The Debt Advice Online Blog

Payday loan is a very short term loan ranging over 1-2 weeks. Cash Advance, Pay Check Loan, Check Loans and Payroll Advance Loans are other names of payday loans. Payday loan aims to meet the needs of people’s day to day expenses. As it is a need for day to day expenses, delays are inevitable. That’s why payday loans are available for a short period of time. The amount you can avail with payday loans ranges from £80 to £100. It is better to repay these loans earlier because they can bundle you up with the increasing load of interest rates.

Criteria

Before you go for a pay day loan, you must have a current valid bank account that can support your goodwill in the loan market. If supplemented by all necessary document application for a payday loan does not take time to get approved. Once your loan is approved, the money will be transferred on the same day and on the following day you are able to get hold of the cash. Your pay date decides the due date for the repayment of payday loans. Payment period ranges from 14 to 18 days. You can change your due date or extend it by negotiating the matter with your loan company.

Necessity of payday loan

• A payday loan is needed when you fail to manage your budget properly.
• When unexpected expenses often hit you at the most inconvenient times
• You are unable to maintain your urgent family expenses like paying of your medical bills, phone bills, house rent or some other utility bills.

Bad credit cash payday loan

This type of loan can be availed by the people having bad credit history. These cash loans provide a relief to the people having bad credit rating. If they find themselves in the condition of money shortage and the payday still very far, through these loans they can borrow money till their next payday. To get this loan there are some simple conditions to be followed

• You must be UK resident adult
• You should be a regular employed worker since the last six months
• You must have regular residence since the last three months

These loans can be approved with in 24 hours or so after application is submitted. The approval amount for this loan ranges from £100 -£1500 and can be borrowed for 14-31 days. Due amount is automatically deducted by the lender on the next salary day of the borrower. Through bad credit cash payment loans the needs of the borrowers are fulfilled easily with out being affected for the bad credit rating.

Advantages

• Payday loans are instant loans so they can meet urgent financial needs.
• With these loans lenders do not take any security while offering the loan.
• Lenders in case of payday loans do not check the credit histories allowing bad credit borrower to avail these loans as well.
• These loans are accessible to twenty four hour a day to provide timely financial assistance to the borrower.
• These loans make you able to extend the repayment duration by paying an extra fee to the lender.
• Disadvantages

• These loans usually have high rate of interest and are bound to be availed by UK residents only.
• These loan require a full repayment, otherwise your credit rating can be affected negatively.
• The credit cards and loans available for bad credit history people have lower limit and higher interest rates.

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Bankruptcy can be a choice as a debt solution when you are not able to manage your debts. UK bankruptcy act was established in 1988, for individual and company directors who found difficulties in dealing with financial or trading positions. Bankruptcy makes you free from over whelming debts so that you can make a fresh start although some restrictions are attached to it. About bankruptcy you have to make sure that all your assets are shared out fairly among your creditors.

A court issues a bankruptcy order when a bankruptcy petition is filed either by you or by your creditor who owe at least 750 pounds by you. It can also be filed by a supervisor or any one bound by Individual Voluntary Arrangement. When a petition is filed, the court issues bankruptcy order and it can not be cancelled even when you don’t acknowledge it.

Once a petition is filed, your assets fall under the control of the Trustee which can be either an Official Receiver who is an officer in the court or a licensed Insolvency Practitioner. This Trustee is now responsible to recover your assets and liabilities and also to minimize the repayments to the creditor.

In this way after the bankruptcy order your creditor can no more pursue you for payments.

Duties of a Bankrupt

• Once your bankruptcy order has been issued by a court, you are supposed to produce a list of all your assets and debts to your Official Receiver or Insolvency Practitioner within 21 days.
• Your increased income or assets must be declared to your Trustee.
• If you are going to obtain a credit of 250 pounds or more from a person, you should inform him of your bankruptcy.
• You are not supposed to make any direct payments to your creditors.
• To attend the court is mandatory for you to give reasons for being in debt; otherwise you can be put to legal punishment.

Effects of Bankruptcy:

• It directly affects your professional life as you can not act as a Company Director after being announced as a bankrupt.
• Your business life is also affected as you can not trade in any business without informing concerned persons about your bankruptcy.
• You can be publicly examined in the court.

