Where to put Your Money Besides a Savings Account

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Savings accounts continue to offer low rates of interest, leaving many people wondering whether they are even worth bothering with. Ever since the current low-interest environment bit, savers have been looking at alternative ways to get more from their money. Things may be on the way up, but even headline-making best-buy accounts are only offering a couple of percent.

While savings accounts are pretty much unbeatable when it comes to keeping your money secure, there are some alternatives you might want to consider, whether you have a lot or a little to put aside.

Extra Mortgage or Loan Repayments

This might not seem like the most attractive choice at first, because it means giving up all access to the money you put aside. However, it will usually leave you better off overall than putting your money into savings. Think of your finances like a balance sheet. On one side you have money and assets in your possession, on the other side you have debts. Subtract debts from what you have to get your net worth. Both debts and savings grow over time due to interest rates, and your debts probably grow faster because interest rates are almost certainly higher. By removing a chunk of debt instead of adding a chunk of savings, you are having the same initial effect on your overall “worth,” and having a bigger impact over time because it will reduce the growth of those debts and lead them to be paid off sooner. Even paying a little extra can make a big difference if done regularly over time. Of course, you should still only consider this if you are sure you won’t need that money in the future.

Peer-to-Peer (P2P) Lending

Those with a lot of money are investing in properties to get more out of their money, and those who are clued up on the stock market or have access to professional advice (these also tend to be those with a lot to save) might turn to stocks. Peer-to-peer (P2P) lending, which sees you provide money for a person or business who wants to take out a loan, is another investment option, but this time it is equally open and equally useful for those with small savings and those with large amounts. While all investments carry risks and this is what rightly puts off those who could afford to invest but can’t afford to lose, P2P is very much one of the safer options. It has been rated as not much more risky than a bank, and many of the online platforms offering this service have been designed to make the experience as close as possible to managing a traditional savings account. Various fixed terms are available from a few months to a few years, and the interest rates far exceed anything the banks are offering.

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Simple Tips for Prioritising Your Various Debt Repayments

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Nobody wants to be in debt, but sometimes we find ourselves in a position where we have got ourselves into a lot of debt. It might seem like they are pushing down on our shoulders and that there is no way of seeing the light of day, but there is a way to make things a bit easier. Here are some simple tips for prioritising debt repayments.

Compile a List of Your Debts

The first thing you need to do is make a list of all your debts. This will men gathering up all the paper work for all of your different debts and compiling it into a pile, list or some other way of being able to look at them all at the same time. You will want to see clearly what each debt entails so that you can get a good idea about what you financial position actually looks like.

Work Out Exactly How Much is Owing

With all of your debts, work out exactly how much is owing on each one. This includes looking at the interest, how much you are paying, and what sort of interest it is, so that you have an idea about the variable amounts with each one. What are the monthly payments, and what annual fees does the debt attract?

Order the Debts

Once you have your list, put it into order of which ones have the highest interest rates, penalties and fees. This will give you an idea about which ones you are treading water with, and which ones could possibly be paid off sooner rather than later. Having a good idea about where your financial position is really at, will help you to see the big picture, rather than looking at the forest from within the trees, as all you see is trees.

Consolidate?

Now that you have your list and can exactly what each debt entails, have a look to see which ones you can consolidate. Ask yourself, if there are any of those debts that could save you money if you consolidated them into the one loan? Consolidating can often be a good idea because rather than spending a lot of money paying off the interest and not getting forward, you might be able to just be paying one monthly repayment on a loan that covers all of them.

Work Out How Much More Than the Minimum Would Help You

Rather than continuing to pay the minimum monthly repayment and only ever paying off the interest, it might be a good idea to start paying a little bit more than the minimum each month. If you did pay more than the monthly minimum, how much would you be paying, and how much would it take for you to pay off before it started to be of help to you and your situation?

Author Bio

This article was contributed by Michael Craig on behalf of Dreamloans – a leading car-finance broker based in Adelaide, Australia.

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Degrees of Debt – A Generational look at Student Debt

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Recent graduates or those about to earn their diploma know all-too-well how competitive the job market can be. Take it from us, the numbers don’t lie. As of 2012, nearly half of recent graduates were without paid employment. It’s a bleak reality that’s further intensified when you see firsthand the degree of debt credited to student loans and other forms of financial aid.

