Saturday, January 12, 2019

3 Golden rules to follow while taking out loans – Don’t miss any one of them

easy loans
In an ideal situation, everyone would have enough funds to pay for all their needs but the reality is far different from that. Majority of us have very few funds left in our bank accounts and hence the only option for us is to borrow money from lending institutions. Considering the banks and other lenders, this yawning gap between the consumer’s income and expenses seem to be their biggest opportunity on carry on their business. In fact, the lenders are already carpet-bombing the customers with loan offers that they send them through SMSs, mails and also over phone calls.

With the changes brought about by technology, you can not only get payday loans online but all sorts of lenders are available online waiting to meet your needs. They will just take 10 seconds to disburse a loan amount to their customers through net banking. But before you opt for loans, here are few of the golden rules that you need to follow.

Golden Rule #1: Borrow only an amount which you can pay back

The foremost rule of smart borrowing is something that the older generation has been advising us since years – ‘live within your means’. Make sure you take out a loan that you can repay easily. A thumb rule that you should follow is that your car loan installments should never surpass 15% and the personal loan instalments shouldn’t account for 10% of your net income that you make in a month. The total monthly income that you make towards all the loans shouldn’t be more than 50% of the monthly income.

Golden Rule #2: The loan term should be as short as it should be

The home loan tenure that is provided by few of the major lenders is 30 years. You have to understand the calculation that the longer the tenure is, the more will be the payment towards interest rate. However, it is always better to take out loans with shorter time period so that you can pay less on interest rates. On the contrary, if you take out short term loans from online sites like PaydayMe.com, you will get high interest loans for a short span of time as they don’t have any collateral and they offer loans to people with poor credit as well.

Golden Rule #3: Ensure paying back on time

As long as repayment of dues is concerned, you should be on time while repaying debts. Whether it’s a short term loan like a payday loan or a cash advance loan or a long term loan like a car or a home loan, you should never forget to make payments on time as this will lead to accumulated interest rates which will lead to debt. Also take care of your credit card payments as they carry the highest interest rate.

Therefore, when you’re wondering about the ways in which you can take out a loan and yet stay in financial peace, make sure you follow the golden rules mentioned above.

Friday, January 4, 2019

Gambling in the Forex trading industry - Something different !!

forex matters
If we are not careful with our professions, they will get out of hand. This can be easily visible in the trading business. For the sake of good returns from this business, traders will have to maintain it. Many traders though, happen to mislead their business and make a mess out of it. They happen to fall for various traps and make their trading experiences miserable to look at. In this article, we are going to discuss some of the most common and serious problems of the trading business. The following will be filled with all of the information about those mistakes. We will try our best to make the traders aware of them. We hope the traders at least the novice ones who are reading this article, will be able to change their business for a greater outcome from this profession.

Over trading is the most dominating

The most important in the sense of distracting ones trading business is the over trading problem. It can single-handedly mess with your trading business big time. When traders fall for that it becomes unorganized and the trade setups become haphazard before executions. This can cause the traders some serious losses from their accounts. You see, over trading is solely based on the trading frequency. It means the traders are placing their trades more frequently than others. This denotes the traders are not planning for most of the trades and when you are not making pre-planned trades, they end up looking very bad and the result from those trades do not bring any good luck. Because the position sizing may have been wrong and when several trades stay like this the total impact on the trades gets really massive. So, try to avoid this problem in your own trading business.

Getting rich quick

Many people in Singapore think high leverage trading account gives them the perfect environment to make tons of money within a short period of time. But if you do some analysis, you will be surprised to see all the risk takers are the ultimate losers of this industry. Forex trading is one of the most sophisticated business in the world. You can’t make any real progress unless you want to find the perfect way to lose money. Learn proper money management technique so that you can save your investment in the long run.

Risking too much is not good either

Like over trading problem, many traders happen to do too much with their risks. It means the traders have a poor money management plan for their business. When the trading business is running like that the outcomes from the trades will not be so good. The risk to profit margins will not bring any good smile to the trades. this not a false story at all, most of the traders think that with more money invested into the trades they will be able to make more profits. This comes from the general ideas about other businesses. When the traders use this strategy for their businesses without any kind of good position sizing, they begin to fall very short. The loss from those trades happens have a negative effect on a trader’s peace of mind. This also affects a trader’s performance after losing trades.

Micromanaging is bad for the mind

Some traders happen to fall for another problem by micro-managing things. It is the whole trading process we are talking about. The main problem comes when monitoring the markets because they are the main thing for proper position sizing. Doing this the traders becomes more engaged with the trades and their tensions during live trades affect a lot on the performance. This is because they begin to lose faith in the trading strategies which has been created from your own mind. So, for the sake of your own relaxation in this business, try to be calm and cool with the whole trading process.

Monday, October 8, 2018

Advantages of Opening Your Savings Account with Leading Banks

money bank
Savings account is a traditional investment option that’s much conservative in nature. It helps you store your extra funds with a banking institution as it’s safer than keeping the funds at home. Compared to the checking account, savings account yields more benefits like the interest that you earn on the funds. Unlike other liquid investments, your savings account helps you obtain an easier access to your money as and when you need it. With much lesser risk involved, your savings account actually provides numerous financial benefits. You must consider it while checking out options for protecting your funds.