Advantages

• If you go bankrupt, your debts are taken away from you and you are no more supposed to repay them.
• Your assets like car and house might be at risk but household goods are saved and no one can deprive you of them.
• You can be discharged from bankruptcy after a year and all the restrictions are lifted automatically.
• Your payment plan lasts not more than three years with the court which is less period as compared to IVA.

Disadvantages

• You are required to pay extra money to the court as a fee for three years.
• Bankruptcy affects your credit rating badly as the record of your bankruptcy remains on your credit file for six years.
• The social stigma attached to bankruptcy, you feel like being a criminal which you are certainly not

Debt Management is a system that takes care of your affordability regarding the monthly amount to the creditors. This is made possible through informal talks with your creditors in order to reduce your debt repayments and to reach a level where you can afford it comfortably.

Debt management is likely to be beneficial more when other traditional solutions are missing at that moment. It’s because debt management can work best only as a temporary solution to your debt crisis. Debt management does not sound good as a permanent debt solution because lenders can continue with legal actions or even bankruptcy for their payments. Though the payments are reduced, but interest continues to accrue on your accounts and in this way it will take long period to pay off the whole amount. So a good understanding is needed to select it as your debt solution.

However, if you have made up your mind to take debt management as a debt solution, you are entered into a certain set of steps leading toward Debt Management Program.

A typical DMP works in such a way that all of your unsecured debt can be consolidated into one which is more affordable in respect of monthly repayments which are going to be paid to the creditors on a pro-rata basis for an agreed period of time. This amount is decided after the deduction of normal cost from your living income.

There are Debt Management Companies that can play a role of third party to carry and explain problems from a debtor to the creditor. The Debt Management DMP explains debtor’s circumstances to creditors requesting them to stop further interest accruing on debtor’s account, any charges or legal actions to recover the debt payments.

DMP provides all details to the debtors, and being agreed by debtors a copy of this set-up made by DMP is sent to creditors. Though creditors are not obliged to agree with DMP set-up but once they re aware of the debtor’s position, they re more likely to accept it. Debtor’ failure to pay due amount over a certain period of time results in cancellation of all their agreements and paying their debts in full. By following all these steps wisely and carefully leads to you to complete Debt Management Program (DMP) and when it is completed successfully, a debtor debts free and it enable him to take a fresh financial start.

The best advice that can be given in this regard is that before choosing a Debt Management Company, always make sure that all your debt could be paid off in a certain period of five years. What you have to do is multiply your debts by 17.5 % and then divide the result by the monthly amount you can afford to pay. It will give you the answer that how much time is required to pay off your payments.

Benefits

• Through debt management you have to make only one payment per month.
• If your income reduces you can also reduce your payments to an affordable level through re-negotiation.
• You are not confronted to stress and worries normally associated with a debt.
• Rate of interest can be reduced or frozen if creditor permits
• If you are unable to pay the full amount over a certain period of time, you can ask your creditor to write off part of your debt.
• All communication on behalf of debtor to the creditor is done through Debt Management Company.

Shortcomings

• Debt management arrangements are informal so they can be cancelled by any one of creditors at any stage.
• Interest keeps on accruing against your existing debts.
• So in the end we can say that If not followed by correctly this debt management arrangement can lead you even into further debts.

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There are many ways and means to borrow money today, especially if you want to consolidate your loans, because there is a demand for it. With a high percentage of individuals in some sort of debt and 2 million of those struggling to manage financially at all, there is a real demand in the market for debt solutions that offer good value for money and can purposefully consolidate debts, thus helping you to get out of debt in a much shorter space of time than would otherwise be possible. There are a number of reasons why debt consolidation works so well and this is evident in most debt consolidation products, no more so than in remortgages.

If you own your own home then remortgaging for debt consolidation is an option for you. The only stipulation on obtaining a remortgage is indeed owning property to begin with. You must own your own property if you want to remortgage it, but that goes without saying. Remortgaging is literally where you borrow more money on your mortgage account by switching providers or renewing your mortgage with the same provider and borrowing more money. This money can be used to fund all sorts of things but, at the minute, it is more popular for consolidating debts than anything else.

