Tag: Avoid

Decreasing Debt Before It’s Too Late … How To Avoid The Pitfalls Of Creeping Debt

Minimizing Debt Before It’s Too Late … How To Avoid The Pitfalls Of Creeping Debt

Decreasing financial debt typically isn’t a high top priority for individuals till they have actually currently entered difficulty with overspending. Utilizing a couple of standard standards, as well as financial obligation estimations, can assist you see when your financial debt tons is getting involved in the risk area.
Budgeting Guidelines
Off, financial institutions make use of budgeting standards when accepting and also assessing credit scores. You have a greater danger of debt applications being rejected if your financial debt goes beyond the economic neighborhoods suggested standards.
Obtaining, and also maintaining, your financial obligation according to advised budgeting standards, is a crucial action in financial obligation decrease. Utilize the adhering to advised budgeting standards (the exact same ones utilized by Financial Institutions) to assess the products in your budget plan:
Real estate 35% – Mortgage or rental fee, tax obligations, fixings, renovations, insurance coverage, as well as energies;
Transport 20% – Monthly repayments, gas, oil, repair services, insurance policy, car park & public transport;
Financial obligation 15% – Credit cards, individual financings, trainee financings & various other financial obligation settlements;
All various other expenditures 20% – Food, insurance coverage, prescriptions, physician & dental practitioner expenses, garments & individual;
Investments & Savings 10% – Stocks, bonds, money gets, retired life, rental realty, art, and so on
. Financial Obligation Income Ratios
The 2nd action is computing your financial obligation revenue proportion. You will certainly recognize simply exactly how essential financial obligation lots is to your total monetary image as soon as you recognize what your proportion is. Your financial debt earnings proportion is the percent of your regular monthly take-home income that mosts likely to paying financial debts.
You compute it by taking the quantity required to settle financial obligations monthly, consisting of rental fee or home loan, and also divide by your net income (your take-home pay after tax obligations). Keep in mind, this is “Debt” proportion, so just consist of real financial debt payment in the estimation.
Debt To Debt Ratio
Since you pay off a credit history card is no factor to shut your account, simply. One unknown reality concerning the Credit to Debt Ratio is the reverse result it carries your credit history. If you settle a bank card, as well as shut the account, you are really adversely influencing your credit report.
The factor for this unfavorable result remains in the computation of the Credit to Debt Ratio itself. This proportion is the connection of your financial debt total amount vs. your credit line.
You determine it by splitting the complete credit line of all charge card and also financing accounts by the total amount of the real financial debt (invested overall). Currently, if you repay a charge card, you are lowering the real financial obligation, which is terrific, however, if you shut the account, you are additionally considerably decreasing the credit line you have, as well as generally by a greater portion than the financial obligation decrease.
Pay Yourself
Vital to lasting economic success, as well as securing your future, is paying on your own. Financial obligations and also various other monetary responsibilities, cash for enjoyment, and also various other investing constantly appear to take a greater top priority. Assume concerning it, if you aren’t worth being paid initially, after that is?
Snowball The Credit Cards
Paying simply $10 added a month on a credit scores card, over the minimum necessary repayment, can reduce your settlement term in fifty percent, if not even more! Press out that added settlement, nonetheless little, every month, and also take benefit of the compounding impact of snowballing your financial obligation away.
Bear in mind, you do not need to be a monetary whiz to recognize what’s happening with your debt as well as financial obligation. Simply a couple of basic estimations, as well as an eye on the future, will certainly go a lengthy method to aid you do well economically as well as maintain your financial obligation controlled. Be secure, be clever, do the mathematics!

The 2nd action is computing your financial obligation revenue proportion. When you recognize what your proportion is, you will certainly recognize simply exactly how essential financial obligation lots is to your general monetary photo. Your financial debt revenue proportion is the percent of your regular monthly take-home pay that goes to paying financial obligations.
One little well-known reality regarding the Credit to Debt Ratio is the reverse result it has on your credit scores rating. Bear in mind, you do not have to be a monetary whiz to comprehend what’s going on with your credit report as well as financial obligation.

The post Decreasing Debt Before It’s Too Late … How To Avoid The Pitfalls Of Creeping Debt appeared first on ROI Credit Builders.

