Spending your tax refund is all about priorities. With most of our lives hustling and bustling along the lines of meeting work requirements and household expenditures, there is hardly anyone without things waiting down the pipeline to get started and be done with. Here are six ways to spend your tax refund, keeping your very own interests at the highest priority:
Pay-off Debts with High Interest
Avoid the tendency to make your tax refund a time of merriment and letting good money go to waste. Debt, when paid in full, looks good on your credit history and report. Hence, it’s best that you pay-off those with high interest as soon as possible.
Make Home Improvements
Your house is your shelter, the one place where you can go to relax after a tiring day at the office and commuting through heavy traffic during rush hours. It is only fit that your dwelling deserves improvement from time to time. Chances are that there are already repairs long due. Now is the chance to be smart and spend your tax refund on what really matters a lot to you and your life style.
Feed Your Emergency Fund
Life is full of uncertainties, and there are some occasions where you badly need a supporting hand. Experts suggest that it is an absolute obligation that one must maintain an emergency fund. This should amount up to at least 6 months of living expenses. Now is a best time as any to start your emergency fund if don’t have one. It’s never too late, and by all accounts it is indeed in the very best of your own interest and well being.
Investment is ideally defined as creating future wealth with existing current resource. Who doesn’t want to have a little luxury in the future, we all do work ourselves tired for a better and brighter tomorrow. Stocks, bonds, and Certificate of Deposits are essentially there to help you understand how well an investment can pay back in future years if done correctly.
Start a Business
Those who have their own businesses to run know no rules and leashes binding them, or holding them back from reaching the sky. Entrepreneurship may not be everybody’s cup of tea but it’s a wonderful and exuberant feeling to have one. With power of internet helping you there is a very good possibility for you to exploit an existing niche and make it into a big hit for your designated target audience. All businesses are a venture for profit and the essence lies in being optimistic about it.
The greatest security in the world which no one can ever steal from you is your qualification and education. Knowledge is power, and learning never stops as there is always room for improvement and personal development. There might be a skill inside you that is waiting to be sharpened. Investing in yourself is one of the best uses of your tax refund.
As homes become more expensive around the UK, the already-broad trend of mortgages also tends to grow. Although having to pay for your dream house with affordable payments is great, but it also invites a huge problem on its way – the mortgage fraud.
The term ‘Mortgage Fraud’ is a broad term which includes everything that leads a buyer to false knowledge about the property being sold. It may include false sales prices, fake offers, or even deceptive information about the property. Such crimes are mostly committed by the lender, but certain cases also hold the borrower of the mortgage as liable.
Fortunately, there are several different ways that help in saving yourself from a mortgage fraud. Some of them are:
Mortgage Fraud includes a great deal of scams. One of the most common types of scams in the UK remains false under pricing. According to Openwork – United Kingdom’s prominent financial advice network – if a property is too good to be true, then it probably is that way!
To avoid such scams, make sure you check the authenticity of the business or the dealer who is in contact with you by determining their address, cross checking the documents for different signs of fraud, and checking whether the market prices and practices in general, are in line with what you are being told.
This is one of the swiftly rising threats of identity theft in the United Kingdom. According to the Express Newspaper, Britons lose thousands of pounds due to identity theft every year. According to a research, identity theft levels grew by six percent during the initial months of this year only. A common practice found was that these fraudsters impersonate the identity of those who have already passed away.
There are several different ways to avoid falling prey to them, like asking them about the reason why a certain client is so interested in buying your house. As it turned out in many cases caught, the “client” was not even a real buyer. Other things that you could do are questioning them about the reason why they are so interested in your sale. Furthermore, if you are buying a house that is being sold by the seller within a short time of moving in, you could question the reason why they want to sell the place.
Another very major mortgage fraud in the UK is playing with the prices. This involves both the buyer and the seller. Since some mortgage lenders don’t allow a 100% mortgage on the price of the property, buyers might ask the seller to over state the price to their mortgage lender. This way, the buyer will tell the lender that they are buying a house for a higher price and paying down-payment from their own pocket, and only need the remaining percentage of the amount. Whereas in reality, the amount being lent by the mortgaging firm might be the complete price the buyer is paying for the property. This practice can prosecute both the buyer and the seller.
The best way to avoid this is by remembering the fact that being the seller; it will bring no good to you. Instead, you might face prosecution in return. Furthermore, overstating a price will also lead you to the loss of your benefits payments. To avoid this fraud, talk to your lender and come up with legal options to save money rather than stating false prices.
Not everyone can afford to buy a car. It is one of the largest purchases you will make in your lifetime. However, there are ways to buy a car in the cheapest way possible. Below are the strategies that will get you an incredible car, while saving you a few extra pounds.
