. No queues and no waiting.

• Loans for bad credit with no guarantor are especially designed for hopeless poor credit customers whose funding applications have been rejected by all traditional banks and other financing institutions.

• Gone are the days when you had to submit numerous documents to the lending company for getting the approval. Now, with the advent of financial technology (FinTech), paperwork has completely gone. You don’t even have to attach scanned copies with the online form.

• As the name suggests, you can access these funds without a guarantor. You don’t have to chase co-signers and plead them for co-signing your application.

• You don’t have to pledge any valuable assets to avail loans for people with bad credit.

• As the competition between the direct lenders is so high, you have a good chance to get an extra discount on the APR.

• You can get the fast approval as there is no credit check or the direct lending companies carry out the “soft credit check” only.

• Highly customised repayment modes don’t overburden the monthly budget of the borrower. You can repay the loan with no guarantor in easy installments.

Cons:

• Chances of a lending fraud are high as numerous non-certified direct lenders are offering bogus deals.

• The total cost is usually high due to the presence of extra charges i.e. lender’s fee, upfront fee, processing fee, and more.

Overall, no guarantor loans have various benefits that you can’t ignore. Yes, these funds have very few cons, but you can avoid them by applying to a reliable and certified direct lender.

Millie Brown is working as a lending consultant with a reputable direct lending company in the UK. He loves to share genuine information on various types of loans.

Invoice Factoring Vs Financing: Understand the Difference

Invoice factoring or financing? Cash-strapped businesses often find themselves in dilemma when they hear two strikingly similar terms consecutively. In a tight credit environment, companies are turning to certain non-banking alternatives so that they can smoothly run their businesses.

Out of all the tools available, invoice factoring and invoice financing are considered to be the most effective. These financing methods are getting more popular due to their non-complex nature. But businesses need to pick one to proceed successfully with their operations.

Let’s understand their meaning first…

Yes, they are different from each other. Factoring of invoices differs to financing of invoices in many ways.

In factoring, the commercial factoring company or lender purchases a business’ outstanding receivables. The lender can factor the advance anywhere between 70 to 90 percent at the time of the purchase. The balance – less factoring fee – is also released once the payments of the invoices are collected.

Under financing, the amount is secured by a pledge of those assets associated with accounts receivables. A borrowing base of 70 to 90 is established with a control management fee of 1 to 2 percent.

Coming to their differences…

Flexibility – Although the amount received is more or less same in both the cases, factoring offers more flexibility than financing, In the former’s case, business can pick and choose which invoices to factor. In the latter, the financing company will choose which invoice to clear.

Collateral – Invoice financing requires companies to submit all of its accounts receivables as collateral to the financing company. This is generally not the case with factoring.

Processing fee – Financing is usually cheaper than factoring. While only 1 to 2 percent is charged against the outstanding amount in case of former, it is 1 to 5 percent in case of the latter.

Both have their pros and cons. If you are a small business, factoring is the option you might have to go for because some invoice financing companies require a minimum of $75k sales a month to qualify.

Both these methods are a brilliant option to tackle your cash management issues. All you need to do is find the company which can fund you with the least processing charges. Factoring invoice companies can put a full stop to your cash crunch situations. They act like an engine of sales and growth and prevent hiccups that might halt business operations. The key here is to know when to get involved and when not to.

In 1985, 1st PMF Bancorp was founded as a family run lender providing factoring, but as our clients’ businesses expanded globally, PMF Bancorp expanded its services to provide credit and financing support for our clients domestic as well as international business needs.

What to Know About Loans

If someone wants to take a loan and asks for your advice, you probably are more than willing to help, but do you really know what a loan is, what you should know before plunging into the ocean of loans. Now we all know loans are available for the purchase of houses, consumer electronics, refurbishment, education, marriage, health and many other reasons that are not possible in your current budget.

