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Archive for June, 2011

Are You Damaging Your Financial Stability?

Written by Toi Williams on Jun 30th, 2011 | Filed under: mindset

There are numerous actions that individuals perform on a regular basis that can result in the destruction of their financial stability.  Although the consequences of these actions may not be noticeable at first, in time these actions will cost the individual a lot of money in various charges and fees.  These actions can also damage a person’s credit score, causing a decrease that continues month after month.  Changing or eliminating these actions from your daily life will lessen their effects on your financial stability and you will be more financially stable within a short time.

Many individuals forget about budgeting and do not track the money that is coming into the household and being paid out for expenses.  This can result in an individual spending more than they intend to spend and leaves them with no money for saving.  In some cases, overspending affects their ability to pay their bills, resulting in late charges and higher interest rates for accounts.

Various retail stores offer a discount on merchandise when you open up a credit card account with the store.  This is good for individuals that do most of their shopping at the retailer offering the credit card, but most individuals open up credit card accounts simply for the discount on merchandise.  Opening a new credit account decreases your credit score and the number of open accounts available to you may cause you to be denied credit in the future.

Countless individuals do not check their credit report because they don’t think that they can change the information contained in the report.  Nearly 25% of credit reports available from the three major credit bureaus contain mistakes that cost consumers hundreds of dollars in increased interest payments and cause them to be denied credit.  Experts recommend reviewing the credit report from each major credit reporting bureau annually to check for mistakes.

Years of easy access to credit caused many individuals to stop placing money into their savings accounts for emergencies.  They believed that they could handle anything with the credit available on their credit cards.  Unfortunately, any purchases that they place on their credit cards will have interest charges placed on them, making the total amount paid for the item much higher.  Placing the amount on the credit card also means that you will not have that money available for any other emergencies until that balance has been paid off.


Is Lending Club a Scam?

Written by admin on Jun 30th, 2011 | Filed under: lending club

Prosper.com and Lending Club have now each issued more than $150 million in loans to borrowers through their peer-to-peer lending marketplaces, yet many consumers wonder whether or not Prosper.com and Lending Club are a scam are or defrauding consumers in some other way. It’s perfectly natural to be concerned about financially innovative companies, but Lending Club isn’t a scam.

When Lending Club and Prosper first went into business in 2006 and 2007, they were operating without the oversight of the U.S. Securities and Exchange Commission. The SEC stepped in and regulated the peer-to-peer lending industry after accusing Prosper of illegally selling unregistered securities. Both Prosper and Lending Club worked out their legal status with the SEC and have the loans made to borrowers listed with the SEC as registered securities. The two companies have also worked out their legal standing with the majority of the 50 states so that borrowers in all but a few states can get loans through the two companies.

If you’re borrowing from Lending Club or Prosper, it’s just like getting a loan from a bank, but you might get a better interest rate than you would from a bank. You make your payments to Lending Club or Prosper and they distribute your payment to the investors that funded your loan. If you default on your loan, the company will certainly try to collect the debt form you as is their legal rights, but the individual investors have waved their rights to try to collect on the debt, so you don’t have to worry about any individual coming after you.

If you’re considering investing with Prosper or Lending Club, there is some risk involved, but it’s certainly not a scam. Prosper drew criticism from its early investors because of the relatively high default rates that occurred, but the company has since gotten its act together and investors on both Prosper and Lending Club are reporting positive rates of return on their investments. Many investors are making around 9% with their peer-to-peer lending investments and investors that take on more risk are reporting even higher returns. It does take a bit of work to invest with Prosper or Lending Club, but it can be an interesting alternative investment that provides diversification outside of stocks and bonds.

Both Prosper and Lending Club are listed with the San Francisco Better Business Bureau. Lending Club currently has a B+ rating and is a BBB accredited business. Prosper also has a B+ rating. Both companies have had a few complaints during the last few years on the BBB, but it appears that both companies have resolved all open issues.

Prosper and Lending Club are not scams. Both are real companies that offer real loans to real people. They both also provide investors the opportunity to invest in consumer debt with some risk involved.


Score Two Free Audiobooks with Audible.com’s TV Offer

Written by admin on Jun 29th, 2011 | Filed under: audible

Audible.com, a subsidiary of Amazon, is currently offering a special deal in which new listeners can get two free audiobooks and a 30-day free trial gold membership under its special television offer (advertised as www.audible.com/tvoffer).

The TV Offer from Audible is currently the best deal that Audible has available for new listeners. Users that take advantage of the special offer will be able to download two free audiobooks and get a 30-day free trial to Audible.com’s gold membership plan. The gold membership normally costs $14.95 per month, which provides users one audiobook credit per month and discounts on additional purchase.

Here’s the fine print associated with the TV offer from Audible, “Get your first 30 days of the AudibleListener® Gold membership plan free, which includes one credit, plus a one-time bonus credit. In almost all cases, one credit equals one audiobook. After your 30 day trial, your membership will automatically renew each month for just $14.95, billed to the credit card you used when you registered with Audible. With your membership, you will receive one credit per month plus members-only discounts on all audio purchases. If you cancel your membership before your free trial period is up, you will not be charged. Thereafter, cancel anytime, effective the next billing cycle.”

