57 articles Articles posted in Money

Why Passive Income is Your Road to Financial Independence

Most of us have to work daily to earn enough income to fund our lifestyle. Unless you are one of the fortunate few that are born into wealth, true financial independence is often a distant dream and the primary goal is to make it to retirement.

But it doesn’t have to be that way. Changing your perception of what work is can be a radical first step to financial independence. What if you didn’t have to work for somebody else? What if income wasn’t tied to the daily grind?

Enter passive income – your road to financial independence.

Once an initial contribution of energy, time, and financial investment is made, you can earn income passively. This means the money continues to come-in consistently, automatically, and with little ongoing maintenance.

If you can create a passive income, especially when young, it is easy to see why financial independence looks more attainable.

Passive Income Is Everywhere

Passive income opportunities are everywhere; from affiliate marketing online, to renting out property, to getting paid dividends from stock. The trick is to make your career and financial decisions revolve around potential passive income streams. Take classes in real estate, not history. Invest your savings, don’t leave them in a regular bank account. Work extra hard now so you can reap the benefits later.

Here are 4 of those benefits that passive income can bring you …

1) Prevent Financial Emergencies

A core piece of financial advice is to create an emergency savings account that you can turn to if you lose your job, are faced with unexpected bills and expenses, get stuck in a natural disaster, are going through a divorce, or a faced with any other kind of financial emergency.

You can also find 1,000 dollar loans online via sites like WeGot1000 to help bridge the gap.

While this advice is still solid if you have a passive income stream, you may never even view any of these situations as true financial emergencies and you might not even need a loan. Not only do you have a safety net, but that safety net keeps on replenishing itself regardless of your circumstances.

If you lose your day job, you can rely on passive income until you find another. If that car payment comes out earlier than expected, you can bridge the gap. Need to ditch everything and get away from a hurricane?  You still have money coming in.

Of course, every situation is different and even with a passive income you can still end up struggling, but you’re in a much better position than those who rely solely on a weekly or monthly wage, tied to their ongoing effort.

If the potential for financial emergencies is reduced, your road to financial independence is a lot smoother.

2) Create Investment Opportunities

A lot of people like the sound of investing. Who doesn’t want more money? The trouble is to invest you need capital to begin with, and you need to be prepared to risk that money because even the soundest of investments can result in a loss.

If you have a passive income alongside a regular job, you can use the passive income to invest. Your wage or salary covers your day to day lifestyle and your passive income can be used to experiment and generate more wealth in the long-run.

The main point is that passive income gives you more financial freedom.

3) Allow You to Find Other Revenue Streams

Usually, when you work a regular job (even a high-powered one), it takes up the majority of your time. You may find if you’re particularly driven that you can get something else going on the side, but there’s not much else you can do after that. There’s only so many hours in a day.

However, if you use your extra time to create a passive income stream and eventually you find success, you then have the freedom to repeat the process. This is because passive income, once it is up and running, takes minimal effort to maintain.

In theory, you can have an unlimited amount of passive income streams, or at least until the point where you’ve found a balance between maintaining them all and not feeling overwhelmed.

Of course, by then you can probably afford to …

4) Allow You to Quit your Day Job

If you have built a stable passive income that can sustain you, then there’s no reason to be working a regular 9 to 5 job. Financial independence is all about having enough wealth to live on comfortably without working. Passive income can accomplish this.

That’s not to say you’ll get there right away, but as you venture on the journey, things will get easier. Before quitting your job outright, you may have the freedom to quit a dead-end job and do something that you enjoy that pays less.

 And even if you don’t retire as the head of a billion-dollar empire, whatever passive income you do have will continue into old age if managed correctly.

It’s a Snowball Effect

As you can see, the brilliance of passive income is that it creates a financial snowball effect. A small passive income on the side gives you the freedom to create another, which gives you the money to invest, which earns you enough to quit your job, which gives you more free time to develop more passive income streams – your wealth continues to accumulate and you reach financial independence.

Now you have the time to travel, start a family, be creative without the pressure of making money, and thoroughly enjoy life.

Start Your Journey Now!

Now you know what passive income can do for you, it’s time to start. The best mindset to have is that of a bodybuilder – no pain no gain. In the beginning, you need to force yourself to live frugally and save every last penny, to have enough capital to get started.