Decreasing Debt Before It’s Too Late … How To Avoid The Pitfalls Of Creeping Debt

Minimizing Debt Before It’s Too Late … How To Avoid The Pitfalls Of Creeping Debt

Decreasing financial debt typically isn’t a high top priority for individuals till they have actually currently entered difficulty with overspending. Utilizing a couple of standard standards, as well as financial obligation estimations, can assist you see when your financial debt tons is getting involved in the risk area.
Budgeting Guidelines
Off, financial institutions make use of budgeting standards when accepting and also assessing credit scores. You have a greater danger of debt applications being rejected if your financial debt goes beyond the economic neighborhoods suggested standards.
Obtaining, and also maintaining, your financial obligation according to advised budgeting standards, is a crucial action in financial obligation decrease. Utilize the adhering to advised budgeting standards (the exact same ones utilized by Financial Institutions) to assess the products in your budget plan:
Real estate 35% – Mortgage or rental fee, tax obligations, fixings, renovations, insurance coverage, as well as energies;
Transport 20% – Monthly repayments, gas, oil, repair services, insurance policy, car park & public transport;
Financial obligation 15% – Credit cards, individual financings, trainee financings & various other financial obligation settlements;
All various other expenditures 20% – Food, insurance coverage, prescriptions, physician & dental practitioner expenses, garments & individual;
Investments & Savings 10% – Stocks, bonds, money gets, retired life, rental realty, art, and so on
. Financial Obligation Income Ratios
The 2nd action is computing your financial obligation revenue proportion. You will certainly recognize simply exactly how essential financial obligation lots is to your total monetary image as soon as you recognize what your proportion is. Your financial debt earnings proportion is the percent of your regular monthly take-home income that mosts likely to paying financial debts.
You compute it by taking the quantity required to settle financial obligations monthly, consisting of rental fee or home loan, and also divide by your net income (your take-home pay after tax obligations). Keep in mind, this is “Debt” proportion, so just consist of real financial debt payment in the estimation.
Debt To Debt Ratio
Since you pay off a credit history card is no factor to shut your account, simply. One unknown reality concerning the Credit to Debt Ratio is the reverse result it carries your credit history. If you settle a bank card, as well as shut the account, you are really adversely influencing your credit report.
The factor for this unfavorable result remains in the computation of the Credit to Debt Ratio itself. This proportion is the connection of your financial debt total amount vs. your credit line.
You determine it by splitting the complete credit line of all charge card and also financing accounts by the total amount of the real financial debt (invested overall). Currently, if you repay a charge card, you are lowering the real financial obligation, which is terrific, however, if you shut the account, you are additionally considerably decreasing the credit line you have, as well as generally by a greater portion than the financial obligation decrease.
Pay Yourself
Vital to lasting economic success, as well as securing your future, is paying on your own. Financial obligations and also various other monetary responsibilities, cash for enjoyment, and also various other investing constantly appear to take a greater top priority. Assume concerning it, if you aren’t worth being paid initially, after that is?
Snowball The Credit Cards
Paying simply $10 added a month on a credit scores card, over the minimum necessary repayment, can reduce your settlement term in fifty percent, if not even more! Press out that added settlement, nonetheless little, every month, and also take benefit of the compounding impact of snowballing your financial obligation away.
Bear in mind, you do not need to be a monetary whiz to recognize what’s happening with your debt as well as financial obligation. Simply a couple of basic estimations, as well as an eye on the future, will certainly go a lengthy method to aid you do well economically as well as maintain your financial obligation controlled. Be secure, be clever, do the mathematics!

The 2nd action is computing your financial obligation revenue proportion. When you recognize what your proportion is, you will certainly recognize simply exactly how essential financial obligation lots is to your general monetary photo. Your financial debt revenue proportion is the percent of your regular monthly take-home pay that goes to paying financial obligations.
One little well-known reality regarding the Credit to Debt Ratio is the reverse result it has on your credit scores rating. Bear in mind, you do not have to be a monetary whiz to comprehend what’s going on with your credit report as well as financial obligation.

The post Decreasing Debt Before It’s Too Late … How To Avoid The Pitfalls Of Creeping Debt appeared first on ROI Credit Builders.

Improve Your Business and Avoid Workplace Drama and More –10 Brilliant Business Tips of the Week

Office interpersonal relationships got you down? Watching your employees snipe at each other? Is the gossip train speeding through your company? Then it’s time to avoid workplace drama. Plus, nine other excellent tips to get you going in this new year.

The Hottest and Most Brilliant Business Tips for YOU – Avoid Workplace Drama and More

Our research ninjas at Credit Suite smuggled out ten amazing business tips for you! Be fierce and score in business with the best tips around the web. You can use them today and see fast results. You can take that to the bank – these are foolproof! It’s time to avoid workplace drama and take your business to the next level.

Stop making stupid decisions and start powering up your business. Demolish your business nightmares and start celebrating as your business fulfills its promise.

And these brilliant business tips are all here for free! So, settle in and scoop up these tantalizing goodies before your competition does!

#10. Take Your Customers on a Journey

Our first jaw-dropping tip is all about a new process to close sales. G2 says your sales process is a kind of roadmap. It pulls your salespeople along from prospect to consideration to sale to after-sale nurturing. But your sales methodology is the ‘how’. Your sales methodology shows you several ways to go through the steps in your sales process. It is your company’s philosophy of how a sale should be carried out.

We really liked this article because it carefully lays out the various steps in a standard sales process. As a result, we highly recommend reading the article in its entirety.

