When you consider a loan against assets, it is vital to understand the type of the asset that will make a considerable difference to the loan available. It is not just about the value of the asset; butseveral other factors about the respective assets, which affect the loan. Therefore, check out the following four differences between various types of loans against assets.
Loan Application Process:
The application process for an ideal loan against property takes a bit longer than others. The evaluation process of the property is much slower than other assets such as gold, fixed deposits, securities, luxury goods, etc. These kinds of movable as well as liquid assets can be evaluated much more quickly than immovable assets like real estate. Additionally, the documentation and eligibility for this kind of loan is quite different, which affects the loan application and approval process. For example: An unemployed person can receive a gold loan, but he/she cannot opt for LAP.
Loan Amount & Tenure:
The loan amount for all kinds of loans against assets is tied to the market value of the asset. The value of real estate is much harder to pinpoint than stocks, mutual funds, gold or FDs. But, it is also a much larger asset with a higher market value. In most cases, the real estate is the largest asset owned by borrowers. Therefore, you will get a bigger loan amount for a longer tenure. Gold loan tenure starts at about 6 months. It can be up to 2 to 3 years based on the amount of gold. However, the tenure for loan against property in India can be up to 15 years.
Processing Time & Fee:
All the loans against assets, including LAP, are secured loans. Therefore, the rates remain competitive and within the same range. However, the processing time for the LAP is much higher as the process for property evaluation is more complex. The market value of any property is based on neighbourhood, square footage, real estate market, demand, infrastructure, etc. So, the processing charges and the time required for loan approval is higher for LAP as compared to other loans like gold loans.
Purpose of the loan:
For most secured loans, this doesn’t make any difference to the lender. The housing finance companies in India are concerned about the LTV ratio, market value of the asset and repayment ability of the borrower. However, for borrowers, they are not interchangeable. The gold loan cannot be replaced easily by LAP as the amount of loan and tenure will be considerably different to resolve the same issue.
The world of finance has provided the backdrop for many dramas, from mergers and acquisitions and Wall Street shenanigans to Tulip Mania and the recent housing market downturn and subsequent financial crisis. Finance obviously has no lack of gripping topics for authors to write about. For finance professionals who want to better understand the history of their industry and better grasp the fundamentals underlying its various dramas, here are 10 suggestions. Most of these books have stood the test of time and are all worth reading.
“Barbarians At the Gate”
Interested in leveraged buyouts and junk bonds? In 1989, Bryan Burrough and John Helyar wrote the definitive history of these financing types when they recounted the struggle involving the leveraged buyout of RJR Nabisco, a now-defunct food and cigarette conglomerate. The writers originally covered the story as reporters for the “Wall Street Journal.”
Benjamin Graham and David Dodd wrote the “bible” of fundamental equity investing in this classic, first published in 1934. If you’re interested in the techniques of value investing, an approach favored by Warren Buffett (who was a student of Graham’s at Columbia University), you’re certain to benefit from this book.
“The Intelligent Investor”
Benjamin Graham also wrote this guide to long-term investing approaches. First published in 1949, “The Intelligent Investor” has been updated repeatedly over the past 65 years, including most recently by the financial writer Jason Zweig, as Graham died in 1976. Graham uses his book to map out and advocate for his preferred value approach to investing.
“Common Sense on Mutual Funds”
John Bogle, founder of the Vanguard Group mutual fund company, came out with his guide for mutual fund investors in 1999. Bogle makes the case for the value of index-based investing, and his book is full of common-sense financial advice, such as noting that the less that you pay someone to manage your investments, the more of your money you’ll keep.
“A Random Walk Down Wall Street”
First published in 1973, Princeton economist Burton Malkiel’s book advises readers on various types of investments. Whether you’re just kicking off your financial professional career, or if you’re looking for advice on managing your 401(k) or if you’re an established professional who wants to expand your investment profile, Malkiel’s tome, which has gone through 11 editions since publication, remains a great source for market fundamentals.
“Extraordinary Popular Delusions and the Madness of Crowds”
One constant of financial markets is that they suffer periods of collective greed and fear, which has resulted in such catastrophes as Britain’s South Sea Bubble and the Netherlands’ Tulip Mania of the 1630s. The British journalist Charles Mackay explored these and other crises in his 1841 classic. Don’t believe that Mackay’s book has no relevance to contemporary times, as the manias he documents provide keen insight into recent events like the dot-com boom and bust of the 1990s and early 2000s.
Are you interested in learning how the world really works? This 2005 book by economist Steven D. Levitt and journalist Stephen Dubner looks beneath the surface of various everyday (and not so everyday) situations and breaks down how things work. For instance, do you believe you’re getting the best deal if you’re a homeowner who hires a real-estate agent to sell your house? You might be surprised. The book also explores the economics of the worlds of drug dealing and Sumo wrestling, among a wide array of topics.
In this 1980 book, Harvard Business School professor Michael Porter looks at what creates competitive advantage in a particular industry. Since many financial professionals spend their days analyzing companies, industries and their strategies, Porter’s book provides an ideal starting point.
“Manias, Panics, and Crashes: A History of Financial Crises”
Charles Kindleberger, a former MIT economics professor, explored the nature of financial crises in this 1978 book. Its most recently updated edition, from 2011 (revised by Robert Aliber, as Kindleberger died in 2003), delves into the causes of the 2007-2008 financial crisis that ignited the global economic downturn.
Several banks and housing finance companies offer different home loan rates. If it was as simple as visiting a third party website and entering your details to compare the home loan interest rates, there was no need for this article. Yet, you know, there is certainly much more to it. So, how do you evaluate the best home loan rates in India ?
Put your best foot forward.
Clear your credit card debts and personal loans and get the best possible CIBIL credit score. You should revise your credit history without any damaging elements. Calculate the required down payment, since it will affect the banks and housing finance companies that approve your loan, interest rates offered, repayment strategy allowed and more.
You would need to start saving up to 20% of the principal amount. So, you should plan for it in advance as you will need all the necessary documents to demonstrate your assets, liabilities, investments and earnings. Your good position and salary in a reputed organization comes in handy too. Now, you are ready to compare the available home loan interest rates in India .
Apply, apply, and apply.
Most banks and housing finance companies have online eligibility calculators and loan application systems, which allow you to apply for home loan within a few minutes. When you apply for a loan, you receive realistic interest rates based on your repayment ability, income and potential to earn. As you receive approvals, you will get realistic interest rates and EMI projections as well. This is a great place to compare the loans as well as finance companies. As these rates are open for negotiations, though banks don’t encourage that practice, you can contact your loan officer and use this time to draft the best possible deal.
Compare the specifics too.
After comparing the home loan rates, you must compare minor details too as they help you to negotiate and customize the loan as per your convenience. Lenders with the best possible proposal would include the right repayment strategy, prepayment clauses etc. All comparisons will not help you to select the best deal. Yet, you must look into boring fine print documents such as terms and conditions that would shape your EMIs and financial life ahead.
No wonder the right foundation for a successful comparison and loan approval is thorough research. So, explore the details of the EMIs, documents, terms and conditions, repayment options and interest rates to finalize the home loan that suits you the best.
Own a home? Looking to buy a home? You’re going to need homeowners insurance. There’s no getting around it, especially if you’ll be financing the purchase: Before handing you one dollar of their money, any lender will require proof that the property is insured. But for some reason, home insurance isn’t as talked-about as health, auto, or even life insurance. What do you need, and how do you find the best deal? We asked some insurance professionals to give us some of the lesser-known facts of home insurance life.
Get a CLUE
You probably know about your FICO score, but what about your home’s CLUE?
The Comprehensive Loss Underwriting Exchange (C.L.U.E. is the formal insurance acronym) is a database that holds a record of any claim made against a property. Underwriters can find the date of the insured loss, type of claim and how much the insurance company paid on the claim.
Laura Adams, senior insurance analyst at insurancequotes.com, says, “A tip for home buyers is to request that the seller provide a copy of the home’s CLUE report. It’s only available to homeowners and is free to pull every 12 months, similar to credit reports. This will help buyers understand what damage has occurred to a property.” And that’s good to know, because “a home’s claim history affects the [insurance] rate a new buyer must pay. Claims that a previous owner makes years before you buy his or her property can cause you to pay more.” Click here to get a copy of your home’s C.L.U.E. report.
Calculate the Needed Coverage
It’s a simple calculation, right? You need enough home insurance to cover the value of your home. Not so fast! You need enough insurance to rebuild your home, preferably at today’s prices. According to Adam Johnson at QuoteWizard.com, “Often shoppers make the mistake of insuring [a house just] enough to cover the mortgage, but that usually equates to 90% of your home’s value. Due to a fluctuating market, it’s always a good idea to get coverage for more than your home is worth. Purchasing replacement cost value over actual cash value is a great idea too. Replacement cost value ensures any damages will pay out enough to restore to its original condition.”
“You can rest easy knowing that you could rebuild your home after a major loss without worrying about depreciation, policy limits or insurance construction costs once you’ve repaired or replaced the damaged property,” agrees Joe Vahey, vice-president and personal lines product manager at Erie Insurance Group in Pennsylvania. “This is definitely a better option than actual cash value, which takes depreciation into account when calculating the amount of your reimbursement.”
Of course, replacement cost value policies are more expensive. In determining the amount of coverage you need, a good rule is to multiply the total square footage of your home by the cost of construction per square foot in your area. Local real estate agents, builder’s associations or insurance agents can help you find that number. Some of the factors that might affect your replacement cost include:
local construction costs
the house’s size and the type of exterior wall construction
whether some or all of it was custom built
local building codes for natural disaster-prone areas (earthquakes, hurricanes, landslides, etc.)
But be careful. Some policies might not fully cover the cost to rebuild your home to the newest building standards.
What Else Needs Insuring?
Home insurance isn’t just about replacing the home. Vahey advises considering your liability coverage, which protects you if somebody gets hurt on your property (and some instances away from your home, as well). Have at least $300,000 in coverage and possibly an umbrella policy too, which could add $1 to $5 million to your home and auto insurance policies. “Lawsuits aren’t as uncommon as you might think, and they have the potential to wipe out many people’s net worth,” he warns.
What if you live in a flood or hurricane area? Or an area with a history of earthquakes? Standard home insurance policies don’t normally cover these types of natural disasters. You’ll want riders for these. There’s also sewer and drain backup coverage you can add on, and even identity recovery coverage that reimburses you for expenses related to being a victim of identity theft.
Say your home suffers major-league damage. You can restore it to its original glory (thanks to your replacement cost value policy), but it’s going to take at least six months to a year to rebuild. Where will you live in the meantime? Loss of use coverage will reimburse you for the costs associated with staying in a hotel or renting an apartment.
Protecting Your Stuff
Home insurance doesn’t just cover your home. It also covers your personal possessions – some of them. Policies differ, but they will typically cover 50% to 70% of the amount of insurance you have on your home.
In order to know if you have enough coverage to replace your possessions, make periodic assessments of your most valuable items. According to John Bodrozic, co-founder of HomeZada.com, “Many consumers are under-insured with the contents portion of their policy, because they have not done a home inventory and added the total value to compare with what the policy is covering.”
He continues, “In addition, many items they own may not be covered, especially collectible items like art, jewelry, coins, wine, etc. The consumer needs to know the value of these collectibles and shop for the special riders above and beyond the standard policy.” (Click here for a A Quick Guide on How to Insure Jewelry).
Now Go Shopping!
Finally, contact local agents for quotes. According to Tom Austin, co-founder of Bungalow Insurance, a Philadelphia independent insurance broker, “there aren’t many online options (only about 5% of homeowners insurance was sold online), so if you want to get multiple quotes, you’ll have to see an agent.”
How many quotes? According Sarah Brown, insurance expert at Obrella.com, “Contact five or more companies so that you know what people are offering and you have leverage in negotiations. If you know how much coverage you need, they won’t be able to sell you unnecessary policies and you’ll be able to get the best price.”
Before deciding on a policy, make sure you understand your deductibles and how they work. Don’t get caught off guard when you file a claim (see Will Filing An Insurance Claim Raise Your Rates?). Deductibles for special events, such as hurricanes, could be a percentage of your home’s value, rather than a flat amount. Also check out Eight Financial Safeguards If Disaster Strikes and Hurricane Insurance Deductible Fact Sheet.
The length of the loan or term and condition of a car loan can stretch to 72 or 84 months in general.
Six and seven year car loans are not recommended for any type of car loan with any loan agent. The interest rates will be very higher. Plus such kind of extended loans with lower monthly payments may cause you to purchase a new car that you can’t really afford for the price of the car. What if the case of your car loses all value and you need a replacement with two years left on the loan of the car. Generally 36 to 60 month loans are only recommended all over the world. Car loans are generally paid off by the entire person in monthly instalments mode only. With your budget of the car and finances in order you will be only able to calculate how much you can afford to put towards a car payment by every month inclusive of all the charges. But do not forget about that the loan payments are not the only cost for owning a car of your own.
Requirements Of A Car Loan
There are many kind of tool available at internet for calculating this kind of car loan. Use a tool such as edmunds true cost tool from the internet to own calculator that uses to estimate other costs which is including annual taxes and fees, fuel, insurance, maintenance, and repairs for a car. Plug in the year you bought the car, the make and model, and your ZIP code to find out the true cost of owning many popular car models at the same series. This true cost estimate will help you by includes depreciation value of the car, which is a loss you should be aware of it all the time but not an outlay of the car that you need to include in your monthly budget for calculating other charges.
A credit card scores play a very big role in our financial lives of every human who has the credit card. Having a good credit card score means that you can get the best interest rates on all kind of mortgages, auto loans with car title loans Canada and even when refinancing a student loans at any point of time. A good score can help you to obtain cheaper auto insurance in your life. To get any good deals you typically want to have a good credit card score just above 700.
However the best deals of the day usually go to people with scores above 750 of the credit card. In this the general credit card scores are reward responsible for the best behavior of the card holder. If you live within your own means without any dependent and pay your bills on time every month, you should be definitely rewarded with a good credit card score. The responsible people do not always have good credit scores with their card. Here are the three most commonly made mistakes that the people make while costing them valuablepoints and money.
You come home after work at one point only to find a puddle located in middle on your family room floor. You might panic, thinking you have to invest in a brand new roof covering, but this isn’t necessarily the situation. You might find some sort of roof repair in Portland is the better choice. Obviously, the idea is to locate these kinds of troubles before any rain water actually starts to get into the home. Somerset County roofers recommends the easiest way to get this done is to inspect the rooftop every six months, in spring as well as in autumn.. Doing this catches just about any issues before cold weather sets in and also spots any harm brought on by the winter season. What are certain signs you are in need of roof repair Portland?
Lost shingles certainly are a certain indication you’re in need of a roofing repair in Portland. The roofing elements are integrated, meaning a single part absent can easily lead to all parts of your roof covering malfunctioning. If you don’t have the roofing shingles replaced inside a short time period, you’re risking a great deal of damage, both on the interior and exterior of the house. In fact, absent roofing shingles, if they are not replaced promptly, can bring about whole areas of the rooftop needing to be upgraded, or possibly the whole roof, since the sheathing underneath might be ruined.
Any type of soft places on the rooftop must be inspected because they are an indication of the need to call for a roof repair in Portland Oregon. Whenever the roof gives while you step upon it, this typically suggests rain has gotten beneath the shingles and it has reached the sheathing and supports, which in turn need to be repaired. The same is true should you see any mildew or dampness upon your roof or perhaps spots which unfortunately look to be warping. Dark places are a sign of trouble expanding too.
Gutters which are wobbly or damaged must be inspected since this could be a manifestation of the need to now have your home’s roof remedied. Whenever you assess the gutters, hunt for asphalt granules inside the gutters on the home because this suggests the roof shingles happen to be disintegrating.
Even if you really don’t spot any type of roofing concerns around the gutters on the home, they need to be repaired simply because loose, compromised, or missing rain gutters can bring about roof covering issues if they aren’t fixed quickly. Talk with a qualified professional when you notice any of these signs in order to get your roof repaired speedily, ideally without worrying about the need to change it out.
If you charge fees to your clients for your financial advice or asset management services, then setting the right price can be a difficult task. You of course need to be adequately compensated for your services, but your clients also need to feel like they are getting their money’s worth in return for what they are paying you. But increasing competition and an explosion of technological alternatives have made it harder than ever to be able to determine whether the fees that you charge your clients are in line with your competition.