The Big Question

This brings us to perhaps the biggest question that needs an answer. That question is- Is it worth taking a loan for vacations if it is paid back? The answer is NO. A loan is meant to make funds easy in the pocket but not for entertainment purposes. A loan should only be used for productive reasons and a vacation is not on the list. A loan should only be used for buying a commodity like house, car or to pay a big utility bill.

Point to Consider

One should consider taking a loan only if it is really required. After all, there is no sense in paying interest for a long period, unless required. If you still need to take a loan, do consider the below questions:

1- Who can get a loan: Generally, as long as you can pay the loan back, you’re eligible. Even a minor can under guardian supervision. A bank makes a decision according to your monthly income. If you are taking from an outsource, then it depends on your income or what you are keeping against the loan, like a loan against gold or property.

2- Rate of interest: Usually the first place to take a loan from us the bank you have an account with. Though this seems like the best way to avail a loan, still if you do a little research on other possibilities like online possibilities, is not a bad option.

3- Suitable EMI: If you avail a loan from the bank, the EMI is set basically according to the monthly payment you have with you after deducting any taxes like income tax etc. A suitable EMI deduction for you should be 10% of your monthly income so you still have an adequate amount of money for other bills and expenses. Hence, a little money management can help you increase the EMI to 30% and clear your loan sooner.

4- Loan Against Property/Gold: Loan against property or gold is given on part of the full value of the property or gold. Say your gold item is 15,000. You can easily get a loan of 10,000 on it.

What It Really Brings to the Table

In today’s time of rising costs of goods, many people are always ready to bargain. What if you are falling short on funds and could not bargain with a money provider? If you are going through the financial difficulties, there is no doubt that taking out a loan will be your last choice. However, you may try to borrow funds from your friend or family member once. The chances are high that you will go back empty hands as your loved ones also have their own concerns. In that case, what you can do is to seek the assistance of a loan.

The reasons can be many due to which you require an easy loan option. Whether you are getting it for a personal need or you just simply need to fund your business expenses, the loan will surely help you to achieve your goal without any setback. In fact, the loan gives you an opportunity to execute your plans and overcome the financial pressure.

Some Questions that May Disturb You

Now you might be wondering which kind of loan alternative comes easily? What about getting the installment loans? Will you consider these loans when it actually comes to borrowing funds without any hurdle? Interested to know more about how such loans can help you out of the crisis? Before you proceed, it does make a sense to know that the funds are acquired on certain factors and your past credit record is one of them. But the need for funds can pop up anytime even if you have a poor credit score. Financial emergencies never ask about your credit score before entering your life. Fortunately, you can easily borrow the money with these loans irrespective of your poor credit score.

There is no denying that the installment loans for bad credit borrowers offer quick financial assistance. No matter how you want to use the money, the loans ensure that your adverse credit score will not stand in the way of your financial well-being. As your credit score is not satisfactory, the loan works effectively by providing you with the cash and also give you a chance to boost your credit rating. The loan is unsecured and you require no collateral to qualify for. If in case you desire to borrow a large amount, then the lender will ask for security. In fact, there are a few lenders, who are ready to serve these loans on better terms and this is what matters in the end.

More about the Loan Features

After clearing your doubts, you might be excited to avail the loans. To meet your purpose of having a financially satisfied life, it seems vital to know a little more about the features of this credible financial resource. Every loan alternative has different features and qualities. The first thing that you should know about the loan is that the lenders do not usually prefer to verify your credit record and this is what provides instant financial respite to those who have been denied for money. If you are in a struggle to win over the situations that increase financial burden, there is good news for you that you are not obliged to convince any person to act as your guarantor. Providing collateral is also not obligatory if you are planning to avail loans for the short term emergencies.

Now guess what feature is going to surprise you next? One of the great features of such loan alternatives is that you can apply in both secured and unsecured format. The loans are multidimensional and can be used to meet short term expenses as well as your long term desires. The loans are the best alternatives to payday loans as they are offered with the flexibility and a simple repayment schedule that do not put an extra burden on your monthly budget. For securing guaranteed approval on these sorts of loans, you are not actually supposed to undertake any stress.