In particular, we draw your attention to the section on after-sales nurturing. The word ‘yes’ isn’t the end. It is just the beginning.

#9. I Pledge Allegiance to the One, Unique Product – Yours

The next awesome tip is about making your product stand out. The Self Employed notes there are a number of ways to showcase your uniqueness. And, yes, you can do this even if your product is toothpaste or your service (yes, services can benefit from this article) is dog walking.

We truly loved the concept of, essentially, being human. Seriously, how many times have you read a company blog or About Us page which was just so much jargon?

So, be human and be approachable. It’s perhaps a little concerning that being human is a unique sales proposition. But there you have it.

Avoid Workplace Drama Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Avoid workplace drama and be more productive – and more!

#8. Kick Your Sales into High Gear

Our following life-changing tip concerns creating the ultimate sales kickoff. LinkedIn lays it all out for us.

Did you know that a good 29% of attendees rate their company’s sales kickoffs at a C or below?

Ouch.

A smart way to get your sales kickoffs out of the doldrums is to consider the ultimate goal. It’s to inspire people, right? And it’s also about getting everyone on the same page.

So, does that have to happen via a PowerPoint presentation where the presenter drones on and on while everyone checks their phone, or wishes they were?

Our favorite tip was to continue with learning after the kickoff is done. And that makes a lot of sense to us – reinforce what was said so it sticks!

#7. Time to Focus Like a Laser on Your Customers

For our next sensational tip, we looked at focusing on your customers. Startup Professionals says that customer expectations have changed radically in the past few years.

Some of this may be generationally driven, as Generation Z (born after 1996) is now outnumbering the millennials. Millennials are born after 1981.

But it’s also just a function of how markets have been changing. As customers demand more and more personalization and attention, they get it. And then, because they like it, they want more.

It is, without a doubt, a self-perpetuating cycle.

Analytics FTW

Oh, we do so love analysis. For the bottom line is, without measurements, we have no idea how anything is doing. Analytics are also great because they push us to create goals and attempt to achieve them. If the goal is for 5% more sales during the quarter, and we know how many sales were closed in the past quarter, then we know what’s expected for the current quarter. We know what success looks like. And that is very powerful.

There’s another aspect of this article we really liked.

Ask What Your Customers Want

What is the easiest way to find out what people want?

C’mon, this is not rocket science.

You ask.

So, ask.

#6. Save Your Money on Ads (for the most part)

This tip is so cool, and it works! Succeed as Your Own Boss tells us all about attracting customers without having to pay for advertising.

This is a great article and it really should be read in its entirety. Here’s our fave takeaway.

Don’t Just Throw Jell-O Against the Wall, Hoping It’ll Stick

Well, that’s not exactly how Melinda Emerson put it. This is actually a combo of two tips. One is to know your audience. And the other is to measure (our fave!).

Reading between the lines, this advice is virtually identical to what you should be doing with paid advertising.

The conclusion we draw from this is, treat free advertising like paid. That is, be intentional about it. And be organized so you’re not just playing around. Make every move count.

#5. It’s Time to Get Out of Middle School and Avoid Workplace Drama

Grab this mind-blowing tip while it’s hot!

It’s time to avoid workplace drama and get down to business.

Young Upstarts says there are a number of ways to derail the gossip train and avoid workplace drama.

We are so listening.

Model the Behavior You Wish to See

Also known as – be the change you wish to see in the world. Or, at least, at the office. You can avoid workplace drama by not encouraging it. And you can also avoid workplace drama by not spreading rumors.

We really loved this tip because it’s all about leadership. And, the truth is, anyone can do it. From the CEO to the cleaning crew, everyone can avoid workplace drama simply by stopping it and cutting it off at its knees.

Transparency Looks Good on You

This tip also really spoke directly to us, and it’s all because of something your intrepid blog writer remembers from, egad, a good 30+ years ago. So, it’s story time.

True Story

Drama, drama, drama.

Find Your Target Audience Credit SuiteThere never seemed to be so much of it in my life until I worked for a certain firm. This was the 1980s, so it was back when there was a clerical pool.

The firm did something which, in my opinion, was a disaster.

While hiring a clerical office manager is often a great idea, the person who was hired was just plain awful. They were, among other things, overly and unnecessarily secretive. Compounding problems was the fact that things were allowed to deteriorate for a long time.

As a result, secretaries left. In droves. It was hard to keep anyone on staff who could actually type.

Don’t laugh – this was a big, big deal back in the day.

So, this office manager once asked me – what do you hear about me? And yes, I heard stuff on occasion. But I said nothing. Why? It wasn’t because I disliked this person, although I did. It was more because the request was an improper one. I wasn’t in charge of anything. So, asking me about what the rumor mill said was just plain nuts.

It would have perpetuated the problem instead of being a way to avoid workplace drama.