Start With the Basic Questions
To some extent, the fees that you charge as an advisor can be determined by common sense. The following questions should be able to help you to determine the types and amounts of fees that you charge.
Would I prefer to charge by the hour, by the job or plan or a percentage of assets under management?
Will I also be charging commissions for some cases or services?
What is my competition charging for similar services to similar clients, and are they making enough profit in order to grow and thrive?
How much revenue will I realistically have to generate in order to stay in business?
Once you have the answers to these questions, you will probably have enough information to at least be able to set an initial fee for your services if you have not done so already. And while the laws of supply and demand will ultimately determine whether your fees are too high or too low in the long run, there are several things that you can do in the here and now to add value to your fee structure and incentivize clients to enlist your services.
Charge low-net-worth clients a bit more – Although the difference in fees should not be too severe, this can make good fiscal sense in many ways. All clients require at least a certain level of administration, but you need to focus more on making your higher net worth clients happy. Those with fewer assets under management can end up taking up just as much of your time as your richer client base, but allocating equal time to them ultimately costs you money.
Offer freebies like a no-fee initial consultation – This can be a great way to get clients in the door so that you can show them what you are able to do for them. The lack of an obligation on their part will make many more prospects willing to meet with you at least once.
Give clients who require the least amount of maintenance a discount – This idea is founded upon the critical distinction between low-net-worth clients and low maintenance ones. As mentioned previously, low-net-worth clients can still take up a lot of your time and should therefore pay slightly more than those with more money. But those who require little or none of your time should also be rewarded for their simplicity.
Charge a single rate for assets under management – If you like to keep things simple, then charging a single rate for all of your clients may be the way to go. Although this may be frustrating to your small clients, it will provide better value for your large ones and may also encourage some of your other clients to increase their asset base with you in order to get a better value.
Offer a few different options to clients for how they can pay – Some clients may be happy to pay you by the hour for your services, while others would rather pay you a percent of their assets for your management services. The ability to offer a choice here can expand your marketability and thus your client base.
Here Come the Robo-Advisors
If you charge a percentage fee for assets under management, be prepared to contend with the coming wave of automated investment services that only charge a fraction of a percent for their services. Websites like Wealthvest and others like it can provide a basic level of money management for less than half a percent in many cases, and you will need to be able to show why the human element that you offer justifies the difference in cost between them and you. Having a top-notch website with technological amenities like a cloud-based platform, skype and chat services for your clients and other convenient features can also set you apart from a set of algorithms that is being packaged and marketed to the public.
It is very important to invest money for better and safe future; but most of the people do not know how to invest and where to invest for better future. There are various investment houses and stock broking companies that offer guidance and expert advice to invest money in the safest manner possible. They not only provide you wealth of knowledge and investment tips, but also clearly explain when and how to invest money. They explain facts, history and fundamentals of stocks and encourage you to invest your money for your family.
Investment experts help in learning key aspects of share market. They even select different types of invest options proactively through conducting on ground research, analysis of the growth drivers and keeping a nice tab on the latest market, economical and social developments. They simply streamline the latest developments with the microeconomics of the region in order to spot trends and investment ideas much before. They even constantly monitor, analyze and evaluate industries and markets across the region to identify and prepare strong investment ideas based on asset class, geography and emerging growth drivers. This allows them to develop expertise to act and react to provide the most suitable options available. In this way, they quickly observe the potential opportunities, and develop strong relationships with you.
For larger investors, invest experts essentially blend the core of global index investing with other several low management cost enhancements. For smaller investors, they conduct core global index investing combined with yield-based adjustment of the asset allocations to bonds and stocks. Today, almost all clients have the flexibility and convenience of a professionally managed global portfolio of shares in companies, and bonds, coupled with the banking and online bill payment capability.
Investment experts mainly focus on merging growth drivers and asset classes as well as geographies. They follow flexible way of investment, which allows them to respond quickly, comprehensively to complex deals. They also believe in the best ever use of debt and assist to obtain good returns. They are able to structure their investments creatively, smart, innovatively and provide discrete need based on financial solutions.
Most of the time, their investment strategy and tactics are focused on participating in the booming sectors through investment in projects that generate good, scalable, sustainable as well as risk-adjusted returns for Investors. Most of the smart investment management firms strategically plan to opportunistically invest in and add value to your portfolio investments across a broad spectrum of sectors. Their overall investment objective is to produce long-term capital appreciation for their Investors.
Modern investment companies keep management fees low and offer exceptional services while seeking undervalued investments. Low fees, high quality and state of the art fundamental investment analysis simply provide optimal value. This allows them to manage more efficiently, smartly than either academic theory or usual practice in the industry. So, If you are unable to take investment decisions or do not know how to invest money, then you must find an investment company that can provide better opportunities.
When you are in a market for home loans, you need to make smart choices. You cannot rush into decisions. There are several aspects of your professional, personal and financial life that will come into play as you opt for a housing loan. The best home loans in India cannot be selected randomly or by mere luck. It needs a more studied approach for the home loan eligibility process as well.
Finalize a property meticulously
This is the most challenging part of the entire process. Most borrowers want to buy a property based on their personal requirements. However, your financial life plays a vital role as you need to select a property that you can afford to pay EMIs for comfortably. Most housing finance companies select the candidate who can spare about 30% to 40% of their in-hand income as housing loan EMIs without trouble. So, selecting the property that you cannot pay for will be unwise. You will need to consider that the principal amount of the home loan will include 80% to 85% of the property cost, legal charges, processing charges, home loan insurance plan, service taxes and allied fees. Hence, property selection will depend upon the likely principal amount, EMIs you can afford on a monthly basis and your credit score report.
Ensure eligibility criteria
When you apply for a home loan at any housing finance company in India, you must make sure that you meet their basic eligibility criteria in order to receive a decent loan offer. This is much easier nowadays as these details are straightforwardly available online. This is important, because a home loan application rejection becomes a permanent part of your credit history. You can compare the home loan offers online, check their websites for details and visit the branch office to understand all that you need to know. However, you should apply for home loan in a particular housing finance company when you believe that you can meet their criteria and get an acceptable house loan offer.
Watch out for all the possible charges
A lot of people are relieved once they get a decent house loan offer. Hence, most of them do not go through the terms and conditions of the home loan to vet it out. Although, you can’t be certain about the graph of your financialsituation for the next 20 to 30 years, you need to know about the prepayment charges as well as the home loan default fees. You also need to understand the consequences of the financial agreement that you are getting into. So, do not enter into this vital contract blind-sided. The best home loans in India are selected with close attention to detail. Thus, you should read thoroughly before you sign on the dotted line.
It’s safe to say that at one time in your life you have probably noticed an increase in the amount of available credit on your credit card. While this may not have been something you asked for or even wanted, you should feel special. This means your card issuer thinks you are an above average borrower, and they want to make sure you remain a loyal customer .
Now what if you took out a new credit card and the issuing company started you off with a fairly low credit limit that hasn’t been raised after the first year. Should you ask for an increase? The answer is yes, and there are several good reasons why.
Increase Your Credit Score
When you increase your amount of total available credit, it lowers your credit utilization rate. This is one of the factors FICO takes into account when determining your credit score, and having a high credit utilization can have a negative impact. For example, let’s assume that you started out with a credit limit of $1,000 and regularly have $800 charged onto the card; that means your credit utilization is at 80%. Now let’s assume you asked for a credit limit increase and now have a maximum of $5,000. If you are still charging $800 each month, your new credit utilization is now 16%.
Receiving this increase in credit limit lowered your credit utilization, which will then end up helping your overall credit score over the long term. Most credit experts recommend keeping this percentage at 30% or below. One important thing to consider is that when you request the increase in your credit limit, the issuer will be doing a hard credit inquiry, which will give you a short-term two to five point credit score decrease. However, if the issuer automatically gives you an increase, then there will be no hard inquiry. (For more, see 3 Easy Ways to Improve Your Credit Score.)
Avoid a Credit Score Decline
Anyone that is looking to increase his or her available credit probably wants the ability to spend more with the card. This could be for a number of different reasons. You may want to put more of your everyday spending on the card to earn rewards. Maybe you have a big upcoming purchase that you want to pay for with the card. (For more, see Rewards Credit Cards That Give Back The Most.)
If you need to extra credit, you have two options. You can work to get an increased credit limit on the current card, or you can take out a new card. While taking out a new card might be attractive because of the signup bonus it offers, it might not be the best choice for you. Every time you get a new card, your average length of credit decreases. Because this makes up 15% of your credit score, you could see a short-term decrease in your FICO score. (For more, see What Is A Good Credit Score?)
The next time you are looking to add more available credit, you are better off forgoing a new card and asking for a credit limit increase on an existing card.
How to Ask for a Credit Limit Increase
Now that you have made the decision to ask for a credit limit increase, you need to figure out how exactly you are going to ask for it and hopefully reduce your chances of being turned down.
The timing of your request is going to be a big factor. Consider for how long the account has been open. If you recently received the credit card, then you may want to establishing some history with the account before asking for an increase. It’s also probably not the best time to ask for an increase if you have been bad at paying your bill on time or are currently behind on your payments. Make sure you establish a good track record for paying your bill by its due date before making your request.
Once you have a credit history that will make the issuer smile, it is time to go ahead and call the number on the back of your card. Be prepared: they are probably going to ask you a lot of personal questions about your current employment and income. They will also ask you to explain why you need an increase in credit limit. Be honest with them, but you can also use this as an opportunity to make yourself look good. Tell them that you have a high FICO store or that you have been a long-time cardholder. Card issuers understand that there are a lot of other companies out there; as long as you are a good borrower, they want to keep you with them and not someone else.
Home loan rates can be a complicated plateau to manoeuvre through. There are, however, a few major factors that do stand out. This guide should help you to screen through the major sections that need to be kept in mind about this subject:
Types of interests
This section may seem basic; however, it’s not. There are three types, obviously. Yet, you need to know some of the important aspects that may affect your EMIs and the repayment structure in the long run.
• Fixed rates: These rates are higher and so are the hikes after the first few years. So, you should know when your interest rates will elevate again. If you opt for fixed interest rates, you should aim to increase your earnings accordingly.
• Floating rates: These are vulnerable to economic fluctuations. They can work in your favour if they lower over a certain period of time, though you must know that the tenure for home loan repayments stretches from 20 to 30 years. Unless you earn a significant income over the course of the years to pre-pay the loan, you will be paying EMIs for that duration and may also face unexpected recession and interest rates hike twice or thrice in that period.
• Hybrid rates: These rates combine the best of fixed and floating. You make two home loan agreements that divide your home loan into two types of interest rates and repayment plans. Though it seems like the best of both worlds, you need to understand that it can backfire too. You need to read the home loan agreement papers and the fine print carefully and protect yourself against any backfires.
The factors that influence your home loan interest rates:
All applicants may not be able to get the advertised rates. Very few people, in truth, are in a position to avail the best home loan rates in India. Although you can influence home loan proposals to get the best possible interest rates for your housing loan. So, what are these factors?
• CIBIL credit score
• Repayment ability
• Company appraisals
• Annual earnings – income, assets and liabilities
• Any other loans
• Your interest rates negotiations
There are always more factors that can come into play, depending on how you choose your house loan package. So, it makes sense to make an effort to mould all these factors in your favour. It is not always possible to transform them all; yet, if you take an expert’s advice and use it to your advantage, you can potentially get much lower housing loan interest rates in India .
There are few fields in the economic sector that are shrouded in as much mysticism as that of trading in stocks and shares. However even more mysterious and yet the largest and most lucrative segments of the same seems to be currency trading. The approximate $4-Trillion being traded daily in the Forex markets dwarfs the combined $99-Billion being traded in all of the world’s stock markets combined.
Forex trading is still in its nascent stages in many countries but is fast becoming a popular investment option. Currency trading can be an extremely profitable business venture, but it is not for everyone. There are many variables involved in the trade whose dynamics have to be understood by anyone who is venturing forth into this field. To become a successful trader you need to first understand what the currency market is all about. Complicated technical systems and information overload can make you slow and confuse you right from the start, making you lose money instead of making your profits grow. In order to succeed you will need to focus on a set of simple trading strategies that you can implement without hesitation. You will also need to have a thorough understanding of the different variables that may affect the position of your stocks in the market, become pro active, spot an opportunity and act on it wisely.
Or you can simply hire the best forex brokers to manage the investment decisions for you! These professionals will provide you with the best tips and trading information to ensure that your strategies do not fail. Their expert knowledge and understanding of the market has enabled them to ensure that their clients receive accurate market insights for a more profitable and less risky trading experience. As long as you have an expert forex broker by your side to guide you in your currency trading venture, you will always be safe from the risks of involved in this type of investments. Their expert advice will help you make the best decisions, spot the best opportunities and make the most profit from your venture.
This is why seeking professional help at the right time can help you make the best investments. Hiring the best forex brokers is a task that every currency trader looks to take up but making the selection often calls for careful screening and research. A thorough background research of a broker, a detailed assessment of his track record, his working style current financial status, experience of past clients and service quality – all these are points to consider. These factors can be assessed in many ways – directly meeting with the broking firm, online checks on their website and third party review sites and a search on social media platforms. The decision to choose the best broker to manage your account will of course be a tough one but once you manage to do it right, most of your trading woes will vanish away completely.
If you need more information about forex trading and the best brokers in the field, visit TradeRushReview.US.com.
Management consulting and law are high-profile and potentially high-income careers. Both carry a healthy dose of prestige, and both have high, but not insurmountable, barriers to entry, including post-college education and fierce competition. The educational and licensure requirements for law are much more rigid: four years of college and three years of law school, followed by passing the bar for the state in which one wishes to practice. Though management consulting has no hard and fast rules about education, most of the big firms that pay top salaries and provide a foot in the door to the business prefer candidates with MBAs from reputable programs.
For either career path, a candidate needs good problem-solving abilities. Attorneys are frequently required to extract tiny needles from massive haystacks of legalese to win favorable outcomes for their clients. A management consultant must be able to analyze a company’s operations and determine where inefficiencies exist and where processes can be streamlined.
While having good people skills confers a significant advantage in either career, it is an absolute must for management consulting. Myriad behind-the-scenes positions exist for lawyers who excel in logic and problem solving but who are introverts or otherwise lack negotiation skills. Management consultants, by contrast, have to solve problems and present their findings persuasively to the client. It is not a career for the timid or for misanthropes.
While management consulting and law produce plenty of millionaires, both careers also have workers who struggle. The salary range is wide for both fields. An attorney’s first-year salary out of law school largely depends on the size of the firm. A starting salary of $160,000 is common at large firms in huge metropolitan areas, such as New York, Los Angeles and Chicago, though some firms scaled that number down in response to the Great Recession of 2007-2009. The median first-year salary that takes into account firms of all sizes in cities of all sizes is $125,000.
The first-year salary at most large consulting firms depends on whether the employee enters with a bachelor’s degree or an MBA. For undergraduates, the big firms pay between $65,000 and $100,000 the first year. For MBAs, the pay can be as high as $200,000.
Whether a person chooses management consulting or law, he can expect to work a lot of hours for the first few years. Sixty-hour weeks are the norm for first- and second-year associates at big New York law firms, while many young attorneys report pulling as many as 80 to 90 hours per week in the office. Work-life balance is a little better on the West Coast and in the Midwest, but very few rookie lawyers at big firms, making over $100,000 per year out of law school, work a typical nine-to-five, Monday-to-Friday schedule.
Though management consultants, compared to lawyers, typically work fewer hours to earn their big salaries, frequent travel eats away at their work-life balance. While some are lucky enough to land gigs in which they service local clients exclusively, or at least travel infrequently, most management consultants are road warriors, often flying out on Sunday night to be at work in a city across the country on Monday morning, not to return until Friday afternoon. Firms expect new associates to be flexible with travel, and when local clients become available, senior employees receive first pick.
That said, many recent college and MBA grads who are unencumbered by kids or family obligations consider such work travel to be a bonus, not an imposition. In addition to a generous salary, big consulting firms pay for their employees’ airfare, hotel accommodations and food while the employees are on the road.
