Debt consolidation – Blog Campcee Tue, 21 Jun 2022 23:03:03 +0000 en-US hourly 1 Debt consolidation – Blog Campcee 32 32 10 Financial Mistakes Physicians Should Avoid Tue, 21 Jun 2022 23:03:03 +0000

We all know that doctors can earn a good amount of money every month, but they are not free from financial gaffes at some point in their lives.

It is essential that doctors, whether young or experienced, understand the mistakes they can make and how to avoid them.

Here are some of the most common financial mistakes doctors make:

1. Fulfill deferred gratification in one fell swoop. When you start receiving your paychecks, it can lead to a huge increase in living standards. Although it may seem like the perfect time to buy everything you’ve wanted for a long time, it’s a common financial mistake.

2. Not maintaining a budget. Another very important mistake to avoid is not maintaining a budget. It’s easy to stick to a budget early in your career, but budgeting often goes off the rails as the scale increases. This can lead to reckless spending. While it’s not necessary to account for every minor expense, it’s important to know where the larger amounts go. This can give you an idea of ​​what exactly is going on with your money.

3. Not saving emergency funds. It is prudent to have an emergency fund, especially in unpredictable times. It helps in times of crisis and prevents you from slipping into a growing cycle of debt. It is highly recommended to have at least 3-6 months of living expenses saved in cash to cover any unforeseen events.

4. Not knowing where to put money for retirement. Taking advantage of retirement programs such as 401(k), 403(b) or 457(b) is usually the first step for doctors. Although these plans offer great value, physicians need to understand how they work. For example, it is good to know what types of investments can be made, what fees are associated with each investment choice, etc. It is always beneficial to seek the advice of an expert and to study all the possibilities available to you.

5. Not managing debt effectively. Another big mistake that doctors usually make in managing their finances is not managing their debts wisely. It’s no secret that doctors usually carry the burden of debt on their shoulders. It can start with student loans and can lead to credit card debt, auto loans, and payday loans.

Debt consolidation is a good strategy to eliminate these debts. You won’t have to struggle with multiple loans to repay on different dates, and you can do it at a lower interest rate.

6. Not making proper investment choices. To maintain financial security, it is essential to acquire financial knowledge and make smart investment decisions.

Physicians need to protect their financial future. This can be done by carrying sufficient insurance to protect them against potential threats, such as personal and professional liability, health issues, injuries leading to permanent disability or death, and loss of valuables.

7. Assuming money is a renewable resource. As a physician, it is reasonable for you to believe that you will continue to earn a steady income month after month. Physicians have a common tendency to view silver as a renewable resource.

On the other hand, this concept can sometimes make it difficult to anticipate a situation where your income could decrease or where you will no longer be able to earn as much money as usual.

8. Having the wrong financial advisor. As a doctor, you may need to consult a financial advisor for various reasons; for example, managing your finances effectively, using your money better, or simply wanting to get the most out of your money. However, you should ensure that your adviser has your best interests in mind and should check to see if your finances are being managed effectively.

9. Unable to maintain income-expenditure balance. The habit of keeping tabs on your expenses based on your income can sometimes become difficult, which can make it easier to break the income-expense balance. To avoid such a situation, you need to keep a monthly budget and stick to it.

10. Not using available resources. It’s one of the most surprising choices some doctors make. They rarely take advantage of the resources available to them. It is important to remember that you will not regret treating yourself to an extraordinary trip or investing a large sum in the car of your dreams.

As a physician, it is important to build and maintain your own financial health. The sooner you do it, the better. You can be more efficient with your money if you plan ahead and budget wisely, consolidate debt, learn about taxes, and invest wisely.

Lyle Solomon, ESQ, is a lawyer.

This post appeared on KevinMD.

]]> Analysis: Risks linked to the public debt of Italian banks: real or already seen? Mon, 20 Jun 2022 06:22:00 +0000

  • Soaring bond yields raise fears of sovereign catastrophic loop
  • Banks have reduced sovereign risks, bad debts
  • Former ECB supervisor says restructuring is incomplete
  • Intesa boss says Italy must stop relying on ECB

MILAN, June 20 (Reuters) – A fall in Italian bank stocks, triggered by rising government bond yields, has reawakened memories of the 2011-12 debt crisis and reignited concerns about vulnerability sovereign risk lenders.

The sovereign-bank nexus, which a decade ago became a “catastrophic loop” of mutually reinforcing risks, is compounding the problems for Italian lenders (.FTITLMS3010), which have shrunk by a fifth this year, nearly the double the loss of the wider European sector (.SX7P), hit by the fallout from the Ukraine crisis.

Many analysts and bankers, including UniCredit (CRDI.MI) boss Andrea Orcel, point out that the situation has changed and attribute the decline in shares to an unwarranted knee-jerk reaction by investors.

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“It’s a matter of deja vu,” Orcel told a conference in Milan last week. “It’s a difficult situation but it’s not the same.”

Italian banks became a proxy for sovereign risk when Rome’s debt costs threatened to spiral out of control, before the ECB, led by current Italian Prime Minister Mario Draghi, pledged to save the euro in 2012 and is only mopping up a fifth of Italian bonds.

A decade later, progress towards a Europe-wide banking union has stalled and Italian banks are still halfway through a consolidation process aimed at strengthening mid-sized players and solving the puzzle. eternal head of Monte dei Paschi di Siena (BMPS.MI).

