Monthly Archives: November 2007

Research your investments before taking a decision

One can come across a lot of people in the financial markets who have at one point of the time or other bit dust on their investments. The reason – their investments were based on some good reliable ‘tips’ from one of their expert friends who knew the markets like the back of his hand. True. The friend knew the market like the back of his hand. But what if the market didn’t know the friend!

Failing investments based on some tips and toes is a common sight in the financial markets, especially with those who are not too well versed in the number crunching game. If you are one of them, beware all those flying rumors. One way to verify the veracity of such tips is to talk to the people to who understand finance and its branches.

Don’t make the mistake of following a single advice and neither that of following the herd. Visit some finance forums where you can feel the talk of the financial markets. Ask and share is the key to build up rapport and understanding at such places. There is loads of information available on the internet like finance articles, data, charts, company reports – download them and try to understand what they mean. Crack the terminology code and let your decisions be based on facts and figures rather than emotional sentiments.

The credit card credibility

Credit cards have been one of the most intriguing financial tools in the world of finance. Most of the users are unable to decipher the fine printed rules and regulations with respect to charges and often fail to understand the impact of them on their day to day finance.

Credit card is a kind of rotating finance where you can carry forward you unpaid bills to the next month. However there are some charges and interest rates to be paid for availing such a rotating finance.  There are some 0% credit card schemes available in the open market but it is advisable to read all the clauses before hurrying into it any of the best credit card deals

Being an unsecured financing, having a good track in the credit card world carries a lot of weightage. For a creditor there is nothing more delightful to look at you unsecured financing history and finding it absolutely clean and to the mark.

Loans against Car mortgage

Car mortgage loans are one of the secured financing types of money lending. In financial parlance it is also termed as ‘refinancing’ the asset.

The car mortgage loan market has many competitors and has huge business following and has is a better option than the unsecured loans.

Other than having a lower rate of interest refinancing of your own vehicle gives you the liberty of using the resultant loan cash in any of the other personal purposes. The funding is done to you with your car as collateral.

From a different perspective if you are a second hand car purchaser, you can be assured of the due diligence with respect to the legality of the car and its history. The financier would always conduct its own independent inquiry whether the car is worth the loan application amount or not. The banker / financier would also go into the driving history to ensure that there are no legal tangles webbed around the car. So all you need to do is to just check out whether the motorability of the car is within you expectations or not. Other legalities like car insurance, motor fitness etc. are ensured by your banker / financier.

The various types of personal loans

They say it is advisable to map your routes before you start for your adventurous trip. The same holds true for your personal finances requirements. It would be prudent to know the nuances of the financial world before you enter such uncharted territories.

We will today have a look at the types of personal loans available in the finance market:

Secured loan

Such finance loans are given against any collateral that you can provide. A collateral can be your house, your car or any of your fixed assets. Even your business establishments can be used as collateral. The risk involved is the loss of the collateral in case of defaults and they are also referred to as cheap loans because of lower interest rates.

Unsecured loan

This type of finance loans are given against your profiling – like your business, your lifestyle standards, your source(s) of income and their stability. There are no collateral to be mortgaged for availing such kind of loans. However the rate of interest in higher than that of the secured loans because of the inherent risks involved.

Short term personal loans

Short term finance loans can be availed by banks or any other financial institution and most of the times the transactions are online. The catch is that the interest rates are unusually very high and the repayment period, as the name suggests, are short.

Fast Cash advances

These are the super fast category finance loans and have a very short turn around time. Generally you get the cash within 24 hours of your application and repayment is built around your monthly cash flows. Fast cash can also be used to consolidate debts and restructure your finances. The repayment ranges from 2 weeks to 8 weeks. The rate of interests is high.

The intricacies of debt consolidation

Debt consolidation is a wonderful crisis management tool when applied appropiately. In the course of their hectic schedules many people don’t find enough time to manage their finances, resulting in avoidable debts. Bills not paid on time are one of the major contributors to such a crisis situation.

Debt consolidation means getting rid of the accumulated debt over a number of years. Basically debt consolidation will consolidate all your existing debts into one single debt and reschedule the repayment frequency and period. Keeping your house as collateral you can take a refinance cash loan it. The interest rates would be lower since it is a secured loan. However one must be cautious while putting up your house as collateral because it the person defaults on this loan, he risks losing the house to the lenders. You can also keep yourself away from bankruptcy because of this. Another option is to go for an unsecured loan, in which case, the rates would be higher than the secured loan.

Though debt consolidation comes as a ray of hope for individuals who have messed up their finances there are also some points of caution to be exercised.

One must check the interest rate structure, any foreclosure clauses and the reschedule of repayment charges.

Choose your debt consolidation company wisely. Enter into debt negotiation. Negotiate the rates. Every company negotiates and so will yours. There are various debt calculators available in the market. Use them and see what suits your requirement the best.

There other side of the coin has some drawbacks like higher costs in not chosen properly, risk of losing the collateral in case of secured borrowing and a even worse credit history if not managed properly and unscrupulous market players.

However, a smart and well researched debt consolidation decision shall help you to improve your credit history and subsequently shall make your standing and credibility stronger in the financial market.

How to use Payday loans to your benefit

In a credit economy like that of US, having surplus cash lying in your desk is a waste of time value of money. Keeping the money idle is criminal. But then there would be some circumstances when you would be in a dire need of money and that too urgent and immediate. This is where the concept of payday loans comes handy. A payday loan is an instant access to cash. It is an unsecured loan lent for a very short period of time. Another hallmark is that there is no credit check performed for payday loans. The loan is generally lent for a period of 1-30 days. The payday loan must be repaid on or before the next payday; that’s how the name got coined in the financial sector.

