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Loans and IVA Debt Management

by Jim ONeil on September 9, 2010

in Debt

This website does it’s best to compare the top brokers and companies which offer debt consolidation and PayDay loans. Every loan is rated on different categories which can give you a clear view on the attributes of the loan so that when you choose the loan using
which way to pay, you would be able to make a wise and informed decision.loans and debt  management
Since we are an independent company, all of our reviews are unbiased so that you would not get anything but frank and reliable information.

Payday Loans

Payday loans are also known as cash advance, short term loans and easy loans are these are used by those who need money on an urgent basis before they payday at work.

Unlike the traditional loans, these loans are generally for small amounts and have to be paid back within the time frame of a month.

If you are really in requirement of funds, in order to pay bills or any type of unexpected payment, you can use these loans.

You can apply for these loans directly online and you would receive instant approval notification.


In order to get the loan, you would have to fulfill the below mentioned criteria:

  • More than 18 years old
  • A UK citizen
  • Own a valid bank account
  • Be employed

How Do these Loans Work?

Unexpected events always occur at the wrong times and if you need funds quickly, payday loans would offer cash for short term. These loans are based on personal check which can be cashed later or through electronic transfer to the bank account on the predetermined date. As a borrower you would have to write a check for the amount that you need to borrow along with the loan charges and then you would receive the amount in cash.

The lender would hold the check till the next payday. Then, the lender would either cash in the cash or it can be redeemed by paying the amount in cash. You could also pay the finance charge if you want to roll over the funds to the next month.

Terms

The terms for payday loans would vary depending on the loan providing. Generally, the loan would be for around two weeks and the shorter loans would have higher APRs. Payday loans are just a way to handle tricky financial periods and not really for getting value for your money.

Who Can Qualify for Payday Loans?

Lenders do not conduct a complete credit check. However, to qualify for this loan you would need to have a bank account in good standing, an identification proof and regular income.

Where Can I Get the Loan?

Pawn shops, check cashers and payday loan shops all offer these loans. There are quite a lot of online companies offering the loan as well.

What are the Risks?

Short term loans could trap some individuals because of heir high interests into borrowing cycles. Always be careful while considering payday loans and if you would be able to pay back the loan on time. If, for example, the check cashed by the lender bounces you would incur a penalty from the lender as well as a bank charge.

Bad Credit Loans

What are Bad Credit Loans?

Bad credit loans can be taken when you have been refused a regular loan. If you had a credit card or a loan in the past and have had problems with timely payments, your credit ratings would be low. This would make it harder for you to get qualified for the regular loans since you would be considered high risk by the lenders.

These loans are specially for people who have had credit problems in the past. There are several different types of lenders and bad credit loans available, however, in the recent times, the numbers have declined since banks are now less interested in offering funds to high risk individuals.

How can I Get Qualified for the Loan?

You would be able to easily get a bad credit loan through a broker. You would have to specify your requirements and the rest would be taken care of by the broker. The brokers would search all the options for you and find you the type of loan that you need. Whether it is secured, personal loan, credit card or mortgage, you would be able to find something to suit your needs. If you are good with your repayments, you would also be able to increase your credit scores.

What are the Risks?

Like with any other type of loans, there is always a risk involved. The interest rates on these loans would be higher since there is a higher risk involved for the lender. You would have to ensure that you can cover all your payments. Some of these loans could be secured against your house or your car as collateral. If you fail to meet with the repayments, the assets could be seized.

IVAs

What are IVAs?

IVA refers to Individual Voluntary Arrangement and it had been introduced in the year 1986 by the government. It is a type of agreement between creditors and the individual who might be struggling with extensive debts. According to the agreement, generally, the individual would promise to make a monthly fixed amount payment for a particular period which would go towards the debts. This is the last resort for avoiding bankruptcy and the creditors would be sure to get at least a part of their sum back.

Benefits of IVAs

IVA is preferable rather than declaring bankruptcy even when you are already a subject of bankruptcy order. Once you are accepted for an IVA the bankruptcy would be annulled. The interest rates on the debts would be frozen and you can make a monthly payment.

How to Qualify for IVA?

Only an individual who owes more than 15,000 GBP and has at least three or four creditors would qualify for an IVA. You would also need to be employed full time.

