Financial Utopia – Help with credit cards, debt savings and loans.

Like most people I find balancing the household finances at the end of the month a struggle. With three children all under eight and me not in full time work we need to watch every penny and I have become adept at making the money last and would be described by the popular press as a “Thrifty Mum”. I am probably not alone when I’m not only able to list all of my direct debits but also able to say the amounts I pay each week for each of them and the day they come out of our bank account. The control this gives me allows me to avoid worrying too much as I couldn’t cope with the thought of not being able to do so and the crisis I would be in would threaten everything I and my husband have worked together for. I have become very canny at looking out for offers and religiously cut vouchers out of the newspaper and keep an eye out for when the deals are on at the local Tesco supermarket.

One of the most helpful ways of saving money I’ve come across in recent years is to use the comparison websites to make sure that you aren’t paying a penny more than you have to on your household bills. I will regularly log on and do a life insurance comparison or a check to see if our buildings and contents insurance can be bought cheaper than we have it already. Changing electricity and gas suppliers is always worth considering as they tend to put up prices for people who don’t switch providers like the banks and building societies do for those who don’t move their money to the best savings accounts. I believe that we can save about one month’s salary a year by switching or threatening to switch suppliers. Sometime purely mentioning the fact that you are about to change provider to your existing provider will mean that they will drop their price by a huge margin. Its well worth trying, the alternative is too awful to contemplate.

Source: http://lifeinsurancecomparison.uk.com/blog/2012/01/26/always-take-time-make-online-life-insurance-comparison/

Do you have bad credit? And you think that your bad credit score is the biggest hurdle in getting a car loan. Dont worry we have got the way to overcome, such kind of thinking. This implies no matter what was your credit score whether good or bad, the person can still avail the loan.

Bad credit car loan is one such kind of loan, which does not consider your credit score. These bad credit loans make you feel the freedom in choosing your dream car. There are number of ways through which the person can avail the bad credit car loan. Mostly all traditional lenders such as banks, building societies and other financial companies offer such loan.

The person after availing the loan can buy a car through a broker or the dealer. This decision totally depends upon the borrower whether he chooses the broker or a dealer.
Today tremendous growth in the financial market helps you to buy car regardless to your credit history. It implies that the person is not required to keep himself away from his desire of buying a car. Rather he can also easily finance his car.

It is true that the lender will approve the loan though the person was previously bankrupt or has made arrears in payments. Like any other loan its approval depends on same four factors:

Ability to repay back
Employment proof
Residency proof
Value of car

Another two factors, which are the core of any type of loan, are the annual percentage rate and its repayment period. The annual percentage rate depends on the rate prevailing in the market and value of the asset placed as collateral. Basically, it is the sum of interest rate and the other costs involved. On the other side, the repayment period depends on the amount borrowed and the financial status of the borrower.

In order to save money and time, the person can apply the car loan online. Online method is regarded as a way of getting hassle free finance and that too instantly.

Like any other loans, bad credit car loan can also be availed with or without placing a security. If the person chooses to place a security against the amount, then this will enable him to get the loan approved quicker, than the person not willing to place a security. Despite of the quicker approval there is also a risk involved in secured bad credit car loan. This risk generally arises on the occasion if the person has any doubt regarding his repayments.

Make sure that you are aware of every aspect of the agreement of car loan before going into it.

Personal Finance. Student Loans Debts Do Not Go On Your Credit Record.

Every time you apply for credit, for example a credit card or a loan, the lender will request to see your credit history from a credit reference agency. The information they hold is so detailed that there’s really no need for us to fill out that long application form, because within a fraction of a second they can see all they need to know from Experian, Equifax or Callcredit, the three main credit reference agencies. You would be very surprised to see just how much they know about you.

Banks, building societies and other financial institutions providing credit have been passing on details of your financial transactions to the credit agencies. Every time you apply for a credit card, every time you miss a mortgage repayment it gets noted. They know whether you pay the minimum or the balance each month, they even know details of your credit limit on each credit card. They also look to public records, the voters’ roll and the public register of court actions because that is where all county court judgements are listed. It all happens automatically, and when your credit history is requested, the computer will provide a statistical analysis of your financial habits and provide an assessment of your suitability. It enables, the industry argues, lenders to make an accurate judgement about whether they should lend you money or not.