Help Yourself by Finding the Right Lending Company

Since your repayment schedule is fixed, you can easily make your budget and pay back the borrowed amount in scheduled time. To qualify for the installment loans, you only require to be employed, have a valid number and have an active savings account. Now you do not need to stress over where the instant cash flow will come from and start searching online for the right lending company.

Applying for the loans is quite easy since the entire process is online and you do not need to take off from the work. The online application will proceed quickly and you can receive the exact amount of money that you need on time. Look for the genuine lender, who is interested in assisting you to meet your borrowing needs and brings you the desired financial relief.

You can simply make the use of the internet to find out the ideal loan deals at convenient lending term. This means that a comprehensive research will indeed help you to get the affordable loan product and achieve the financial goals.

Easy Loans UK is providing customised loan deals to ease the financial burden of people, who are struggling to deal with the emergencies. We are offering an easy loan with attractive terms and you are not required to arrange any document.

Other Hidden Fees To Watch Out for With Invoice Factoring Financing

The simplicity of invoice factoring financing often gives merchants the opportunity to extract more money from businesses. Business owners interested in factoring their invoices often end up paying more than what they are supposed to. This is made possible with the help of various hidden fees which merchant can try including in the processing of invoices.

Some additional fees that can be charged beyond the discount rate are:

Application fees – A business owner is required to fill out an application describing all the details of the company, details of invoice, and client info. While this process generally requires no additional charges, spammy companies make it mandatory for their customer to pay this amount when they are looking for factoring their invoices.

Overdue fees – Often merchants charge you an overdue fee for those clients whose payments are not yet cleared. Since there is already an unpaid invoice with the client, companies take this opportunity to include another malicious fee.

Credit check fees – During preliminary approvals and verification process, clients run a background check on you as well the client on whose name the invoice was issued. A credit check in another responsibility of the factoring company and no money is charged in the process.

Mailing fees – For all mailing and document related work, companies also try to include mailing fees. If the factor contacts your clients and follows up for payment, you are not liable to pay any charges whatsoever. There are no mailing fees associated with A/R financing.

If you are charged with these or related fees anywhere else, it means you are not at the right invoice factoring financing corporation.

The only fee associated with factoring is the processing fee, which generally is 1-5%. Although there are a lot of determinants in case of factoring, the processing of this method is very simple and fees is one. Other than that, there are no significant fees that discount invoicing companies charge their customers with.

Watch out for these fake features and make sure that your company is not among the ones where unnecessary fees pile up as most fees should be paid after funding is working smoothly, not before funding starts. Authentic companies understand your business and, therefore, asks you for the processing fees only. Keeping all things similar, you need to make sure that you get the maximum out of your invoices. Go for companies who offer simple, transparent pricing with no or zero hidden fees.

In 1985, 1st PMF Bancorp was founded as a family run lender providing factoring, but as our clients’ businesses expanded globally, PMF Bancorp expanded its services to provide credit and financing support for our clients domestic as well as international business needs.

How to Cope With Loan Rejection and a Poor Credit Rating

A lot of factors including your credit score, past credit history, debt to income ratio and credit appetite determine your credit worth; while credit score is considered as a major factor for approval of loan. With low score, your chances for loan approval are also low.

Often times we get to know about low credit score only after loan rejection. Once your loan application is rejected it becomes difficult to get it approved by another lender soon. In fact it can take enough time to improve your score and improve your loan eligibility. Thus, in face of urgent cash requirements, you need to take some financially prudent steps to deal with loan rejection and improve your credit rating.

Some of the common reasons for loan rejection

Bad credit history and low score: When you fail (or delay) to pay your past loan instalments or credit bills, the lender assumes that you are incapable of repaying the loan on time.

Low monthly income: When you have high debt to income ratio, your monthly income appears insufficient to manage the additional debt burden.

Errors in application: Whether intentional or otherwise, flawed details in your application would result in loan rejection.