1. Lease Your Car
Instead of directly buying a new car, you can settle for the leasing option, as it can save you money. This is when you borrow a car for a particular amount of time i.e. 2 to 3 years, until your lease period ends. After that time, the car should be returned back to the dealer, and you will be paying the finance charges and the depreciation costs of the car.
2. Buy Used Car
The second-hand car will be obviously cheaper than a brand new car. A lot of dealers sell used cars and offer dealer warranty for a particular period of time, so that the customer is satisfied even when buying a used car. Additionally, when you buy used car, you can purchase it by paying the amount upfront. This will save you from the interest costs and other fees. However, you need to know that not all used cars are covered for repairs, so you have to bear loss if anything goes wrong.
3. Buy Old Rental Car
When the rental cars have reached their capacity, the dealer sells them off at cheaper prices. You will find a number of old vehicles on deals as well. Although these cars are quite affordable, one of the setbacks of buying them is your lack of awareness regarding the condition of the car. You do not know if it is in a proper condition or not, or how roughly the drivers have used these cars.
4. Car Finance Agreements
Not all lenders can offer you deals, packages, and discounts. You need to look for other ways to reduce the financial burden on yourself. One such alternative is hire purchase. In this category, you will to make a deposit of 10% initially, and then you will have to pay plus interest and balance till your loan period ends. The car will be yours once you have paid off the entire loan amount. Make sure not to miss any payment because the lender can cease your car, as a result.
5. Personal contract purchases
People who like changing their car, but do not want to spend a fortune on them can opt for personal contract purchase. In this agreement, the person loaning the car will pay the deposit of up to 10%, while making the low fixed instalments on a monthly basis. However, a lump sum will be deferred when the contract ends. When you will reach the end of loan term, you can return the car, pay the lump sum, or sell the car to settle the balance. The responsibility of repair, maintenance of the car, and staying within the set mileage will be yours.
So follow these advices, and purchase a car at a cost-effective price.
For last 20 years, buy to let investments were an incredible way to make money but the present tax reforms have changed the way we look at this particular mortgage market. Are you looking forward to invest in buy to let property? Lower mortgage rates might compel you to consider entering into the buy to let market but now is a good time to rethink your decision. Here is why…
Stamp Duty Tax Increment
Earlier in April this year, the stamp duty tax increased by 3% for the buy to let properties as compared to other residential properties. This reform applies to all the citizens of Wales, England and Northern Ireland who want to buy surplus residential properties – this includes second homes as well.
Previously, the stamp duty for the properties ranging from £125,000 – £250,000 was 2% which after the 3% increment has become 5%. Buyers will also have to pay a stamp duty tax on first property if it is worth more than £40,000.
The changes imposed are probably done to hinder people from investing in the buy to let properties so that more first time buyers have a greater supply of residences accessible to them.
Tax Relief Changes to Take Place in 2017 Deadline
Tax relief changes have made the buy to let property investments less attractive and appealing. Up until now, the landlords would offset the interest through rental income and the taxation considered the interest as a financial cost (and taxes were supposed to charged on the profit), which meant that interest could be deducted when calculating taxes. However, this scenario is changing and this year’s budget has made the buy to let business recede further. There will not be the 10% relief on the furnished anymore from 2017. Also the tax relief on the financial costs will be reduced as well – this means that by 2020, the investors won’t be allowed to deduct the mortgage interest from the rental income. From next year, only 75% of the income will be relievable and after that it would further reduce to 50%.
These changes in the tax relief will make the taxable income increase and the buy to let property investors will also become liable to pay the child tax benefit charges till 2020. So decide for yourself if it is really a good idea to invest in buy to let properties.
Changes in the Capital Gain Tax
If you have a buy to let property and are expecting to sell it after 2019, you need to consider the changes in the deadline of the capital gain tax. This means that from April 2019, you will no longer have time until January to file the tax return – in fact, you will have to pay the capital gains tax within the next 30 days. How will this affect you? Well, this deadline restriction implies that you will have a limited short term cash flow so you will have to plan proactively and way before time to handle this situation. For someone looking for unsecured loans and its application requirements, you can read the next blog.
What are the Application Requirements for an Unsecured Loan?
Unsecured loans are the most popular forms of loans that are granted based on the applicant’s credit worthiness. Having a good credit score makes it easy for you to get approved for an unsecured loan. What people like most about unsecured loans is that they do not require any collateral. This saves borrowers from ongoing stress of losing their homes and cars in foreclosure.
Considering getting an unsecured loan means meeting the requirements of the lenders. Every loan has different application requirements. To ensure you are taking the right steps to getting approved for the loan, below is detailed information on the application requirements of an unsecure loan:
Prerequisites to Consider
Before you get in touch with a lender and apply for an unsecured loan, there are certain things you need to know. If you are new to borrowing, it is important you take special care and be prepared to get loan approval.