Audible.com is the world’s leading provider of audiobooks, with more than 85,000 titles in its library. The service contains best-selling audiobooks, such as those featured on the New York Time’s best sellers list, Oprah’s Book Club and Business Week’s best sellers list. Audible also has a number of unique offerings, including audio versions of magazines, newspapers and other periodicals. Audible has also produced a number of its own titles as part of its Audible Originals collections. Audible.com audiobooks are iPod compatible and work with more than 500 different MP3 players and smartphones.

If you would like to try out Audible.com’s TV Offer, visit www.audible.com/tvoffer


The Benefits Of Refinancing Your Mortgage

Written by Toi Williams on Jun 26th, 2011 | Filed under: loans

In recent years, many homeowners have refinanced their mortgages to attain the benefits of refinancing.  Mortgage loan companies have made refinancing a mortgage a smart decision for most homeowners because of the enormous financial benefits realized by refinancing at the right time.  There are many benefits associated with refinancing a mortgage loan and each one can significantly affect the homeowner’s financial stability.

One common reason for refinancing a mortgage loan is to take advantage of a lower interest rate offered by a loan company.  Some homeowners obtained their original mortgage loans when their credit score was average so they accepted a higher interest rate in order to obtain the loan.  If the homeowner has increased their credit score by a considerable amount, then they may qualify for a lower interest rate when they refinance.

Even homeowners that qualified for an excellent interest rate when they obtained their original mortgage loan may qualify for a lesser interest rate today if they refinance their mortgage.  Lowering the interest rate by a single percentage point can save thousands of dollars over the life of the mortgage.  Refinancing for a lower interest rate is only a good idea if it is for a fixed-rate mortgage because an adjustable-rate mortgage can increase over time with a higher interest rate in the future than what the homeowner originally started with.

Another benefit to refinancing a mortgage, including mortgages uk, is decreasing the amount sent to the loan company each month to pay off the loan.  Refinancing a lower balance effectively lowers the amount of interest paid on the loan in the future.  This also allows the equity to remain in the home while reducing expenses to the homeowner.

Extracting the equity in the home is another common reason for refinancing, although this may increase the amount of time that the homeowner is paying the mortgage loan.  Refinancing for equity allows the homeowner to easily acquire money that can be used for other purposes, such as college tuition or remodeling the home.  The amount of equity extracted will be equal to or less than the amount of equity accumulated over the years.  The longer the person has paid the mortgage without extracting equity, the more equity will be available in the home when the time comes to refinance.

If you’re looking to get a quote on interest only mortgage rates, consider visiting The Mortgage Broker.


Can You Recognize These Debt Elimination Scams?

Written by Toi Williams on Jun 15th, 2011 | Filed under: scams

As more people across the nation find themselves facing unmanageable debt, more companies that prey on the desperation of these individuals are created.  Debt elimination companies can be a good way for a person to gain control of their finances, but some debt elimination companies have been created solely to scam the individuals that come to them for help out of more of their money.  Debt elimination scams are easy to spot once you have been made aware of what is possible and what is not as many of these scams employ tactics that are illegal or impossible to accomplish. 

Creating A New Credit Profile

Some of the most common promises made by debt elimination scammers are promises to create a new credit profile for the person that will give them a fresh start.  Unfortunately, this is impossible using legal means.  What the person is paying for is a fake social security number that is then linked to a forged credit profile that the person can use to obtain credit.  This diverts creditors from viewing the person’s actual credit history by creating a blank slate for new credit information.  This is illegal and any person found using a fake social security number in this manner runs a good chance of being prosecuted as a criminal in a court of law.

Claiming Illegal Debt

Another commonly used debt elimination ploy is using “experts” to find flaws in credit agreements that render the debt “illegal” or “uncollectible”.  These fake professionals charge a fee to tell the individual that the person does not have to pay the debt and advises them to stop paying it while the company negotiates on their behalf to remove the information from their credit record.  This often leads to the individual being sued in court by the creditor for the non-payment of the debt and very few judges believe the “this debt is illegal” claim without some type of substantial proof.  In more than 98% of these lawsuits, the individual is ordered to pay the debt.

Before doing business with any type of debt elimination company, you should always review the company, its practices, and its reputation.  Businesses that have a great deal of complaints listed with the Better Business Bureau or many negative reviews on internet based consumer review websites should be avoided to ensure that you do not find yourself in a bad situation as well.


Is Now the Right Time to Consider Refinancing?

Written by admin on Jun 14th, 2011 | Filed under: debt relief

The economic recession of 2008 has been followed by a slow recovery – this had cast a cloud over many people’s finances and forced many more into significant debts. If you are in this situation you are doubtlessly struggling under the burden of onerous repayments. There is a way out of this however, and you might want to consider refinancing to reduce the interest on your personal loans.