There are a number of advantages that remortgaging your property would have over other types of borrowing when it comes to consolidating debts. They include the following:

• A better rate on interest – A better rate of interest can indeed be had on a mortgage account than on any other form of borrowing, This is largely because high street banks and lenders do make more money out of mortgages over a period of time and, as such, can afford to keep rates much lower than with other borrowing. This can help you if you do have heavy debts because you will not end up paying so much back than if you continued with the same credit cards and loans.
• A more manageable debt – With one monthly payment every month, it is much easier to manage a remortgage than several every month. You know where you stand and can budget accordingly rather than facing varying payments that could make your finances messy. It is much easier to keep up with repayments and you may find that you are paying less back each month than you currently are with mortgage payments and debts combined.
• Maintaining your credit score and even improving it in some cases – With one debt rather than several, it is easier to keep up with repayments and doing this month after month would improve your credit score, as would having less than £10,000 personal debt because the mortgage would not count towards this. If your credit rating is already good then this would maintain it. However, if it needs a little improvement then this could easily help you to get on the right track

However, you should always be a little wary of borrowing money on your home and should work finances out accordingly in advance. There is nothing worse than overstretching yourself financially and this can indeed lead to problems further down the line because you have secured the debt on your home. You could end up losing your home if you do not keep up repayments, so it is essential that you plan out your finances in terms of what you can afford to pay back over the coming years. It is most definitely worth considering the option of remortgaging for debt consolidation, but not if your home depends on repayments that you cannot afford.

Debt consolidation loans are a favourite amongst the individuals that are in financial difficulties at the moment. The UK is heavier debt than ever before and the average individual is in over £5,000 of debt. However, this debt is often spread over several different providers and cause problems in terms of how much it is necessary to pay every month and how much interest is added on to every different balance. Debt consolidation loans can bring all of those debts under the one roof and thus make it far easier to manage your finances in terms of debt.

As the debt consolidation loan becomes more desired, the market grows with it and becomes more competitive. As a result, there are many deals and offers out there for the average consumer to take advantage of. It is imperative that you read the small print to familiarise yourself with what is on offer. However, before you take that step, take the time to learn a little bit about the debt consolidation loan in advance. There are many advantages to having a debt consolidation loan, with some of the best advantages being listed below to help you to familiarise yourself with them.

• One easy payment every month to help you to manage your finances – Instead of having several credit card and loan payments to manage every month, a debt consolidation loan will give you just one payment to manage at a fixed time of the month every month. As a result, you can manage your finances far better. If you know when the payment is due and make sure that you pay it on time every time then you will soon manage your debt without thinking about it. Not only does this make it easier to manage your finances, it also makes it easier on your general health. Managing debt can be extremely stressful and a debt consolidation loan just takes that right out of you! You can relax and get debt free at the same time.
• Fixed payments – Not only is one payment a month easily manageable, the fact that most providers actually offer you a fixed payment makes it even better. You therefore know exactly how much is coming out of your account every month and can budget accordingly. Setting up a direct debit will take it out of your hands and this, again, will make it that much easier for you!
• A lower interest rate – Debt consolidation loans have a much lower rate of interest attached to them than the various credit cards out here. It is quite easy to find loans that have less than 10% interest attached to them, but it is near on impossible doing so with a credit card. This will reduce your overall debt and will make the amount much easier to manage.
• One provider to deal with should you get into financial difficulty – If you happen to get into financial difficulty whilst dealing with several lenders then you will have a nightmare getting in touch with all of them to try and figure out a viable solution. However, if it is with just one lender then you can pick up the phone and try to come to some arrangement without much hassle. It is far less complex and far easier, especially as there is not any room for manoeuvre or game playing because another creditor is not getting a better deal.
• A fixed period in which to pay of your debt – Debt consolidation loans will run for the term of your choosing, therefore you know that it ill all be paid off after that period of time. You can thus look forward to your debt free day! This will give you a boost in more ways than one so take advantage of it!

If you do not own your own home then your options are cut down when it comes to borrowing money because you cannot obtain a secured loan. You need to own your own home in order to be granted secured debt, but what if your credit is poor or could be better? If this is the case then you are likely to get turned down for unsecured loans and credit cards, despite the fact that you are struggling financially and a loan would be a welcome cash boost. However, the financial market is not as rigid as it once was in that where there is demand, you can guarantee that there are products on offer to fulfil it. In more simple terms, if you have a financial need then you can guarantee that there is a product out there for you. This is where the tenant loan comes in!