It’s a really good time to be the CEO of a late-stage startup. Raising money is very easy, possibly as easy as it has ever been. Even during the tech boom of the nineties, it was fairly unusual to see Wall Street money being funneled into risky startups. Now, all the world’s biggest financiers – from big banks to sovereign wealth funds – are investing in high-growth startups like Uber and Slack. There are now at least 60 startups worth more than $1 billion, weakening the stigma associated with keeping your company private. However, even if you can raise a lot of money for very cheap, there are still some times when it’s not such a good idea. The following are four of those times.
The Terms Are Bad
The most obvious reason to reject a VC offer is that the terms aren’t favorable. The CEO has dual responsibilities to their shareholders and their employees. And while it’s certainly true that they can’t live up to any of those responsibilities if they run out of money, there are also situations where it’s beneficial for everyone if a CEO asks for less. Giving away too much equity too soon can make it hard for you to remain competitive down the line, as many startup hires expect it as a part of their compensation packages. VCs can also benefit from a “less-is-more” approach, as a down-round makes its possible for another firm to get the same equity for a better price.
You’re Not Near an Inflection Point
One of the most important things to keep in mind when raising money is its effect on your momentum. That’s why many successful entrepreneurs recommend seeking new funding when you’re near an inflection point. VCs are always going to be interested in your record, and they are more likely to be swayed by proof points than they are by rhetoric. If you’ve just accomplished something noteworthy, VCs will be more likely to make a better offer. (To learn more, see: The Stages in Venture Capital Investing.)
The VC Doesn’t Get Your Industry
VCs like to invest in trends, and it’s usually not too hard to identify what those trends are. Some of the most valuable things venture capital firms can provide, besides money of course, are connections and knowledge. You don’t want to do business with a firm that doesn’t understand your industry or what you are trying to accomplish. It makes it difficult to align expectations and set intelligent goals. If the firm doesn’t have a track record in your industry, there’s no guarantee they will have good advice either, and deliver on their promises.
Your Valuation Is Getting Ahead of You
If you get a valuation that’s too high, higher than you’re worth, you run the risk of a down round, because it’s impossible for you to get the sales and customers you need to raise the valuation further. This obviously isn’t true all the time: people scoffed when Snapchat suggested it was worth more than its $4 billion offer from Facebook Inc. (FB). Without that sky-high valuation, it is unlikely that Snapchat would have been alluring enough to poach top bankers and journalists from Credit Suisse and CNN. However, it’s also still too early to know whether Snapchat’s risk will pay off, having lots of attention on you can be a two-edged sword.
Managing your personal finances is a vital skill in today’s fast-paced, digital money era. Unless you pay careful attention to where your money is going, you may end up losing it. This article is full of helpful tips to keep you focused on what you’re spending your money on and how to manage that spending.
1. Build-up Your Credit Score
Use a credit card for small purchases each month such as groceries and gas, and make sure you pay it off completely or at least pay off a majority of the balance each month. This will show creditors that you are capable of handling your credit card and demonstrates how much you are being responsible with managing your payments. Doing this on a regular basis will help to repair that bad credit score that you may currently have.
2. Be Honest About Your Finances
Always openly communicate with your spouse about your financial situation. It is a proven fact that couples fight more often about money than almost any other subject. Lying to your spouse about frivolous spending, your savings plan, or past debts, can only lead to big disaster. Be honest and open to keep your relationship in good shape.
3. Sale Your Unneeded Items Online
To put yourself in a better financial position, find all of the products that you have lying around the house, which you do not need. Sort these items and sell them on EBay. This online marketplace is fantastic for making a couple hundred dollars with items that you do not use anymore.
4. Establish an Emergency Fund
One piece of advice that you should follow so that you are always in a safe position is to establish an emergency account. If you are ever fired from your job or facing some hard times, you will want to have an account that you can resort to during that period of time. Most experts recommend that you put aside the equivalent of three to six month worth of your living expenses. In fact, the larger the emergency fund, the better position you would be in to ride out any unforeseen financial catastrophes like losing your job.
5. Learn to Save Money Each Month
Make sure you’re not overspending on luxury items that you can’t actually afford. The most common issue people have is that they’re spending more money than they’re making in revenue. If you don’t have the money for a luxury item, it would be safer not to buy it. Instead of putting in on the credit card, put aside a small percentage of the money you earn toward the item each month. It’ll save you more in the long run. One easy way to get yourself in the mindset is to get your paycheck put directly into a savings account rather than checking or cash. This will help get you in the habit of saving money and not thinking of it all as disposable income.
Hopefully, while reading this article you kept in mind your personal goals and realize that managing your finances and being aware of your spending are vital skills. Now you can figure out exactly what steps you need to take. With the information from this article, you should by now be better prepared to manage your spending the right way. As a disclaimer, don’t forget to consult with a licensed financial advisor in your local area to get personalized advice that are more appropriate to your financial situation.
If it could be answered in a single statement, then the right housing loan lender will be the one who can package the loan suitably for you. Yet to be fair, the lender doesn’t really matter unless they can make a perfect home loan offer with the 3 right factors. The factors are:
The home loan interest rates have to be cost efficient
This is the first factor that borrowers consider while selecting a bank or a finance company as a lender. The equation is simple. Once you borrow the money to pay the previous house owner or builder, the principal amount won’t change, neither would the tenure. So, you want to optimize the home loan interest rates. For most borrowers, the right lender is all about the lowest interest rates. However, there is certainly more to it than just home loan rates.
The house loan has to suit your fiscal needs
If you are like most borrowers, you believe that the best home loan in India is the one with the lowest interest rates. Financially speaking, it can be true. Though, if it is not packaged right; it can become the toughest one to repay too. So, you need to consider the home loans in India from a holistic perspective. When you meet the home loan eligibility criteria and submit the required documents, the potential lenders have a reasonable idea about your finances – assets, savings, liabilities, income, etc. So, a smart housing finance company will make an offer that you can afford individually. It should lead to a home loan with lower EMIs that you can afford to pay. Therefore, along with affordable interest rates, the lender should offer a suitable tenure, repayment option, and type of interest rate too.
The home loan should remain manageable
The home loan lenders should offer ECS to transfer funds, simplified terms and conditions document and lower prepayment charges on fixed interest loans. The borrowers will benefit from these simple details. A right lender will be able to support you for the entire loan tenure of 20-30 years. The importance of this factor cannot be overstated. The right lender should also okay the top-up loan for renovation and offer suitable re-structuring, if required. This support goes a long way in retaining the borrower for a long term.
A housing finance lender who prioritizes borrowers is the right lender for you. You cannot fully depend on the home loan rates to help you to identify it;nevertheless, with a holistic look, you will be able to find the right lender for sure.
Space as the final frontier continues to grip the imaginations and minds of many, including investors seeking profitable opportunities. One of the most exciting companies in the space sector is Space X founded by noted entrepreneur Elon Musk. Space X is a commercial space exploration company. At this point, Space X is a private company. It obtained a $1 billion round of funding from Google in January of 2015. Since it is so well-funded, there does not appear to be any initial public offering (IPO) on the immediate horizon for the company. Investors need to look at other public companies to be able to invest in the space sector. Fortunately, there are some good alternatives for investors, including Boeing Co. (NYSE: BA) and Lockheed Martin Corp. (NYSE: LMT). These stocks are the largest NASA contractors.
Both Boeing and Space X won contracts from NASA to take astronauts to the International Space Station. NASA awarded the contracts after a four-year competition. The companies are splitting the approximately $6.8 billion award for the contract called the Commercial Crew Transportation Capability project. NASA had previously used the Russian space agency to ferry crew members back and forth at a cost of $78 million a seat. Boeing and Space X are hoping to accomplish the same task for around $58 million a seat.
Boeing is constructing the Crew Space Transportation System for the contract, which it bills as a space capsule for the 21st century. The capsule can be reused up to 100 times, thus allowing for substantial savings. It seats up to seven and even includes LED lighting used in its commercial planes that allegedly allow for a more spacious feeling inside the capsule.
Boeing is a well-known name in the aeronautical industry, known both for working with NASA and for its airplanes. It is the largest aircraft manufacturer in the world. Boeing had net income of $5.46 billion in 2014 on $90.78 billion in sales. As of August 2015, Boeing’s stock is up 22% in the past year and pays a healthy annual dividend yield of 2.54%.
Lockheed Martin is another large aerospace and defense company involved in space exploration. Lockheed is building the Orion Multi-Purpose Crew Vehicle, or Orion MPCV, which is intended to carry a crew of up to four astronauts at or beyond a low Earth orbit. It will be launched on the Space Launch system. This is a single launch vehicle designed to replace the retired Space Shuttle. The vehicle had its first test flight in December of 2014, landing safely in the Pacific Ocean. The test flight used new technologies that are critical to future deep-space missions.
The company is also working with NASA on the MAVEN mission, which is the first spacecraft to survey the upper atmosphere of Mars. In addition, Lockheed Martin constructs satellites for different purposes and rockets to serve as launch vehicles. The company has dedicated launch sites in Alaska and Florida.
Lockheed had gross sales of $45.6 billion in 2014, with an operating profit of $5.6 billion. The company paid around $1.8 billion in dividends, realizing substantial dividend growth. The stock price has performed well over the past year, up over 29% from 2014 to 2015. The company has a large market cap of over $65 billion, making it one of the biggest players in the industry. Lockheed also has a beta of 0.62 with a lower monthly volatility of slightly over 1%. This shows the company has some stability and is not as volatile as other stocks. This may be because longer-term investors are holding the stock for the dividend yield. However, the stock had substantial losses during the financial crisis of 2008, like many other stocks. Therefore, as with all stocks, there is risk in investing in the company.
Credit card are always going to have an overall negative stigma attached to them. With so many people struggling with debt every day, most will just stay away from credit cards altogether. Unfortunately, that is not always the best idea.
There are a few instances when you should always use a credit card to make your purchases. One of those times just happens to be when you book a hotel. The next time you go to book a hotel room make sure you consider these reasons why it’s important to use a credit card and not a debit card.
If you have a cash-back or travel-rewards credit card then you are rewarded for every purchase that you make. With cash-back cards you will receive a percentage of each purchase back, and with travel-reward cards you will earn hotel points or airline miles.
There was a time when banks offered reward earning debit cards. Those days are long gone and now it requires a credit card to earn any type of meaningful rewards. There are a few reward earning cards that are great choices for anyone.
Chase Sapphire Preferred – The Chase Sapphire Preferred Card is one of the best overall credit cards available today. One of the reasons it’s so popular is because it offers two Chase Ultimate Reward points per $1 spent on travel expenses. You will need to book your room directly with the hotel and not through an online travel agency.
The Hyatt Credit Card – If you frequently stay at Hyatt Hotels then The Hyatt Credit Card is a great option. First, you will earn a bonus of two free nights anywhere in the world after you sign up and spend $1,000 in the first three months. You will also earn three Hyatt points for each $1 you spend at Hyatt properties.
Foreign Transaction Fees
There is nothing worse than being charged a fee just to have the right to make a purchase. If you are planning a trip outside the United States and need to book a hotel then you might want to think twice about using your debit card in order to avoid fees. Most banks will charge a foreign transaction fee when you use your card outside of the U.S. This fee typically ranges from 1% – 3% of the total purchase price. If you are booking a week-long hotel stay then this could be a pretty large amount.
Instead of using a debit card make sure you use one of the many credit cards that don’t have a foreign transaction fee. A couple of the best options include:
British Airways Visa Signature Card – If you book your next hotel stay with The British Airways Visa Signature card then you don’t need to worry about foreign transaction fees. If you aren’t currently a cardholder and need to sign up, they offer a bonus of 50,000 British Airways Avios after you spend $2,000 in the first three months.
Barclaycard Arrival Plus World Elite Mastercard – Another option for avoiding foreign transaction fees would be the Barclaycard Arrival Plus World Elite Mastercard. You will receive 40,000 bonus miles once you spend $3,000 in the first 90 days.
Trip Cancelation or Interruption Insurance
When planning vacations no one ever expects things to not go as they had planned. Unfortunately, things sometimes aren’t as easy, especially when weather causes delays and in some cases cancelations.
If you paid for your trip using a debit card then you have no protection against non-refundable expenses if your trip is delayed. Instead you could use a credit card that includes trip interruption/cancelation insurance. If your trip is delayed for a number of covered reasons and your hotel is non-refundable then you will receive a reimbursement check up to a certain value.
Here are a couple of credit cards with the best trip cancelation/interruption insurance:
United MileagePlus Explorer Card – One of the many card options that include trip cancelation insurance is the Chase United MileagePlus Explorer card. If you book a non-refundable hotel with this card and your trip is canceled then you can be reimbursed up to $10,000.
Marriott Rewards Premier Visa Signature – If your trip is canceled or interrupted and you prepaid any non-refundable hotel expenses using a Chase Marriott Rewards Premier Visa Signature card then you could be reimbursed up to $5,000.
Extra Loyalty Points
If you book a hotel using one of the hotels co-branded credit cards then you will earn additional hotel loyalty points. Instead of earning the base rate of one or maybe two points, you can earn a lot more. For example, anyone that uses the Hyatt card mentioned earlier will earn three points for every $1 spent on purchases at Hyatt including food and shopping. All other purchases with the card earns just one point.
A couple of the best credit cards that earn consumers additional points for hotel stays include:
IHG Rewards Club Select Credit Card – When you use an IHG Rewards Club Select card and make any purchase at an IHG property then you will receive five points for every $1 spent.
Starwood Preferred Guest credit card from American Express – Cardholders will earn one point for all purchases, but when you book a hotel at any of the 1,200 Starwood locations you can earn up to five points for every $1 spent.
Fixed deposits are traditionally known as low-risk and high-reward investment products. Banks and financial institutions invest these funds into debt instruments across the market and in return offer you an amount over the investment in the form of interest. This simplicity makes this one of the easiest financial products to pick from the bouquet of financial services offered by organizations.
But what else does a fixed deposit account have to offer? This financial product offers interest amounts at a pre-determined interest rate which differs between organizations. Within every organization, there are also several products based on time frames and the age group. Senior citizens get to deposit their funds, for example, at a higher interest rate than younger people. While organizations do allow you to invest in FDs for as short a period as 7 days, standard FDs offer great interest rates for anyone who invest for more than a year or so. With the right time frame, this product will offer higher interest rates as compared to other financial tools like a savings account. While the interest received is taxable, it offers an opportunity to earn more without having to deal with financial risks involved with investing in the stock market, mutual funds, commodities, etc.
FDs have higher liquidity than other financial investments. Any other investment, if withdrawn prematurely, could result in significant losses. These deposits, on the other hand, are much more flexible. The bank or financial organization will pay all due interest to the investor. There is a glitch to this, though. You may need to pay a penalty for making a premature withdrawal, although in most cases, the amount is minor. There are also organizations that have no applicable penalty on premature withdrawals, allowing you to protect your investment entirely in spite of premature or partial withdrawals. Most organizations offer overdraft or loan facility on these deposits as well. This basically means that you can take a loan against that investment. Most organizations offer up to 90 percent of the principal amount in loan.
The best part of the fixed deposit schemes is the fact that they are customizable. You can select the time frame as well as the interest processing that you are comfortable with. In other words, you can receive interest on monthly, quarterly or annual basis. You can also re-invest the interest to earn compounding interest on both the principal and the interest amount. It should be noted, though, that this reinvestment option is available in select organizations only. With the right strategy, this investment could be used to pay off certain monthly expenses or make strategic re-investments of your own.
So, as a financial tool, a fixed deposit is both safe and rewarding. Within every diversified portfolio, it is advisable to invest in some of these accounts strategically and keep them as low-risk tools. This in turn will help safeguard investors against the market vulnerabilities.
EMI calculators calculate the EMIs based on three factors; the principal amount, the housing loan interest rate and the loan tenure. Out of these, the home loan rate is the most important one, as it is the only factor that can vary after you have started paying off the EMIs. Whether you have a floating or a fixed home loan rate , it will be based on the RBI rules and regulations, the profit margins and economy variables as well.
Due to the various financial challenges, it is likely for your EMIs to become the biggest deduction from your monthly earnings. This can be hazardous to your financial life for two reasons:
1. You may not have sufficient funds set aside for emergencies due to which you may end up losing your home because of the additional expenses.
2. Any external factor like a raise in the home loan rates in India can affect regular monthly payments such as EMIs, utility bills, grocery purchases and insurance payments. At times, it can imply that you won’t have sufficient savings for any other financial or medical emergencies.
