Category: create some drama

Loans and Credit Card Offers for Bad Credit: Find Visa Cards and Bank Loans for People With Low Credit Rating

One thing consumers may not realize is that banks are in business to make money and they rarely lose. When a client approaches a bank to borrow money, whether it’s by opening a credit card account or applying for a loan with bad credit, the bank takes precautions to be sure that their investment is profitable.

Low Credit Rating Credit Card Offers

When a bank creates an account for clients with a low credit rating, their first protective measure, an application fee, generally costs the client around $40 per card. Additionally, the application itself often includes the client’s checking account information, in case they need to take legal action. If they get a judgment against the client in court, they can simply pull the money from the client’s checking account, without further notice.

The bank that hosts the checking account is legally bound to turn over all funds to the credit card company. Some banks charge a steep fee for this “service,” $75 is not an uncommon “legal document processing” fee.

Getting Loans and Credit Cards with Bad Credit

The major difference between bad credit loans and loans for clients with good credit, is the fact that the bank isn’t sure if the client will actually make all of their payments. Because of this, they charge a higher interest rate. There are two different kinds of interest. Simple interest is just a percentage of the entire debt.

Compound Interest means that in the beginning, a high percentage of your payment is interest. For each payment, the client paying interest on the entire amount due. Depending upon the length of the loan, compound interest can cost several times the amount of the debt.

Find Credit Card Fees Before You Apply

By law, the application form will have the entire contract. Look specifically for fees related to late payments, closing the account, transferring the balance, reporting positively to credit agencies, early pay-off and going over the limit. Some credit cards, called “secured credit cards,” are attractive to people with low credit ratings because they appear to work like a bank’s debit card. However, the fees can be exorbitant, especially when a client realizes “Hey, this is my own money.”

Secured Credit Card for Bad Credit

The Visa Rush card is secured, meaning that client send them the money and then can spend it. The card can be swiped at any online or offline merchant that takes Visa. However, there’s a fee for each transaction as well as a percentage charged for using the card at a cash machine. The major selling point for the Visa Rush is that it reports to the credit bureaus regularly, allowing clients to rebuild their credit. Regular usage, though isn’t a very good idea.

Bank Loans with Bad Credit

Banks also make loans to people with bad credit. The hitch is that clients typically have to apply for a secured loan, like a second mortgage. Finding home equity loans with bad credit isn’t impossible. A good starting point is for potential clients to inquire at the bank that hosts their checking account.

Using a home equity loan to pay down credit cards (before cutting them up) can save money in the long run. In markets where the value of homes has depleted, very few homeowners will be able to get a second mortgage. Other ways to secure a bank loan are with a motor home, business, or investment account.

Clients with bad credit can still get credit cards and bank loans. Certainly no one wishes to have bad credit and a new credit account should be looked at as a chance to rebuild credit. It’s wise to be sure that the card isn’t used regularly, as the fees are probably better spent elsewhere. It’s worth the time it takes to study the contract and understand the fees associated with the account. Clients are also advised to attempt to build up equity in their home loan faster, so that they can access the funds if necessary, or even pay off the house early to save a lot of interest.

Categories: create some drama

Secured Loan Advice: Negotiating Financial Problems with a Debt Consolidation Loan

A debt consolidation loan allows someone to put loans and credit card debt under one roof and benefit from lower monthly payments. It is also possible to get a secured loan when bad credit exists. A bad credit loan means that finance is obtainable when a debtor has defaulted on a previous agreement.

Lower Monthly Payments

The payments are generally spread over more years which results in lower monthly payments. This can be of great assistance if financial problems exist and monthly outgoings need to be reduced.

Although lower monthly payments are of considerable benefit, more interest is paid over the loan duration. A £25,000 loan over 5 years at 17.9% would result in the payment of £13,008 interest. However, the same loan at just 7% over 25 years results in paying a colossal £28,008 interest.

Lower Interest or APR

The added security means that the borrower will benefit from a lower interest rate making monthly payments more affordable. If adverse credit exists, a debtor would have to pay a very high rate of APR if offered an unsecured loan.

Secured loans usually have a variable rate of interest. This means that the rates will vary at the lender’s discretion, which can throw out calculations.