Too many unsecured loans: When you have more unsecured loans as compared to secured loans, your application for personal loan is bound to be rejected. Herein pledging collateral can help you get a secured personal loan. In fact a lot of borrowers even opt for online secured homeowner loans (second charge) despite bad credit.

How to improve your loan application and avoid future rejection?

Look beyond main street lenders: Post loan rejection, it is important to work on your profile before applying for loan to other lenders. If your requirement for funds is an urgent one, consider applying to private loan partners online. Unlike main street lenders, the FinTech players have less stringent eligibility criterion.

Use online eligibility calculators: You can either check your loan eligibility online using eligibility calculators available on various loan brokers’ websites or contact a broker and ask for referrals.

Pull out your credit report: You must also analyse your credit report. Sometimes errors in report also lead to loan rejection. Herein disputing the error can help you improve your score and get the loan approved later on.

Check your score: When you pull out your credit report, it doesn’t make any footprint in your credit report as it raises only a soft query. The better is the score, the better deal you would get.

Build good history: One of the best ways to improve your score is building good credit history. You must ensure timely repayment of loans and credit bills. Consider using automated repayments via a bank account for this. Most people fail to realise that delayed, partial or rolled over credit card bill also negatively affects their score.

Do not exhaust your credit limit: Crossing your credit limit every month is another common mistake. To keep your score healthy, do not use over 30% of the credit limit each month.

Do not make multiple loan queries: When you apply for multiple loans in a short period, it makes you look credit hungry to lenders. Thus always enquire for loans after assessing your credit needs.

Keeping track of all these details along with proper documentation, you can certainly get instant loan approval. Not to forget you can also use a licensed loan broker’s advice to locate the best deals available near you. You can compare and choose the best fit loan according to your credit needs.

Why You Need a Low Interest Rate Business Loan

Refinancing is one of the best things you can do for your business because it reduces your loan costs overall. However, this is not the only benefit that your business can enjoy. There are many things that you will enjoy with refinancing and they include:

  • Reduction of interest rates

This is a very common goal for many businesses that have short-term loans or even a cash advance. The cost of short-term loans makes them rather unsustainable for a long time. A small consolidation loan has a lower APR than other short-term financing options.

  • Low monthly payments

This option comes with much lower monthly payments and this eases the strains that you may be having to your cash flow. This, in turn, means that you will have some extra cash to put into your operating expenses and any other opportunities that may come unexpectedly. You may find that you do not need any more borrowing in the near future. These loans have a longer payment term and a lower APR.

  • Additional borrowing

When your business gets this kind of financing, you may qualify for another loan. This is due to the APR that has been lowered and a much longer repayment period that increases the debt service coverage ratio of the business. It is not uncommon for a business to need some more working capital when they are consolidating their debt. This additional capital helps them to handle anything that comes unexpectedly. This prevents the business from getting a short-term loan that is rather expensive in future.

  • Cash flow management simplification

There are different ways in which this kind of loan can help you with cash flow management. Instead of juggling different creditors at the same time, you will only have to deal with one account. The other thing is that you will only have to make a single payment per month. Because of the longer payment period and a lowered rate, your monthly debt is lowered greatly.

  • Free up the credit lines

There are revolving business lines of credit such as credit cards and they are extremely useful tools for management of cash flow. They allow the business to be flexible in spending since they are interest-free as long as the card is paid every month. When you build a balance, then you end up losing that flexibility. If you lose this, then the debt repayments can also be quite expensive.

You should consider consolidating the credit card loan to make the payment a lot more affordable. You will have freed up the credit line very easily your line of credit can be put to work once more. This braces you for any unforeseen situations.

  • Predictability of the payments

Most of the consolidated loans have a variable interest rate, meaning that payment may change from time to time. You may not be able to budget the amount of each repayment deadline. This may be frustrating, especially when you have to pay more than you anticipated.

When you have a consolidated business loan, the interest rate is fixed, meaning that you can budget your loans all through the period.