The rest is up to you.

5 Ways to Boost Your Finances in 2018

No matter what happened in 2017, a new year has begun. For many people, organising theirfinances will be a new year’s resolution. After all, Christmas is an expensive time of year and we can end up spending huge amounts of money over the festive season.

January can be a tough month for finance, but it doesn’t have to be. PPI claims, gathering unwanted gifts and reviewing your current account is all part of the plan to have a healthy bank balance in 2018.

It’s important to have some extra money to pay for financial emergencies and events throughout the year. Thankfully, there are some great ways to boost your finances this year — and these five ideas can all be done right now! So, why put off getting that cash boost?

  • Try a New Way of Saving

The website Apartment Therapy came up with a new way of saving in small amounts. It’s a simple, yet effective way for people to save money from the very first day of the year to the very last. It’s not too late to start either! It’ll be incredibly easy to get on schedule quickly if you start soon.

The idea is simple: For each day of the week, you save some money. You increase the amount saved each day, but when the week restarts, you start all over again. The amounts below are the recommendations about how much to set aside every day:

Sunday £1

Monday £2

Tuesday £3

Wednesday £4

Thursday £5

Friday £6

Saturday £7

When Sunday arrives, you start back at £1. This way of savings means you will have £28 a week, equating to nearly £1500 by the end of the year. Find a big piggy bank or set up a direct debit to a savings account and add £28 a week. You’ll be so grateful by the end of the year and taking it out in small amounts every week can make the saving that much easier.

  • Make a PPI Claim Today

The PPI deadline is getting ever closer. While we’ve all seen and heard the adverts about payment protection insurance claims, the reality is that there are still thousands of people who haven’t claimed PPI. Many consumers were unaware that PPI was sold to them alongside a mortgage, credit card or loan. It’s so important to check old bank statements and find out if you’re due a refund. It could well be thousands of pounds; a substantial amount to boost your 2018 finances. Even if you no longer have the paperwork, you can still find out if PPI was added to your account.  Make your PPI claim today before it’s too late!

  • Sell Unwanted Christmas Gifts

Are there still some Christmas gifts at home which you know you won’t ever get around to using? Those bath salts from your secret Santa might be lovely, but you’re not really a bath person. Selling unwanted Christmas gifts is an excellent way to make some extra money and make sure the gift doesn’t go to waste. Using eBay or even Facebook to sell gifts can be a good boost of income and is very simple.

  • Cash in on Gift Cards

Instead of presents, you may have received some gift cards for Christmas. Some of these can be really useful, but, if you got a gift card for a shop you rarely use, you can cash it in online. Websites such as Zeek will show you various options about how to get cash for your gift cards. Although you’ll never receive the full price, the cash can sometimes be much more worthwhile than the card.

  • Switch Current Accounts

Years ago, the thought of switching current accounts was too much effort. Now, however, thanks to the Current Account switch guarantee, changing current accounts is swift and easy. Most banks are signed up to the switching guarantee, making it a painless experience.

The best part about switching bank accounts is the great rates that banks offer to entice you. Rates do change regularly and there are terms and conditions, so be sure to check on websites such as Money Saving Expert for the best deal.

So, why put off getting some extra cash in 2018? Whether you’re possibly due a huge refund from PPI claims or can sell £50 worth of unwanted Christmas gifts, making use of these finance-boosting tips can make a huge difference. Start making money today!

How to Save Money Faster: Three Quick Tips

Having some money saved up is undoubtedly the key to better financial security, and for many people, saving up is essential for making big purchases such as a new house, new car, or a dream vacation. Whether you’re saving up for something specific or simply want the added security of knowing that you have some cash stashed away for emergencies, saving money regularly is an excellent habit to develop.

However, putting money aside is not always the easiest, especially if you are struggling with high living costs. Thankfully, there are several smart things that you can do to help your savings grow faster. We’ve rounded up some top tips for faster and more effective saving.

Tip #1. Choose a High-Interest Savings Account

If you’re looking for a new account in which to put your hard-earned savings, then it’s a good idea to choose an option with the highest amount of interest available. As you pay money into your savings account, you’ll also be able to earn money on it. And, the longer that the money is in there, the more you’ll be able to earn. A higher interest rate means better earnings for you.