Rejected For an Unsecured Loan

A credit rating may be so poor that it proves impossible to get an unsecured loan. This will be the case if someone has a CCJ registered against their name or have missed payments in the past. These customers are deemed a high risk so the only way to borrow money is through a debt consolidation secured loan.

Family Home is at Risk

Turning unsecured debt into secured debt isn’t usually a good option due to the higher risk. If considering consolidating a large amount of unsecured debt, one should consider an Individual Voluntary Arrangement first.

Early Redemption Penalty On a Secured Loan

Early payments towards the loan have a minimal affect on reducing the amount borrowed. Sometimes a borrower wishes to pay off some or all of the loan early and faces an early redemption penalty. This can amount to thousands of pounds.

There are a number of reasons why a secured loan may be the right choice, but one should always think carefully before securing debt on your home. If going ahead with debt consolidation, it is imperative that financial advice is sought before proceeding.

Categories: create some drama

G7 Nations Desperate for Big Loans: Net Debt Levels of G7 Countries Approach Bankruptcy

A country’s continual trade deficits eventually crystalize into national debt.

The so-called most developed economies of the G7 provide cases in point.

Net Debt by G7 Country

The following list shows the net debt levels for G7 countries, sorted from lowest to highest. With a population of 303.8 million, America leads the G7 with the highest amount of debt.

  1. United States … US$7.387 trillion in net debt
  2. Japan … $5.699 trillion
  3. Italy … $2.131 trillion
  4. Germany … $1.85 trillion
  5. France … $1.503 trillion
  6. United Kingdom … $793.3 billion
  7. Canada … $266.2 billion.

Population of Each G7 Nation

The population statistics below are estimates from the CIA World Factbook.

  1. United States … 303.8 million people
  2. Japan … 127.3 million
  3. Italy … 58.1 million
  4. Germany … 82.4 million
  5. France … 64.1 million
  6. United Kingdom … 60.9 million
  7. Canada … 33.2 million.

Net Debt Per Capita by G7 Country

Based on the above population numbers, the following list reveals that Japan and Italy lead other G7 nations in net debt per capita.

  1. Japan … US$44,722 in net debt per person
  2. Italy … $36,645
  3. United States … $24,315
  4. France … $23,457
  5. Germany … $22,454
  6. United Kingdom … $13,018
  7. Canada … $8,015.

Global Trade Surpluses Only Part of Answer

Some economists might recommend a country to aggressively grow its exports as a tonic to cure deficit and debt issues.

While a positive balance of international trade will benefit any country, debt levels are so high that G7 countries are forced to borrow money to cover interest payments on their loans. Even robust export growth would be inadequate to cover these huge debts.

Countries that Could Loan to G7 Debtor Nations

According to the International Monetary Fund, only 30 countries are today net creditors. The rest of the world is drowning in debt. The 30 nations that could lend money to G7 countries including the U.S. are presented in alphabetical order below.

Algeria, Angola, Bahrain, Botswana, China, Finland, Gabon, Iran, Kiribati, Kuwait, Libya, Luxembourg, Malaysia, Namibia, New Zealand, Nigeria, Norway, Oman, Papua New Guinea, Qatar, Qatar, Russia, Saudi Arabia, South Korea, Sweden, Trinidad & Tobago, Turkmenistan, United Arab Emirates, Uzbekistan, Venezuela and Yemen.

Why Creditor Countries Will Eventually Stop Lending

The problem is that eventually the currencies of debtor nations will devalue if debt levels continue to grow. That means that countries like China that loan money to the United States will be repaid in U.S. dollars that will plummet in value as central banks pump more cash into the system and inflation erodes the value of U.S. currency.

So freshly inaugurated president Barack Obama is quite right in fearing the day that lending nations like China back away from loaning money to the U.S.

Like other developing countries with healthy balance sheets, the Chinese are reluctant to agree to committing vast sums in financial agreements that, in essence, offload G7 debt.

Government spending on infrastructure projects is a step in the right direction. This will create jobs that will stimulate consumer spending, the largest component of a nation’s Gross Domestic Product (GDP).

Next, G7 nations need to focus on commodities and products in which they have competitive advantages in global trade. Only then will creditor countries consider extending more credit to G7 countries burdened with debt.

Categories: create some drama