If you understand the impact of the potential growth in home loan rates, you must ensure that your EMIs account for less than 30% of your monthly income. This will help to make certain that any possible increase in the housing loan interest rates can be dealt with easily.
It can be challenging to keep this percentage consistent throughout the term of your loan repayment though. However, it is the most strongly advised course of action. Fundamentally, there are two strategies that can help you get there:
1. You can work towards an increase in salary or your monthly business turnover, to stay ahead of this ratio.
2. You should make significant low-risk-higher-liquidity investments with whatever funds are left after all the expenses.
The most suitable type of investments for this purpose include SIPs in balanced or gold mutual funds, fixed deposits, recurring deposits, and gold and blue chip equities from stock market. These are realistic as they offer the right combination of liquidity and rewards. You can use them if you get into a situation where you can’t depend on your salary or business turnover to pay your EMIs. First time borrowers believe that home loans are about making the repayments by the set date. However, if you ask any financial expert, they would tell you that it’s much more about the financial discipline of setting enough money aside.
In this world of ubiquitous ATMs, tap-to-pay checkout and automated bank deposits, there are still times when it’s necessary to hand over, or collect, hard cash. That’s why money-transfer services Western Union and MoneyGram have tens of thousands of agents in cities and towns around the world.
Money-sending services can be a lifesaver. You may feel it’s unlikely you’ll ever be broke and stranded in a bus station in Bengaluru, needing your spouse to send cash, but stranger things have happened – and not just when you’re traveling abroad. How about when your kid, who’s gone off to study at a Canadian university, needs you to send rent deposit – pronto? More routinely, money-transfer companies provide banking services like money transfers, money orders and bill payment to people who don’t have bank accounts. In the United States and Canada, many customers are new immigrants who send money regularly to family members in their home countries. Outside the U.S., it’s even easier to find a nearby agent for Western Union (WU) or MoneyGram (MGI) or both. Cash is still king in many countries, and in developing nations many people don’t have bank accounts.
So which is better, MoneyGram or Western Union?
The Big Three
There is now actually a “big three” in the money-transfer business: Western Union, MoneyGram and Wal-Mart (WMT), with the retail giant recently big-footing into this business. (Its service is currently limited to in-store domestic transfers, while its international and online transfers are handled by MoneyGram.)
In the U.S., Western Union or MoneyGram services are available in many pharmacies and supermarkets as well as small local businesses, bus stations and check-cashing outlets. For most of these agents, handling money transfers is a side business. Wal-Mart, of course, offers its service in its stores.
A Few Drawbacks
One drawback to sending cash through these services is that they open or close with the shops’ usual hours. You may have to cool your heels at the bus station until the next morning before your family can get you that emergency cash.
The biggest drawback of any money-transfer service is the vulnerability of its customers to fraud. A request from a stranger for payment via cash transfer is usually a fraud. Since the recipient is untraceable, it’s the modern equivalent of stuffing a wad of unmarked bills into an envelope and leaving it in a public place on instructions from a stranger.
Which One to Use
There are a few differences between the services:
Western Union is the larger of the two companies and has instant name recognition around the world, thanks to its one-time monopoly of the telegraph business. Sending telegrams was discontinued only in 2006, but by then Western Union had moved on to new ventures. It has about 400,000 locations around the world. Customers can send money by phone, through the Western Union website or in person.
Fees can be steep or cheap, depending on a long list of factors including the form of payment used, how fast the money is delivered, whether it is paid in cash or wired to a bank, where it’s sent from and where it is delivered. For international transfers, the exchange rate adds another element of uncertainty to the cost.
Say you are in Philadelphia and want to get $500 delivered to someone in Mexico. If you pay cash at a Western Union agent, and the recipient picks it up in cash, it costs $28 for three-day service, and $40 for immediate delivery. The same transaction costs $5 if it is a bank-to-bank transfer, or $25 if a credit or debit card is used to pay money into a bank account. The most cost-effective way to pay is online or via the mobile app, where fees for most of the above variations are only $4 to $7. But even using the mobile app, if you’re paying with a credit or debit card, and the money will be picked up in cash, the fee for that $500 transfer is a steep $45.
MoneyGram is Western Union’s biggest rival, and its fees are often cheaper. It recently changed its fees to a flat rate of $11.50 for transferring $50 to $900 within the United States, and 2% for amounts over $900. But MoneyGram built its reputation on international money transfers. It has 25,000 payment locations in Africa alone.
MoneyGram’s rates for international money transfers don’t appear to be much simpler than Western Union’s. You can transfer $500 to Mexico, even using a credit or debit card, for a $6.65 fee, but the same transaction costs $29.45 if the money is picked up in Ireland, and $23.75 if it goes to China.
Another big difference: For now, MoneyGram transactions can be initiated only in the United States and a handful of other countries, although it claims some 350,000 locations around the world for pickup.
Wal-Mart offers a lower price than its rivals in this area, but its in-store service is limited to transfers within the U.S., using cash, a debit card or a WalMart MoneyCard. (International money transfers are available in the stores and the website through MoneyGram.) Its fees are currently $4.50 for up to $50, and $9.50 for up to $900.
Most housing finance companies offer ahome loan balance transfer as a housing finance service. This has been available in the market for quite some time now. However, you need to do this smartly. You cannot rush into these decisions as they can turn out to be expensive. Therefore use this step-by-step guide to select the right financial service for you.
Step 1- Consider all the options available:
Most borrowers do not research the home loan transfers holistically. However, it is a new home loan after all. So, you need to take similar precautions. Check out the organizations offering this particular product because all the organizations don’t offer it. Then, identify the most beneficial one that will suit your requirements perfectly. Are you getting lower interest rates or a no-prepayment-charges clause in the home loan transfer? Find out.
Step 2 – Focus on your requirements:
Why do you need to opt for a home loan balance transfer ? What are your requirements that aren’t being met efficiently withthe current housing finance company? Are you earning more and need the loan with no prepayment charges? Or do you want to be offered lower interest rates that are available to new borrowers? Are you interested in the top-up loan for home renovation? When you make a clear list, you eliminate some organizations by default. You will only select the housing finance companies that serve the requirements you seek.
Step 3 – Watch out for loan details:
You will need to check out the terms and conditions of the home loan agreement. You need to look at it as a home loan rather than just a home loan balance transfer because you do go through the entire home loan process again. You need to meet their home loan eligibility criteria. You need to consider the housing loan offer along with its terms and conditions. This is not optional. It should meet your financialsituation too. Simply put, an ideal home loan transfer will allow you to save more than the amount that you are spending on it, since you will spend on the legal fees, processing charges, credit score report, service taxes, etc. So, as long as you are profitable in this equation, it is a smart decision. If you are not profitable, you will have to say a “No.”.
Step 4 – Finalize the transfer:
If you are certain that you will be in a profitable situation, then you will need to obtain a NOC (No Objection Certificate) from your current lender. This is an additional document required for a home loan transfer. The submission of all the documents and signed application form will seal the deal. Though, you must realize that the NOC is non-negotiable and will not be issued by your current lender if you have defaulted any of your repayments. So, make this transfer swift by following up diligently for the same.
When you borrow money, you have to pay back the amount of the loan (called the principal), plus pay interest on the loan. Interest essentially amounts to the cost of borrowing the money – what you pay the lender for providing the loan – and it’s typically expressed as a percentage of the loan amount. You might be paying 3% interest on your car loan, for example, or 4% for your mortgage.
There are actually two different kinds of interest – and it pays to know the difference. Depending on the loan, you will pay either compound or simple interest. Compound interest is calculated on the principal amount plus the accumulated interest of the previous periods, which means you effectively pay interest on the interest. In contrast, simple interest is calculated on the principal only, so you don’t pay interest on the interest. Because you’re paying interest on a smaller amount of money (just the principal), simple interest can be advantageous when you borrow money. But do simple interest loans exist?
You’ll find simple interest loans offered by a variety of loan products, including car loans. With most car loans, interest is calculated on the principal loan balance on a daily basis, and payments are first applied to any interest due, and then towards the principal balance. The daily interest amount is equal to the annual rate (3%, for example) divided by the number of days in the year (365, except 366 during a leap year). So the daily interest on a loan balance of $10,000 at 3% interest would be $0.82 ($10,000 x 0.03 ÷ 365), assuming it’s not a leap year.
Like many loans, simple interest loans are typically paid back in equal, monthly installments that are established when you receive the loan. These loans are amortizing, meaning a portion of each payment goes to pay down interest, and the rest is applied to the loan balance. At the beginning of the loan, more of your monthly payment goes towards the interest since the interest is always calculated off the remaining balance, which is highest at the onset of the loan. As the loan term progresses, less of your payment goes towards interest and more applies to the principal.
If you have a $10,000 loan at 3% for three years, for example, your monthly payment would be $290.81. Twenty-five dollars of your first payment would go towards interest and the remaining $265.81 to the balance. The next month, $24.34 would go towards interest ($9,734.19 x 0.03 ÷ 12), and $266.48 to the balance, and so on until the loan and interest are paid in full. (If you are thinking of buying a car, see How Interest Rates Work on Car Loans.)
If you make all your payments on time each month, you should expect to pay back just the amount that is stated on your loan agreement. If you make a late payment, however, more of that payment will be used to pay the interest you owe because you’ll be paying more days of interest – and less will go towards reducing your principal balance. This adds interest to your loan, plus you may have to pay late fees.
Most student loans use what’s called the Simplified Daily Interest Formula, which is essentially a simple interest loan since interest is only calculated on the balance (and not on the previously accrued interest).
Most mortgages are also simple interest loans, although they can certainly feel like compound interest. In fact, all mortgages are simple interest except those that allow negative amortization. An important thing to pay attention to is how the interest accrues on the mortgage: either daily or monthly. If a mortgage accrues interest daily, it is always a simple interest loan; if it accrues monthly, it is simple interest unless it’s a negative amortization loan.
It’s important for borrowers to know how interest accrues on their mortgage since simple interest loans need to be managed differently than monthly accrual mortgages. One thing to watch out for: Late payments on a daily accrual loan can cost you dearly. If your payment is due on the first of the month, for example, and your payment is a week late, you’ll end up paying an extra seven days’ worth of interest. The grace period just allows you to avoid paying a late fee – not more interest. Since more of the payment goes towards interest, the late payment can actually make the loan balance go up instead of down. See What Are the Pros and Cons of a Simple Interest Mortgage? for more on this topic.
The Bottom Line
Simple interest loans calculate interest on the principal balance only, so you don’t end up paying interest on interest as you would with a compound interest loan. If you keep a balance on your credit card, you probably pay compound interest, and any interest charges are added to the principal – making your debt grow exponentially over time. Adding insult to injury is the fact that most cards compound interest on a daily – not monthly – basis, which can cost you even more over time.
Compound interest can sometimes work in your favor – just not when you borrow money. Here’s when: Simple and compound interest also apply to interest you earn when you invest money. But while simple interest can work to your advantage when you borrow money, it will end up costing you when you invest. Say you invest $10,000 at 5% interest paid once a year for 20 years. If your investment earns simple interest, you will have $20,000 – your original $10,000 + ($10,000 x 0.05 x 20) – after 20 years. If the investment earns compound interest, on the other hand, you will have $26,533 – your $10,000 + ($10,000 x (1 + 0.05/1)^20) – assuming interest is compounded one time per year. If it’s compounded 12 times a year, you’ll end up with even more – $27,126 in this case.
Dollar wise, you’re typically better off with simple interest any time you borrow – as long as you make payments on time and in full every month – and compound interest any time you invest.
When it comes to retirement investing, many people understand the basics. Essentially, start investing in retirement funds as early as possible and utilize your employer’s 401(k) match and individual retirement accounts (IRAs) to the best of your ability. However, many people want to know if there is anything else they can invest their money in to diversify their retirement portfolios. While you should always do your research when it comes to alternative investments, many people have had success investing in some of the options below which range from investing in your favorite wines to investing in yourself.
This is a lesser known and highly unique investment that you might consider if you love wine. Essentially, you can purchase wine and then hold on to it for years and wait for the value to accrue. In order to make money investing in wine, the wine has to be stored appropriately. If you don’t have the facility for that, you can actually pay companies to store your wine for you, sometimes without ever holding the wine in your hands yourself. This type of investment requires significant research and know how to ensure you choose the correct types of wine and vintages to create a profit. But it could be a fun and interesting investment for someone looking for a different way to grow their money. The best part is that if it doesn’t sell, well then you just have a lot of wine to enjoy in your retirement years. There’s nothing wrong with that. (For more, see: Investing in Fine Wine.)
If you have a love and a knowledge of antiques, this can be an extremely lucrative way to diversify your retirement portfolio. Keep in mind that during recessions, items like antiques and art do not hold great value. However, with the right piece, you can turn a significant profit at any time. Keep your eyes peeled for unique antiques at thrift stores and garage sales. If you inherited furniture or other objects from your parents or grandparents, keep them in good condition and seek out the advice of an expert who might be able to tell you what they’re worth. You can always sell antiques in a private sale, or if you prefer to make it more official, you can always place them with an auction house. Many people keep their antiques to enjoy them and then sell them off periodically well into retirement to generate cash flow. Either way, if you have a love of old objects with unique history, this could be a good option for you. (For more, see: How to Cash in Your Heirlooms.)
If you enjoy real estate, this is an excellent way to invest any additional funds you may have. Many people invest in second and third homes and rent them out, which can generate much needed cash flow during your retirement years. For the inexperienced buyer, real estate can be risky. However, if you learn valuable skills in the process, you can grow your wealth by adding to your real estate portfolio over time. Be careful, as always, when borrowing money for this endeavor. Namely, always purchase a home that is affordable enough to where you can pay your mortgage and your second home’s mortgage if you don’t have a renter for a certain period of time. (For more, see: The Income Property: Your Late-in-Life Retirement Plan.)
Peer-to-peer lending has gained immense popularity in the past few years, and many people report excellent returns. Essentially, peer-to-peer lending is when you offer a loan or a part of a loan to someone who needs it. Many of the loans on peer-to-peer lending sites are for credit card consolidation loans or real estate loans. In many ways you can be helping someone who might not be able to qualify for a traditional bank loan.
It’s typically always a good idea to invest in yourself. This might include taking additional college classes, learning new skills, honing your business acumen or paying for a personal trainer to get in shape to improve your long-term health. You should never invest money you don’t have in yourself, but if you have spare cash and have always wanted to learn a new language or experience a new culture, this is absolutely a valid investment that can bring you great joy in your retirement years. (For more, see: 8 Affordable Retirement Hobbies.)
Teaching others your expertise and skills is a great way to supplement your income. It can also be a low-cost route of profiting from the ever-present demand for valuable information. In fact, many successful entrepreneurs have built their business empires by simply selling useful content and information.
For example, Martha Stewart became the first self-made female billionaire in the United States after taking her housekeeping media and publishing company, Martha Stewart Living Omnimedia Inc. (MSO), public in 1999. Similarly, Robert Kiyosaki, author of the New York Times Co. (NYT) bestselling book “Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!”, has made a lot of money by publishing a number of books tall geared towards helping improve the financial conditions of others.
Below are three ways in which you can monetize your knowledge and make some money on the side.
Build an Audience and Sell Advertisements
One way to make money from your expertise is to attract a sizeable audience by publishing free, useful content on the Internet. This can take the form of YouTube (GOOG) videos, articles, blog posts, email newsletters, Instagram photos, podcasts and even tweets. Regularly publishing fresh content will help to rapidly grow your platform because people typically gravitate to free resources. With this approach, you’ll make money from advertisers interested in promoting their products and services to your subscribers.
Take, for example, reality television star and entrepreneur Kim Kardashian. She charges businesses up to $10,000 to have her tweet about them to her more than 19 million Twitter (TWTR) followers. Then there’s sales trainer and real estate mogul Grant Cardone, who has produced three online one-hour live shows on relationships, finance and sales every week for the last four years. In the process, he built a YouTube following of 95,000 subscribers. The live shows are streamed to his subscribers for free, and he makes money by selling advertising space to sponsors.
Many well-known online media companies also use this strategy. Sites like Ask.com, Nolo.com and Entrepreneur.com attract visitors to their website with free, valuable and insightful content. They can then fund their operations primarily with advertising revenue because the volume of visitors they attract is so large.