Some accounts, such as stocks and bonds accounts, will require you to lock the money away for a certain period of time, during which you’ll be unable to access it. However, you will be rewarded with a higher interest rate when your account reaches maturity. Follow the link for more information on choosing the best savings account.

Tip #2. Sell Your Old Stuff

One great way to make some extra cash to put into your savings account is to go through your old belongings and see what you can sell. Chances are, you have items in your home that you no longer have any use for, such as old clothes and shoes, DVDs, gadgets, video games, books, and even essential household items. If you’ve upgraded something such as your television or smartphone, then don’t just simply throw the old one away – you can earn some cash back for it on sites such as eBay or Craigslist that can then be put into your savings account.

Tip #3. Cut Your Monthly Expenses

If you’d like to be able to put more money away into your savings account each month, then the first place to start is by cutting down as many monthly expenses as you can and putting the extra money that you save away instead. There are many different ways in which you can ensure that you are spending less each month.

For example, you can actually save thousands of dollars per year by switching to taking a packed lunch to work, or preparing your own coffee instead of going to Starbucks. Check out comparison sites to see if switching could drive down your utility bills, and call up your cell phone network provider to ask about moving on to a cheaper plan if you feel that you could manage just as well with fewer minutes or data.

If you liked these tips, please let us know!

 

4 Key Reasons That End You in Debt

Most people scream and yell when debt overburdens them. The biggest issue is that they never realize why they ended up in a bad debt situation in the first place. To come up with a solution, it is important to eliminate the cause. Once you overcome the cause, only then you can bring back the financial stability in your life.

We will look at some of the reasons that lead to debt issues in the first place.

Causes Of Debt Piling Up

Spending beyond your means

The biggest reason most people out there end up with debt is overspending.This usually happens when you do not define your budget. When there is no planning and budget, then you are bound to be spending beyond your means.

Absence of insurance

There are times when you ignore the need for insurance. This is why you end up with a bad financial situation in the first place. If you have health insurance, then you can deal with the unexpected medical expenses coming your way. When you do not have health insurance, this can be catastrophic.

Same holds true for businesses. If they have insurance, they can deal with the unexpected financial issues.

 Medical cost

 Sometimes you have to undergo an emergency medical procedure. This is one more reason that you end up dealing with unexpected expenses and end up with debt.

 Having insufficient financial knowledge

When people do not have enough financial knowledge, they end up making the wrong decisions and end up with debt.

 Here it is important that we should look at the uncontrollable factors also that lead to a bad financial situation. Inflation is one of the key reasons. The cost of living goes up almost every year. This is why people have to go beyond their means to handle the living costs.

 Another issue is local taxes continue to increase. This is also another element that cannot be controlled by individuals.

The wise move on your part will be to adopt the proactive approach. When you notice that your debt has started to pile up, approach a good debt settlement company right away. You should not wait for the situation to get worse.

However, it is important that you should check out the reputation of a debt management company before you make your selection. The best way to check out the reputation is by looking at the reviews about the company.

For example, you can go through the cura debt reviews. Once you have gone through the reviews, the free consultation should be the next step. This way you will get the idea if the company holds the ability to handle your case.

It is also important that you should be honest and upfront about your debt issues. Otherwise, the company will not be able to assist you much. Discuss your concerns with the debt management company, and they will make sure that they present the most feasible solution that suits your needs by all means for sure.

Make sure that you take your first step towards debt settlement and you will contend with your move.

Think Their Lives Are Better? Think Again!

It’s always easy to look at  life through rose tinted glasses, isn’t it? When you’re having a bad day, you might think that you drew the short straw, and that others have got it easy. But that’s not necessarily the case. You may look at the lives of others and think that they’re better than yours, but remember, you’re not always getting the whole picture.

Happiness

When your friends, family, colleagues, or neighbors always seem so happy, it can drive you insane. It may also make you believe that they’re so much happier in life than you are, but again, that may not be the case. They could be suffering from a lot of issues, but they just keep it all in. Everyone has their demons, so don’t just assume that they’re not.