I don’t recall anyone telling this person, although it’s been over three decades, so my memory may not be perfect. Perhaps someone else did. But either way, the inquiry didn’t help this person. Instead of trying to avoid workplace drama, they were fueling it. And instead of being open and transparent, they hid.

They were let go not too long after that. And so much of it had to do with not being transparent. Which leads me to ….

Encourage People to Carry Their Own Messages

This one also really resonated. Some of this relates to the above story. Essentially, instead of asking me what others were saying, this office manager should have asked people directly. Now, it’s entirely possible they wouldn’t have been truthful. But they should have asked. Having me carry water for her was an absurd notion. She was the boss and should have been confident enough to speak directly to the clerical staff.

Instead, by trying to use a go-between, she perpetuated the problem.

Talk directly to people. Even if it’s unpleasant or uncomfortable. You’re the boss if not the owner. This is why they pay you the big bucks.

Avoid Workplace Drama Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Avoid workplace drama and be more productive – and more!

#4. Overworking is no Good for You or Your Business

Check out this spectacular tip, all about avoiding becoming overworked. Work It Daily notes that overworking makes you a less effective worker.

But it can be easier to say you’ll stop overworking than to do it.

And the article smartly acknowledges there are people with financial goals who take on a side gig because they need cash in the short term. Plus, they may be trying to start a business. You may be one of those people or have been.

But then there’s another reason for overworking.

Time Management Matters

Quick true story here.

In the 90s, your intrepid blog writer worked for a person who. Could. Not. Stop. Yapping.

All the livelong day, they would talk to this one or that one. And it turned out to be fortunate that this boss didn’t like me. I was left alone!

As a result, I got my work done on time and left at 5, 5:30 most nights.

This person and their coterie did not.

They also complained (as a part of their constant gabfest) about being overworked.

Whatever this person wanted to do with their life, whatever goals they had for themselves outside of work – those were all sacrificed at the almighty altar of incessantly chattering.

Don’t be that person – and you won’t be overworked.

#3. Throw Some Water on Your Burnout

To go along with tip #4, it’s not your imagination: this winning tip can help you avoid burning out. Acorns tells us it’s all about four D’s.

Delete

Is the task really worth the time and money you’re putting into it? Not?

Then why the hell are you doing it?

Delay

You probably don’t have to do everything at once, the very moment you’re asked to. If so, then you have got to ask about priorities. Once you have the priorities down, guess what? You know what you can put off. And keep that in mind for the future. If that task comes up again, you just may be able to defer is again.

Diminish

You can diminish tasks by finding a shortcut to get them done. Even if it just saves you a keystroke, that will pay off if you have to perform a similar task over and over again.

Your intrepid blog writer firmly believes laziness is an evolutionary advantage. The basics of it are not to sit around and do absolutely nothing, though. Rather, the idea is to find faster and easier ways to do nearly anything.

After all, many of us have dishwashers. Are we lazy for not washing and drying our dishes by hand? Of course not! And by having a machine perform this task, that frees us up for all sorts of things. Those things can be everything from a task which cannot be performed by a machine (yet) to working on our relationships. Or binge-watching Netflix.

So, when you have a moment, consider what you do at work which takes a lot of time or feels repetitive. You just may be able to find a faster way of doing it.

Delegate

This one, we hope, is self-explanatory. You do not have to do everything. That way lies madness.

#2. Ready, Aim, Customer!

Our second to last unbeatable tip can give you a new perspective on how to reach your target audience. Noobpreneur reveals all about determining your target audience and how to best and most effectively reach them.

Target audience? Say what? But won’t everyone love, love, love my product or service?

Get real.

Sorry, that was harsh.

But consider this. Even water isn’t sold to everyone. And it’s branded, anyway. Some waters are flavored to appeal to dieters or to fitness enthusiasts. Others have snob appeal. And then there are folks (me, I’m guilty) who just open the tap and wonder why the heck anyone would want to pay for H2O if they didn’t have to, beyond paying for utilities.

But I digress.

Reaching an audience means defining that audience.

#1. Start Mastering Digital Marketing

We saved the best for last. For our favorite remarkable tip, we focused on digital marketing tips for you to win social, email, and search. Nextiva says the most underrated digital marketing is email. Yeah, good old email!

But let’s look at something kind of disturbing.

Google, Thy Name is Legion – and Maybe a Monopoly?

Let’s think about Google search for just a moment. And I mean Google, not search in general.

Google’s basic mission is to serve seekers what they are looking for. The first time, every time. And with the enormous number of webpages (that figure is in the trillions if not the quadrillions by now, folks) and the exceptional competition out there, Google has to make decisions every picosecond about what’s better and what’s best. Because it’s impossible for human beings to do this, it’s all done via algorithms.

Ya with me so far?

Here’s where it gets tricky.