Debt Management

Understanding Debt Management?

Debt management services are offered by insolvency practitioners and by special companies providing debt advice. Whenever an individual falls into unmanageable debt, for example, owes money to two or three creditors, a company like this can help the individual find solutions. The company might conduct a means test to find out how much per month you would be able to afford to pay. This would be useful for those who face financial circumstances due to pay cut or job loss.

A debt company can help you work out a feasible debt plan which could include gathering all your debts into a monthly repayment plan and freezing the interest on these debts.

How to Get an Efficient Debt Plan?

If you have more than 1,000 GBP in debts you can get a debt plan. Ensure that you check the debt requirements for the company. You might also need to show that you have at least two or three creditors. There could be several other requirements like employment and age.

Main Benefits of Using Debt Management Services

Getting debt management services from an efficient company can help you get a debt free future. Rather than ignoring severe problems and debts, you would be looking for a solution to the problem.

The company would also be ready to negotiate with your creditors, which is an added advantage. The interest on your debts would be frozen too but you should remember that your overall debts would not go down.

Logbook Loans

Logbook loans are more or less the same as the payday loans and are often categorized as one.

How are Payday Loans and Logbook Loans Similar?

Logbook loans as well as payday loans are meant for you if you have problems with:

  • Arrears
  • CCJs
  • Low credit rating

You would be more likely to get qualified for payday loans or logbook loans than a normal unsecured or secured loan. Both of these loans would provide the borrower funds quickly and it is best to pay it off as quickly as possible too.

What are the Differences Between Logbook Loans and Payday Loans?

Although there are quite a lot of similarities between both of these loans, there are also many main differences. Unlike the payday loans, these loans would be secured against your vehicle. What this means is that basically they are secured loans but rather than using your home as collateral, your car is used. You would risk losing your vehicle if you do not make regular payments.

Also, you would be able to get lower rates on logbook loans since the risk associated is also lower. The APR rate would be quite high so it would be best to pay the loan off as early as possible. The lenders would not carry out extensive credit checks so you would have more chances of getting accepted for these loans if you have bad credit history. You should only get these loans if you would be able to meet with the monthly repayments.

Consolidation Loans

Consolidation loans are basically the loans which are designed to pay off all of your current debts. Rather than making different payments per month, you can combine all of them into a single lower monthly payment and pay it off.

What Would be the Benefits of a Consolidation Loan?

Consolidation loans are helpful if you find it difficult to manage different debts. The monthly payments are lower so you would be able to save some amount. Quite a lot of consolidation loans also have protection schemes so you would be covered in case of unemployment, sickness and accident.

Consolidation Loans for Students

Students would also be able to benefit from these loans since quite a lot of students today have multiple debts. By consolidating all of these loans, it would be easier for you to get yourself on feet and get a better credit standing.

Things to Look For

If you are thinking about a consolidation loan, it is best to look around and check all your options before you commit yourself. Consider the amount of interest that you would have to pay and if it would be beneficial to consolidate your debts.

Risks Associated

It is important to remember that the debt would not be reduced with these loans. It is just a way of combining all your debts into a single payment. You would also have to remember not to get too comfortable with your loan and relapse.

Who Can apply for Consolidation Loans?

The exact terms of the loans would depend on the lender but any homeowner with equity would be eligible for the loan. Most lenders would require that there should be a minimum balance to be eligible. There are several special online companies today that provide consolidation loans.

Unsecured Loans

Although the name is unsecured loan, these are actually safer loans for borrowers than the secured loans. This is because of the fact that the borrower does not have to put up any assets as collateral like home or car. Whether you loan would be approved or not would depend on your overall credit rating. There are various companies which would be ready to provide you with a loan even when you have a lower credit rating, however, the APR would be higher.

Secured Loans

Secured loans are effectively loans which are secured based on assets, mainly a home. This means that if you own your home, or at least a part of it, you would be able to get a larger loan against your assets.

Benefits of Secured Loans

Since you would be putting up a significant asset as collateral for the loan, the loan would be considered less risky by the borrower and hence you are likely to get qualified for a larger amount. It is easier to obtain the amount of loan you need with secured loans.