Love

Comparing your love life is never a good idea. When you’ve argued with your other half, it’s easy to assume that you’re unhappy and better off without them – especially when others seem so happy. Because the grass must be greener, right? Wrong! Love isn’t easy to judge, because you never really know what goes on behind closed doors.

Money

When you see your neighbours with a new car, or your best friend with a new bag, you’re probably always wondering where they get their money from. But you don’t know if they’re drowning in debt! So don’t assume. Not even with your favourite TV characters. Because as the below infographic shows us, even their financial situations may not be as rosy in real life.


Infographic: How Much Money Would These TV Characters Make In Real Life?

Home Buy and Sell Is No Big Deal – Thanks To Conveyancing Solicitors

Buying or selling any property is always stressful and complicated no matter you are doing it for the first time.

However, the hassle is all gone now.

Thanks to the conveyancing solicitors.

They are there to help you with the procedures of sale and purchase of a home and make the process carry on as quickly and smoothly as possible.

You can visit https://www.woodgrangesolicitors.co.uk to know more about how the conveyancing solicitors help out with law and client’s requirements.

Experience with conveyancing solicitor

The conveyancing solicitor will help you with tackling the formalities related to the sale of any property and will make sure that your deal is completed smoothly and quickly.

Choose your solicitor carefully and make sure that he is completely aware of the complexities of the law. He will be your expert advisor in the matters related to home sale and purchase.

Sit back and relax- Conveyancing solicitor got you covered

You can have a peace of mind and expect seamless and hassle- free transaction.

Feel free to resolve any query from your conveyancing solicitor at any point in the process. Moreover, do make sure that accurate and clear estimate of costs is provided to you which includes all legal fees and the stamp duty.

Advice for remortgage

You can feel the need to remortgaging any time.

You may need money for something else and borrow money against your property for that matter, or you can also wish to change your lender, or any other issue or reason can cause you to think of remortgaging.

A conveyancing solicitor will provide you with a sound and legally sensible advice and make the process effortless and straightforward for you.

Advice for equity transfer

Your conveyancing solicitor will also guide you about the equity transfer.

If there are more than one owners of a property and someone wants to sell his interest to another person due to any reason, then the solicitor will help in the equity transfer process.

Other than this, the experts can also advise you on other matters related to shared property ownership.

Advice for lease drafting

You can face certain occasions where the leaseholders or freeholders want to make changes to the lease which may include the leasehold and lease extensions authorization.

In such scenario, there is no need to worry about anything, and the best option is to let experts take care of matters. The conveyancing solicitors will take care of the drafting and negotiations.

Moreover, they will tell you about your rights and responsibilities under the new lease terms too.

Mortgage Transactions

If you want to purchase a home via Islamic Mortgage, then you need to have economic pragmatism while remaining compliant with Sharia Law principles.

If you wish to buy home with such Islamic mortgage system, then you need to pick up your conveyancing solicitor carefully after making sure that the person you are hiring is aware of all facets of mortgage law so that the things run smoothly.

In this way, you will have the best outcome on your behalf.

How to Create a Budget

You want to create a budget, but where do you start? If you’re not financially savvy, creating a budget can be intimidating. Whether you want to save for a mortgage or you have tax debt you need to take care, reach your goals by following these simple tips.

Determine Your Net Income

It’s easy to overestimate your budget if you don’t make an accurate assessment of your income. Instead of incorporating your entire salary into your budget, calculate your net income by subtracting Social Security, taxes, 401(k) and flexible spending account allocations into your budget. The remaining pay is your net income; this is what you use to pay other expenses. If it’s easier, show your deductions in your budget worksheet to keep track of where your total salary goes.

Record Your Spending

Record your expenses or use an app that shows how much you spend. Use online banking that shows each expense in real time, or download an app like Wally to categorize where you spend money the most. Apps like Wally keep track of how much you spend on bills, restaurants, retail, and entertainment. Once you see how much you spend in a month, you can adjust your budget accordingly.

Begin your budget worksheet by listing all your fixed expenses. These include regular monthly bills like car payments, utilities, student loans, rent, backup withholding payments, or mortgage payments. These are expenses you can’t adjust, but you’ll get an accurate assessment of how much money will get taken out of your paycheck each month.

