I have always emphasized the importance of financial education and learning finance. One of the things that came to my attention is how ignorant people are when dealing with the finance. One of my clients was looking to take up a boat loan. Well he could get a boat loan, not an issue, there are so many banks and other financial institutions ready to give loans for exactly this purpose, buying a boat. But that person almost never made his past payments on time and even had a defaulted on a loan just because he did nt want to pay back. So what he needed actually was bad credit boat loans.
What he did nt understand was the credit history. He did nt actually know the concept of credit history of an individual, this is one of the most important aspect related to an individual’s credibility. As with boat loan or any other loan or mortgage, a lender always makes a check of the borrower’s credit history, whether the borrower has the capability to pay beck the loan on time, whether he has been paying his past payments on time. A good credit history can mean that you qualify for a loan easily and can get a better deal than others on your loan if you can negotiate on it. A bad credit history means it can be tough for you to qualify for a loan or if you qualify it would be expensive to get a loan. The interest rate would be higher as the lender has more risk on giving you a loan. Bad credit boat loans is also possible, there are not too many lenders giving bad credit boat loans but still there are some who specialize in such loans.
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A very important factor to run a business is the capital. You need the finance or money as the capital to start or expand a business. A lack of funds or liquidity can seriously affect the business efficiency in almost every respect. Now not all people or entrepreneurs have good amount of funds to back their business. Then arises the need of arranging it from the money market in other words getting a loan or a business loan. There are a lot of options to get loans you can get a loan for everything you need. Business loans and home loans are most common of them.
Small business loan or finance can be secured or an unsecured one. A secured loan will be a loan with some asset of the borrower as the collateral which means lesser risk for the lender in case of a default. So the terms of the loan would be favorable to the buyer in this case. The unsecured loan is just the opposite when there is no security kept by the borrower, so the risk is entirely upto the lender and more the risk of the lender, the expensive the loan would be in terms of rate of interest.
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I strongly believe that learning is a lifelong process, the day you will stop learning will be the day you will stop growing. Learning becomes all the more essential when it is about finance. Everyone should know the meaning of financial terms and know how money works. Loans mortgages are just the financial tools which you can use to your advantage once you know how to work them out in the right way. Most people would see a loan as a liability, that’s true because you have to pay it back it does cost you but still it is a money tool and you can use it to your advantage.
If a person does not know about the finance part of his life, the people and the situations he comes in touch will always take unfair benefit out of him or make him pay for his ignorance. And this ignorance cost can be really high. I always tell everyone to go for the best education they can afford. That is one of the best investments they can make for their children, this is one thing that will empower them for a lifetime.
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I had a loan against property or a mortgage on the fixed rate basis at a 20 year term. Half way through the loan now. As we all know economy is going on a low, there will be less jobs, layoffs will be common, this makes it hard to keep up with all the fixed expenses you have especially when you are directly affected by the slowdown. I am retired but one of my kids is having a problem with his job. So have to cut down on my expenses and help him out. I guess worse times are coming ahead with respect to the economy and whole world would be affected in some way.
Taking a loan on a fixed term can be an expensive decision in this situation. You can not change the rates much while the fluctuating rate has gone down as a result of rate cut by the banks to increase borrowing and spending. This makes fluctuating rates as a better choice. I am paying more because I choose the other one.
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