Refinancing entails replacing an existing debt with a new one under different terms – there are a few reasons to do this. For instance, if your monthly payments are too high you can cut them while lengthening the term of your loan, or you can do the opposite to get into positive territory sooner. You can also pay off multiple obligations and consolidate them into one loan, simplifying your payment plan. If any of these options appeal to you, it might be worth considering refinancing as it can really make a significant difference to your financial life.

Aside from these reasons there is one big incentive to refinance: interest rates. If you are on a fixed rate loan you might be paying far more than you need to each month – interest rates have dropped as governments try to stimulate financial growth, this has increased the supply of credit and made repayments much lower on debt. So if you refinance now you will be able to set your interest at a very low rate and thus save money in the medium and long term.

As the recovery continues to progress it is quite likely that interest rates will rise – indeed, governments will return them to normal to cool down the economy and prevent it from overheating. So it is worth getting going on refinancing now while the opportunity is there – interest rates will likely stay low for the coming months and years, yet it won’t last forever.

Refinancing is a great way to make substantial changes that can benefit your financial life: it is certainly a significant step, yet with interest rates where they are there is no reason not to do it. Just make sure to strike now before circumstances change.


The Most Important Features Of A Peer To Peer Loan

Written by Toi Williams on Jun 12th, 2011 | Filed under: loans

Over the last several years, a large number of people have decided to use peer to peer loans to obtain additional funding or to reduce the amount of money that they are spending on interest charges for debt.  Many people use peer to peer loans for paying off a loan with a high interest rate with a loan with a lower interest rate.  Obtaining a peer to peer loan that is right for you and your financial situation will not be difficult if you know what features indicate a good loan and peer to peer lending company.

The first item to look at when looking for a loan is the interest rate that you will be paying for obtaining the loan.  Many loans that are offered by peer to peer lending companies will have different interest rates applied to the loans of different individuals.  The interest rate charged for the peer to peer loan is based on the applicant’s personal credit history and may be significantly lower than the interest rate that would be charged by a credit card company for the same amount of credit.  Obtaining the loan could end up saving you hundreds of dollars in interest charges over the life of the loan.

For any loan, it is very important to read all of the terms and conditions so you know exactly what you are getting into when you sign up for the loan.  The terms and conditions of the loan will disclose what interest rate charged for the loan will be and the length of time given for the repayment of the loan.  The interest rates for these loans are fixed for the life of the loan so the payment will not change during the repayment period.

There are a number of peer to peer lending companies that advertise a low interest rate for new applicants with good credit scores in the hopes of luring business away from traditional lenders.  These types of loans can result in significant savings as long as the loan is repaid according to the original terms of the loan.  Borrowers with lower credit scores may also be eligible for loans using the peer to peer lending companies but the interest rates that they will be offered by lenders will not be quite as attractive as the rates offered to those with high credit scores.


Using a Loan Calculator to Find The Best Loan

Written by admin on Jun 10th, 2011 | Filed under: loans

Increasingly, consumers are arming themselves with tools and information when making decisions about their personal finances and making use of the web to aid decision making.

For example, many people take out loans for an array of purposes. These might be for big ticket items such as a car or home improvement, a home purchase loan, or simply a smaller holiday loan or consolidation loan to repay existing credit card debts at a better rate of interest.

The trouble is that there are simply so many financial products available and reviewing them – within your own criteria – can be a time-consuming and confusing process, especially with so many different factors to take into account.

Happily, various consumer websites offer handy simplifying tools, such as a loans calculator. These online gadgets help make the review of different loan products much easier and quicker.

A loans calculator will ask you to enter basic information relating to the amount you wish to borrow, the interest rate and length of time you would like to borrow for and your ability to repay.

It will then – if a price comparison site – return a list of suitable loan products for you to review and select from, which you can filter by different categories such as overall cost or customer service rating.

A loans calculator can also be useful for clarifying exactly how much you will repay on a loan in total, when the interest rate is applied over the loan period. This can be a sobering calculation for some and often provide a sanity check on whether to take out a loan product or not!

An advanced loans calculator may also offer additional options, to factor in additional charges or incentives for example, with more detailed fields relating to your tax status.

It will allow you to enter different loan amounts, different borrowing sums and different repayment times, to help arrive at the best option for your particular needs.

This can be particularly useful if the driving factor is to keep down the monthly repayment rate. However it’s worth checking out the total repayment sum when chasing cheap monthly repayments, as it will simply drive up the overall cost of lending over time.

As well as loans calculator tools, many consumer websites also offer savings calculators, which work on a similar principle by helping you calculate savings amounts, interest rates and required savings timeframes.

Where the calculations reveal that a loan is too expensive an option, or unsuitable for your needs, then look at other options. A good price comparison website will have links to other products, such as credit cards.

These can be good if they have a zero percent interest rate for a certain period, or a low ‘life of balance’ transfer fee and may be cheaper in the long run than taking out a loan.

As with any type of borrowing however, it’s essential to read the small print and understand what you are entering into. A loan is a contractual agreement and failure to pay will lead to damaging your credit record and possible legal action.

It may also be valuable to take out repayment protection insurance on a loan, should you find yourself unable to meet monthly payments through unemployment. Look around for the best providers – often the financial institution providing the loan or credit card will not offer the most competitive insurance product.