Set Goals

What are you saving money for? Keep a list of short term and long term goals to stay inspired. Short term goals should take no more than a year to achieve, like a family vacation or paying off credit card debt. Long term goals may take years to achieve, like funding your child’s education or earning your doctorate degree. Your goals may change over the years, but identifying what’s important to you will help you stay motivated.

Create a Plan

Once you’ve listed your goals, it’s time to execute a plan. With your net income and fixed expenses in mind, you’ll have a better estimate of how much you can spend each month.

Break down your expenses based on your typical spending habits, and separate your needs from your wants. You can’t achieve your goals without making a few sacrifices, so it may be time to nix your Netflix account. Gas and groceries are necessary expenses, but you can reduce your spending by carpooling or choosing less expensive grocery options. Identifying your priorities will help you decide what you really want to do with your extra spending money.

You can also pick up a second job. If you want to achieve your goals quicker or you’re afraid you don’t have the funds to cover your basic needs, a second job can help fill in the gaps. Take up a job as a server or bartender and stash the tips in a jar at home. You can also work on your own time as an Uber of Lyft driver. There are dozens of apps available that allow you to babysit, tutor, and take care of people’s pets. If you have a special skill, use it to your advantage to make some fast cash.

Change Poor Spending Habits

After you categorize your necessary expenses, you might have some money left over. This is the money you can put away in your savings. You can deposit the full amount, or take out a small chunk to treat yourself.

If you want to splurge, take out a certain amount in cash and use only that amount when you want to take a night out or go to a movie. It’s easy to overlook how much money goes into small expenses like happy hour when you use a debit or credit card. Deposit the majority of the remaining amount into your savings so you can save.

Follow these steps, and you’ll have a budget you can stick to and achieve your goals.

5 Tips To Deal With Financial Emergency

Have you ever found yourself in the middle of a financial emergency?

You may even be experiencing one at this moment; what can you do?

You’re not alone, over 76 million Americans struggle each year according to a survey from the Federal Reserve Bank.

There are lots of reasons and causes of financial stress. Whether you’re in the middle of a crisis, or want to help plan for the future, there are options available to get you back on your feet.

Here’s five tips on how to deal with a financial emergency:

1. Create a Budget

How do you get control of your finances? Spending less money sounds easier than it really is. Creating a budget (and sticking to it) can be a great tool for spending less, and saving more. Here are some tips for creating a budget.

  • Track your weekly spending. If you use a debit or credit card, you can see where your money is going each week. Small purchases like a morning coffee or fast food can add up over time.

  • Divide expenses into categories. Some examples can be entertainment, eating out, groceries, bills etc.

  • Set money aside for an emergency fund. Even a small amount saved overtime will add up when you need extra funds for a crisis.

  • Gradually cut down expenses. Instead of cutting out restaurants entirely, limit yourself to once or twice a week.

If you need additional assistance in creating a budget, take a look at this article from US News.

2. Cut Expenses

Cutting expenses can be another option to take during a financial emergency.

Spending less money in just a few areas can provide relief.

Here’s some tips for reducing your monthly expenses:

  • Save money on transportation. One option can be to carpool to work with your friends. By alternating days with your coworkers, you can save on gas, reduce wear and tear on the car, and in some cities, make use of carpool lanes.

  • Reduce entertainment expenses. Do you have cable for watching your favorite shows? Switching to a streaming service like Hulu or Netflix can be a cheaper option. Some of the networks also stream episodes for free on their website as well.

  • Cancel unused memberships. How often do you go to the gym that you pay for each month? If you only go once a week, it may be a cheaper option to find a gym to pay per use.

For other tips on saving money by reducing expenses, Trent Hamm has written up 40 ways to save on monthly expenses.

3. Prioritize Your Expenses

Are your bills overwhelming you?

A financial crisis can make it hard to follow your budget. It’s important to be pay your monthly bills, but sometimes this is impossible.

Here are some tips on how you can prioritize your expenses and get through the crisis:

  • Make a list of all monthly expenses. Listing them out gives you a clear picture of how much money you’re spending each month.

  • Figure out which expenses you have to pay. Once you have your list, you can mark which ones have to be paid first. Groceries and your rent/mortgage should be at the top of your list. Most utility companies will give you extra time to pay bills so that you can prioritize the more urgent bills.