Google says they don’t suppress results. And maybe they don’t. Let’s operate under the assumption that they don’t. After all, for Google, what does it matter if Coke or Pepsi gets the top search spot when someone searches for best cola?

But What If Google Gets into a Side Business?

Google could enter a market like hospitality or music or food service, let’s say.

What’s to stop Google from giving more credence to their own ridesharing service, or music streaming platform, or string of restaurants? Or whatever they decide to try their hand at?

Let’s even say everyone is 100% ethical and above-board.

What’s to stop Google’s search division from sharing inside information to another division of the company? Maybe even inadvertently? How many times do you get misdirected internal mail? I do, every single month.

Or what’s to stop Google from bending their algorithms to better serve how their side gigs have their webpages set up?

One thing the article doesn’t mention, but should, is that this is bound to draw the attention of the fine people at the Federal Trade Commission. And they won’t take so kindly to allowing this.

Before you say the government would never want or need to break up Google, think again. People said that about AT&T, over 35 years ago.

It’ll be fascinating to watch as this unfolds in the future.

And do check out the article for some more insights into digital marketing.

So, which one of our brilliant business tips was your favorite? And which one will you be implementing now?

Avoid Workplace Drama Credit Suite

If you are as passionate about succeeding in business as we are, please help us spread the word about how to take the plunge and save time and money – and your sanity! Avoid workplace drama and be more productive – and more!

The post Improve Your Business and Avoid Workplace Drama and More –10 Brilliant Business Tips of the Week appeared first on Credit Suite.

Residence Refinancing For People With Bad Credit – How To Avoid High Fees

House Refinancing For People With Bad Credit – How To Avoid High Fees

When house refinancing with poor credit report is as crucial as discovering reduced prices, staying clear of high costs. With costs amounting to hundreds of bucks, make certain that you are obtaining the very best offer by contrasting lending institutions. Look at various other kinds of credit scores to protecting cash money out funding.

Inquire About Closing Costs And Fees

Demand car loan prices quote that consist of details on closing prices and also costs. The APR will certainly consist of the rate of interest price, shutting prices, and also any kind of yearly charges.

Know costs or shutting expenses that are consisted of as component of the concept. These are frequently identified as “no down” finances, yet in truth you are spending for those costs throughout the funding.

With finance quotes, understand that also the charges are flexible. You can request for them to be gotten rid of or removed. Some charges, such as the very early settlement charge, are just eliminated if you pay an added quantity at closing.

Select Low Fee Terms

While you are looking into funding business, additionally have a look at exactly how they structure their finances. Typically the most affordable prices, such as rate of interest just or balloon repayment lendings, have the highest possible charges.

Select terms that are much more desirable for reduced charges, such as dealt with or flexible prices. Flexible prices are normally the most affordable setting you back financings with some danger of boosting future prices.

Various Other Ways To Cash Out Your Equity

Take into consideration using for various kinds of credit score to conserve on costs if you are just re-financing to pay out component of your equity. Bank loans as well as credit lines have a lot reduced closing prices than re-financing your overall home loan. They can likewise be held for a much shorter duration, which additionally conserves you cash.

While reduced charges might be your objective, be open to far better funding choices. By contrasting the APR, you might discover that ordinary charges can generate much better prices that will certainly conserve you cash. The longer you maintain your car loan, the more vital reduced prices will certainly be.

Preventing high costs when house refinancing with poor credit history is as crucial as discovering reduced prices. Demand finance prices quote that consist of details on closing expenses and also costs. The APR will certainly consist of the rate of interest price, shutting expenses, as well as any kind of yearly costs. Some costs, such as the very early settlement charge, are just eliminated if you pay an extra quantity at closing.

If you are just re-financing to pay out component of your equity, think about using for various kinds of debt to conserve on charges.

The post Residence Refinancing For People With Bad Credit – How To Avoid High Fees appeared first on ROI Credit Builders.

5 Disastrous Blunders to Avoid When Applying for a Small Business Loan

And What to Do Instead When it comes to applying for a small business loan, there is a right way and a wrong way to do things.  The problem is, no one really tells you the wrong ways.  There is not a class that tells you what not to do.  There are directions given, sure.  … Continue reading 5 Disastrous Blunders to Avoid When Applying for a Small Business Loan

5 Disastrous Blunders to Avoid When Applying for a Small Business Loan

And What to Do Instead

When it comes to applying for a small business loan, there is a right way and a wrong way to do things.  The problem is, no one really tells you the wrong ways.  There is not a class that tells you what not to do.  There are directions given, sure.  However, there is much room left for mistakes when someone is only telling you what you should do.

The truth is, it can be just as useful to know what not to do.  Knowing what the common mistakes are and how to avoid them is vital.  Here are 5 common mistakes that can mean disaster for your application approval odds.