Check Out the Major Benefits that Come with Your Savings Account:

Interest on the Funds Deposited

For all the funds deposited with your basic savings account, you’ll earn interests. This is the most important benefit associated with any savings account. The interest that you earn with your savings bank account is arrived at by multiplying the rate of interest by the value of funds deposited and maintained in the account. The rate of interest will even vary from time to time.

Simplified Access to Funds

The money that you deposit after an online saving account opening can be brought out easily in the event of an emergency. The funds that you deposit can be withdrawn for covering any unforeseen financial obligation. With a majority of banking institutions, funds can be accessed over the internet for 24 hours a day. Linking your savings account with your other financial accounts is a possibility with most banks just to ensure a smooth flow of funds. The most important benefit of maintaining your savings account is the quick access and mobility of funds that it supports.

Automatic Transfers

You might find it tough to save money out of your daily expenses and obligations. However, your savings account yields another benefit to resolve this issue. You may set automatic deposits with your account on a weekly or monthly basis. The amount of saving will then get transferred from your checking account on the date specified every month. This way, you won’t need to do the math of extracting money from your monthly budget.

Liquidity

Liquidity is certainly a major benefit associated with your savings account. All the money entrusted with your savings account can be accessed without any prior notice. Also, you may withdraw your funds as frequently as you need by availing facilities like the bank teller, internet banking, and ATM. However, you’re entitled to enjoy up to 6 electronic transfers each month as per the government regulation. In case, you need more funds, you may achieve it through an online transfer and it hardly takes a few minutes to get it processed. It’s much easier than taking your funds out of any certificate of deposit, government bond, and stock that charge a substantial amount as penalty.

Opening your savings account and operating it is much easier than your other modes of saving. You may achieve a few interest advantages with banks that bridge your savings packages and checking facilities. You may even choose to avail lower initial deposit with some of these banks.

Saturday, October 6, 2018

Passive Income with Peer to Peer Lending

earning ideas
Many investors these days are looking for new passive income ideas. Passive income means making money for an investment or asset without doing any regular work. Types of passive income include royalties and licensing fees, revenue from content and advertising fees, interest income and a variety of other sources which people are taking advantage of. Many of these streams of income are available on the internet although some are offline. The common denominator is that they all require no significant effort on the part of owner/investor.

One option for those looking for passive income is peer to peer lending investing. Peer to peer (also known as P2P) lending platforms allow individuals to invest in personal loans to borrowers. Investors can see borrowers credit information and select loans they want to invest in. The minimum investment is $25 so a hundred or more investors may be funding each loan. Investors normally spread their money across a hundred or more loans in order to diversify their portfolio and minimize risk. The risk in this type of investment comes from the possibility that a borrower will not repay their loan. Loan defaults can happen and that is why people invest in many loans.

Investors in P2P loans can expect to earn anywhere from 4% to 7% depending on the particular loans that they invest in. They can choose higher rated borrowers with loans at lower interest rates, or lower rated borrowers with higher interest rates. There will be more defaults with the higher rate loans but the return on investment will normally be higher for these investors. Compared to other common investments P2P lending investing has a good risk/reward ratio. This means that the risk is relatively low compared to the return on investment.

At this point, you may be wondering how P2P loans can be a passive investment since we have described how the investor selects loans to invest in. The investor can choose to use a tool called automated investing. This tool, which is available on most platforms, allows investors to set certain criteria for selecting the best loans which they think will be repaid in full. Once the tool is set up, it will automatically choose loans. Whenever the investor has funds available, either through deposits to their account or payments made on other loans, the tool will reinvest those funds immediately. So, the investor does not have to do any work, which is why this is a passive investment.

Based on this ability, peer to peer lending can be a good part of a passive investors portfolio. While it is not recommended that people invest all of their money this way, it does help diversify a portfolio and soften the blow when the stock market is down. The ease of managing this investment is very attractive which explains the explosion in popularity over the past several years. While many people actively manage their accounts, just as many are using the automated investing tool to do the work for them.

Thursday, October 4, 2018

Credit reports versus credit scores: What’s the difference?

score in credit
Remember the day in school, when teachers declared the results. The class teacher would come with a file containing our performance in the recent exam. In that file would, there would be that one piece paper that depicted our performance in the last exam. Each subject would be graded by a specific teacher and in the end, we would have a grade or a score.

You must be wondering why are we reminiscing about our school days and those dreaded report cards? Well, back in the day we knew the difference between a report card and the marks scored in a subject as well as the total.

However, in the world of loans, many borrowers become confused about credit report and credit score.

Before you feel aghast about this, you should know that not knowing the difference between the two can hamper your chances of availing a business loan.

Now, don't worry we will tell you the difference between a credit report and a credit score. So, that all-important loan for a business is never too far for you. Read on.

What is a credit report?

A credit report is a report, simple. Each credit report lists loan/credit-related information for a particular individual.