  • Contact your creditors. Late payments can damage your credit, and ignoring the problem will make it worse. Most creditors will let you set up a payment plan or allow an extension.

For additional tools on prioritizing your expenses, visit the United Way’s article.

4. Reduce Your Debt

How many of you want to get rid of your debt? Even if you’re on a tight budget you can follow these tips to be debt free over time.

  • Create a budget. Once you write down everything that you spend money on each month, subtract that amount from your monthly take-home pay amount. Look for areas where you can cut back on to free up more cash.

  • Separate your debts from the budget list. Arrange your debts from smallest to largest. You will want to know what the minimum payments are for each of these debts.

  • Use money that you’ve freed up to start paying off the smallest debt. For all other debts you will want to maintain the minimum payment. Once you pay off the small debt you can use that money on the next loan repeating the process.

For more tips on reducing debt, take a look at the Huffington Post article from Tiffany Allche.

5. Get Financial Help

What if you’ve exhausted all other options for managing a financial emergency?

Ideally you would have access to emergency funds that have been saved up over time for a situation like this, but if you’re currently experiencing a hardship, you need cash urgently.

An option would be to get a loan to help pay for bills, essentials for the household, and other needs during the emergency.

A traditional bank loan may not be an option. You may be asking, what can I do? A 30 day payday loan, like one from ElcLoans, can help you.

Used responsibly this can get you through an emergency until you’re back on your feet.

Conclusion

I hope that you found this information helpful.

Having a financial crisis can be a stressful time, but there are tools and resources available to help get you through the hard times.

Each of these tips are options that you can put into practice immediately.

Do you have any other tips that you would like to share?

If you found this article helpful, be sure to share it with your friends and family.

How to Prepare Your Finances for When You Buy Your First Home

Buying a home for the first time is a painstaking process. It’s never easy to secure a mortgage in the current economy and it’s even harder to find a home for the mortgage that’s sometimes offered. Therefore, it’s important you prepare your finances well in advance so you get the best deal on a mortgage and you get a deposit that’s going to contribute handsomely. If you’re looking for preparation tips, consider the following points a few years before you think about applying for a mortgage – it could save you thousands and give you the best mortgage deal available.

Work Hard and Stick with the Same Job

Sticking with the same job for years is easier said than done. But, it’s definitely worth getting your head down now as it could help you save on your mortgage when you finally apply for one. Lenders want as much security as possible when it comes to dishing out loans. So, sticking with the same job to show a lender you’ve had a reliable regular income for the past few years is one way of getting a good deal. Of course, there’s nothing wrong with changing jobs if you’re not happy, as long as you have a regular income paid into your bank. However, a few years with the same employee could help pay dividends in the future and could be the difference between an excellent mortgage deal and a higher interest product.

Ready Your Credit History Now

If you have little to no credit history when you apply for a mortgage, your application could be declined as if you have a poor credit history. If you don’t have a credit history, banks aren’t going to know whether you’re reliable. They may even think that you’ve only recently sorted out debts that are no longer showing on your credit file. Debts only stay on your credit file for six years whether they have been paid or not, so lenders may well think you haven’t got any history for that reason. The best way to counter this issue is to prepare your credit history now and save for the next couple of years. If you need a new car, look at whether it’s a viable option to get a car on finance. Or, apply for one of the many money loans just to give your credit history a good boost for when the time comes around.

Look at Your Mortgage Options

If you have a partner and you’re both planning on moving in together, that’s a good start to help bring mortgage repayments down if you both have decent incomes and eventually a good deposit of 20% or more. However, if you’re on your own, you may want to consider getting on the property ladder with a family member or friend. This could help boost your credit history further and it could give you a way onto the property ladder yourself once you’ve built up enough equity. The benefits of buying a house with someone else are endless in the sense you can carry on saving for your future as the equity in the house grows.