1.      Not Having a Complete and Professional Business Plan Before Applying for a Small Business Loan

Any traditional lender is going to need to see a business plan as part of the loan application process.  The problem is, many business owners have no clue what this should look like.  There is so much more to it than just filling out a few lines to answer questions on the application.  It is much more than writing answers in a template.

Learn business loan secrets with our free, sure-fire guide.

A complete business plan is really a combination of a number of reports that need to be researched and written.  It is rare that a business owner has all of the knowledge and skill needed to sufficiently put together an entire business plan on their own.

A complete business plan should include the following:

Introduction

  • An Executive Summary

This is a complete summary of the business idea.

  • Description

The description goes into further detail than the summary, describing the business. What type of business is it? What product or service will it offer? This is where you work to get others excited about your business. Note that this is important even if your business is already operating.  It will just be in the present rather than the future tense.

  • Strategies

Layout your plan for getting started. Do you have a marketing plan, area in mind for location, or idea of how many employees you will start with? What is your ramp up plan? Again, already operating businesses will state the current operating strategy.

Market Research

  • Market Analysis

 This actually includes two parts:

o             Analysis of audience:

What need will your business fill, and for who? Explain the need you see in your market and how your business will fill that need.

o             Competitive Analysis

Is there already a business working to fill this need? Is there room for more? How do you plan to compete with them?

If you are not a new business, this will be a market analysis that supports your need for funding, or that shows your business is strong and growing.

Plan and Financial Information

  • Plan for Design and Development

How is all of this going to play out, from start to finish. What steps are you going to take? This part should be more detailed than your strategies section.

  • Plan for Operation and Management

Who will own or does own the business and who will run or currently runs it from day to day. This could be as simple as stating that you are the sole owner and operator.  It could be as complicated as laying out a complete partnership plan or board or directors’ chart. It just depends on how your business works.

  • Financial Information

This section includes current financials, projections, and a budget plan for the loan funds you are applying for.  Lenders need to see that you know how to handle any funds they may give you, including paying them back.

2.      Trying to Put Together Your Own Financials When Applying for a Small Business loan

While it may be possible for a business owner to handle writing a budget for loan funds, it is unlikely that a business owner can provide sufficient financial statements and tax returns on their own.  It is much better to have an accountant prepare all financial statements to be included with the business plan, and any others that lenders may ask for, to ensure completion and accuracy.

The same is true for tax returns.  A professional tax preparer will be better able to ensure accuracy and answer any questions the lender may have.

3.      Not Being Willing to Pledge Collateral When Applying for a Small Business Loan

While it is often not a requirement, it is always helpful to pledge collateral.  Loan terms will be better, interest will be lower, and you will likely end up being eligible for more money. In addition, not being

Learn business loan secrets with our free, sure-fire guide.

willing or able to pledge collateral sends up a red flag from the beginning.  If you aren’t willing to take a risk for your business, why should a lender be willing?

4.      Not Knowing or Understanding Your Credit Scores Before Applying for a Small Business Loan

Before you begin applying for a small business loan, you need to know your credit scores.  Where do they come from?  What do they mean?  If you do not know what your credit score is telling your lender about you, you are going in blind.

Most understand their personal credit scores and where they come from.  Fewer understand their business credit score, where it comes from, and what it tells lenders.

It is way more involved that personal credit, and much less cut and dry.  There are many more options for reports and scores, and each business credit reporting agency calculates the scores a little differently. Furthermore, some business credit reporting agencies allow the lenders to weight certain information.  This means two lenders could end up with a totally different credit report with a different score on the same borrower based on how they asked for the information to be weighted.  It definitely much harder to get a grip on your business credit score.  Let’s break it down to gain a better understanding.

Business Credit Report from Dun & Bradstreet

Dun & Bradstreet offers a number of business credit report options. In fact, there are 6 various reporting alternatives in all. They all supply various info relating to business credit history and credit worthiness. The result is, it takes all of them for a lender to get the complete picture.

However, some lenders only use Dun & Bradstreet to get the PAYDEX. This is probably because it is the easiest to comprehend.  It is the most like the consumer FICO rating, determining how promptly a consumer makes payments on a scale from 1 to 100. Ratings of 70 or higher are good. For more information on Dun & Bradstreet and their other business credit scores and reporting options go here.

Experian Business Credit Scores

Experian uses what it calls Intelliscore. There are greater than 800 different variables that they make use of to forecast a company’s credit risk. With Intelliscore, a score of 76 or greater indicates a reduced risk of default or late payment. If a score drops between 51 to 75, it indicates a reduced to medium threat. Scores from 26 to 50 are medium threat. Lastly, from 25 down to 1 is average high to high risk.  Find out more about Experian credit scores here.

applying for a small business loan Credit Suite2

Equifax Business Credit Score When Applying for a Small Business Loan

Equifax gets its business credit report information in methods comparable to D&B as well as Experian. Like D&B, they have a sharing contract with the Small Business Finance Exchange.