Schedule One-on-One Sessions
Although selling advertisements can be quite lucrative, building a brand and following that’s strong enough to attract advertisers will take a long time. Individuals that are looking to monetize their expertise from day one should strongly consider charging for one-on-one tutoring or consulting sessions. These sessions can be conducted in person or virtually, and fees can be charged to clients based on the length of time of each session.
For instance, a person who knows more than one foreign language could use a service such as Verbling or italki to tutor private classes, while a recent college graduate could earn extra income by conducting one-on-one piano lessons with children in her neighborhood.
Create and Market Information Products
Conducting one-on-one sessions can become time consuming for anyone looking to make a lot of money by teaching others. One way around this dilemma is to create and sell information products, also known as info-products. These can be any product or service — a books, audio lecture, online course, or instructor guide — that provides learning material on a particular subject matter.
Info-products can turn into a strong passive income source. Unlike one-on-one sessions, a creator of an info-product can make money even while sleeping. Added to that, an info-product can be created once and sold multiple times. For example, an individual who is good at sewing can create a course on sewing by using a service like Udemy. The majority of that person’s time can be spent on promotion and getting new customers because the course creation is a one-time event. This is the complete opposite when charging for one-on-one sessions. Likewise, authors of books receive regular royalty payments years after their books are published.
When do you need to keep tabs on home loan rates in India ? The factual answer is; all the time really. It may not be something that all the borrowers want to do, which is understandable. However, you cannot escape the practical realities of it. You need to watch your housing loan interest rates regularly as they have serious implications on your home loan, repayment schedule and EMIs. So, these are the three important reasons namely for keeping a check on the home loan rates in India.
Negotiate a better home loan deal
There is a time gap between the date of your home loan application and the approval for the same. This time may work against you; if competitive banks and housing finance companies make better home loan rates in the interim. You certainly do not want to miss out on these deals. You want to be in a position to take the maximum advantage of these ongoing home loan offers. So, keep an eye out for related advertisements and online offers so that you can have a word with your branch manager or loan executive to make the most of it.
Opt for a home loan transfer
Within the first few years of the home loan; most borrowers pay a significant portion of their home loan principal amount. You can watch out for home loan offers from competitive banks and housing finance companies so that you can choose to carry outa home loan balance transfer; provided it is a profitable decision. You must focus on the lowest home loan interest rates rather than prepayment offers because it will actually go a long way in minimizing your interest repayment considerably.
Adjust your monthly cash flow
There are always clues in the home loan market that the interest rates may escalate. The home loan borrowers need to watch out for such kind of news. You may need to pay higher amount of EMIs from the subsequent month if the housing loan interest rates for your home increase. It is especially a risky situation for borrowers with floating interest rates. So, keeping a close eye on these fluctuations is almost mandatory.
You will need to tighten your expenses to make room for the additional EMI payment that you will incur. So, it is not a casual choice. It will be much more challenging if you have other expenses or financial commitments. However, you cannot default on your EMIs as it will affect your credit history and also chances to get a loan transfer. Hence, it is a smart choice to keep a look out on the housing loan interest rates and be prepared for any possible fluctuations
As a holistic guide for home loan buyers, it is important to offer useful and actionable insights to them.Prepayment charges on housing loans have always been there. However, there is a greater awareness about the subject in today’s market. Therefore, explore this concept thoroughly so that you can fit this strategy into your housing loan repayment scheme profitably.
What are prepayment charges?
When you opt for a house loan, you are expected to pay a certain amount as EMIs for the next 20 to 30 years. Most borrowers can, however, save sufficient additional fundsby repaying more than this set amount. This additional repayment is known as prepayment. Since, prepayment allows home loan borrowers to repay the principal amount sooner, they can save substantial amount of interest. For most housing finance companies in India, this is not a profitable practice, as their return on investment is lower than anticipated. So, to discourage this practice, there are minor charges levied on these repayments, which are known as prepayment charges. The percentage of prepayment charges varies from one housing finance company to another, nonetheless, it is applicable in 99% of the cases.
What are the advantages and disadvantages of these charges?
There is no advantage of the prepayment charges for housing loan borrowers. You have to pay more to repay early. However, housing finance companies in India need this kind of charges to operate profitably and continue their services. So, in a way, it is an advantage that you can prepay your house loan and spare some funds that would have been spent as the interest otherwise. In financial terms, the main advantage of using the prepayment charges to prepay the loan is that these charges are way lower than the interest that you would have ended up paying eventually. So, if you are in a position to prepay, it is a great deal because, in spite of the prepayment charges, you are saving cash and lowering your account payables.
What are the current standards for prepayment charges?
Since May 2014, RBI has made an announcement that banks are not allowed to levy any prepayment or foreclosure charges on floating interest home loans. So, if you have opted for a floating interest on your home loan in India, you can prepay your loan without any prepayment charges. It is great news for people, who have access to disposable funds, which can be channelized to repay their home loans sooner than later.
So, equipped with this information, the borrowers can evaluate their finances and identify the amount of prepayment that they can make efficiently.
A Good and a bad home loan is all about convenient and affordable EMIs. Borrowers want to repay the loan without any financial or mental stress. They want to maintain a high credit score, accumulate good savings and repay their EMIs without the monthly hassle. If they are in a position to repay the loan sooner, they want a housing finance company that supports it. So, here are a few hallmarks that separate good and bad housing loans. Use them to distinguish the loans strategically.
Productive home loan eligibility:
When the banks and housing loan companies include credit score, finances and professional standing in the home loan eligibility criteria, they do it for a reason. Agreeably, a stringent housing loan eligibility criteria cannot be appreciated. However, even borrowers must be qualified to repay the house loan that they borrow. If a borrower decides to opt for a home loan that he cannot afford to repay comfortably, then he will be in a long term fiscal challenge. The only way to get out of such circumstances is to sell the house or default the loan. None of these situationswould have occurred if you had opted for a loan that you can repay steadily and effectively. So, the EMIs, interest rates, type of interest rates, borrower’s income and current assets, all play a vital role.
Dependable home loan package:
You can find the best home loan in India, with the lowest interest rates and the most affordable EMIs. Though this can turn into a bad house loan for you if you did not pay attention to the other factors of the loan, which are equally vital. When you are about to enter in a legally binding long term financial contract, you vet it out. You consider all the possible aspects to differentiate a perfect housing loan offer from a bad one. Consider the following criteria and calculate if it suits your personal long term financial plans:
• Loan tenure
• Fees and charges
• Terms and conditions
• Type of interest rates
Doable long term repayment plan:
Though it is one of the factors affecting home loans in India, it is the most vital one in the long run. You cannot anticipate all your financial variables for the next 30 years. So, you need to work with the branch manager who understands that and helps you along the way. A good home loan has a right repayment option, which can be changed as per the financial conditions of the borrower. A housing finance company should be flexible enough to consider restructuring of the loan, when a borrower needs to. There should be enough room for the borrower to make the prepayments comfortably and profitably.
If you examine the home loan offer along with the terms and conditions document carefully, you can distinguish a suitable choice for your personal finances easily and confidently.
The projections for the growth of robo-advisors are ambitious to say the least. However, this is a normal reaction for a growing trend. In many cases, the analyst is not looking at long-term patterns, assuming that the investment environment will remain the same for many years. This doesn’t mean robo-advisors are a bad option. It depends on your goals. Where do you fit in?
A few of the most popular robo-advisor services today are Wealthfront, Betterment, Personal Capital and FutureAdvisor. Charles Schwab Corp. (SCHW) offers its Intelligent Portfolios service.
A big reason for robo-advisor popularity is affordability. For instance, 90% of Wealthfront’s 30,000 clients are below the age of 50 and 60% of those clients are below the age of 35. This points to the Millennials, a generation that is still in the early stages of building wealth. Most Millennials can’t afford the fees of a traditional financial advisor who also typically require a minimum amount of assets to invest.
Wealthfront has a minimum investment of $5,000. If that total is below $10,000, then the service is free. After $10,000, there is just a 0.25% fee. Betterment works a little differently, with no minimum investment required and a 0.35% fee if the total investment is below $10,000. If the investment is between $10,000 and $100,000, there is a 0.25% fee. If the investment is north of $100,000, the fee is 0.15%.
But let’s skip right to Schwab and its Intelligent Portfolios. This service requires a $5,000 investment, but there is no fee. That being the case, it’s going to be difficult for Wealthfront, Betterment, and its peers to compete over the long haul. As we all know, nothing beats free. And if you’re wondering how Charles Schwab makes money on this service (you have to read the fine print), it’s through its proprietary exchange-traded funds (ETF) and third-party ETFs. But this is still a top option for an investor interested in robo-advisor services. In addition, Intelligent Portfolios will diversify your account across stocks, fixed income, real estate, commodities and more.
Another reason for the popularity of robo-advisors is tax-loss harvesting, which automatically minimizes tax obligations on your profitable trades and maximizes tax reductions on your losing trades. And, best of all, it’s all done by a computer, requiring zero effort on your part.
Millennials have seen the worst of it during their lifetimes, including the Dotcom Bubble and 2008 financial crisis. Many are risk adverse and wary of the stock market. Unfortunately, the same pattern that helped create the last crisis is likely taking place again (record low interest rates). Only this time, the problem is global. And instead of just corporations being overextended and unable to pay their debts when growth stalls, you can now add countries to that list.
Is a bear market is approaching? Even if it isn’t on the horizon, it’s only a matter of time. It’s important to realize that while robo-advisors can rebalance portfolios all they want, those portfolios are going to be almost 100% long (excluding cash positions). It will be impossible for those robo-advisors to deliver a positive return. Millennials will see their investments head south and robo-advisors may wane in popularity.
Paying for a good financial advisor might be money well-spent in a bear market. Unlike a robot, a human can look at trends, keep up with all the up-to-the-minute headlines and make sense of them in a way that only a human mind can. At least there is potential of navigating a bear market when you have a human financial advisor. When you use a robo-advisor and the markets head south, your investments are likely to head south as well.
This is one question that many people consider closely. Floating home loan rates, for the most part, are a major concern for potential home loan customers for two main reasons:
• Wider market affects the interest rates.
There are several aspects that determine the floating interest rates for housing loans. Select organizations play a key role in influencing them; such as the Reserve bank of India, International and Local markets such as NASDAQUE or BSE, etc. How do they actually affect the home loan interest rates? The RBI can change the rules and regulations, which in turn will affect the banking operations. Fluctuations of the money market can affect the entire economy, which in turn affects the availability of funds and the housing loan interest rates for customers .
• There can be potential threats.
You cannot anticipate these changes. Worst of all, you cannot control them. If your interest rates lower, you will be happy as a customer. However, if there is, for any reason, an increase in the home loan rates, most consumers may not be in a position to afford the growth in the EMIs easily. The bottom line is, when you choose floating interest rates, you consent to the possibility of these fluctuations.
So, the reality is that it can be a hard road ahead. When you opt for a home loan, the typical tenure of the loan is 20 to 30 years. No one can anticipate the long term changes in the RBI policy, the Indian economy or the lending policy of your lender. You are taking a risk – the size of the same depends on you, though.
How to afford floating rates for home loan?
While it is a risk, the rates are manageable too. Home loan rates in India are always going to vary. Hence, you must take certain strategic actions to stay ahead of the game.
• Ask for the strategic housing loan duration and the interest rate. You should negotiate the details well enough so that your EMI is 30% of your monthly earnings.
• Use the no-prepayment changes clause to your advantage and repay the largest part of your loan when you can.
• Do not ignore better interest rates during the first 5 to 10 years of the home loan duration. If a lower interest rate opportunity is available, then go for a home loan balance transfer. It is a great decision in the long term.
• Understand that there is a possibility of a home loan rate hike over a period of 5 to 10 years. You must stay ahead of this potential landmine by increasing your earnings by investing your savings into the right financial products.
People perceive loans as a huge liability. Aside from marriage, it is probably the longest commitment that people take up. Apart from savvy business owners and investors, most people do not even understand the financial strategy of loans well enough. One of the better strategies available is loan against property. Before analyzing that, it is important to consider some principles of borrowing money that businessmen and investors use to optimize their funds:
1. Stay updated about the aspects of loan process and eligibility criteria that matter.
2. Take each and every effort possible to get the best loan possible. It’d be time worth spent for years to come.
3. Do not sign on the dotted line if you are unsure about any aspect of the loan agreement.
So, how do you use these principles for getting the best loan against property in India ? There are several factors that play a vital role in such an important financial transaction. Here is how you can optimize this loan on each factor:
• Know where you stand and what you want.
If you are taking a loan against property for the first time, this is where you may fall short. You need to understand a few important aspects such as:
1. LTV ratio: Loan to market value of the property
2. Potential criteria for evaluating the cost of the property
3. Suitable repayment strategy
These are very important and can be considered almost non-negotiable. It may not seem to make sense that this list doesn’t include interest rates, but the fact is, after you have taken this loan, these factors will matter as much as loan rates.
• Know what you would be willing to adjust.
You may not find the perfect loan against property in India . In that case, there are certain factors that you will have to adjust with. You should, however, be certain about how much you can adjust. In other words, if the interest suggested by the housing finance company is too high to make comfortable repayments, then you should negotiate it. In the end, ensure that these factors are within your comfort zone. These include:
1. Loan tenure or the loan term offered
2. Pre-payment penalty
3. Interest rate
4. Processing fees and other charges
• Know your finances well enough.
Here are some factors that should be in the best possible condition to provide you with maximum advantage in loan negotiations:
1. Credit score
2. Property documents and evaluation
3. Employment details
The list may seem to be a long one. Keeping these factors in mind though, you can ensure that you get the best loan as per your requirements.
Home loan protection plans (HLPP) are unique insurance plans for home loan borrowers. Simply put, this gives a lump sum benefit in the event of the death of the insured, which can be used to pay off the pending home loan amount to the bank or housing finance company. This basically helps to safeguard your decision of buying a home using a housing loan . That being said, it is important to know a few facts about this to make the best decision possible.
• It is a term insurance.
This cover works as a term insurance i.e. provides coverage at fixed rates of payments for a limited period of time. In case of death, the nominee gains full benefit, which is the lender, in case of a house loan. While most mortgage organizations have collaterals, this insurance cover is a great asset for the insurer as it can ensure that the borrower’s family don’t lose their house in the event of an accident.
• The premium is a very small amount.
Like term insurance, the premium on this is a small amount and can be paid annually or in a single payment. Most Indian housing finance companies also allow you to include it in home loans, if you don’t have sufficient balance for paying the premium.
• There are no benefits in the event of survival.
This type of policy has no benefits if the insurer survives. This drawback is the main reason why low cost insurance plans are available in the first place. However, this home loan insurance cover is valid for the entire duration of the loan. That makes it a great and affordable safety net in case of death as your home stays within the family. For most people, this is an important cover as their home is the largest asset for them.
• You can use term insurance for the same purpose.
If you already have term insurance of an equivalent amount and time period, you may not need to buy HLPP separately and can use the same. In most cases, people need to buy it as they don’t have an existing term insurance policy of equivalent value.
The safety of this policy is very important to people who do not have any major investments that can be used to repay pending amounts in EMIs. While this is not a necessity for people buying homes as an investment, it can be deemed as a requirement for self-occupied property purchases with housing finance.
Even in this charge-it world, there are times when having cash on hand is handy, especially when traveling out of the country. When abroad, you have to deal with the issue of coin. Specifically, the coin of the realm.
Sure, there are plenty of places waiting to make a currency exchange quick and easy. But that almost always means that you will pay more for converting money than you should. What’s the best way to exchange without giving too much of it away? We asked around.
If you have to have cash fast, an exchange firm is the easiest way. Travelex is probably the best-known company. You don’t have to order five days in advance (as you often do with your local bank, see below) and you don’t have to deal with language barriers. Travelex will even deliver the money to your home or to your departing airport.
Of course, all of this convenience comes at a price: the service charge. If you wait until you get to an airport to exchange your currency, you’re probably going to pay a hefty foreign transaction fee. Branch locations may be a little cheaper: Some Yelp customers (who generally give Travelex high marks) have commented that fees were waived if they checked in to a branch location online, and the company would take back any unspent money within 90 days of their trip, converting it back to U.S. dollars for no additional fees. Others comment that there are minimum amounts you have to exchange to avoid larger fees.