How many Americans currently have debt? On average, about one in ten. That means if you’re a student about to complete a 4-year undergraduate degree, get ready to pay back about $25,000 in loans. Don’t have that kind of cash? Well neither do the other 37 million Americans with debt.  Consolidated Credit have collected some information which has been put into this interesting infographic below.  Review this visual timeline to get a notion of what’s in store for future generations and where you fall in the generational scope. It’ll also help answer questions like: how has inflation affected the education system in the past 60 years? And in what ways will you kids’ educational costs be impacted? Be forewarned, however, that you may not necessarily like the answers.

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Think Differently About Your Debts

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For many people, having debts can feel like a weight around your neck, dragging you down constantly due to the pressure that it puts on you.

Research has even suggested that money worries can affect your decision making, due to the constant worry over an unfavourable financial situation, supposedly lowering your IQ by around 10 points.

As with anything in life there is always more than one way to approach something.

Prioritise debts emotionally?

Think of it as a battle you can win, rather than an endless struggle that will take a long time to pay off.

Many people may prioritise paying off the largest amount first. It can give you more satisfaction to pay off something that may mean more to you emotionally, rather than just paying off the largest sum.

If you are free of debts that are having a serious effect on your living expenses, you can list your debts in according to the ones that would mean the most to you to clear. The sense of satisfaction gained from clearing the debts that mean more to you emotionally can really spur you on to repay any other less significant debts.

For example, you may owe money to a family member which could be harming your relationship with them. By approaching this debt first you can begin to solve this issue, giving you a clearer head to tackle any other existing debts. You may want to give an emotional value to the rest of what you owe and continue the cycle.

However, if there is an amount you owe that is seriously affecting your ability to meet other more essential living costs, such as shopping and utility bills – you should prioritise getting rid of this debt first.

There are solutions available to you like consolidation loans which can help you to completely clear some debts, leaving you with more manageable repayment amounts.

If you cannot find a solution to your situation, you may want to contact debt advice charities. StepChange, Citizens Advice Bureau, Debt Advice Foundation and National Debtline are all able to provide you with free, independent and tailored advice to fit your situation.

Leave debts in the past

You were a different person when you took on these debts. Even now, by acknowledging that you have had a problem you are becoming more responsible and distancing yourself from the person you were before.

Rather than constantly beating yourself up about getting into debt, you should forgive yourself for that behaviour.
Further on, you will be able to feel much greater satisfaction the more you begin to repay what you owe.

Remind yourself of your progress

It can be a brilliant idea to keep a diary of how you overcame your debts; this can help to serve as a positive reminder of how much you’ve cleared and something that you can look back on with pride.

You may even be able to use it to offer some advice to any friends you have that are in the same position.

Enjoy the process

It’s likely that you’ll find it much easier to carry out a task if you enjoy doing it, rather than attempting a task you hate.

This may be difficult, especially if your debts are causing you some sleepless nights, but by concentrating on the positive changes you’re making, you should begin feeling a little better about your situation. Just remember that each step you take is one where you are nearer to being debt free.

This article has been written by Jamie Smith on behalf of Loans4Tenants.

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6 Steps for Choosing the Right Debt Settlement Company

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The best debt settlement company  for you is just 6 steps away.

Within a few years, debt problems have amplified like never before. So the demand for proficient debt settlement companies has also increased. Finding a good debt settlement company doesn’t have to be difficult. You only need to be watchful in order to contact the perfect debt settlement company for your needs.

Following are the 6 steps, which you need to climb without any fail to find out a trustworthy and legitimate debt settlement company in California:

1. Investigate the companies available around you: You can find out lots of debt settlement companies in California. Not all of them are equally good. Check the backgrounds of various companies. Find out what kind of service they provide. Ask people who may have contacted debt settlement companies earlier. Contact those companies that have a good reputation and positive word-of-mouth publicity.

2. Talk to company representative: You must be careful enough while talking to the representative of your chosen debt settlement company. Ask for details regarding the debt settlement program. Know whether or not the company is aware of the California debt settlement laws and follows them rigorously.

3. Know you payment plan properly: Do proper inquiry about your payment plan. You must have all the essential details like, how you need to pay, what is going to be the monthly payment amount and the duration of payment plan. Make sure there is no hidden cost waiting for you in your payment plan.

4. Make sure the collection calls stop: According to the California law, collection agency must not harass a person for collection of debts. The company you are eyeing must be careful about this. If any creditor or collection agency ignores the law and keeps pestering you, then the debt settlement company must take care of that.