In India, there are 4 major credit bureaus– TransUnion CIBIL, Equifax, Experian and CRIF Highmark. If you are a credit taker, then it is quite likely that there will be a separate report produced by each of those companies. Think of a credit report as a detailed report of an individual's, in this case, your credit history.

What is inside a credit report?

Like your report card in school/college, your credit report will contain all the relevant information pertaining to credit history.

Listed items fall into the following categories: personal information (name and address, PAN card details, known business address, and phone number), open and closed credit accounts, credit inquiries, and others.

In most Indian credit reports, there is a credit account summary, a current credit balance amount summary and a credit enquiry summary that lists all the enquiries that have been for new credit such as business loans.

The information contained may pertain to credit card payments, and various loans such as automotive loans, business loans, home loans, and student loans. A credit report also contains the status of those loans such as doubtful, settled, closed, days past due, etc.

A credit report uses records reported by financial institutions to show how you as a borrower has kept up with payment agreements with various current and previous creditors. All this information helps creditors, like Tata Capital, form a credit picture of you. Simply put, they tell a story of the way you use your money especially credit/loans. So, the credit report gives lenders a total view of your credit journey.

What is a credit score?

As you can understand that a credit report is a compilation of your credit information. If there are 100 million borrowers, everybody will have tons of information. This is where a credit score comes in. A credit score is usually a 3-digit number that falls on a scale from bad to good. Usually, the maximum score is 900, while the minimum score that somebody can score is 300. Any credit score above 750 is usually taken as a good by all lenders.

How a credit score is calculated?

The exact formula for calculating credit score is proprietary knowledge. However, it is enough to know that a credit score is calculated based on information listed in a particular credit report or reports.

There is a possibility that one individual may have a different credit score. This is because the credit scoring formula is slightly different for different companies. However, your credit score will not greatly vary. For example, while applying for a loan for business, you may find that your Equifax credit score is 800, and 730 in Experian. But there is little chance that your credit score in one credit bureau will be 800 and becoming 500 in another credit bureau.

It is very unlikely that a good borrower in the eyes of one bureau will become a bad borrower in another bureau's assessment. While you may have several different credit scores, at the core of the idea is something simple: to provide a quick snapshot on how good or bad you are as a credit taker.

Credit score importance

A credit score has become so important because it helps financial lenders use the three-digit score to decide personal or business loan approvals, interest rates offered and other credit-related decisions. If they need greater detail, they can go through the credit report.

Do remember that a credit score as a number and a credit report as information are historical in nature. They only show what you have done in the past.

Focus on having good credit habits i.e. not over-borrowing, paying your bills on time, and keeping your word when it comes to credit agreements. These habits will help you in getting the best interest rates and deals for business loans when you someday need funds to set up or scale up your dream enterprise.

Tuesday, October 2, 2018

How a Business Loan Helps in Balancing Your Expenses and Incomes

business needs loan
It’s often tough for a businessman to strike a balance between all the expenses and incomes even when things are running smoothly. Again, you may perceive an uphill task to cope with the piling debt that affects your financial situation. Under both of these circumstances, you’ll face the challenge of taking major decisions that shape the future prospects of your business. A fair share of your income gets claimed by the regular cost of running a business, thus leaving only a small portion of it to be invested in growth and to cover unforeseen expenses.

A business loan can be of real help when you’re attempting to invest in avoiding risks and improving the future course of your business. You may compare some of these loans by visiting any loanable website and narrow down your choices. However, you must first acquire more knowledge on the benefits of small business loans before signing up.

The following scenarios hold good for considering a small business loan:

  • A dry financial season may create fresh opportunities. The pinch can be felt by even the most successful businesses, especially when the industry is trudging through a downturn. Till the revenue picks up again, a business can achieve adequate funds by way of a loan.
  • A seasonal business needs to be restocked. Few businesses don’t achieve returns throughout the year. Their activities may be restricted through different phases. The seasonal boom can be met with more funds when you apply for a loan.
  • Hiring new staff may be another instance. You might consider expanding the employee base for enhancing profits and productivity, especially when the trend is high. Covering all extra costs becomes easier once you obtain a loan. Such costs may include paying for their salary and training.
  • Procuring fresh equipment is also an important reason. Your business can reach out to more buyers once you improve efficiency by deploying advanced equipment.
  • Apart from opening a new branch, you may even expand your business operations. While experiencing success with your business, you may explore a new opportunity for business expansion and achieve a new reason for obtaining a loan.
  • Initiating a few marketing events. A small business loan will certainly help in exploring fresh marketing attempts regardless of whether you’re introducing a grand opening or an annual sales event. Alongside enhancing your ROI, it will also draw in more buyers.
Things That Demand Special Consideration While Applying for a Loan

You must create a list of all your requirements prior to applying for your loan. A concrete business plan needs to be drawn before you even think of it. You must keep a detailed note of the amount that you ought to borrow and know the direction in which your funds will flow. Knowing the loan amount that you need to allocate towards addressing various financial areas will help you maintain a certain buffer for achieving the desired ROI. This, in turn, will even help you in determining all loan options that keep your business up and running.