Think of Travelex as a concierge service. Like most anything else, you can always pay less if you’re willing to invest more of your valuable time doing the legwork on your own. But if you are taking an impromptu trip, waited too long or just don’t want to go through the hassle, Travelex, and companies like it, will make the process easy.
Your Local Bank
To avoid high fees, you can always go to your friendly local bank branch. But you’ll probably have to arrange for the money several days in advance. “Most banks will allow you to order foreign currency prior to traveling internationally. Banks such as Bank of America offer their customers the options to order currency online or in their banking locations by using Bank of America checking or savings accounts,” according to Ileaa Swift, owner of the website Swift Travel Deals. “If you do not have a savings or checking account with a particular bank, but have a credit card with the bank, visit the local branch and ask about onsite foreign currency exchange options. Most banks even offer tips that will help you figure out how much foreign currency you will need to order and also offer options for cash advances. Most banks also have the option to print out currency exchange rates as wallet cards for you to take with you during your trip.”
You read that right. People who travel abroad sometimes end up with foreign currency they haven’t changed back into dollars Place an ad on Craigslist, Facebook or your local newspaper saying that you would like to exchange your currency. You avoid all fees and depending on the other person, you can probably make the exchange at current exchange rates without any markups.
There are some caveats. First, you have to understand how to calculate exchange rates. There are online currency exchange rate calculators and plenty of articles to help with that, like Understanding The Spread in Retail Currency Exchange Rates.
Second, any time money is involved safety becomes a concern. Make the exchange in a public place and have somebody with you. If you have a GoPro camera, consider recording the transaction by leaving the camera on your dashboard.
The plastic in your wallet isn’t a bad resource. But be careful: If you use your bank ATM card or a credit card, make sure it doesn’t charge a foreign transaction fee. If it does, be prepared to pay an extra 1% to 3%. If you plan to travel abroad regularly, consider getting one of the Top Credit Cards With No Foreign Transaction Fee.
“Not only is the lack of a foreign transaction fee important, but so is the exchange rate,” says Mike Scanlin, CEO of Born to Sell, a software development firm that creates covered call investment tools. “I did a test when I was in Japan. I used the same ATM machine first with a Bank of America debit card and then with a Capital One Visa card (with a cash advance feature). Even though the transactions were done one minute apart, the Capital One [card’s] exchange rate was much better than the Bank of America [card’s] exchange rate. Plus, Bank of America charged a foreign ATM fee, where Capital One did not. Even though the Capital One [withdrawal] was treated as a cash advance (since it was a credit card and not a debit card), I was able to pay it off immediately with online banking so there was no interest charge for the cash advance.
If you have multiple cards, you can do a similar test in a foreign country and then log onto the bank site to see what happened. Take out $100 with each of two or three different cards and see which cost you the most. Then use the best card for the rest of the trip.”
Last week was another difficult one for stocks, marked by a bruising mid-week selloff triggered by China’s surprise devaluation of its currency. For many investors, the move reinforced fears about the growth prospects of the world’s second-largest economy. Though U.S. equities remained resilient, other markets came under pressure. European equities in particular struggled as the fall in China’s currency and the appreciation of the euro hit exporters especially hard.
It also did not help that the news came on the back of another worrisome trend: an accelerating decline in U.S. inflation expectations. Too little inflation can be just as perilous as too much, as a decline in inflation expectations can indicate slower growth ahead.
That said, as I write in my new weekly commentary, “The Scene Is Set for Higher Volatility,” there is a big difference between slow growth and no growth, so it’s important to put last week’s events in context.
China’s surprise devaluation.
While I don’t believe China’s move has the dire repercussions some have suggested, it does fit within the broader narrative of a slowing global economy, with less support from emerging markets.
But it needs to be viewed in the context of the currency’s relative strength: The yuan was one of few currencies to have appreciated against the dollar over the past five years. In that light, the move can be viewed as part of a shift toward a market-determined exchange rate and broader financial liberalization. In addition, over the intermediate term, it should provide some modest stimulus to that economy.
Declining inflation expectations.
Despite the slump in inflation expectations and other signs that U.S. growth remains below trend, I don’t view deflation as a real risk. Last week brought more evidence that U.S. economic growth should be modestly higher in the second half of the year, although it’s unlikely to surge. Reports on retail sales, industrial production and producer prices were all solid.
Finally, much of the recent drop in inflation expectations is being driven by lower commodity prices, particularly oil. Last week, headlines were focused on oil trading down to a six-and-a-half-year low. However, this had more to do with supply than demand and was mostly a U.S. phenomenon, driven by the recent stabilization in the U.S. rig count as well the fact that production has remained resilient, despite the pullback in drilling activity.
As for what this means for investors, there’s one key takeaway: the ingredients are in place for more financial market volatility.
At its peak last week, the VIX Index, which measures volatility of the S&P 500 Index, was up 50 percent from the previous week’s low, according to Bloomberg data. Yet volatility is still below its long-term average, and the low-volatility climate of the past few years is incompatible with a world marked by slow growth, unstable inflation expectations and a likely Federal Reserve rate hike before year’s end.
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock. He is a regular contributor to The Blog and you can find more of his posts here.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.
Most expenses for a home loan seem small as compared to the principal amount, due to which people fail to take them into account and include them in the principal amount. Thus, it should come as no surprise when the final home loan calculations bring about EMIs that are shockingly huge to pay. It makes sense, thus, to include these minor expenses in your principal amount while calculating your EMIs with the home loan EMI calculators in India .
It is a tiny percent of your principal amount and can even be waived off in certain cases. In most banks, it can be anywhere up to 1%. However, the final processing fee will be charged along with the requisite service tax.
This amount was earlier included in the principal loan; however, from mid-2012, this amount must be paid in its entirety separately. So, calculate the stamp duty and set aside sufficient funds for it like you would save up for the down payment. Since it costs up to 8% to 10% of the principal amount, you must include it in your home loan calculations carefully. As, you can’t pay it via EMIs, exclude it from the amount you enter in the home loan EMI calculators.
A home loan protection plan is a term insurance product for homes. You can pay it all at the start or you can pay it in monthly instalments. This choice mostly depends upon available funds after the down payment and stamp duty cost. If you plan to pay it on a monthly basis, you must include it accordingly in your EMI calculations.
Interest rate fluctuations:
These are really challenging to anticipate. Most people fail to include them in the home loan calculators in India . But, for floating and fixed interest rates, these fluctuations are very common. So it would be smart to make a few rough calculations to observe their impact on your EMIs. You should be in a position to pay off the EMIs in spite of the variations as they would occur eventually. Therefore, don’t plan your EMIs in such a way that there is no money left for these additional expenses.
It is imperative to foresee all these factors and understand their impact on your total expenses. A smart strategy would be to keep sufficient room in your monthly cash flow for these additional expenses. So, plan smart and choose well for your dream home.
Most people provide the much required maintenance, update or total overhaul to their homes from time to time. How you choose to improve your home depends on your lifestyle, home management and discretionary income. Most people can easily afford the partial renovation, basic decorations or painting. However, a complete home renovation would need major financial support. This is where the home improvement loans come handy.
Nowadays, most people can change the look of their homes or make major changes easily. All they would need is a house renovation loan from the right housing finance partner. When you understand the developments in the interior designing or architecture field, you know that you can overlook some of the trends although you cannot neglect all of them. For example: You can be choosy about furniture or electronic gadgets for your home and these can even be changed as per your convenience and personal choice. However, you must ensure that you use concealed wiring, in-wall plumbing, recessed lighting, etc in your home. In addition, there are certain choices such as wall mouldings, installation of German kitchen, eco-friendly furniture etc. that would require you to possess considerable amount of funds for effective execution. When you plan major alterations for your house, you must ensure that you consider all the involved variables well. If you don’t get a contractor adhering to his deadlines and budget, your borrowed amount may turn out to be insufficient.
You must also pay close attention to your loan contact. The tenure for a home renovation loan can extend for as long as 20 years. However, obviously, you would not want to extend it for that long since you would end up paying much more interest as compared to the principal amount.
The interest rate for home improvement loans is variable. Hence, it is best to negotiate it well with the finance institution or bank beforehand. A lot of people contact the same housing finance company that they were in touch with for their home loan, as the process tends to be faster if you already have shown your repayment ability and credit score to an organization. The borrower must also pay close attention to important factors such as processing fees, stamp duty, EMIs, etc. If you can manage to add it to your existing home loan, then you can enjoy the tax exemption on the respective EMIs of the renovation loan too. Hence, make a smart and financially savvy choice for your home.
It’s a sad fact of modern life: Senior citizens are often targeted by thieves and financial tricksters, and those residing in nursing homes can be the most vulnerable of all. If your loved one is in a facility, or will soon be entering one, how can you make sure that his or her pension plan payments, Social Security income, annuity income or other funds are protected from unscrupulous employees? Here are a few pointers.
1. Set Up a Power of Attorney
Have the senior legally appoint a trusted relative or friend to act as a representative with the authority to manage money and make financial decisions by having a lawyer draw up a power of attorney (POA) document. In fact, you can do this long before you think your loved one might ever end up in a nursing home; the POA can be written to go into effect only if, and when, the patient enters a facility or can no longer make his or her own decisions. POAs can act as a deterrent: If a sticky-fingered staffer at a facility knows John’s son has control over his finances, he or she might be less likely to target John. (For related reading, see Power Of Attorney: Do You Need One?)
2. Ask About Safeguards
Another important step is to interview the appropriate nursing home staff prior to admission. Ask about how they respond to late or missed payments (unpaid bills can be a sign of hanky-panky), how they handle cash for residents, how they release money from residents’ accounts and whether they allow salespeople to make onsite presentations. Also ask what the facility’s policies on theft are and what measures they take to safeguard residents’ checkbooks, ATM cards, federal benefit cards and other sensitive documents against financial and identity theft. Finally, ask what the facility’s procedures are if they suspect that a resident is being financially exploited or a victim of theft or fraud. A trustworthy facility will have clear procedures in place to prevent and detect problems. (For related reading, see How Seniors Can Fight Identity Theft)
3. Use Direct Deposit
Don’t have checks mailed to the nursing home; have payments directly deposited to the resident’s bank account. Nursing home residents will also want to receive their bank statements electronically to prevent someone from gaining access to their financial information by stealing their mail. Residents should also avoid logging into sensitive accounts from any public or shared computer, where account security could be compromised (see Tips For Keeping Your Financial Data Safe Online). If you suspect mailed checks have been stolen and fraudulently cashed, notify the US Postal Inspection Service as well as the facility. And, as always, watch out for fake mail and email that pretends to be from a financial institution. but is really a ploy to steal money.
4. Don’t Let the Facility Receive Disbursements
A nursing home can be appointed a patient’s representative payee; this means the facility can directly accept federal benefit payments from the Social Security Administration, Department of Veterans Affairs, Department of Defense, Railroad Retirement Board and the Office of Personnel Management on a resident’s behalf. The facility is then supposed to use those payments for the resident’s benefit – to pay legitimate bills he or she is responsible for, for example.
The potential for financial elder abuse is obvious with this arrangement (if not from outright fraud by the nursing home, then from administrative snafus). There have been cases of nursing homes overpaying themselves with that income. “If a resident has dementia to the extent that it limits his or her ability to handle finances, a trusted authorized representative, often a family member, should handle income and bills,” says Eric Carlson, directing attorney of Justice in Aging, a national organization that uses the power of law to fight senior poverty. “Some residents do not have such representatives, and these are the residents at greatest risk.”
5. Don’t Bank with the Facility
Nursing homes may offer resident trust funds into which patients can deposit their pension checks, Social Security checks and other monies. The problem is that unscrupulous nursing home employees can potentially steal from these accounts. And they have.
As a 2013 investigation by Peter Eisler for USA Today revealed, “Nearly half the states do not require background checks for nursing home office workers who handle residents’ trust accounts, and only a handful of states require that those accounts be audited.” The investigation found that business managers, bookkeepers and other office workers had stolen from thousands of residents’ accounts; the lack of audits made it easier for thefts to go undetected. Some of these thefts were in the hundreds of thousands of dollars.
Nursing homes cannot require residents to deposit funds in resident trust funds and have no legal right to manage residents’ money, according to the Atlanta Legal Aid Society. Even if a resident does put money in one of these funds, he or she must authorize every transaction or appoint a representative to do so (unless the resident or the represent directs the nursing home to release some or all of the funds on an “as needed” basis).
If you are going to deposit your funds in such an account, know whether your state requires audits and background checks; if not, find out if the nursing home conducts its own criminal background checks on the people who will have access to residents’ accounts, and if it performs voluntary audits of accounts.
Buying a home is probably the largest single financial investment you’ll ever make and, if you’re like most people, you’ll need a mortgage to make it happen. While there are no guarantees that you’ll qualify for the mortgage you want, there are certain steps you can take that will make you more attractive in the eyes of lenders. Read on to find out the best tips for improving your chances of getting a mortgage.
1. Check Your Credit Report
Lenders review your credit report – a detailed report of your credit history – to determine whether you qualify for a loan and at what rate. By law, you are entitled to one free credit report from each of the “big three” credit rating agencies – Equifax, Experian and TransUnion –every year (see, What’s On A Consumer Credit Report?). If you stagger your requests you can get a credit report once every four months (instead of all at the same time), so you can keep an eye on your credit report throughout the year.
2. Fix Any Mistakes
Once you have your credit report, don’t presume everything is accurate. Take a close look to see if there are any mistakes that could negatively affect your credit. Things to watch out for:
debts that have already been paid (or discharged)
information that is not yours due to a mistake (e.g., the creditor confused you with someone else because of similar names and/or addresses, or because of an incorrect Social Security number)
information that is not yours due to identity theft
information from a former spouse that shouldn’t be there anymore
incorrect notations for closed accounts (e.g., it shows the creditor closed the account when, in fact, you did)
It’s a good idea to check your credit report at least six months before you plan to shop for a mortgage so you have time to find and fix any mistakes. If you do find an error on your credit report, contact the credit agency as soon as possible to dispute the mistake and have it corrected.
3. Improve Your Credit Score
While a credit report summarizes your history of paying debts and other bills, a credit score is the single number that lenders use to evaluate your credit risk and determine how likely you are to make timely payments to repay a loan. The most common credit score is the FICO score, which is calculated from different pieces of credit data in your credit report:
Payment history – 35%
Amounts owed – 30%
Length of credit history – 15%
Types of credit in use – 10%
New credit – 10%
In general, the higher the credit score you have, the better the mortgage rate you can get, so it pays to do what you can to achieve the highest score possible. To get started, check your credit report and fix any mistakes, and then work on paying down debt, setting up payment reminders so you pay your bills on time, keeping your credit-card and revolving credit balances low, and reducing the amount of debt you owe (e.g., stop using your credit cards).
4. Lower Your Debt-to-Income Ratio
A debt-to-income ratio (see Debt Management Ratios) compares the amount of debt you have to your overall income. It’s calculated by dividing your total recurring monthly debt by your gross monthly income, expressed as a percentage. Lenders look at your debt-to-income ratio to measure your ability to manage the payments you make each month, and to determine how much house you can afford.
If you have a low debt-to-income ratio, it shows you have a good balance between debt and income. Lenders like to see debt-to-income ratios that are 36% or lower, with no more than 28% of that debt going toward mortgage payments (this is called the “front-end ratio”). In most cases, 43% is the highest debt-to-income ratio you can have and still get a qualified mortgage. Above that, most lenders will deny the loan because your monthly expenses are too high compared with your income.
There are two things you can do to lower your debt-to-income ratio, and both are easier said than done:
Reduce your monthly recurring debt.
Increase your gross monthly income.
The single most important thing you can do to reduce your monthly recurring debt is to buy less. Take a careful look at where your money goes each month, figure out where you can save and make it happen.
While there’s no easy way to increase your income, you can try to find a second job, work extra hours at your primary job, take on more responsibility at work (and get a pay increase) or complete coursework/licensing to increase your skills, marketability and earnings potential. If you’re married, another option to increase your household income is for your spouse to take on additional work – or go back to work if one of you has been a stay-at-home parent.
5. Go Large with Your Down Payment
Nothing shows a lender more that you know how to save like a big down payment. A large down payment reduces the loan-to-value ratio, which increases your chances of getting the mortgage you want. The loan-to-value ratio is calculated by dividing the mortgage amount by the purchase price of the home (unless the home appraises for less than you plan to pay, in which case the appraised value is used). Here’s an example. Say you plan to buy a house for $100,000. You put down $20,000 (20%) and seek a mortgage for $80,000. The loan-to-value ratio would be 80% ($80,000 mortgage divided by $100,000, which equals 0.8, or 80%).