Risks Associated

Secured loans are risky for the borrower in comparison to the unsecured loans because in case you fail to make your payments you risk losing your property. Always think carefully before you secure debts against an asset like home. Your home could be taken over if you fail to make timely repayments on the loan.

Car Loans

For most people, deciding to buy a car is a big decision and a purchase that they would not very often make in their life. Whether you are looking for a used or a brand new car, the prices would vary greatly. Apart from the price of the car, there are also several other types of associated costs like insurance and tax.

There are several different ways of financing a car like:

Cash Purchase

A cash purchase would mean a payment that you make in one go. It does not necessarily have to mean that you pay the cost of the car in cash. Check that the paperwork is all genuine before you purchase the car and give any money.

Hire Purchase

Plenty of dealers offer hire purchase as their own arrangement. PCP or the Personal Contract Plan is also an arrangement offered by the dealer. These are a type of loan and would have an APR rate so ensure that you consider the charges and the account fees and the rate before you consider this option.

Credit Car, Personal Loan and Car Loan

You would be able to get a wide variety of loans these days to help you pay for purchasing a car. you can also tailor your loan needs by getting car loans from a special provider. There are several providers who even cater to people with low credit scores.

What are Car Loans?

Unlike hire purchase where the car company would own the car until your last installment has been paid, a car loan would give you the opportunity to buy your car and then pay the loan back over time.

Car loans are offered by several companies offering user friendly and quick services. You can apply for the loans online and there are very less chances of getting rejected for these loans. Most car loan providers are willing to provide loans to customers even if they have low credit history.

Who Would be Eligible for Car Loans?

Most of the car loan providers ask for a driving license copy, address proof, passport and some bank statements. Applicants are required to be above 21 years and a credit check could be carried out. This check could determine the amount of loan you would be eligible for. However, there are very less chances of you getting rejected for the loan.

Would Car Loan Companies Sell Cars?

Car loan companies do not really sell cars. They are purely there for providing a type of financial service.

Business Loans

What are Business Loans?

Whether you are a sole trader or a limited company, you would be able to find a large variety of loans which you can use for your business requirements. You can use these loans for starting a new company or to invest in your existing enterprise to give it a boost for the long term.

You would be able to get a business loan from traditional banks and financial institutions and even from one of the independent lenders. The right way to go about finding a loan which suits your business needs is by doing enough research. You would be able to find start up loans, fixed rate loans and cash advances. Choosing the right loans is like choosing a home loan or personal loan. Take time to compare the loan period, terms and the rates and consider what you would be comfortable paying as a monthly installment before you go ahead and take the loan.

Terms of Business Loans

The terms of business loans would greatly vary depending on the size of the funds and the lender. Some lenders would require that the applicants should have a business with an annual turn over of up to 25 million GBP while others ask for just 3,500 GBP per month. You would need to prove the credentials for your business and provide merchant statements. When you are searching for business loans, look for the requirements of the lenders first.

What are the Normal Loan Amounts?

The loan amounts would also hugely vary. You can get business loans of anywhere between 1,000 and 25,000 GBP and there are even a few lenders which allow you to borrow as much as one million and more. The loan could be secured against your property if your loan amount is too high. Consider the risks associated with the loan if you fail to keep up with the monthly payments.

Guarantor Loans

Guarantor loans are low credit loans which are mainly aimed at individuals who have problems getting approved for traditional loans because of bad credit rating, ex-bankruptcy, defaults, CCJs etc.

The guarantor loans are a type of personal loans in which you can nominate a guarantor for your loan. The guarantor would step in if you later have problems with the loan repayment. The guarantor would have a responsibility for you and if you fail to make the payments, he/she would have to pay the remaining loan amount.

Would I Need High Credit Ratings?

Since there is a guarantor who acts as a security, the borrowers of guarantor loans do not need to have a perfect credit history. However, only those with a good credit rating would be able to act as guarantors since they would essentially be responsible if you fail to make the payments for the loan. If at all they fail to make payments on your behalf for the loan, their credit rating too would be adversely affected. You would need to choose an individual who would be ready to take the risk for you.

How Much Amount Would I be able to Borrow?

In most cases, guarantor loans would be up to 3,000 GBP but you can always look around since there could be a few lenders who offer more loan amounts than that.

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