The tenant loan is a product on offer to private and council tenants alike. You can obtain a tenants loan even if you are living with your parents or lodging with a friend and need something, such as a car. The whole point of a tenant loan is to offer a financial solution to those individuals that do not own their own home or indeed any property to secure a loan against. As such, they are unsecured and can indeed offer you the amount you need. However, before you look any further into the possibility of a tenant loan, there are some things that you need to know about them and the lending companies that offer them:

• Interest rates are higher for tenant loans than secured loans, but the rates tend to depend on the nature of the loan and your credit rating. In general, the worse your credit rating, the more interest you are likely to be charged as a result. Those offered to individuals with excellent or good credit scoring can dip below 10%, but loans for those with poor credit ratings are usually nearer the 17% to 25% mark.
• Some companies offering tenant loans do tend to have strict eligibility criteria, meaning that you have to fit into a specific group in order to benefit. For example, the lenders that are not prepared to take a chance on those individuals with bad credit will not allow a scoring of any less than good in terms of eligibility. Others require that you have been in your current employment for more than two years. Then there are those that actually require a certain level of income before they will loan money to ensure that you can meet your financial obligations and repay the debt.
• Tenant loans are available to the self-employed. Some companies will loan to those individuals that own their own business and can prove their income from the last tax year. They may ask to see your account and other documentation that can back up your income estimates, but they will take a chance if everything checks out.
• If you have CCJs and defaults against your name, there are companies that will offer you a tenant loan, but you do have to look for specialist companies if this applies to you because many high street banks and lenders will not consider those with such things against their name. It is considered too much of a risk for most.

Finally, tenant loans come in many forms, although the most popular is the any purpose loan. This is obviously available for any purpose, such as a holiday, car or debt consolidation for example. Some are more short terms loans that are designed to cover a period of time rather than a more ongoing item/period. For example, lending for Christmas comes into this category.

A Quick Guide To Selling Your Endowment!

Endowment mortgages have been in the news quite a lot over the past ten years or so as a result of a financial scandal that rocked the mortgage world some time ago now. Endowment mortgages were very popular in the 1980s and 1990s as a result of their perceived ability to pay for a homeowner’s mortgage. If the homeowner took out an interest only mortgage then an endowment would have gone with it in order to pay the debt off. As a result of this premise, endowments were extremely popular and the persisted for a number of years so that a high percentage of homeowners actually had one!

An endowment was effectively a savings plan that incorporated life insurance as well. The idea behind it was that individuals would actually contribute a monthly sum to the policy and then that would actually be used to pay off the mortgage when its term was up. The majority of policies were also designed to have a little left over so that they represented an investment as well. Many people opted for endowments in order to begin a retirement fund as well as paying off the mortgage as a result

However, many now want to sell their endowments because there have been warnings that many are performing poorly and will not cover the mortgage that it was designed to pay off in the first place. They are no longer popular and many compensation claims have actually been made against policies that were misold to begin with. Shortfalls are expected for many of the remaining endowment policies out there and so if is no surprise that a high percentage of those are looking to sell their policies before it matures.

There are various options for you if you have chosen to surrender your endowment policy. The first is cashing it in with the company that provided it for you in he first place. This is of course the easy option and they will most likely give you a good price for it, but that is not to say that they will offer the best price possible. It is worth getting quotes from a number of companies before finally settling for one.

The first company that you should contact is always the provider of the endowment policy. The quote they give you for surrender value is the one that provides the benchmark for comparison. It should be the figure that your company gives you that every other quote is compared to, but first you have to get the quotes that you need!

You should get as many quotes as possible. There are a number of companies that specialise in endowments and will be only too happy to take them off your hands. If you want to get the quotes yourself so that you do not have to pay commission then you can find a number of companies via a quick Internet search. They often have forms that allow you to fill your details in for an automatic quote. However, you will have to call some for a quote and to discuss your options.

If you do not have time to get the quotes yourself then you can employ a policy comparison purchase company that will actively negotiate with purchasers for a quote that you like. Many will report to you with quotes every day and will continue searching if you are not happy with the ones that they have initially returned. This is the most time efficient way of doing it because they will then prepare all the papers and act as an intermediary so all you literally have to do is signed on the dotted line when you are happy! This option suits everyone as these companies often have access to far more purchasers than you do. You can just sit back and relax!