Learn about Unsecured Loans
The first thing before you apply for an unsecured loan is to find out all about it. You must know what you are getting into so you can make a wise decision. Unsecured loans can be much more expensive than secured loans at the end of the loan term.
Because the loan isn’t backed by your asset, the lender charges high interest. Therefore, it is essential that you do your calculations and make sure that you can afford the loan.
Check your Credit Score
Unsecured loans are approved based on your credit score. Therefore, it is a must that you check your credit report. You can request a copy of by mailing one of the three credit bureaus. The copy is sent within a week or two. You must check the entries in the report to ensure there are no errors and mistakes.
If you have a high credit score, you don’t need to worry about being disapproved by the lender, since that is the main criteria of an unsecured loan. Don’t apply for an unsecured loan with bad credit score. Take your time to improve the score and apply later. The better your credit score, the lower the interest will be.
Pay your Bills
For any lender to approve your loan, you must be a responsible payer. Having too many debts and unpaid bills on your report will minimise your chances of getting approved for an unsecured loan or any other type of loan. Therefore, if you haven’t paid your bills, this is the time to do so. This will help you improve your credit score and get you the loan you need.
Pay off all Debts
Another important thing to consider before applying for an unsecured loan is to make sure you have paid off all your debts. If you already have a couple of loans in your name and you haven’t paid them off yet, no lender will be willing to grant you another loan. This happens because lenders consider such individuals too risky to lend money to. If you have ongoing debts, clear them before you apply for an unsecured loan.
Applying for an Unsecured Loan to Get Approved!
You are not just applying for an unsecured loan, but you are applying to get approved. Therefore, it is important that you prepare in such a way that the lender has no reason to disapprove your request.
Verify your Identification
To get a loan, you must be a citizen of the country you are living in. You cannot apply for a loan if you are on a visitor’s visa. That’s the reason lenders need proof of identification from borrowers. You will need to provide your identification verification including your ID card, driver’s license, passport, etc.
Collecting and providing this information should be a breeze.
Verification of your Permanent Address
When it comes to the loan approval process, lenders look at several factors including your living conditions. You cannot be approved for any loan if you don’t have a permanent place to live in. If you are applying for an unsecured loan, you are not using your assets as collateral, which is why it is much more important for the lender to ensure you have a permanent place to live.
Therefore, when applying for an unsecured loan, make sure you provide the lender with recent mail with your current address. You can also provide the lender with a copy of your rent agreement.
If you don’t have a job, do you think anyone would be willing to lend you money? To get approved for a loan, you need to verify your employment to the lender. Provide your employment letter, bank statements, and tax return forms to the lender so they can be certain that you can pay them back.
Verifying your employment is an essential step to take before getting a loan. If you have a job and a steady income, your lender will have no problem approving the loan.
These are the things you need to provide to your lender at the time of application. An unsecured loan doesn’t require you to do extensive documentation. So, you have a greater chance of being approved for the loan. Once you provide these documents to the lender, they will get in touch with one of the credit bureaus to request your credit score. Your credit score is what determines whether you are eligible for the loan or not.
Who is Eligible to Apply?
How do you know if you are eligible for an unsecured loan or not? It’s quite easy!
Before applying for any type of loan, it is important to understand the lending criteria. It is when you understand the criteria that you are eligible to apply. Getting approved for an unsecured loan is not as easy since the lender is depending entirely upon your earning power. Let’s find out how you can be eligible for an unsecured loan:
If you are applying for an unsecured loan, make sure you are not already in lots of debt. Having multiple loans to repay is not considered a good sign by lenders. Lenders look at your credit report and history to see how many loans you have taken out and how much debt you have. The decision of lenders to approve your loan majorly depends upon your debt status.
The more debts you have, the lower your chances are to be approved for the loan. So, before you apply, make sure you clear all your debt. Any overdue debts are a red sign to the lenders so try to eliminate them first. If you have too much debt on you, you will unfortunately not be able to get an unsecured loan.
· Credit Score
The biggest factor determining whether you are eligible for an unsecured loan or not is your credit score. If you have a good credit score, you will not have any trouble getting approved for an unsecured loan. Lenders providing unsecured loans do not use collateral to protect their loan. Hence, they are extra careful in approving it. That’s the reason lenders offering unsecured loans are extra critical in approving applicants because they want to be 100% certain that the borrower will be able to repay the loan.
It is best to keep a check on your credit report every six months. This helps you understand your credit standing, so when need be, you can get any loan almost instantly. Having a good credit score means you are a responsible payer and never default on your payments. This is exactly what lenders of unsecured loans need to know.
· Loan Amount
The amount of money that you are borrowing has a huge impact on your loan approval and disapproval, especially with unsecured loans. Since these loans aren’t backed by any security, they are riskier for lenders. Lenders offering unsecured loans will not lend a large sum of money.