However, there is one piece of financial information that the credit agencies are not allowed to access, and that’s the student loans. Despite the industry’s remonstrations to the government, nothing has changed, and they are not allowed to access the information. The reason? Student loans constitute a debt to the taxpayer, they were not funded by commercial business.

Before September 1998, the student loan system worked like this: once graduates were working and earning the national average, which was 15,000 at the time, they had to repay their loan on a monthly basis by direct debit. 59,000 of those pre-1998 graduates still haven’t started repaying their loan, and each has on average a debt of 2,750.

In September 1998, the student loan system changed, and the system remains the same to this day. Now, repayments are taken directly at source, straight from the salary in the same way as national insurance and income tax. This method has been a lot more successful.

The lending industry is not happy about the student loan situation, their main argument being that they need to know, when considering an application for credit, if the applicant has extra financial responsibilities. The introduction of top-up fees resulted in increasingly large student debts, and as the post-1998 loans have to be paid off at a rate of 9% of the graduate’s income once it has reached 15,000, it is a large portion of income to lose.

The Association Consumer Credit Counselling Service made the following statement: Knowing whether a young person has a student loan and whether it is being paid back, is useful. So they are in agreement with the lenders.

The Citizens Advice Bureau is also keen to have the information made public, because they feel that graduates could be taking on too much debt, and if lenders could see their student loans, they would ensure that graduates are not given the ability to borrow beyond their means.

However, the Department for Education and Skills is showing no signs of wavering on its decision to keep individuals’ debts to the Student Loan Company private.

For the foreseeable future the situation will remain the same and student loans information will be inaccessible to the credit industry.

Personal Finance. Student Loans Debts Do Not Go On Your Credit Record.

Every time you apply for credit, for example a credit card or a loan, the lender will request to see your credit history from a credit reference agency. The information they hold is so detailed that there’s really no need for us to fill out that long application form, because within a fraction of a second they can see all they need to know from Experian, Equifax or Callcredit, the three main credit reference agencies. You would be very surprised to see just how much they know about you.

Banks, building societies and other financial institutions providing credit have been passing on details of your financial transactions to the credit agencies. Every time you apply for a credit card, every time you miss a mortgage repayment it gets noted. They know whether you pay the minimum or the balance each month, they even know details of your credit limit on each credit card. They also look to public records, the voters’ roll and the public register of court actions because that is where all county court judgements are listed. It all happens automatically, and when your credit history is requested, the computer will provide a statistical analysis of your financial habits and provide an assessment of your suitability. It enables, the industry argues, lenders to make an accurate judgement about whether they should lend you money or not.

However, there is one piece of financial information that the credit agencies are not allowed to access, and that’s the student loans. Despite the industry’s remonstrations to the government, nothing has changed, and they are not allowed to access the information. The reason? Student loans constitute a debt to the taxpayer, they were not funded by commercial business.

Before September 1998, the student loan system worked like this: once graduates were working and earning the national average, which was 15,000 at the time, they had to repay their loan on a monthly basis by direct debit. 59,000 of those pre-1998 graduates still haven’t started repaying their loan, and each has on average a debt of 2,750.

In September 1998, the student loan system changed, and the system remains the same to this day. Now, repayments are taken directly at source, straight from the salary in the same way as national insurance and income tax. This method has been a lot more successful.

The lending industry is not happy about the student loan situation, their main argument being that they need to know, when considering an application for credit, if the applicant has extra financial responsibilities. The introduction of top-up fees resulted in increasingly large student debts, and as the post-1998 loans have to be paid off at a rate of 9% of the graduate’s income once it has reached 15,000, it is a large portion of income to lose.

The Association Consumer Credit Counselling Service made the following statement: Knowing whether a young person has a student loan and whether it is being paid back, is useful. So they are in agreement with the lenders.