The ECB’s latest promise to devise a new anti-spread tool last week halted the rout for Rome bonds and bank stocks, but investors are wondering if the respite is temporary.

Speaking at the Milan conference, Carlo Messina, CEO of Italy’s biggest bank Intesa Sanpaolo (ISP.MI), said a wealthy state like Italy should not rely on the ECB to support its debt , and thinks his “problems will be solved from the outside.”

Italian banking index and Italy’s 10-year bond yield spread over Germany


“There are certainly differences from the past, but I also see elements that worry me,” said Ignazio Angeloni, a researcher at Harvard Kennedy School.

“I think the restructuring of the Italian banking system is incomplete,” added Angeloni, who previously served on the ECB’s supervisory board and headed the central bank’s financial stability department.

“The two major lenders are safe at any speed, so to speak, but there are four or five mid-sized banks that haven’t gone the full length of the trip.”

When bond prices fall, banks experience a direct impact on capital reserves and see the cost of their debt and equity funding increase.

Pushed by regulators to diversify sovereign risk, Intesa and UniCredit have cut domestic bond holdings to 70%-80% as a proportion of their capital base.

Also including smaller peers, that ratio rises to 148% for Italy’s top five banks, according to JPMorgan, though that’s still a long way from 2017’s 261% level.

As a share of total assets, domestic bonds of major listed Italian banks fell to 6.6%, Citi said, from previous levels of more than 10%, a threshold that still applies to the banking system. at large.

Sovereign holdings as % of tangible equity and total assets


To protect themselves from market fluctuations, Italian banks have reserved 72% of their national bond portfolio among held-to-maturity assets that do not require “mark to market”, according to the Bank of Italy.

As a result, a 100 basis point widening of the yield spread between Italian and German 10-year bonds would cost banks 20 to 25 basis points in terms of aggregate Tier 1 capital, which is well above the thresholds minimal.

The Bank of Italy calculates that Italian banks held excess capital equivalent to almost 4% of their risk-weighted assets at the end of 2021, after increasing their reserves in recent years.

The ECB, which became the euro zone’s banking supervisor at the end of 2014, also heavily armed Italian banks to reduce gross bad loans to 4% of total loans, from a peak of 18% in 2015.

Investors fear problem lending could rise again as companies face higher lending costs, record energy and commodity prices and disrupted supply chains and the phasing out of COVID support measures.

Sebastiano Pirro, chief investment officer at London-based Algebris Investments, said tougher lending criteria and state guarantees provided by Italy during the pandemic – which cover 40% of all corporate loans – would allow control troubled loans.

“Italian banks have changed their approach to lending over the last decade. Personal relationships used to play a key role, it’s not like that anymore, banks pay huge attention to credit risk,” he said. declared.

Incorporating time-series data based on much looser past lending practices, banks’ risk assessment models tend to overestimate potential loan losses, Pirro said.

“None of the COVID-related loan loss provisions that banks made in the first half of 2020 were used to write down loans,” he added.

Angeloni, however, warned it was too early to assess the extent of the damage caused by COVID.

“It looks like things aren’t that bad, but we’re not sure,” he said.

Italian companies have only just started repaying capital from state-guaranteed COVID loans. Read more

Pandemic-related support measures have pushed Italy’s debt to 151% of domestic output in 2021. Rome is now hoping that 200 billion euros in EU recovery funds will help it grow enough to reduce its debt.

“The problem is that Italy has no fiscal space,” Angeloni said, adding that Rome failed to take advantage of low rates in a timely manner to reduce debt.

“I wouldn’t say the catastrophic loop of banking and sovereign risk is behind us.”

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Reporting by Valentina Za, editing by Louise Heavens

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How to Reduce Credit Card Debt After the Fed’s Rate Hike Fri, 17 Jun 2022 14:00:00 +0000
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It’s the worst debt to carry in good times. It can be oppressive when the economy is struggling with high inflation, a plummeting stock market and rising interest rates.

Do you have credit card debt? Now is the time to come up with a plan to pay off that debt as soon as possible, because it will cost even more.

To bring inflation down, the Federal Reserve raised its key rate by three-quarters of a percentage point, its biggest hike in nearly 30 years. One of the implications of this decision is that interest on credit card debt will increase.

What will the Federal Reserve rate hike mean for consumers?

The average credit card interest rate is now over 20%, according to Matt Schulz, chief credit analyst at Lending Tree. “The worst news for cardholders when the Fed raises rates is that they don’t just raise rates on the things you buy in the future,” Schulz said. “The rate you pay on your current balances also increases, usually within a billing cycle or two.”

Maybe you’ve kept your credit card debt like a pet, pecking it out bit by bit with minimum payments or occasionally throwing extra cash at the balance. Or maybe your financial situation has forced you to rely on credit to make ends meet. Whatever your situation, here are seven ways to reduce your credit card debt in light of this latest Fed rate hike and more increases that are likely to come.

Seven Ways to Financially Prepare for the Economic Recession

1. Stop charging your credit cards. Have you ever heard of the expression “If you’re in a hole, stop digging?” » You should stop using your credit cards if you don’t pay off balances each month. Also consider that whatever you’ve been billing for, whether it’s a TV, dinner, vacation, or clothes, will end up costing you more money in the long run if you keep paying down the debt. .

The share of credit card revolvers, or those who carry a monthly balance, rose 0.6 percentage points to 40.1% nationally in the fourth quarter of 2021, the American Bankers Association reported on last month. The Fed has said it expects more rate hikes if it can’t get inflation under control.