You can lower the loan-to-value ratio by making a larger down payment: If you can put down $40,000 for the same house, the mortgage would now be just $60,000. The loan-to-value ratio would fall to 60% and it will be easier to qualify for the the lower loan amount. In addition to increasing your chances of getting a mortgage, a larger down payment and lower loan-to-value ratio can mean better terms (i.e., a lower interest rate), smaller monthly payments and less interest over the life of the loan.
When you’re setting your down payment, remember that a 20% or larger down payment will also mean that g you won’t be subject to a mortgage insurance requirement, all of which can save you money.
Traditionally speaking, most investors considered identifying the right fixed deposit to be as easy as visiting a bank and opening an account. With the current economy, most banks compete with each other for your money. So, they offer the best interest rates they can. It won’t be as easy as visiting a third party website to check out all the interest rates though. If you do visit these websites, you can find the bank that offers the highest interest rate on the fixed deposit schemes . There are a few other considerations too, that are important for savvy investors.
There are several organizations that offer fixed deposits today. All nationalized, cooperative, private and foreign banks, select mutual funds, select companies and the Indian postal service offer term deposits. So, you should evaluate all these organizations to select the best one possible. Company FDs have higher returns and an even higher risk, just like cooperative bank FDs. Nationalized banks and the Indian Post offer higher safety and lower returns. Hence, evaluate all these options based on your investment agenda.
For investors looking for a high yield, FDs are not the ideal choice. You must invest funds as per your agenda so as to choose the right investment tool, organization and amount. The most popular reasons for investing in low risk and low gain tools like the FD are:
• To earn interest
• To maintain liquid assets
• To have spare cash for an emergency like an accident or a surgery
• To diversify the investments
• To invest for a certain long term objective such as a gift for a minor
Based on your agenda, you can narrow down the specifics to look out for in the fixed deposit options. For example: If you want to save some extra cash for an emergency, you can read up on the premature and partial withdrawal penalty. If you want to diversify your investments, then you won’t invest the entire sum in one organization. Company FDs and fixed deposits in banks can make a great choice. You can’t invest anything more than 1 lakh rupees in any bank, though, as this is the maximum limit of insurance on these term deposits.
If you have chosen your specifications well, you can end up with the best possible investment. While this process may seem a bit complicated when compared to just choosing the highest interest, the result can certainly be a useful investment for you.
Many first time borrowers are hastily impressed by the interest rates advertised in newspapers and television ads. However, most people don’t get their home loan at those advantageous rates. There are a few factors to bear in mind to get the ideal home loan rates possible for your brand new home.
• Credit history
This factor is all about financial standing. It allows the lenders to see your repayment ability, which is one of the most important factors. The smart thing to do before you apply for a home loan is to improve your credit history. Get rid of those credit card debts and personal loans. There are a number of things that you can do to show yourself as a reliable candidate for a home loan. Hence, you should take all the necessary steps to let these factors work in your favour.
• Nature of employment
Since your income is the means of repaying your EMIs, the nature of your employment is essential to your lenders. If you’re working in a smaller organization, you may come across as a less reliable candidate as compared to someone working for a public sector bank or a government job since their income is considered more consistent. Thus, your organization, years of experience and appraisals affect your credibility and repayment ability. If you compare a professional to a SME business owner with the same income, a professional is sometimes deemed more credible. You can certainly make this bias work in your favour. Today, most employees are job-hopping only for a 5 to 10 percent increment in salary. You can either choose to work with a more established organization or apply for a loan along with a co-applicant, who is working in a reputed organization.
• Your lender and home loan market
Many banks and housing finance companies are offering home loans today. There is a huge market and substantial competition. So it makes sense to apply to several organizations and let the competition work in your favour. If you get an approval from more than one organization, you are in a good position to negotiate and get the best possible housing loan interest rates .
There are some factors that affect your home loan rates considerably; however, these factors are not under your control. The Reserve Bank of India has several rules and regulations that affect rates for all kinds of loans such as SLR (Statutory Liquidity Ratio) Rate, Repo Rate, Cash Reserve Ratio (CRR), etc., which you need to be aware of.
The economy of India can also affect interest rates significantly. It is possible, though, to anticipate the possible changes to an extent and use them to your favour. So, make sure you use these factors where you can.
Exchange Traded Funds. Likely you’ve heard of them. But you may not know exactly what they are or how they could work for you.
The truth is ETFs are an easy and low-cost way to invest across many stock and bond markets. But even as they’ve gained broad investor acceptance and lots of media attention, many people still have questions about them, such as, “Why should I use ETFs?” and “How do I buy them?” Here, we cut through the noise and offer some key facts about ETFs.
Once you understand the benefits of ETFs, you’ll see how they could be an exciting and smart way to help meet your financial goals, no matter your age, investment experience, or how much money you’re looking to invest.
The simple facts
Let’s dissect what the name “ETF” actually means. ETFs are investment funds that trade like a stock. Made up of a mix of stocks and/or bonds, most are designed to track a major index, like the S&P 500 or the Russell 2000.
Index ETFs aim to match the returns of their market index, often at a lower cost than most mutual funds. Over time, you may do better than if you were invested in a similar mutual fund. In fact, for some markets, ETFs may outperform active mutual funds.
Put simply, ETFs can help you:
- Save money — ETF managers help keep fees low by managing a fund to track its benchmark index. And the taxable capital gains distributions of an ETF can be lower than the average mutual fund. Over the long term, these savings can really add up. Note that you may need to pay a trading commission to buy or sell an ETF (just like a stock), although some brokerages let you trade many ETFs for free.
- Diversify your portfolio — There are many ETFs to fit your personal investment goals — whether it’s building a diversified core across broad markets, investing in short- or medium-term opportunities, or targeting a specific purpose such as cushioning against jumpy markets. You can quickly achieve broad diversification with a single ETF that contains both stocks and bonds. Or choose from specific asset classes, sectors, geographic regions or countries.
- Quickly capture market opportunities — ETFs offer the same trading flexibility as stocks, meaning you know the price throughout the day and can easily buy and sell them during market hours using limit, market or stop-loss orders.
- Earn income — Many ETFs pay dividends, and some focus specifically on high-dividend-paying companies, which can be important if you’re looking for potential regular income. ETFs are also an easy way to access bond markets.
- Manage risk — There’s a growing array of ETFs that can help you hedge currency risk on foreign investments, reduce market volatility, or target specific “factors” such as growth-oriented companies.
- Stay invested — Rather than parking your money in low-interest cash accounts, you can invest in an ETF and still have the potential to earn market returns while you save for short-term goals or decide on specific stocks or bonds to buy. Of course investing in ETFs comes with more risk and volatility than cash accounts. But you may also have better growth potential.
Does the debt from your college days seem overwhelming? You’re not alone: According to the Consumer Financial Protection Bureau, student loans total more than $1.2 trillion in the U.S. That’s second only to the size of the nation’s mortgage debt. Ironically, the burden of student loans is making it harder for college graduates to buy a home. Politicians are debating what to do about the problem, but in the meantime, individual Americans can’t wait around for them to work it out.
Developing a plan to manage your student loans is critical to your long-term financial health. We explore 10 steps to help you get control.
1. Calculate Your Total Debt
As with any type of debt situation, you need first of all to understand how much you owe overall. Students usually graduate with numerous loans, both federally sponsored and private, having arranged for new financing each year they were in school. So gird your loins and do the math: Only by knowing your total debt can you develop a plan to pay it down, consolidate it or possibly explore forgiveness (see Who is eligible for student loan forgiveness?).
2. Know the Terms
As you sum up the size of your debt, also itemize the terms of every loan. Each one could have different interest rates and different repayment rules. You’ll need this info to develop a payback plan that avoids extra interest, fees and penalties.
3. Review the Grace Periods
As you pull together the specifics, you will notice that each loan has a grace period (the amount of time you have after graduation to start paying your loans back). These too can differ. For example, Stafford loans have a six-month grace period, while Perkins loans give you nine months before you have to start making payments.
4. Consider Consolidation
Once you have the details, you may want to look at the option of consolidating all your loans. The big plus of consolidation is that, often, it lowers the weight of your monthly payments burden. It also frequently lengthens your payoff period, which is a mixed blessing: more time to pay the debt, but more interest payments, too. What’s more, the interest rate on the consolidated loan may be higher than those on some of your current loans. Be sure to compare loan terms before you sign up for consolidation. Also, if you consolidate, you will lose your right to the deferment options and income-based repayment plans (see below) that are attached to some federal loans. For more on the subject, see Student Loan Debt: Is Consolidation The Answer?
5. Hit Higher Loans First
As with any debt-payoff strategy, it is always best to pay off the loans with the highest interest rates first. One common scheme is to budget a certain amount above the total monthly required payments, then allocate the overage to the debt with the biggest interest bite. Once that is paid off, apply the total monthly amount on that loan (the regular payment, plus the overage plus the regular amount) to repaying the debt with the second highest interest rate. And so on. This is a version of the technique known as a debt avalanche.
For example, suppose you owe $300 per month in student loans. Of that, a $100 payment is due to a loan with a 4% rate, $100 is due to a loan with a 5% rate and $100 is due to a loan with a 6% rate. One would plan the budget with $350 toward student loan payoff, applying the extra $50 to the 6% loan. When that is paid off, the $150 used to pay the 6% debt each month would then be added to the $100 being used to pay the 5% – thus speeding up that payoff. Once that is paid off, then the final loan at 4% would be paid at the rate of $350 per month until all student debt is paid in full.
6. Pay Down Principal
Another common debt payoff strategy is pay extra principal whenever you can. The faster you reduce the principal, the less interest you will pay over the life of the loan. Since interest is calculated based on the principal each month, less principal translates to a lower interest payment. For more techniques, see Student Loans: Paying Off Your Debt Faster.
7. Pay Automatically
Some student-loan lenders offer a discount on the interest rate if you agree to set up your payments to be automatically withdrawn from your checking account each month. Participants in the Federal Direct Student Loan Program get this sort of break (only .25%, but hey, it adds up), for example, and private lenders may offer discounts as well.
8. Explore Alternative Plans
If you have a federal student loan, you may be able to call your loan servicer and work out an alternative repayment plan. Options include:
Graduated repayment – increases your monthly payments every two years over the 10-year life of the loan. This plan allows for low payments early on, accommodating entry-level salaries and assuming you will get raises, or move on to better-paying jobs, as the decade progresses.
Extended repayment – allows you to stretch out your loan over a longer period of time, such as 25 years rather than 10 years, which will result in a lower monthly payment.
Income contingent repayment – calculates payments based on your adjusted gross income (AGI) at no more than 20% of your income for up to 25 years. At the end of 25 years, any balance on your debt will be forgiven.
Pay as you earn – caps monthly payments at 10% of your monthly income for up to 20 years, if you can prove financial hardship. The criteria can be tough, but once you’ve qualified, you may continue to make payments under the plan even if you no longer have the hardship.
While these plans may well lower your monthly payments (click here to review the complete list of repayment options), bear in mind that they may mean you’ll be paying interest for a longer period, too.They also aren’t applicable to any private student loans you took out.
9. Defer Payments
If you not yet employed, you can ask your student loan lender to defer payments. If you have a federal student loan and you qualify for deferment, the federal government may pay your interest during the approved deferment period. If you don’t qualify for deferment, you may be able to ask your lender for forbearance, which allows you to temporarily stop paying the loan for a certain period of time. With forbearance, any interest due during the forbearance period will be added to the principal of the loan.
10. Explore Loan Forgiveness
In some extreme circumstances, you may be able to apply for forgiveness, cancelation or discharge of your student loan. You could be eligible if your school closed before you finished your degree, you become totally and permanently disabled or paying the debt will lead to bankruptcy (which is rare). Less drastic, but more specific: You have been working as as a teacher or in another public service profession.
The questions that possibly come to your mind when you think of opting for housing finance are – ‘How much will I have to pay in the form of EMIs every month? Will I be able to afford it?’ These questions are answered to a large extent by the amount of home loan interest rates that we choose. If our home loan rates are chosen well, we have nothing to worry about in terms of our monthly repayments. With careful planning, a home loan can be exceedingly easy to pay off; however it’s imperative that we choose the best available home loan interest rates . This aspect of the home loan can be a huge deciding factor in understanding how our funds will be paid off in the years to come.
The amount we pay as EMIs every month certainly has an impact on our lifestyle. If your EMIs are too high, the other expenses would have to reduce drastically. This in turn causes your lifestyle to take a downslide and has you compromising on basic things at times. A home loan shouldn’t mean that you lose out on your quality of life in any way; on the other hand, it is supposed to make your life much better. The opposite, paying slightly low EMIs means that your loan is being stretched for a much longer duration than it has to and you’re, hence, paying back a lot more money than you borrowed. Why drag on the home loan for any longer than you have to? Make sure that your home loan rates are just right and choose the best option carefully.
You need to communicate your needs to the bank/financial institution so that they can help you with the kind of housing finance that is apt for you. It is essential to know the home loan amount that you’re eligible for so that you have a defined budget for the property you wish to buy. Then figure out how much you can afford to pay every month in the form of EMIs. This gives you a defined direction to choose the interest rates and loan tenure accurately. Bear in mind that it’s very important to plan out your monthly budget; since it’s the only way you’ll know whether or not your home loan is affordable.
It’s not as hard as it seems to find the perfect home loan rates in India . With a large variety of home loans available, you can easily pick an option that suits your financial situation. Look carefully and select the loan with the ideal home loan rates to make sure that your new home never feels like a burden.
This debate is a common one among most home loan borrowers. Honestly, they both have their merits and demerits. You may wonder; how do you then select a strategy for a future that you can’t definitively predict? How will your profession or job shape up eventually? What kind of gains will your investments offer? Without a realistic understanding of these details, selecting the ideal home loan interest rates from among fixed or floating rates can be tough, and should not be treated as a random part of the house loan package. There are, however, three important factors that will affect your home loan rates.
• Home loan rate fluctuations
The RBI regulations, the market changes and the changes in the economy (local and international) affect floating interest rates whereas the fixed interest rates remain constant for a pre-determined period of time. Floating interest rates can increase or decrease and you may pay more or lesser EMIs when compared to the fixed rate counterpart. You cannot foresee specific details; however you can benefit from fixed rates if the floating rate escalates. You can also benefit from floating rates if they sink down. Keep that variation in mind before making the choice.
• Higher interest rates
Fixed rates are higher than floating rates. So, the question is simple. Will you like to pay more EMIs every month to avoid the fluctuation? Do you have enough funds and self discipline to pull it off? Is it a smart decision, a lot of people wonder, to take up additional responsibility? Can you pay more than the floating home loan rates for the next 30 years? Yes, the interest rates will not stay the same for next 30 years. Most lenders adjust the rate after 3 to 10 years, based on the agreement consented to by both the parties.
• Financial management
Lenders are never at a loss. Fixed interest rates on housing loans always place their rate of interest higher than the conventional floating rates of interest. As a borrower, you can do little to avoid the risk. This is an important factor – can you afford to pay this extra charge for the home loan tenure? Does it fit in your monthly cash flow? Most people will need much higher monthly earnings to afford the fixed home loan rates in India .
If you consider these three factors in detail, you can hope to understand how you want to take the home loan. So, take a look at your financial planning and make the best possible “long-term” decision for your family.
A home loan balance transfer is a mere financial service to avail certain advantages that you previously didn’t. Any smart borrower should be able to determine if the transfer is worth the expenditure. Otherwise, it may turn out to be a very expensive choice. This is a primary reason why financial experts do not suggest opting for a home loan balance transfer in the last 2 to 5 years of the housing loan tenure. Hence, every borrower must identify the vantage point for his or her Home Loan before considering a transfer.
Lower interest rates
When you opt for a housing loan with certain interest rates, you may gain an advantage by shifting to another housing finance company, which offers much lower interest rates. For most borrowers, who have made well-disciplined repayments, it can be a huge save. This kind of ideal home loan transfer is a profitable choice based on the home loan offer received. So, make your own calculation before making the decision, though.