They combine monetary information with industry  information, and they include utility and telephone payment data as well. Public records are also a source of information. Find out more about Equifax business credit scores here.

How Can You Know Your Score Before Applying for a Business Loan?

Just understanding your business credit score is not enough.  You need to know what you can do about it if it isn’t helping you get funding.  That’s where monitoring comes in.  Unfortunately, you cannot get a free copy of your business credit reports like you can with your personal credit reports.  It costs money to see your business credit score.

For example, the big three charge close to $50 or more for each report:

  • Dun & Bradstreet reports range in price from $61 to $229 per report.
  • Experian reports are $49.95 per report.
  • Equifax is $99.95 per report.

You can monitor your credit with D&B and Experian at a fraction of these costs by going to https://www.creditsuite.com/monitoring/.

Don’t forget personal scores  matter as well, for a couple of reasons.  First, most if not all traditional lenders will check your personal credit score before they even consider business credit.  If your personal credit isn’t the best, then good business credit can help you get the loan anyway.  If your personal credit is okay but not top notch, good business credit can help you when it comes to rates and terms.  However, another reason personal credit  is still important is this.  Some of the business credit reporting agencies use your personal credit score in their business credit score calculation.

5.      Not Considering Other Types of Financing Before Applying for a Small Business Loan

Sometimes, applying for a small business loan isn’t the best option.  There are other options, and in some situations, they may be best. Some other options include:

SBA loans

While these are loans still disbursed by traditional lenders, they are guaranteed by the federal government.  This means two things.  First, some business owners may be eligible for SBA loans even if they are not eligible for other loans from a specific lender.  Next, it means that these loans have a much more involved and lengthy application process.

However, if your credit score is on the cusp of what is needed and you meet the other eligibility requirements, then an SBA loan may very well be what works best for you.  Don’t forget to research this option when applying for a small business loan.

Alternative lenders

These are lenders other than banks and credit unions.  They typically operate online.  Due to this, they usually have a faster application process.  These lenders also tend to have less stringent eligibility requirements.  What’s the catch? They generally have higher interest rates.  However, if you are aware of where your credit scores are, you can know on the front end to just skip applying for a small business loan with a traditional lender and head straight to these types of lenders.  It could save you a lot of time and hassle.

Invoice Factoring

If you need money fast, invoice factoring might be a better option than a traditional loan.  Lenders that factor invoices will pay you a portion of what they are worth immediately.  Then, when the funds come in, they will send you the difference less their factoring fee.  You don’t end up with all the funds from the invoices, but you definitely get fast cash.

Merchant Cash Advance

This is an advance against future credit card sales.  The lender averages your daily credit card sales and lends funds against what is expected in the future, at a premium.  This is another way to get cash fast, and while the premium may be higher than the interest rates on some loans, it is a much more convenient option in some cases.

Learn business loan secrets with our free, sure-fire guide.

How Do You Avoid These Blunders When Applying for a Small Business Loan?

So the best first step is to check your credit.  That can help you avoid a lot of mistakes by simply guiding you toward the right type of lender. Once you decide between a traditional lender, an alternative lender, or some other type of financing, you can determine what the requirements are.  If you need a business plan or financials, you can find a professional to help with these items before you even start the process.

Don’t forget to consider collateral. Take everything into consideration.  Your business is the first and most obvious option.  You could also use any land that you or the business owns.  Even company automobiles can be used as collateral.  Explore all your options. It can make a huge difference in terms of interest rate and the amount of money you are eligible for.

 

 

 

The post 5 Disastrous Blunders to Avoid When Applying for a Small Business Loan appeared first on Credit Suite.

Can Debt Consolidation Help You Avoid a Financial Emergency?

Can Debt Consolidation Help You Avoid a Financial Emergency?

Unforeseen clinical expenses, separation, as well as joblessness are the 3 largest triggers behind personal bankruptcy. Typically, individuals that are monetarily in risk locate themselves incapable to stay clear of personal bankruptcy when these points take place. The indicators of insolvency, however, are typically existing long prior to insolvency really takes place.
If you are living income to income, you would certainly not be able to pay for any type of financial obligation settlements or any kind of unanticipated expenditures. Financial debt loan consolidation can aid by assisting you figure out where your cash is going as well as by aiding you manage your expenses.
If you have no cost savings, -. After that any type of economic emergency situation such as joblessness or ailment can leave you without cash for the fundamentals, if you have not place any kind of loan away. Without financial savings, you would certainly need to obtain in order to spend for the fundamentals in instance of an emergency situation, a high-risk technique that can promptly bring about expensive financial debt.
– If you have no economic emergency situation strategy. Simply as you have a strategy in instance of a fire in your residence, you must have a strategy for dealing with an unexpected economic emergency situation. By acting on your strategy as quickly as emergency situation occurs, you can prevent insolvency.
If you have big financial debts, -. If you have great deals of financial obligations, any kind of emergency situation might make you not able to fulfill your financial debt settlements, causing personal bankruptcy. Financial debt combination can assist you prevent insolvency by making your financial debt repayments cost effective and also by aiding you pay for your financial debts.