“What really matters is that all of these rate hikes come on top of potential multi-percentage-point increases in credit card rates in a single year,” Schulz said. “So many people’s financial margin of error is tiny anyway. The last thing they need with their grocery bills and rising gas prices is for their credit card interest rates to rise.

What the Federal Reserve’s interest rate hike means for mortgages

2. Start paying the smallest balance. The question I often get when it comes to credit card debt is, should I pay off my credit cards with the highest interest rate first or the one with the lowest balance first?

On paper, the logical method would be to go into debt at the highest interest rate. But what works on paper doesn’t always work in practice. The debt reduction method that I recommend is what I call the “debt dash method”. With this, like a 100-yard dash, the goal is to make a super-fast run to debt.

In my experience I have helped hundreds of people pay off their credit card debt, their motivation to get rid of debt increases when they get a quick win. The result is that they become more aggressive in tackling what remains of the debt, ultimately paying less interest charges than if they had started with the card with the highest interest rate. Part of the battle for debt reduction is sticking to a plan.

With the debt dash, you list all your debts starting with the one with the lowest balance. Then, use any extra cash you can find to apply it to that first card on your list while making minimum payments on all other debts. Once you’ve eliminated that card, move on to the next one on your list, and so on. If two cards have a similar balance, the one with the higher interest rate gets priority processing.

Have you been plagued by series of debt troubles?

3. Transfer balances to a zero percent card. If you have good credit, you may qualify for an offer that lets you transfer your balances to a card with zero percent interest for a limited time. Zero percent balance transfer offers are still plentiful, Schulz said. “We’re even seeing a few select cards offering a full 24 months interest-free,” he said.

But as the Fed continues to raise rates and delinquency rates rise, those offers are likely to disappear, Schulz said. Instead of being able to find offers for 15 to 20 months interest-free, consumers may end up finding zero percent interest for 9 to 12 months, he said.

Typically, these cards are available to people with credit scores of 670 or higher, according to Ted Rossman, senior industry analyst at and “The average FICO score is 716, so most people should be able to qualify,” he said.

Balance transfer credit cards can be a good deal for some people

4. Talk to your credit card issuer. Talking ain’t cheap when it comes to credit card debt. Many borrowers struggling with the weight of their Debts never ask for help, according to Bruce McClary, senior vice president of membership and communications at the National Foundation for Credit Counseling.

Before calling your creditor, check your credit report and credit score, McClary said. It helps to know the strength of your negotiating position. “You want to make sure you know exactly what you’re going to say to the creditor, to start the conversation about finding more affordable options,” he said. “Use a high credit score to your advantage.”

Here’s everything I did to get a perfect 850 credit score

Maybe when you first got your card your credit history wasn’t great, so you were offered a card with a high rate. But with on-time payments, you could now qualify for more affordable terms or even an interest-free credit card rate, McClary said.

“It’s a huge win because then you can start planning the power to pay off the balance while you have that interest-free repayment period,” he said. “But these offers go to people with the best credit ratings.”

5. Use debt consolidation or a personal loan. It makes sense to try to consolidate debt and make one payment, especially if you can lower the interest rate. But don’t just focus on the monthly payment, warns McClary. “What you don’t want to do is tinker with the terms so that you have this artificially low payout,” he said.

You might get a lower monthly payment, but you could drag out the loan for years and end up paying more interest over time than your issuer was charging.

6. Contact a non-profit consumer credit counselor. If you don’t feel comfortable negotiating with your card issuer, get help from a nonprofit credit counseling agency by visiting the National Foundation for Credit Counseling or calling 800- 388-2227.

By working with a credit counselor, you can put a debt management plan in place. You make a lump sum payment each month to the nonprofit, which then forwards the payments to your creditors. By participating in this type of debt management program, you may benefit from reduced or waived finance charges or fees.

7. Treat bankruptcy as a last resort. I’ve helped a few seniors overwhelmed with credit card debt for bankruptcy protection. For them, credit had become the bridge to extending their Social Security retirement benefit checks. This is how they were able to make ends meet. Bankruptcy gave them a fresh start.

Ask for recommendations for a bankruptcy attorney or use the National Association of Consumer Bankruptcy Attorneys’ Find An Attorney database.

]]> Government focuses on fiscal consolidation and relieves the masses: Miftah Sat, 11 Jun 2022 07:30:00 +0000

Finance Minister Miftah Ismail said on Saturday that the aim of next year’s budget was fiscal consolidation and relief for the masses, a day after the government presented an inflationary budget of 9 .5 trillion rupees to achieve ambitious goals.

The new budget for the 2022-23 financial year brings comfort to the working class whose tax burden has been significantly eased in addition to a 15% increase in salaries for inflation-hit government employees.

The finance minister said the country was going through “very difficult” and unprecedented times. The minister, speaking to the media alongside State Minister Ayesha Ghous Pasha and Information Minister Marriyum Aurangzeb, said the government understands that these are difficult times and “we have tried to reduce the burden of the poor and take more from the rich”.

Referring to the budget presented a day earlier, Miftah argued that the government has tried to tighten fiscal policy and reduce the overall deficit. He said taxes have been increased for Pakistani citizens who own overseas assets as well as new property taxes.

Continuing his developments, he said that the budget of the Benazir Income Support Program (BISP) had been increased by 35-40%. He added that flour, sugar and ghee will be supplied at discounted rates from utility shops throughout the year. The finance minister also said that the government has taken tough decisions with the country’s interest in mind.