A sudden, urgent and unexpected requirement of cash is one of the prime drivers for the payday loan economy. One of the striking features is that you do not require submit any physical papers not even the usual fax that everyone requests you to do – it’s plain no fax payday loans at your disposal.

Apart from being faxless payday loans this facility also has a very low turnaround time. The loan amount is directly deposited into your bank account. The turnaround time is usually one business day – in other words it’s plain 24 business working hours. The only collateral that a payday loan requires is your electronic signature.

One can use the payday loans smartly to take care of timely repayment of other loans and thereby avoid the penal charges in those loans. In many instances the savings on penal charges can offset your costs of the payday loans. They also serve as an interim relief for any emergency loans. Use this financial tool to your benefit in the best possible manner. Do not forget to read all the fine print and conduct a cost-benefit analysis before indulging in it.

The 5 Biggest Mistakes in Asset Protection

Asset Protection can be as simple as purchasing an Investment Holding LLC in tax haven states like Delaware or and then transferring your assets to it. Incorporating in Nevada is currently a more favourable means of incorporation due to less stringent income tax policies. However, in case you have different types of assets to protect or investments to manage, incorporation may get very complicated and lead to serious mistakes that will cost you an arm and a leg.Some common mistakes, with very serious consequences, are listed below:

  • Do not transfer passive investments to a C-Corporation – this leads to risks of personal holding corporation additional tax penalty of 39 %.
  • Do not transfer your primary residence into a Corporation – this will cause automatic loss of $250,000 ($500,000 if married) capital gains tax exemption upon the sale of a personal residence.
  • Do not rely on a “Bearer Share” Corporation to protect your assets.
  • Do not assign “high risk” and “safe” assets to the same LLC.
  • Do not transfer assets or a home into a “Living Trust” in order to protect assets – such assets will be quickly and easily seized by creditors. “Living Trusts” offer no asset protection from creditors.If you feel your incorporation case might fall into these sections above, contact an incorporation professional like for consultation BEFORE you make costly mistakes! Usually the solution is more complicated that just forming 1 Investment Holding Corporation and requires the use of multiple LLC’s especially when it comes to holding “High Risk Assets” or “Extreme High Risk Assets”. You’ll also have to talk to your Attorney or CPA in order to arrive at the very best solution for you.

The personal loan – an efficient tool

For many of the borrowers who have taken a mortgage loan against their real estate property and have repayment problems, the personal loan is a tool which when efficiently used can help them save their mortgaged property from being confiscated by the lenders. The sub prime mortgage fiasco has ensured that future lending would be prudent and stringent. However it has also ensured that pressure is being mounted on the defaulters for paying up their dues.

The personal loan being an unsecured loan at least does not carry the risk of losing your mortgaged property. Having said that it does not mean that one should or can default on a personal loan. The recovery processes are strong and the law provides for prosecution for the defaulters.

While taking a personal loan one should take care of some important clauses like and ensure that you have understood the nutty gritty of each one them.

  • The foreclosure clause
  • The reschedule clause
  • The penal clause
  • The loan transfer clause

The personal loan segment is also popularly referred to as the cash loans because that’s what they give you – hard cash. So the moment you Cash loans you must take into the account the cost benefit analysis and plan you finances.

The Real Estate Opportunity in the US

The sub-prime mortgage saga is taking its toll on the US real estate sector. The home equity loan sector has come full circle.

An aggressive sub prime lending by leading banks has resulted in a scenario where the bubble has burst. The effect has further been compounded by a slow economy and fears of recession. The average American is unable to service his home loan mortgage installments. Failure to keep up the commitments would result in defaults and in many instances sell out of mortgages.

The sub-prime mortgage saga is taking its toll on the US real estate sector. The industry has come full circle.

An aggressive sub prime lending by leading banks has resulted in a scenario where the bubble has burst. The effect has further been compounded by a slow economy and fears of recession. Many of the mortgage borrowers are unable to service their home loan mortgage installments. Failure to keep up the commitments would further result in defaults and in many instances sell out of mortgages by their bankers.

For those who have been holding cash for some or the other reason, this is an opportunity to grab. Many of the mortgaged real estate would be sold at dirt cheap rates by the bankers in order to recover their principal dues. Go out in the market and purchase those real cheap offers. Keep the asset with you for some years and wait for the wheel to circle again. Like everything under the sun, real estate too has cyclic movements.

Purchase when the tide is low, hold the assets and think about exiting your portfolio when the real estate market hots up again.

What to do with a Bad Credit Offer ?

In a world where cost increases 24×7 against your cash flows which increases only yearly or quarterly, the average person is always going to be at a loss of credit management. It comes as no wonder that many of the people who had availed credit at some point of the time are under credit scanners.

Add to this the mortgage bubble that is bursting all around and you are surely going to be left with a bad credit loans history. Having a bad credit history is not a problem, but others knowing them certainly is a problem. Hence every effort should be made to come out of the bad history and create a reputation of your own.

If you have had a bad credit history, chances are that not too many creditors would be willing to engage in financial activities or do business with you or lend you some type of finance / credit. Under such circumstances you should look out for companies and agencies that give bad credit offers i.e. credit to people who did not had a sound credit history for whatsoever reason. This is your chance for redeeming the lost glory. Take up such offers (based on requirement only) and ensure that you manage the repayment smartly. Get into debt consolidation techniques and if required take the help of experts on the issue.

Do not get into the debt trap just for the sake of it. Plan your finances smartly and live with dignity. There is nothing better than having a good credit history to your name in the world of finance.