No prepayment charges
A lot of borrowers do not want to pay the applicable prepayment charges for Home Loans with fixed interest rates. If the new housing finance company allows you to repay your loan in a lesser home loan tenure, you can save a substantial amount of interest. That can make it a smart move, based on the other costs incurred in the home loan transfer, though. So, you must calculate the savings against the expenses incurred before signing on the dotted line again. Most borrowers forget that this is the same home loan process – you will need to meet the home loan eligibility criteria, you must submit the documents required for home loan and you will need to pay the processing charges, service taxes etc. Hence, you must include all these expenses in your calculations.
Loan restructuring options
Some of the housing finance companies in India deny two types of home loan restructuring that you may need as a borrower; extra money for home renovation, and extending the home loan tenure as the current floating or fixed interest rates may be too high for easy repayments. Sometimes, housing finance companies fail to take this into account and make the necessary changes. It is perfectly alright to seek an alternate lender. Even if your current lender fails to offer the restructuring, you still will need to get a NOC (No objection certificate) from them, because no housing finance company will complete the home loan process otherwise. It is a much needed move; though, you must make it cautiously.
When discussing how to invest like a millennial, I mentioned that social responsibility is a key factor when making investment decisions. A study from Morgan Stanley’s Institute for Sustainable Investing supports this claim, finding that millennials are two times more likely to invest in companies that target impact outcomes. What’s more, 76 percent of women surveyed prioritize economic, social and governance factors in their investment decisions. But this phenomenon isn’t limited to any one generation or gender. I spoke with Deborah Winshel, BlackRock’s Global Head of Impact Investing, to learn more about what she is seeing in this space and why sustainable investing is here to stay.
First things first. What is sustainable investing?
At BlackRock, we define “sustainable investing” by three key segments: exclusionary screens, ESG considerations and impact investing.
1. Exclusionary screens
Exclusionary screens remove specific products or industries that don’t align with an investor’s values. For example, you may decide you don’t want to invest in tobacco or fossil fuels. This approach was really the first iteration of making investment decisions based on factors other than just financial performance, applying constraints based on personal beliefs.
2. ESG considerations
ESG considerations use environmental, social and governance factors to identify not just what a company does but how they do it. Companies report on how they pursue environmental responsibility, how they support employee diversity, how many volunteer hours they devote to the community every year, etc. We then use these standards to build a portfolio.
3. Impact investing
Impact investing targets a very clear social or environmental outcome that is measurable and transparent. Instead of just refraining from investing in something that doesn’t align with your beliefs, you’re focusing on companies that are operating responsibly and having a positive impact on the world.
How much of an increase have you seen in sustainable investment assets globally?
We have seen sustainable assets increase by 61 percent in the last few years and the growth continues globally. About two thirds of the sustainable investment market is in Europe and 30 percent in the U.S., where we are seeing faster growth. We know that exclusionary screening is most prevalent in Europe, whereas the ESG approach is most common in the U.S.. In my opinion, a key reason why growth isn’t even greater is because there hasn’t been a wide range of investment opportunities to meet the demand until very recently.
If you could pinpoint the source of this increased demand, what would it be?
No matter how old you are or which generation you identify with, there is an increasingly undeniable overlap between our personal lives, our financial lives and the world at large. Whether it’s carrying reusable bags with you to the grocery store or hearing the Pope talk about climate change or reading about President Obama’s environmental initiatives, it’s clear that what we do today has long term impact. There’s now an opportunity for people to direct their investment capital in a way that is meaningful to them beyond just generating a financial return. This opportunity is resonating with individual investors who are looking to do more with their money. At BlackRock, our job is to try to protect and grow our clients’ assets, and our investment platform, insights and technology drive our ability to identify and track attractive impact opportunities. Our objective with any impact investment is to deliver two outcomes: (1) defined and measurable impact outcome alongside (2) a targeted financial return.
How can an investor be certain that they are making a difference and having a positive impact overall?
Transparency is very important. With the reporting capabilities that are being made more readily available through technology, it is becoming easier to effectively measure the repercussions of where we as investors direct our money. For example, my colleagues and I are laser focused not on what makes a “good” company or a “bad” company but which companies have a carbon footprint that is better than the index, or companies that are achieving environmental outcomes through green technology and innovation. By making this information readily available to the investor, we are helping them to decide for themselves which investments will have the impact that they are hoping to achieve.
The one issue that any start-up construction company faces is capital. The business is just getting off of its feet which mean money will not be easy to come by. But the paradox here is you NEED money to get your operations going. Those backhoes and diggers and other heavy duty equipment you need – they certainly aren’t cheap. Then there is the matter of you being a newbie in the industry which means that a business loan won’t be easy to obtain either. So how DO you get the ball rolling? What means do you have of acquiring the machines that are essential for you to deliver your services?
The answer is construction equipment financing.
There are various companies out there that are willing to take the risk of providing loans to start ups for their machinery and equipment needs. Of course their terms and conditions will be a bit different from what you would expect in a regular term loan. The equipment that you will buy will have to be mortgaged to secure your payoff. The financer will also perform a stringent analysis of your future business prospects. But this money can be the life-blood you need to kick-start your enterprise. Matching these eligibility requirements is something you should seriously look into.
So how do you ensure that you make the right decisions when it comes to heavy equipment financing?
• First you must understand that the financing you are about to avail can make or break your business. Be sure you are ready to take up the responsibility.
• Carefully go through the different construction equipment financing plans that different lenders offer. A thorough study of all the options is a must here.
• Look into their eligibility criteria next. That will narrow down your list of financers considerably.
• Always check the terms and conditions of the loan they are willing to offer, especially of the company that is offering a too-easy-to-be-true loan. Beware of falling into a trap which you are incapable of getting out of.
• Check their repayment terms carefully. Look for hidden charges and overheads.
• Scan through the experiences of past customers. How do they rate the lending company’s services? What do the review portals say about them? Or the social media? Look for any clues on their service quality.
Now comes the hardest part. Once you have found the right heavy equipment financing company and availed of the loan from them, the true struggle begins. You are a start-up enterprise. How on earth will you be able to pay back all that money?
Here are a few tips on making some smart savings
• Take a look at your buying habits. Do you buy construction material in bulk? Consider buying in off season?
• Think about a liaison with your local supplier and agree on terms that are easier than the market price.
• Keep an eye out on the market for any new deals, offers and clearance sales.
• Don’t overlook the small savings like on utilities and regular bills. Even if you save $100 a month it still totals out to $1200 for the year.
For more information on construction equipment financing, be sure to visit Aberdeenfinancialgroup.com.
Every finance expert and finance blog suggests that reading the fine print for your home loan agreement is very important. You must understand it, clarify your doubts and enter into a contract with complete awareness about the implications of the terms and conditions in the contract. However, most borrowers don’t. But, this long and boring document can help you to understand the ramifications of your contract like no other housing loan blog post or article can. So, it is a must-read. Though it is not entertaining, it is an important piece of information. If you would not want to read it all, here are a few crucial pointers that you should pay attention to:
There will be an extended section about all the possible charges and fees. It will be vital to understandhow and where you will need to pay. This category will include details about:
• Prepayment charges and foreclosure charges on fixed rate housing loans
• Applicable variations in floating and fixed interest rates on housing loans
• Late payment fees for house loans
• Loan default
• Top up loan processing charges
Most borrowers are likely to take certain actions under specific circumstances. They are expected to present certain documents and inform precise changes to the lender. The housing finance companies in India are at liberty to change the house loan agreement accordingly. Though the best home loans in India are accommodating in this section, it is essential for people to understand their duties as borrowersand submit all the required documents on time. The primary advantage of this kind of effort will come in handy when you want to opt for a top-up loan for renovating your home.This is more important if you are a self-employed person because there will be over-draft facilities available on the property in question. So, understanding the rules and regulations for home loans are vital.
Last but not the least, these documents are complicated and include quite a few terminologies, which will be well-explained in the document itself. So, take a look at the definitions of certain words if you do not follow them easily. It will help you to process your home loan terms and conditions clearly. When you submit the documents required for home loans and sign the agreement, these are the rules and regulations that you are agreeing to. Hence, understanding the terms and conditions appropriately will be as crucial as the signature on the document.
When you do what you love, you won’t work a day in your life. At least that’s how the saying goes. Even if that is a high ideal to live up to, it doesn’t mean you can’t incorporate some of the things you love into your work. The marketing of your financial advisory business can often be conducted while you are pursing your hobbies. So why not take advantage of the situation when the opportunity presents itself?
Mixing business and pleasure is actually not that hard. Many people find golf to be an ideal sport for business owners and advisors in that it allows them to get outside, engage with others and talk shop, all while getting in a bit of exercise. In fact, many professionals, from Presidents to Wall Street moguls, have closed deals or settled on a plan of action while taking in 18 holes on the golf course.
Do the thing you love while at the same time trying to sell your services to prospective clients or forge partnerships with other professionals that could help your business, like insurance agents and tax attorneys.
Many of your current clients may already be golfers, or they may have friends who play. So why not arrange a day of golf that includes lunch and a financial advisory workshop that you offer to your clients and any friends they would like to bring along? Not only will your clients enjoy a day out on the golf course, but the outing may provide an informal setting for them to get better acquainted with you, your work and some of your colleagues.
It could also be a good way for some of your clients to get to know one another, and if they bring friends, you will have a chance to pitch your business to these potential clients in a relaxed atmosphere among people who already know and trust you and your work. Be sure to extend the invitation to women as well as men — more and more women are looking to take up this pastime.
Knowing the difference between $10 and $100 bottles of Chardonnay can not only help you choose the right taste for any meal, but it’s also a good way to impress others. When attending a business dinner, the last thing you want to do is look lost when the waiter hands you the wine list and asks you to choose a bottle for the table. Many of your clients most likely feel the same way. A wine testing event for your clients, where you can all learn together, enjoy the wine and talk shop would be a unique, interesting chance to network (not to mention that wine can be a good investment). Again, encourage clients to invite friends who may be looking for a financial advisor.
Ladies Night Out
If you advise a good amount of female clients, you could organize a ladies night out. Dinner, drinks or taking in a cultural event like an art exhibit or a play would provide a comfortable environment in which they could talk about their investments and their futures. Invite professional women to join who work in a field that would be of interest your clients. The outing is also a good opportunity for the women to network with one another and talk about some of their concerns and goals. The women may find some common ground in their financial challenges, or they may be looking for more information about investing or buying insurance. This type of night out could easily pay off in terms of increasing your client roster.
Clients and other professionals you work with might appreciate a day of letting off some steam at a sporting event. If you can get enough people together who might be willing to rent a box, you will have a place where you can have some food and drinks and chat while you watch the game. Exchange investing and saving ideas with those in attendance and make sure to give your card to any potential clients who join in.
If you have the time, organize a weekend away, take some clients fishing. Professionals often look forward to time away from the stresses of the office. A day or two away to decompress in nature may provide a way for clients to relax and talk about their hopes and dreams for the future and exchange ideas about how they can financially accomplish those goals. Again, encourage clients to invite friends. Fishing involves a lot of time sitting down and waiting, so you could use the time to ask prospective clients if they have any questions for you about financial planning.
Your credit score is a long-term view of your use of credit. Most credit problems, such as late payments or nonpayment of debt, must be removed after seven years, but some types of bankruptcy stay on your credit report for 10 years. Student loans can be there even longer; some may stay on until paid in full or forgiven.
The time it takes to fix a problem will depend upon what is negatively affecting your credit score. If credit information owned by someone else is harming your score, for example, removal of that information could result in almost instant repair once you get the error corrected. But you shouldn’t expect a quick resolution; for most people who want to fix their credit score, it’s not that simple. Here are five steps to improving your score.
1. Get the Facts
Your first step in attempting to fix your credit score requires that you get the facts. You can do that by ordering a free credit report from all three of the credit bureaus: Experian, TransUnion and Equifax. You are limited to one free report a year from each bureau, which you can order at AnnualCreditReport.com. But it is a good idea to order them throughout the year. Ordering one report immediately and then one in four months and the third in eight months will allow you to order a report every four months for free.
If this is your first time looking at your reports, order a free one from Experian using the link above and then get your TransUnion and Equifax reports for free by signing up at CreditKarma.com. Membership at this website is free, and so are the reports; there isn’t any kind of monthly fee (see Why Credit Karma Is Free & How It Makes Money). You definitely want to look at all three reports as quickly as possible to be sure they are accurate. (To find out what a credit report will tell you, read What’s on a Consumer Credit Report?)
2. Dispute Errors
You may find errors on your report, such as payments being late when you were not late, or a credit card shown as yours that is not yours. Mistakes like these can drag down your credit score. There are several key things to look at that will help you identify the problems:
• Personal information – Make sure the names and addresses reported match your personal history. Sometimes the credit reports of people with the same or similar names get combined incorrectly; having your report tied to that of someone with bad credit can lower your score. To correct an error you need to document what is wrong and send a letter to the credit bureaus. This can be a quick fix if all the negative information belongs to someone other than you, but proving that may take some time.
• Account Information – Carefully check all accounts listed and make sure they are actually accounts that you have opened. If you find an account in your name that you did not open, contact the credit bureaus, explain the fraud and ask that a fraud alert be put on your account. Then contact the card-issuing company to find out more details about the account. The fact that it is on your report means it is likely that someone used your Social Security number in opening that account. Also be sure that the balance information and payment history for each account is accurate. If any information is inaccurate, you will need proof of the correct information and you will have to start a dispute with the credit bureau to ask that the wrong information is corrected. For more detailed advice on this, see How to Dispute Errors on Your Credit Report.
• Collections – If there are collections on your credit report, check to be sure there are not multiple reports of the same unpaid bills. Collection accounts are bought and sold, so the same information could be reported by more than one agency, which would make your credit history look worse than it is. Dispute the information and send documentation to prove the debt is listed more than once.
• Public Records – Negative information from public records can include bankruptcies, civil judgments or foreclosures. Bankruptcies can be on the report for seven to 10 years, but all other public records must be removed after seven years. If the public record on your report is older than is allowed, dispute the information with the credit bureau and send documentation to prove that the debt is too old and should no longer be on the report.
3. Negotiate with Creditors
If you have a past due account and have the cash to pay it off, try negotiating with the creditor by offering to pay the balance in full if it will remove the information from your credit report. If not, try getting the company to make the debt “paid as agreed.” Getting the negative information completely off your report is best, but a creditor may not be willing to do that. Make sure you get any agreement in writing before making the payment.
If your account shows non-payments for a couple of months, but you can prove the problem was caused by a hardship, you might be able to ask your creditor for a “goodwill adjustment.” If you were injured and in the hospital or rehabilitation for a couple of months, for example, you might not have had the money (or been in physically healthy enough) to pay that bill. Write to your creditor, explain the hardship and provide proof. Ask if the company would consider a goodwill adjustment erasing the late payment history on your credit report. Your payments will need to be up-to-date to succeed in getting this adjustment.
4. Get Your Limits Under Control
Check your credit reports to be sure they accurately reflect your credit limits. Then add up all the credit limits in one column and all the outstanding debt in another. For instance, you could have $10,000 in total credit limits and $4,000 in total debt, which would mean you are using 40% ($4,000/$10,000) of your available credit limits.
“It’s best to keep your debt-to-credit ratio 30% or lower – the lower the better,” says Anthony Sprauve, former director of public relations for FICO, one of the key credit score companies.
You can make your credit utilization look better than it is by making your payments just before your statement is sent, rather than waiting until it goes out. Most credit card companies report your balance at the same time that they send a statement, and the balance reported to the credit bureaus is the statement balance. If, for example, your statement goes out on the fifteenth of the month, as long as you have the money on hand, pay your bill early so the money will arrive prior to the statement being sent out – let’s say the thirteenth of the month. That way your outstanding credit balance reported on the statement and to the credit bureaus will be lower.
Even if you pay your bills on time, in full, every month, the credit bureau will only see the statement balance, which can make it look like you are carrying more debt than you are.
5. Eliminate Your Low Balances
A factor that affects your credit score is the number of credit cards you have with open balances. Having a lot of small balances lowers your score. So if you have VISA, MasterCard and American Express cards that you alternate using each month, for example, you could end up with three cards that all have low balances – perhaps under $100.
“The solution to improve your credit score is to gather up all those credit cards on which you have small balances and pay them off,” says John Ulzheimer of Credit Sesame and former credit expert for FICO and Equifax. Then consolidate how you use them.