Even if a lender is willing to lend a massive amount of money, they will be extra cautious with the application and approval process. They will make certain that you have enough money to repay the loan in time or they will not approve it.
· Monthly Income
As in the case for most loans, lenders offering unsecured loans will require you to pay a monthly repayment. To determine whether you can pay this amount, lenders will look at your monthly income.
No matter what type of loan you apply for, lenders will require information about your income. They will ask for proof of employment and your bank statements to see how much you make every month. They do so to see if you earn enough to pay their monthly instalments and still live a decent life.
Lenders will inquire about your salary, your monthly expenses, and savings to be 100% certain. Do not try to fool the lender by giving them a false employment letter or bank statement. They will check back with your employer to verify your documentation.
The amount of money you are borrowing must be enough to cover the debt you are in or else you will not be approved.
Dos and dont’s of Unsecured Loans
There are certain rules by which everything around us functions. Very much like a restaurant where there are certain etiquettes that you need to follow.
When it comes to unsecured loans, there are certain dos and don’ts that you need to keep in mind to enhance your relationship with the lender. If you don’t want to end up in trouble, below is a list of dos and don’ts that you need to keep in mind before applying for an unsecured loan:
- Always save money when you are applying for a loan. When you keep some money aside for paying off your debt, you are much more stress-free and relieved.
- Do lots of lender research. It is essential that you find the best lender when looking for an unsecured loan since interest rates are quite high. Not doing enough lender research will result in wrong decisions and regret.
- Read the lender’s agreement before signing it. Some lenders trick customers into buying additional products and approving unusual conditions. Keep your eyes and mind open when signing a loan agreement and read it thoroughly. There’s no rush. Take your time and ask the lender to wait while you read every clause in the fine print.
- Make regular monthly payments and save money for them separately. This is important because if you fail to make your payments, you get in trouble with the lender.
- Don’t fall for loan scams. There are plenty of lenders out there offering all sorts of loan products with tricky clauses to trap you. You need to be smart and wise in picking a lender to avoid getting tricked. Many lenders entice customers by offering great rates. But before you choose them, learn about them by looking up reviews.
- Don’t borrow too much. That’s the number one rule when borrowing money. You might think you will be able to repay it, but it is a huge risk to take, especially when you can’t predict the future. Borrow only the amount you need and it will be easier for you to pay your debts in a timely manner.
- Don’t pester your bank or the credit bureaus too much. Checking with one of the three bureaus multiple times has a bad impact on your credit report. You will be marked negatively for requesting copies too frequently. Check your credit report only when you are ready to apply for a loan.
Unsecured loans are harder to get, but if you follow the instructions mentioned above, you will get the green signal without any trouble.
People are often afraid when going for payday loans. Are they reliable? Will they put me in indefinite debt? Will I be able to pay it back? But once the time arrives when you are in absolute need of it, you seldom keep these questions in mind and just go for it. Why? Because it seems like the easiest way out for obvious reasons. But there is a whole lot of negative air that surrounds the idea itself – the dark and negative air is referred to as one question: What kind of an effect will it have on my credit score?
While it’s a valid question that you must ask yourself before taking the leap of faith and borrow, it does not tag along with a negative answer. In fact, surveys, over the years, show that a payday loan actually makes your credit score appear better than before. How is that possible, one may ask? But before you get the answer to that, you must know some other details.
Payday loans help people with bad credit scores. Since traditional borrowing methods do not allow people with bad credit history to get verified to borrow – borrowers eventually turn to payday lenders for help. Payday loans are comparatively easier to get and pay back, the records of which will make to your credit file. There might be a misconception that your credit file may not record payday loans, it’s false. It usually includes every little detail relating to your credit history, and it does include all details of payday loans and repayment.
Due to the recent changes in the laws, more of your borrowing details make way into your credit report. But how does it exactly work? Well, once you start making timely payments on your payday loan, it has a positive impact on your previously negative credit score, as it begins to balance it out. Many companies account the balance out while keeping in mind both the aspects of the credit report. But it’s not given the same kind of weighing when applying for every kind of loan. For example, it may not be seen as the same level of beneficial hen applying for a mortgage, but proves to be quite substantial in helping you to get approval in the case of an auto-loan.
If you have appositive repayment history, it shows in your open credit accounts, where potential lenders are able to view your current positive outflow of repayments and it will in turn reflect positively in their reaction. A few years ago, they were not able to view your open credit history, back then they weren’t as open to trusting the borrowers as they are now, as the inflow and outflow is done on the basis of open honesty.
You may have taken a loan to repay an old loan you were not able to make payments against, but the potential lender will see it as a positive behavior since you did eventually pay back the loan as responsibly as possible. All of these factors will leave your credits score to appear rather decent in front of anyone who is willing to look in to your credit file. It’s never too late to start correcting it. Click here for more info regarding payday loans.