5. Don’t deliver your personal information: Your personal information is not necessary for debt settlement programs. So don’t entertain any unfair demands of any company representative. Disclosing your personal information will only drag you into risky situations.

6. Look for written agreement: A lawful debt settlement company must provide you with written documents. All the important details regarding negotiation and settlement must be stated there clearly. If you find any inconsistency, then ask right away. Avoid vagueness to steer clear of menace.

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The Alternatives to Bankruptcy

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If you – like literally millions of other people today – find yourself in financial trouble, there are a number of options available to you. Amongst these options, if your debts really are insurmountable, is bankruptcy. And sometimes, declaring bankruptcy is the only realistic way out for people whose debts have reached truly hopeless levels.

But if you’re wondering “is bankruptcy right for me?” don’t be persuaded into declaring bankruptcy until you’re sure of all the facts. There are significant disadvantages to bankruptcy, which you must be fully aware of before you even consider it as a possibility.

The main alternatives to bankruptcy are Individual Voluntary Arrangements (IVAs), Debt Management Plans, Administration Orders, and Informal Arrangements.

An IVA is a formal and legally binding arrangement between a debtor and his or her creditors to pay back set amounts over a few years.  These payments are usually monthly amounts that the debtor can afford, and once all the IVA payments are done the court legally protects you against any further creditor hassle. The costs of an IVA are lower than those for a bankruptcy and you should be able to keep all interests you have in property.  There should be no fees to pay upfront and there are no statutory costs to pay.  To look into the possibility of an IVA, you will need the services of a licensed Insolvency Practitioner.  More information on this can be found in our earlier article Debt Information: What is an IVA?

Debt Management Plans are formal arrangements with creditors that are kept private – you don’t go on an official register. The most appealing thing about a debt management plan for many people is that someone else will talk to creditors on your behalf. Your representative will also negotiate one affordable monthly amount to your creditors. These payments will be based on your income, but none of your debts are actually written off. Instead, interest payments are stopped.

An Administration Order is an option if you owe less than £5,000 in total to two or more different creditors and have at least one County Court Judgment against you

Alternatively, you may be able to come to an “informal arrangement” with your creditors to repay what you owe – though it can be difficult to get everyone to agree to such an arrangement, so it’s best to seek expert advice from a reputable company.

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Debt Information: What is an IVA?

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Many people in the UK have debt problems. Some in the form of mortgages, others credit cards. Paying back the amount borrowed can be difficult if personal circumstances change, with interest added on, it can seem like there’s no way out.

During times like this, an IVA may seem like the solution to put things right or find a way to tackle the issues. An individual voluntary arrangement is a formal agreement which is binding upon the borrower and the creditor.  Governed by the Insolvency Act of 1986, the agreement allows the individual to pay back the money owed at an affordable cost. During this time, creditors will not be able to contact the individual who will be protected from any legal action or in some cases bankruptcy. Any interest which was set out in the original agreement will also be frozen.

In order to be eligible for IVA, the individual must have debts in excess of £12,500. This amount must be between two or more creditors. A regular household income must also be shown. Those who meet the criteria and are struggling to keep up with instalments to the creditor can apply for an IVA.

After the agreement is made, monthly payments will be calculated to be paid each month. An IVA is the amount of income minus necessary living costs. This allows the individual to pay back what they can afford rather than what is being demanded by the creditor.

There are many advantages to setting up this agreement, for example in most cases the individual can be debt free within 5 years with one single monthly payment.  Individuals have a legally binding contract which is a form of protection from court orders and also, as already mentioned, interest will be frozen. Telephone calls and payment demands also stop – for those struggling with the stress of debt this provides peace of mind that is priceless.

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FTC Debt Settlement Rules Safeguard Consumers From Malpractices

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Debt issues have become a regular feature in the US. People have been struggling to pay off debt. The poorly performing economy has inflicted a negative effect on their livelihoods, which has made things even worse. The past few years have seen a rise in the number of debt settlement companies offering debt relief to the needy lot. Their solutions promised an easy and faster way out of debt. Unfortunately, things weren’t working out as they were meant to. A majority of the debt settlement companies were reported to be hiding the nature of their plans and proposals from their clients. This led to the formation and implementation of some ground rules by the Federal Trade Commission (FTC) in order to rein in the illegal and dangerous practices adopted by these companies in the name of service to the debt-ridden masses.