The finance minister added that the International Monetary Fund (IMF) wanted higher tax rates, but the government tried to reduce the tax.

Referring to the tax collection target, he said that more than Rs 700 billion had been set for the next fiscal year, while the non-tax revenue target was set at Rs 2 trillion and that debt service was estimated at 3,950 billion rupees.

Referring to soaring palm oil prices in the international market, Miftah said a Rs 20 billion package had been granted to promote the cultivation of oil seeds and added that special emphasis was on boosting exports, expressing confidence that exports will hit $35. billion dollars in the next fiscal year.

In response to a question regarding the feasibility of inflation and growth targets, Miftah said “we have growth and inflation targets, but our first priority is fiscal consolidation and reducing the burden on the masses.”

Responding to another question regarding a revised price by the National Finance Commission (NFC), Miftah said the commission needs to sit and discuss a new price. “KP’s population has grown since FATA’s incorporation and their allocation should reflect that.”

State Minister Ayesha Ghous Pasha told the press conference that the incumbent government had inherited a “difficult situation”, but the country needed to focus on growth.

She added that the government has regulated and subsidized the prices of wheat, sugar and ghee and the government has also relieved the farmers.

Budget for FY23

The government has proposed Rs740 billion in new taxes, including Rs440 billion in tax measures proposed by the Federal Board of Revenue. Some of the major relief measures will be offset by increased oil price rates due to a levy of Rs 50 per liter as well as a 17% sales tax.

While unveiling the coalition government’s first budget in an unusually calm atmosphere, Miftah attempted to tax the sacred cows – the real estate sector, the wealthiest people while making it easier for commercial banks to cough up the money earned.

The tax burden on the registration of luxury cars over 1,600 cc has been doubled while the rates on sales, purchases and gains made on properties have been significantly increased.

No measures have been announced to reduce the current account deficit or imports while the Minister of Finance sets the current account deficit target at only 2.2% of gross domestic product (GDP).

The coalition government gave in to the IMF’s demand to post a primary fiscal surplus, setting it at 152 billion rupees by planning fiscal consolidation of almost 1.8 trillion rupees or 2.2% of GDP over the course of the year. next exercise. This is the steepest consolidation proposed in an election year amid growing political uncertainty and difficult negotiations with the IMF.

Talks with the IMF have so far remained inconclusive and it could take some time after the finance minister announced some moves against the global lender’s wishes.

While setting the inflation target at 11.5%, Miftah said the total size of the 2022-2023 budget will be 9.5 trillion rupees, an increase of only 4.6%, making the forecast unrealistic expenses from day one. It will be very difficult for the government to virtually freeze spending in the next fiscal year when there will be a significant increase in the cost of living.

Rising prices for electricity, gas and petroleum products would also increase the cost of the military and civilian government, which was not really reflected in the budget figures offered by the Minister of Finance.

The gross revenue target has been set at 9 trillion rupees, 23% more than the government wants to achieve through a combination of tax and non-tax measures, including the oil tax on petrol and diesel at great speed.

A major challenge the finance minister has set himself is to deliver a primary budget surplus of Rs152 billion, especially as provincial governments have announced big development budgets that leave little room for cash surpluses of Rs800 billion. of four federated units, as he budgeted. .

The finance minister said the government will focus on agriculture, improving productivity and promoting exports in the next budget.

Much of the new budget – the 5.45 trillion rupees, or almost 58% of the budget – will be spent on just two heads – debt servicing and defence. There is an alarming increase of more than 806 billion rupees, a 26% increase in the cost of servicing debt in just one year. During the outgoing budget year, the share of these two components represented half of the total budget. The share of defense services remained constant but debt service got out of control.

Domestic debt service will consume nearly 3.5 trillion rupees while another 511 billion rupees will be spent on external debt service. The average interest rate over the next fiscal year is estimated at 14%, which would take away what the government will earn in additional revenue.

Although the government is aiming for a primary budget surplus target of 152 trillion rupees, the Ministry of Finance will still borrow 4.6 trillion rupees to run its operations, thanks to the debt service cost of nearly 3.95 trillion rupees in the financial year 2022-23. This will be the highest debt service cost ever recorded in Pakistan’s history.

The steeper adjustment of 1.75 trillion rupees or equal to 2.2% of GDP will be difficult in an election year and the risks of slippages will remain high.

The size of the Rs 9.5 trillion budget is nearly Rs 418 billion or 4.6% larger than this year’s revised budget of over Rs 9 trillion. There was an 11% increase in expenditure from the initial budget of Rs 8.5 trillion, which has now become redundant.

Current spending is expected to increase by just 3% to Rs 8.7 trillion from revised estimates.

The government has drastically cut subsidies estimated at Rs 699 billion in the next fiscal year.

These are down 815 billion rupees or 54% from this year’s revised estimates. The cost of pensions is Rs530 billion and the functioning of the civil government will consume only Rs550 billion. The cost of Rs 550 billion seems low due to the increased cost of utilities under the IMF program.

The government has proposed 727 billion rupees for the public sector development program for the next fiscal year, although Planning Minister Ahsan Iqbal unveiled the 800 billion rupees draft PSDP. The government has set the budget deficit target at 4.9% of the total size of the economy, or 3.8 trillion rupees.

But the main challenge for the finance minister will be arranging a record $41 billion in foreign loans over the next fiscal year to stay afloat. “Pakistan will have to repay $21 billion in foreign loans, it will need another $12 billion for financing the current account deficit and another $8 billion to increase foreign exchange reserves to $18 billion,” said the Minister of Finance.