Make a Budget and Stick to It

There’s no point in making a budget if you’re unwilling to stick to it for a few years. The budget should include all your outgoings, personal expenses, and also how much you can save each month. Saving for a house is hard work as something always unexpectedly pops up. But, with the right motivation to own your own home, saving can be done with a realistic budget in place. Don’t overdo it though – you don’t want to put yourself out and not enjoy life while you’re saving for a house. At this time, the average house price in the UK is £211,000, so if you’re opting for a 20% deposit like most other first-time buyers, you’re looking at £40,000+. Therefore, you’ll want to spend at least five years trying to save just so you have other funds left over for other expenses and adventures.

Look for the Best Rate on Savings

Don’t just save money in your current account when you can start an ISA and save more money for the future. Saving takes plenty of time, but with the right savings or ISA account at your disposal, the time it takes to save will be less. Always look for the best rates from your bank or look elsewhere at other high paying ISA’s.

Back in 2000, the average house price in the UK was a measly £75,000, but now with house prices well above £200,000, it’s much harder for first-time buyers to get on the property ladder. Therefore, by taking advantage of the above tips for finance preparation purposes, you can ensure you have the best chance of securing not just a mortgage but a mortgage that has a reasonable repayment plan.

Steps for Getting Your First Loan

Loan

The days of walking into a bank, asking to see the manager and walking out approved for a big loan have long been over. You won’t be getting any type of loan from a creditor until you fill out an application and then have it approved. Secondly, all approved loan borrowers must have a way to pay their loans back. Even if you are applying for a student loan and don’t currently have a job, consider the fact that one day, when you have started to work in your new career and the money is rolling in, you will have to start paying the loan back. Here are the most important steps to follow for getting approved for a traditional bank loan as well as other options you have for getting a loan when the usual way doesn’t work.

Getting Established Before Applying for a Loan

Although loan applications can be reconsidered and looked at a second time, it is better for applicants to have their applications go through the first time that they apply. In order to have a bank approve your loan application, there are some minimum criteria that you have to meet. First, you have to be a UK resident in good standing and have a valid bank account. Sure, you can open a bank account the same day that you apply for a loan, but it’s better to have some history with your bank. Next, you have to work somewhere and again be established at your workplace. Imagine if banks approved loans for people who had just gotten jobs and bank accounts all the time. Most of those loans would likely end up being defaulted on.

Looking at Your Credit Rating

Credit is really important when you’re applying for a traditional bank loan. A solid credit rating is necessary to get approved for loans products like mortgages, and a little less important if you are looking for a personal loan. Either way, banks and lenders have different rules for the minimum credit ratings they’ll accept from borrowers. In short, if you want a traditional bank loan of any kind you need to have established credit and possibly a co-borrower. This is how young adults get into brand new cars although they’ve only been working at their jobs for less than a year. You can create credit if you don’t have any by establishing a credit card or getting some type of mobile phone plan. If you’ve got existing credit but it’s down in the dumps, work hard at building it back up because it’s going to be hard getting a traditional bank loan without at least a fair credit rating.

Filling Out the Bank Loan Application

Every piece of data that you include on your loan application needs to be accurate and completely up to date. If you change jobs and your income is lowered, you need to be upfront about where you work, even if you think it’ll hurt your chances for a bank loan approval. Your loan application needs to detail where you currently live, work, and you might also be asked to provide references. Basically, your bank loan application is supposed to help creditors validate that you are who you say you are and that all of your pertinent details are accurately reflected. Lenders aren’t particularly impressed when they catch applicants in outright lies, so try to ask for clarification when you need it instead of just guessing or writing down answers that you believe sound good.

Applying for Secured and Payday Loans

Traditional bank loans aren’t for everybody and they don’t meet every purpose. For example, if you want a mortgage or a new car you should absolutely start the money borrowing process with a well-regarded lender. In the case of consumers who want personal loans for emergency expenses, there are payday loans and secured loans such as logbook loans. These types of loans can be better for those who don’t have great credit history, but they also come with higher interest rates. Secured loans are secured on an asset such as a car, so be aware that you could lose your asset if you default on the loan repayments.

You can get a loan all on your own, with the assistance of a co-borrower, or via an alternative method just by understanding how to get prepared and fill out an application. Give potential creditors all of the information that they ask for during the application process to determine if you’re a good match for their financial products. It can take as little as five minutes and up to several weeks to hear by from a potential lender, but getting your first loan can be a really good step toward having a more bountiful financial future.