People have been complaining about debt settlement companies not fulfilling their promises. They had their faith in these companies, but didn’t find the assistance necessary to reduce debt and avoid bankruptcy filings. They paid a healthy sum of money to these companies, but could buy nothing but the blank assurance of faster debt relief. As if this wasn’t enough, they found working with the debt settlement companies to be harmful to their credit scores. Their credit history reflected negatively, which was a strong blow to their financial future.

Although debtors received suggestions against resorting to debt settlement companies, they continued to seek help from them. Quite obviously, the damaging consequences were for them to bear. Debtors would have saved themselves thousands of dollars had they filed for bankruptcy. Frustrated with their situations, debtors lodged a series of complaints against the debt settlement companies to the Better Business Bureau (BBB) and the FTC. This pushed up the number of complaints by 18 percent between the years 2008 and 2009.

Rescue efforts by the FTC for consumers

The FTC laid out new rules that will make the debt settlement companies show honesty with their proposals to customers. The following are the restrictions imposed on the debt settlement companies:

No more lies – The companies can’t lie to their customers about anything in any way. They have to provide the debt solutions if that’s what they promise to do.

Transparency in costs – Customers are to be provided with written documents stating the estimate of the expenditures involved.

Specific timeframe – The companies must state the timeframe within which the customers could get rid of or see reduction in debt.

Negative effects on FICO or credit scores – Consumers should be informed about anything that could inflict negativity in their credit report and reduce debt.

Aside from the aforesaid rules, consumers have been equipped with the right to stop paying the debt settlement companies till they get to see the desired results. Consumers have been misled by debt consultants. In their attempt to avoid filing for bankruptcy, they end up in higher debts. This also causes a downslide in their credit scores.

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Debt Relief: Declaring Personal Bankruptcy

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Personal bankruptcy is unavoidable especially if you have tried your best to manage your assets. While there’s no use to regret your financial decisions, declaring personal bankruptcy is the only way you can get out of your ordeal. Declaring your personal bankruptcy can save you through debt relief and consolidation as you work on a plan to finally repaying your debts in the future.

However, before you declare bankruptcy, you’ll need to know a few things. In declaring personal bankruptcy, you allow authorities to help you discharge some of your debts through financial aid. However, not all debts can be secured. Second, you’ll need to consider which debts you can handle as they are already “secured” or they have collateral that you could use to pay for the entire debt.

Third, consider the cost of the entire process. Declaring bankruptcy doesn’t often work as you expect it to be. It doesn’t clear all the financial aspects of your case that leaves you in a clean financial state afterward. Personal properties will be used to pay for your debts. You’ll also need to work with consolidation to address at least part of the debt as agreed.

The reason for filing bankruptcy is also a big importance to consider. If you suffered debt because of overspending using credit, don’t declare bankruptcy all at once. You can only file bankruptcy after six years from the last time you used authorized aid. If you find yourself in the same position having suffered business failure and job termination, you’ll find yourself having no relief at this point.

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Effective Ways to Recover From Bad Credit Scores

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In your finances and your financial stature, anything and everything can go up and down. Credit scores, which reflect your financial conduct, can go up and down depending on your financial status. There comes a time when improper financial decisions take a toll on your credit. But don’t fret, there are ways to recover from bad credit scores, as listed here.

1. Credit Unions

A bad credit score will make many lenders and financial institutions skeptical about you. But a credit union will not decide to approve your application based on your credit score alone. However, credit unions are not as big as banks. They can only provide for people who belong in the communities, professions or organizations they support. The choices for your financing are based on your financial capability and your actual conduct.

2. Credit Cards

Repaying your credit cards in full on a monthly basis helps your credit score rise up. Avoid paying the minimum amounts for credit cards as they can increase your interest fees. This could mean more expenses for you. A great way to use a card is to use it for items that you need. You should also consider using the card only if you need an item critically.

3. Debt Consolidation

People with great debts caused by financial mismanagement might turn to debt counselors or consolidators. These companies can help intervene between you and your lenders to arrive at a point to help you find a solution to end your financial problems. Debt consolidators ensure that the financing you receive, the income you get and your basic needs are all addressed carefully to end your credit ordeal.

4. Agreement-Based Financing

There are people, companies and organizations aside from credit unions that report your credit conduct to the monitoring bureaus. Car dealerships who provide in-house financing based on your conduct report to credit bureaus and help you get financing while improving your own credit conduct. Try to find them online and apply for their financing.

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