Gross receipts are estimated at 9 trillion rupees for the next financial year, an increase of almost a quarter or 1.7 trillion rupees. The provinces will receive 4.1 trillion rupees as their share, leaving the federal government net revenue of 4.9 trillion rupees. Federal government net income is expected to be 600 billion rupees less than defense spending and debt servicing.

How People With High Credit Ratings Use Personal Loans Thu, 09 Jun 2022 14:36:26 +0000

Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

Personal loans offer people a flexible way to borrow money to pay for various expenses. Even if your credit score is low, chances are a lender can meet your financial needs and help you get the financing you’re looking for.

A recent LendingTree study collected data on how borrowers with high credit scores and low credit scores tend to use their personal loan money, based on data on personal loans closed between April 2021 and March 2022.

The study showed that personal loans for high-scoring borrowers — those with credit scores of 720 and above — averaged $18,443, a number 122.2% higher than the average amount of 8 $301 borrowed by those with credit scores below 720.

In addition to revealing that high credit score borrowers take out larger personal loans, the study also showed how they spend their personal loan funding. More than a third of high-scoring borrowers use personal loans to consolidate debt, and the second-largest use is to refinance credit card debt. Here’s what the study found with high-scoring borrowers:

  • 39.7% took out personal loans to consolidate their debts
  • 15.8% used the funds for credit card refinancing
  • 12.8% borrowed money to improve their home
  • 7.6% used a personal loan to pay for a major purchase
  • 2.8% paid to have their car financed or repaired
  • 1.9% paid for medical expenses
  • 1.5% spent the funds on moving or business expenses
  • 1% paid for wedding or holiday

It’s no surprise that borrowers are taking advantage of their high credit scores to consolidate their debts. Debt consolidation allows borrowers to pay off multiple debts with one new loan, often at a lower interest rate, and the higher your credit score, the better your chances of getting that new low rate. Consolidating your debt is a good way to streamline your finances, as it means you only have to account for one monthly payment versus multiple monthly payments with separate lenders. According to the LendingTree study, high-scoring borrowers who consolidated their debt took out personal loans with an average value of $19,991.

Even when looking at low-scoring borrowers, debt consolidation tops the list of reasons to take out a personal loan. Here’s what the study found with low-scoring borrowers:

  • 37.7% used a personal loan to consolidate their debts
  • 5.7% invested in home improvements
  • 3.6% paid for medical expenses
  • 3.5% used funds to buy or repair their car
  • 3.3% spent the funds on moving or relocation expenses

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You don’t need a high credit score to get a personal loan

Beginner personal loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, credit card refinancing, marriage, moving or medical

  • Loan amounts

  • Terms

  • Credit needed

    FICO or Vantage score of 600 (but will accept applicants whose credit history is so poor that they have no credit score)

  • Assembly costs

    0% to 8% of target amount

  • Prepayment penalty

  • Late charge

    Greater of 5% of monthly amount past due or $15

Repayment of personal loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation/refinancing

  • Loan amounts

  • Terms

  • Credit needed

  • Assembly costs

    0% to 5% (based on credit score and application)

  • Prepayment penalty

  • Late charge

    5% of the monthly payment amount or $15, whichever is greater (with a 15-day grace period)

It’s important to keep in mind, however, that the higher your credit score, the more likely you are to receive favorable interest rates at the lower end of the lender’s range. In other words, you will be able to save money on your monthly repayments. If you want to take advantage of lower rates, you will need to improve your credit score.

Paying your bills on time is the most important thing you can do to increase your score – your payment history actually makes up 35% of your FICO® score, so it carries a lot of weight in determining a creditworthiness. individual.

Applying with a co-applicant who has a higher credit score than yours can also help you get approved for a lower interest rate and help you get approved where you might not have been. otherwise taken into account. Indeed, it is common for lenders to analyze your credit history, debt-to-equity ratio, and other identifying information during the process to determine the loan amount, interest rate, and term of your loan. .

Having a co-applicant can be helpful if you don’t have enough credit history to get approved for a lower interest rate. It can also be useful if you need to withdraw a larger amount of money but don’t have a stable income. Not all personal lenders allow co-applicants, so you’ll need to do your research to find which ones will.

SoFi and PenFed are just two solid options that allow you to have a co-applicant. SoFi lets you request up to $100,000, while PenFed allows a maximum of $50,000 – this lender’s $600 minimum makes it an extremely flexible option for those who need to borrow small amounts of money. silver.

SoFi Personal Loans

  • Annual Percentage Rate (APR)

    5.74% to 21.28% when you sign up for autopay

  • Purpose of the loan

    Debt consolidation/refinance, home improvement, relocation assistance or medical expenses

  • Loan amounts

  • Terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

PenFed Personal Loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, home improvement, medical bills, car financing and more

  • Loan amounts

  • Terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

I erased £60,000 debt in FIVE years and used three tips to fix my finances Mon, 06 Jun 2022 22:59:00 +0000

A WOMAN who wiped out £60,000 of debt in five years swears by three tips that have helped her get her finances back on track.

Dr. Nikki Ramskill took out her first credit card at 18 before starting medical school – and her bank balance went into debt.


Nikki chose to take out a debt consolidation loan to streamline her debts into one monthly payment

Through loans, overdrafts, a high tax cost, and the credit card bill, she quickly accumulated money that she would need to pay back.