The Citizens Advice Bureau is also keen to have the information made public, because they feel that graduates could be taking on too much debt, and if lenders could see their student loans, they would ensure that graduates are not given the ability to borrow beyond their means.

However, the Department for Education and Skills is showing no signs of wavering on its decision to keep individuals’ debts to the Student Loan Company private.

For the foreseeable future the situation will remain the same and student loans information will be inaccessible to the credit industry.

Personal Finance. Credit Agencies Refused Access To Information About Student Loans

These days, when you apply for a mortgage, loan or other form of credit, the lending industry will automatically scrutinise your personal credit history. In practice, you hardly need to tell them anything as within a fraction of a second, the lenders computers will lock into your credit file held by any one of the big three credit agencies; Experian, Callcredit or Equifax And you’ll be amazed what they know about your finances!

For many years now banks, building societies and other lenders have been providing information about your finances to the credit agencies. They know about every credit applications you’ve made, the occasions you’ve been late or missed paying a loan, mortgage or credit card, the balances on your loans and credit cards and whether you just pay off the minimum each month – even your credit limits! The agencies also accumulated lots of other information about you provided by public records, the voters’ roll and the public register of court actions where all county court judgements are recorded. Their computers then statistically analyse all this information and assess your application. So in this context, the credit industry argues that the more information they have about you, the more accurately lenders can make lending decisions.

Yet within this mass of information, there is one notable omission. Despite representations to the government, information about student loans and their repayment history’s, is not provided to the credit agencies. The data is refused because student loans are a debt to the taxpayer, not a commercial business.

Prior to September 1998, graduates repaid their student loans by mortgage style direct debits collected once the graduate started earning over 15,000. But more than 59,000 of graduates from before 1998 graduates are understood to be in payment arrears to the tune, on average, of around 2,750 per graduate.

After September 1998, the system of collecting student loans changed. These days, repayments are deducted directly from salaries by employers along with national insurance and income tax. This method is far more efficient and avoids the possibility of bad debts.

The credit industry argues that it needs the information on student loans as they can represent a significant strain on the graduates’ finances especially following the introduction of top-up fees which results in the average student loans being much larger. These loans are repaid at the rate of 9% of the graduates’ income in excess of 15,000 and can represent a significant drain on their monthly income.

Therefore, to fully assess graduates’ financial situation the credit industry argues that it needs student loan information. The Association Consumer Credit Counselling Service agrees. A spokes person said, Knowing whether a young person has a student loan and whether it is being paid back, is useful.

Yet despite the pressure to share its information, the Department for Education and Skills remains steadfast in its decision to refuse permission to the Student Loan Company to provide information to the commercial sector.

Even the Citizens Advice Bureau wants this decision changed arguing that lenders need information on student loans to help ensure that graduates avoid taking on so much debt that they can’t maintain their repayments.

But for now at least, the situation remains. The credit industry cannot obtain any history about student loans.

Two million Muslims in the UK face an ethical dilemma if they want a mortgage or a loan. Conventional mortgages and loans all require the payment of interest and riba as interest is called under Islamic law, is forbidden by the Koran.

British financial institutions are increasingly catering for Muslims’ specialist needs through a number of alternative arrangements that respects the teachings of the Koran. Here are just two of them:

Ijara with diminishing Musharaka the mortgage alternative.

Ijara with diminishing Musharaka is an Islamic alternative to a conventional UK mortgage and has been adopted by several British banks and building societies.

In essence, Musharaka means partnership. Under this Islamic financial concept, the bank buys the house and legally becomes its owner. Then throughout the pre-agreed period, say 25 years, a monthly payment is made. Each monthly payment includes a charge for rent and a charge that buys a small proportion of the house itself. It’s form of variable shared equity plan with the proportion of the house being owned by the purchaser, steadily increasing as payments are made. Once the final payment has been made, the house is owned outright. Ijara

Here you tell the bank or financial institution what you want, for example a car, and they buy it. In return for a monthly payment that covers the cost of the bank’s capital, the bank then allows you to use the asset for an agreed period. In reality, it’s a form of leasing

Islamic finance is not widely available in the UK so where can find it? Here are three suggestions:

Over the last few years Lloyds TSB has introduced Islamic products to 33 of its branches. Their spokesperson says, It’s important for our customers to see that we are following the right procedures. We have a panel of four Islamic scholars who over-see the products. They offer guidance on Islamic law and audit the products.

Another high street bank, HSBC, is developing a special range of Islamic products under the Amanah brand name. This range includes home finance plans, home insurance, commercial finance, and various current accounts and pensions. Hussam Sultan, the Amanah product manager says, As a bank, we are not here to moralise or tell our customers that Amanah finance is the way to please Allah. We’re just here to provide them with a choice.

The Islamic Bank of Britain has three branches in London, two in Birmingham and one each in Leicester and Manchester. They’re the only British bank specifically providing for Muslim customers and claim to be halal throughout their operations. All their financial products are approved by their Sharia’a Supervisory Committee all Muslim scholars who are experts in all aspects of Islamic finance.

For your interest we show below, definitions of some words used widely in connection with Islamic finance.

A Glossary of selected Islamic words used in finance.

Amanah : Means trustworthiness, with associated aspects of faithfulness and honesty. As a central supplementary meaning, amanah also describes a business deal where one party keeps another’s funds or property in trust. This actually the most widely used and understood application of the term, having a long history of use in Islamic commercial law. It can also be used to describe different financial activities such as deposit taking, custody or goods on consignment.

Arbun : Means a down payment. It’s a non-refundable deposit paid to the seller by the buyer upon agreeing a sale contract together with an undertaking that the sale contract will be completed during a prearranged period.

Gharar : This means uncertainty. It’s one of three essential prohibitions in Islamic finance (the others being riba and maysir). Gharar is a sophisticated concept that encompasses certain types of uncertainty or contingency in a contract. The prohibition on gharar is often used as the grounds for criticism of conventional financial practices such as speculation, derivatives and short selling contracts.

Islamic financial services / Islamic banking / Islamic finance : Means financial services that meet the specific requirements of Islamic law or Shariah. Whilst designed to meet specific Muslim religious requirements, Islamic banking is not restricted to Muslims. Both the customers and the service providers can be non-Muslim as well as Muslim.

Ijara : Means an Islamic leasing agreement. Ijarah permits the financial institution to earn a profit by charging leasing rentals instead of lending money and earning interest. The ijarah concept is extended to hire and purchase agreements by Ijarah wa iqtinah.

Maysir : Means gambling. It’s another of three fundamental prohibitions in Islamic finance (the other two being riba and gharar). The prohibition of maysir is often used as the basis for criticism of standard financial practices such as conventional insurance, speculation and derivative contracts.

Mudarabah : A Mudarabah is a form of Investment partnership. Here, capital is provided by the investor (the Rab ul Mal) to another party (the Mudarib) in order to undertake a business or investment activity. Profits are then shared according to pre-arranged proportions but any loss on the investment is born exclusively by the investor and the mudarib then loses the expected income share.

Mudarib : The mudarib is the investment manager or entrepreneur in a mudarabah (see above). It is this managers responsibility to invest the investor’s money in a project or portfolio in exchange for a share of the profits. A mudarabah is essentially similar to a diversified pool of assets held in a conventional Discretionary Managed Investment Portfolio.

Murabaha : means purchase and resale. As opposed to lending money, the capital provider purchases the required asset or product (for which a loan would otherwise have been taken out) from a third party. The asset is then resold at a higher price to the capital user. By paying this higher price by instalments, the capital user effectively gets credit without paying interest. (Also see tawarruq the opposite of murabaha.)

Musharaka : This means profit and loss sharing. It’s a partnership where the profits are shared in pre-arranged proportions and any losses are shared in proportion to each partners’ capital or investment. In Musharakah, all the partners to the commercial undertaking contribute funds and have the right, but without the obligation, to exercise executive powers in that undertaking. It’s a similar concept to a conventional partnership and the holding of voting stock in a limited company. Musharakah is regarded as the purest form of Islamic financing.