But when she decided to take the time to travel to Australia, New Zealand and Thailand, a five-month break made her realize just how bad things had gotten, the Mirror reported.

Nikki, who is now 37 and lives in Milton Keynes, began to panic trying to pay her bills and trips after realizing there was no money coming in.

Soon, the unhappiness and sadness of being a few bad decisions away from the real issues that prompted her to change her ways.

My company is about to make £100,000 from teaching TWERKING after leaving my dream job
I started my own business in my bedroom when I was 16 and just sold it for £22m

She said: “That’s when I thought ‘oh my god, this is terrible’. I was down on a chance of a trip of a lifetime that I may never take again .”

When she returned to the UK aged 31, she pledged to do the work to get by – but found it was harder to get out of debt once you were already starting to look like a bad investment from the bank’s point of view.

Zero percent balance transfer credit cards were no longer an option as his credit rating had begun to plummet.

She adopted the snowball method – repaying the smaller of the unpaid and owed amounts first.

Most read in The Scottish Sun

Nikki found that when she cleared a debt, it motivated her to move on to the next highest sum.

But after taking a pay cut, she still struggles to make it all work.

After accessing all of her options, Nikki opted to take out a debt consolidation loan to streamline her debts into one monthly payment.

She said: “I cut up all my credit cards and didn’t use them because I didn’t trust myself. I had to go cold turkey.”

“The good thing was that it cut my payments in half. The other good thing was that the interest rates I was paying were much lower.”

Over five years, Nikki – who now runs The Female Money Doctor – was able to pay off the £60,000 while earning around £2,600 a month.

She credits the snowball method with around £10,000, £40,000 through the consolidation loan and she inherited £10,000 after losing her father.

Although a debt consolidation loan was the right move for Nikki, she admits she was “lucky” to be able to agree on good rates with the bank manager.

She said: “Some debt consolidation loans will be secured by your home, so if you miss payments your home could be at risk. Debt counselors would never suggest taking out a secured loan to pay off unsecured debt.

“You should also check the termination fee for an existing loan agreement – and if there are any prepayment charges. This may not be an option at all if you have a bad credit history. “

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For anyone struggling with money, Nikki has three key tips.

She says to tell someone as soon as possible, talk to a debt counselor for free, and make a decision on how to get help and come up with a plan quickly.

Over five years, Nikki was able to pay off the £60,000 while earning around £2,600 a month


Over five years, Nikki was able to pay off the £60,000 while earning around £2,600 a monthCredit: Nikki Ramskill / Livi
What happens to your HELOC if the value of your home drops? Thu, 02 Jun 2022 18:42:23 +0000

A home equity line of credit (HELOC) allows you to leverage your home equity, which is the percentage of your home’s value that you already own, using the home as collateral. HELOCs are attractive because they provide easy access to money for home improvements, debt consolidation, medical bills, and other expenses. However, there’s a catch: Because HELOCs are tied to home equity, your lender can freeze or reduce your line of credit if your home’s value drops.

Key points to remember

  • A home equity line of credit (HELOC) is a revolving line of credit secured by your home.
  • Lenders base the loan amount on your home equity, credit score, and debt-to-income ratio (DTI).
  • HELOCs generally have two stages: a draw period and a redemption period.
  • If the value of your home drops significantly, your lender may limit or freeze your line of credit.

What is a Home Equity Line of Credit (HELOC)?

A HELOC is a revolving line of credit much like a credit card, except your home secures it. Because a house acts as collateral, HELOC interest rates, which are variable rather than fixed, tend to be more favorable than credit cards and personal loans.

Your lender approves you for a certain amount of credit based on your home equity, credit score, debt-to-income ratio (DTI), and other factors. As long as you stay under your credit limit, you can borrow whenever you need money, drawing funds via online transfer, cash pickup at your local bank branch, or check, card ATM or credit card linked to the account.

HELOCs and home equity loans allow you to borrow money using your home as collateral, but they work differently. A HELOC is a revolving line of credit, while a home equity loan gives you an upfront lump sum payment. Both loans involve interest and fees.

How do you reimburse a HELOC?

HELOCs generally have two stages: a draw period and a redemption period.

The drawdown period is typically 10 years, during which time you can borrow up to your credit limit, pay it off, and borrow again as often as you like. During this stage, you pay interest on the amount borrowed or make a minimum monthly payment (according to your loan agreement). You may also be able to make payments on the principal of the loan, if the lender allows it.

When the draw period ends, the HELOC closes, meaning you can’t withdraw any more money, and moves into the redemption period. You’ll make monthly installments to repay principal and interest, usually over 20 years. The amount of your payment will depend on your outstanding balance at the end of the drawing period and the prevailing interest rate. Some HELOCs have a lump sum payment, which means that the full amount of the loan plus interest is immediately due at the end of the drawdown period.

HELOCs typically have variable interest rates, so your payments can go up or down over time.

HELOC and falling home values

As mentioned above, your HELOC credit limit is tied to the value of your home, among other numbers. Although your lender considers the value of your home when you apply for a HELOC, they assess your line of credit and your ability to make payments over the life of the loan. If something has changed drastically since you got the loan, your lender may reduce or freeze your HELOC.