Riba : This means interest. The legal concept extends beyond interest, but in simple terms, riba covers any return of money on money. It does not matter whether the interest is floating or floating, simple or compounded, or what the rate is. Riba is strictly prohibited under Islamic law..

Shariah : This is the Islamic law as disclosed in the Quran and through the example of Prophet Muhammad (PBUH). A Shariah product must meet all the requirements of Islamic law. To facilitate this, a Shariah board is usually appointed. This board or committee is usually comprised of Islamic scholars available to the organisation for guidance and supervision for the development of Shariah compliant products.

Shariah adviser : Means an independent professional, usually a classically trained Islamic legal scholar, appointed to advise an Islamic financial organisation on the compliance of its products and services with Islamic law, the Shariah. While some organisations consult individual Shariah advisers, most establish a committee of Shariah advisers (often known as a Shariah committee or Shariah board).

Shariah compliant : Means the activity that ensures that the requirements of the Shariah, or Islamic law are observed. The term is often used in the Islamic banking industry as a synonym for “Islamic”- for example, Shariah compliant financing or Shariah compliant investment.

Sukuk : This has similar characteristics to a conventional bond. The difference is that that they are asset backed and a sukuk represents the proportionate beneficial ownership in the underlying asset. The asset is then leased to the client to yield the profit on the sukuk.

Takaful : This is Islamic insurance. Takaful plans are designed to avoid the characteristics of conventional insurance (i.e. interest and gambling) that are so problematical for Muslims. They structure the arrangement as a charitable collective pool of funds based on the comcept of mutual assistance.

Tawarruq : When used in personal finance, a customer with a cash requirement buys something on credit on a deferred payment basis. That customer then immediately resells the item for cash to a third party. The customer thereby obtains cash without taking an interest-based loan. Tawarruq is the opposite to murabahah.

A Benediction For Bad Credit Scorer: Bad Credit Secured Loan UK

Having a bad credit history doesnt mean that the person is in a financial disaster. There may be any genuine reason for having such poor history. Most of the times it is seen that these people find it impossible to get a loan. No matter what was your credit history, regardless to this fact, bad credit secured loan UK invites all UK people with poor credit score, willing to apply for a loan. The obligation attached to this invitation is that the person should own a house or real estate.

What are UK bad credit loans?
Bad credit loans are the loans meant for the people with low credit score. Now you might be thinking that what is credit score? Credit score is the rating given to the person on the basis of his or her creditability or his ability to pay off his debts. Due to bad credit rating borrowers are not able to apply for the conventional loan. This loan can be taken for any purpose as the borrower wants for. They provide a chance to the people of UK to improve their score by paying dues in time and getting better opportunity next time. The rate of interest charged is higher in bad credit loan as compared to other loans.

How to reduce the rate of interest?
As mentioned above, the rate of interest in bad credit loans is higher. However, one way to avail the loan at better and competitive rate of interest is to secure it against property. Property kept as collateral to the lender acts as a security against the loan amount.

Traditional lenders such as banks, financial institutions, building societies, other lending companies provide loans at your convenience. It can also be applied online. Now you might be thinking how the lenders offer loan online? Online is the easiest way to avail a loan. One just has to fill a form online and the lender will get back to him within 24 hours.

So, with a low cost, low rate, online UK bad credit secured loan you can borrow from ₤5000 to ₤100000. And it can be repaid over a period between 5 years to 25 years depending upon the amount being borrowed. Above all while taking loan against the property one must be cautious about making payments on time otherwise it can result in higher penalties and there is also a chance that borrower might lose the asset. Be sure that you commit to the terms and condition of the bad credit secured loan, as building up your credit status is more important than short term gain.

The benefits which the UK resident can avail from applying online are:
Low cost involved
Fast and friendly service
Repayment between 5 years to 25 years
Low interest
Easy comparison between UK lenders

Just think carefully and evaluate every aspect of bad credit secured loan UK before availing it. You deserve the best deal.