If this happens, you won’t be able to draw the full amount of your line of credit (or part of it, in the case of a freeze). However, you will still be responsible for performing your loan agreement, including monthly interest payments. Some of the most common reasons a lender might reduce or freeze your line of credit are:

  • Credit rating dropped
  • Employment or income status has changed
  • Overall indebtedness has increased
  • Marital status has changed
  • The value of the house has dropped significantly

Your lender must send you written notice within three business days of your HELOC being reduced or frozen. If the lender’s reasoning doesn’t make sense to you, ask for a detailed explanation and if there’s anything you can do to re-establish your line of credit.

You can appeal the decision if you think the lender made a mistake. For example, your house is worth more than your lender thinks because you recently made substantial improvements. Of course, your lender will expect an updated home appraisal if you want to appeal based on the value of your property. However, keep in mind that the appraisal fees will be your responsibility and, more importantly, an updated appraisal will not guarantee that your lender will approve your appeal.

If your lender does not restore your HELOC, you can check with other lenders to see their offers. You may be able to open a new HELOC and use some of the funds to pay off your original line of credit.

Can I use a HELOC to pay for anything I want?

Once you’ve pulled out of your HELOC, it’s up to you (not your lender) to decide how you’ll spend that money. Smart uses can include home improvements, debt consolidation, major purchases like a house, a new business, or medical bills.

Of course, it’s important to avoid using a HELOC to hide any financial troubles you might be having, such as maxing out your credit cards for unnecessary expenses. In other words, you shouldn’t use a HELOC to plunge yourself into a bigger financial hole. Instead, work on the factors that caused you problems in the first place and use the HELOC to help improve your financial situation.

How much does an assessment cost?

The average price for a single-family home appraisal is $375 to $450, according to, which provides cost guides, comparisons and information for home improvement, installation and repair projects. .

Can I deduct HELOC interest?

You can deduct the interest you pay on a HELOC only if you use the money to buy, build, or significantly improve the home that serves as collateral for the HELOC. Nevertheless, the standard deduction has increased under the Tax Cuts and Jobs Act, so you might not be a winner by itemizing HELOC interest on your tax return.

The essential

Property values ​​tend to increase over time. Yet rising mortgage rates, increased supply, falling demand, recessions, and other events can drive prices down. If your home’s value drops a bit, your lender probably won’t reduce or block your HELOC, as slight fluctuations in the market are normal. It’s when the value of your home changes significantly that your lender can take steps to limit their risk.

Administration Marcos: So far so good Sun, 29 May 2022 21:06:00 +0000

As noted in my previous column, investors are lukewarm about the prospects of a Marcos presidency given the uncertainties over his economic platform.

I also shared in my column that to allay concerns, one of the most important things President-elect Ferdinand Marcos Jr. should prioritize is appointing highly skilled, competent, and integrity-based economic managers he trusts. to work independently to deal with the problem. problems facing the economy.

After being proclaimed the next president of the Philippines, President Marcos last week announced several appointments to his economic team.

These include the head of the Philippine Competition Commission, Arsenio Balisacan, as head of the National Economic Development Authority (Neda), Governor of Bangko Sentral ng Pilipinas (BSP), Benjamin Diokno, as finance secretary, and former head of Neda under then-president Joseph Estrada Felipe Medalla as governor of BSP.

Marcos also named former UP president Alfredo Pascual as business secretary and Manuel Bonoan, CEO of San Miguel Tollways Corp., as secretary of the Department of Public Works and Highways (DPWH).

Marcos did not disappoint as the five appointees received the endorsement of the business community given their extensive work experience and skills leading the country’s economic team.

Balisacan, Diokno and Medalla are all economists with PhDs, while Bonoan is an engineer with an MBA. Pascual also holds an MBA and was previously president of UP.

Additionally, all five previously worked for government and highly respected institutions in various capacities, and under different presidents, some even working under the late President Benigno Aquino III.

This, in my view, implies that President-elect Marcos chose the five leaders for their skills, not their political opinions, showing his commitment to helping the economy recover from the crisis caused by the pandemic.

The next step for President Marcos is to clarify his economic priorities.

Recall that the Aquino administration prioritized reducing the deficit and increasing the efficiency of tax collection, while the Duterte administration had its 10-point economic program and its government spending program. infrastructure.

At present, investors would like to know how the Philippine economy can recover from the pandemic and continue to grow above 6% while tackling the government’s huge budget deficit and debt levels. students.

Just last week, the outgoing Secretary of the Department of Finance (DOF), Carlos Dominguez III, unveiled his team’s proposed fiscal consolidation and resource mobilization plan. Recommendations include a three-year deferral of planned income tax cuts for individual taxpayers and the implementation of new taxes over the next three years.

These proposals are expected to generate a total of 349.3 billion pesos in additional revenue each year, allowing the government to reduce its debts to 55.4% of GDP by 2025, from 60.5% of GDP last year. without the need to cut expenses.

It will be interesting to see which part of the plan will be adopted by the new administration.

Although new finance secretary Diokno said the government would prioritize public debt sustainability, he said it was too early for him to make a decision on whether or not to increase debt. taxes, or to push for new ones, as recommended in fiscal consolidation and resource management. mobilization project.

After all, if the economy can grow faster, revenue collection will increase, allowing the government to finance its spending needs and reduce its debts, even without the imposition of new taxes.

I maintain the view that in the short term, other issues including high inflation, interest rates, war in Ukraine, aggressive Fed rate hikes and US market weakness will impact more important in local financial markets.

However, it is reassuring to know that the Marcos administration is taking the right steps so far to help the Philippine economy recover sustainably from the pandemic and face the current challenges. This should allow financial markets to perform better in the longer term, especially when economic data starts to show a favorable trend.

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Diokno’s main concern: tax collection, not debt Fri, 27 May 2022 21:20:00 +0000

Bangko Sentral ng Pilipinas Governor Benjamin Diokno expects to prioritize implementing existing tax measures over pushing new tax laws when he takes up his post as finance secretary, after answered the call to lead the economic team of new President Ferdinand Marcos Jr.

On Wednesday, Marcos Jr. also named Monetary Council member Felipe Medalla as Diokno’s replacement at BSP.

Medalla, who was economic planning secretary when Joseph Estrada was president, will serve as BSP governor, which will last until July 2023.

During a press briefing, Diokno stressed the importance of political continuity as he accepted his new position as finance secretary.

“As the country transitions to the next administration, I believe the continuity of sound macroeconomic and fiscal policies is important to achieving the stronger post-COVID Philippine economy that we all aim for,” he said. “As Finance Secretary, I will strive to continue to carefully and carefully balance the need to support economic growth, on the one hand, and maintain fiscal discipline, on the other,” he said. added.

Additionally, Diokno said he intended to retain “most of the undersecretaries” in the Department of Finance (DOF) as well as the national treasurer, Rosalia de Leon.

Fiscal consolidation

Asked if he would take up the fiscal consolidation plan handed over by the outgoing administration, he said it was too early for him to comment on whether or not to raise taxes, or grow new ones.

Still, Diokno said it was important to increase the economy’s growth momentum because strong growth would mean more revenue than the government could collect.

“We need a lot of money – first [in order] continue our [economic] growth momentum and second to service our higher level of public debt,” he said.

Even then, Diokno said the first item on the agenda when he takes over the finance portfolio will be public debt sustainability.

At 12.7 trillion pesos at the end of March 2022, the stock of national government debt represents just over 60% of gross domestic product (GDP) – the threshold not to be crossed based on international standards of prudent economic management. .

But Diokno said that’s no cause for concern as long as the Philippine economy is growing 6-7% “on a sustainable basis.” The government expects Philippine GDP to grow by 7-8% in 2022.

“That said, it is also important that I review debt sustainability to assure the domestic public and international credit watchers that we are serious about consolidating our fiscal resources so that we are able to reduce our debt. and our deficit-GDP ratio over time,” he added.

Pre-pandemic level

In the first quarter of this year, the government budget deficit was 6.4% of GDP. The goal is to bring this down to the pre-pandemic level of just 3%.

In a statement, the Bankers Association of the Philippines (BAP) welcomed the new appointments for Diokno and Medalla.

“Drs. Diokno and Medalla are outstanding economists who have the academic distinction and broad experience that transcends different jurisdictions, making them the best candidates for these roles,” said Antonio Moncupa Jr., President of BAP.

Moncupa said Diokno’s and Medalla’s experiences as economic managers in previous administrations were valuable assets as the Philippines moves toward economic and post-pandemic recovery.

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Subscribe to INQUIRER PLUS to access The Philippine Daily Inquirer and over 70 titles, share up to 5 gadgets, listen to the news, download as early as 4am and share articles on social media. Call 896 6000.

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5 ways to avoid getting into debt Thu, 26 May 2022 03:52:07 +0000

When people save money, what do they usually do? Because of a better lifestyle tomorrow, they sacrifice what they want today. People can now fulfill their wishes as they come with the help of credit cards, monthly installments and loans.

To support themselves, people are now comfortable going into debt. It’s possible, however, that this level of ease could send things spiraling out of control, leading to unintended consequences.

What is a debt trap?

The term debt trap refers to a situation in which debt grows out of control. When you spend more than you earn, you find yourself in this position. It’s a fact of life that things happen. If you’re not careful, you could end up with a mountain of debt that will take years to pay off.

How to avoid the debt trap?

Identify the problem

Analysis of the current situation and identification of areas of concern. Make a plan to manage the areas over which you have control. You may be able to solve your debt problems by doing a thorough analysis of your current financial situation.

Prioritize your needs

After a thorough investigation

Next, you can categorize your expenses into three categories: necessary, semi-essential, and optional.

Prioritize these costs.

Spend less on semi-essential and non-essential items by changing your behavior or lifestyle.

Consider debt consolidation

If you want to consolidate your debts, you can take out a single loan to pay off all your other obligations at once. You will only have to worry about repaying one loan instead of multiple loans with varying interest rates and maturities.

To pay off your debts, take advantage of your investments

It is possible to reduce your debt commitments if you have invested in high yield schemes such as mutual funds or bank deposits. Following a large debt repayment, you can begin to recover your fortune.

Stop taking on more debt

In addition to increasing your financial commitments, taking out additional loans to pay off your existing debt increases your level of financial and emotional stress. So, stay away from them at all costs.

Set aside money for unforeseen circumstances

It is crucial to maintain a separate emergency fund which is exclusively used to deal with unforeseen financial situations that may arise. For optimal results, an emergency fund should have at least three to six months of living expenses. Without needing a loan, this fund helps you through the bad times.

This money can be placed in a variety of investment vehicles that guarantee high liquidity. While a bank savings account is a useful way to save emergency funds, it doesn’t offer much in the way of interest rates or dividends. Consider putting your emergency money in a bond fund, which guarantees immediate liquidity and higher returns on your money, as an alternative.

Getting your finances under control can help you avoid the pitfalls of debt and achieve financial independence. To avoid exorbitant interest rates and the pitfalls of debt, be sure to pay off your loans and credit cards on time.

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