Financial debt combination can aid by aiding you figure out where your cash is going as well as by aiding you manage your expenses.
With no cost savings, you would certainly have to obtain in order to pay for the essentials in instance of an emergency situation, a high-risk method that can swiftly lead to expensive financial debt.
If you have great deals of financial debts, any type of emergency situation might make you not able to fulfill your financial obligation settlements, leading to insolvency. Financial debt consolidation can aid you prevent insolvency by making your financial obligation repayments economical and also by assisting you pay down your financial obligations.

The post Can Debt Consolidation Help You Avoid a Financial Emergency? appeared first on ROI Credit Builders.

Creditors and Predators: 10 Ways to Avoid Falling Prey to Predatory Lenders, and 6 Questions to Ask Before You Jump In

How to Tell the Difference Between Legit Creditors and Predators Out to Eat You Alive

Watch any animal reality show and you will see what happens between predators and prey.  In a similarly menacing way, some lenders actually prey on unsuspecting borrowers.  Not only do they leave finances in ruins, but often the trail of destruction trails across their entire lives.  They basically eat their prey alive.  How can you avoid falling victim to these devilish creatures?  We are going to show you how to tell the difference between legit creditors and predators, so that you can survive in the credit wilderness.

Know Thy Enemy: What is Predatory Lending

According to Investopedia: “Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. These lending tactics often try to take advantage of a borrower’s lack of understanding concerning loans, terms, or financial literacy.”

Basically, just like predators in the wild, predatory lenders take advantage of the weak.  They look for those that are unassuming, easily tricked into coming closer, and without suitable defenses.  Then they pounce.

In the wild, predators often disguise themselves as something else.  Consider the venus fly trap.  To the fly, it looks like a flower.  The fly saunters over to enjoy the beauty, and snap!  It’s gone before it even knows what hit it.  That is the peril of a predatory lender.  It looks great, inviting even. Before you know it, however, they trap you.  The best protection you can have is to know the difference between creditors and predators.  Don’t be fooled.  Learn the signs and build your defenses.  Know thy enemy.

Common Signs that a Creditor is Actually a Predator

The only way to tell the difference between creditors and predators is to know the signs of a predator.  They are not that hard to spot if you know what tricks to look for.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Payment is King

If you are trying to get a loan and the “creditor” continues to emphasize what your payment will be, while downplaying how much the actual loan is, that creditor might be a predator.  While a monthly payment is obviously important for budgeting purposes, you need to know all the terms of the loan.

A lender can use many tactics to ensure your monthly payment is where you need it to be to fit your budget.  They can increase the loan period, adjust terms, and add balloons to make things look much better than they really are.  The result is that you get a really bad loan in exchange for a temporary lower payment.

Burst the Balloon

Speaking of balloon loans, those are also a common predatory lending practice.  They use them to provide unsuspecting borrowers with a low monthly payment for most of the loan.  Most borrowers do not realize that they are typically only covering the interest for each month.

In fact, usually the principle isn’t reduced at all by payments until the very end of the loan.  The final payment ends up being a large “balloon” payment that should pay off the entire principal of the loan all at once.  Most of the time borrowers are not prepared for this, and they end up either refinancing or defaulting.

Unpack the Packing:  Unnecessary Baggage

Packing is another practice that predatory lenders seem to lean towards.  It involves them adding extras onto the loan.  You do not need these extras, and they add them without your knowledge.  The most common culprits are insurance products that are not necessary for your situation.  You pay for them without realizing it, and they offer you no benefit.

Excessive Points and Fees

It’s not uncommon for lenders to charge points and fees on a loan.  It is a practice that some use to increase profits.  As a general rule, one point is worth one percent of the loan balance.

Asking for more points and higher fees than is normal for the type of loan you are getting can be a sign of predatory lending.  If you feel that is what is going on, dig deeper.

How do you know what is “normal” and what is excessive? As a general rule, three points, or 3% of the loan amount or less, is a decent deal.  This includes appraisals and title insurance, which are necessary.  Research to see what is normal for your area, but know this is a good rule of thumb.

The New York Connection: Of Creditors and Predators and Judgements and Confessions

New York plays a unique role in the predatory lending drama.  Knowing this can provide a pivotal clue when trying to determine if you are about to become prey. In New York, state law is friendly to confessions of judgement. Cash -advance companies, which are a huge faction of the predatory lending family, almost always make borrowers sign one of these as a loan condition.

If a borrower signs a confession of judgment, they are basically agreeing to lose in a court battle if a dispute arises about repayment. Regardless of where these types of loans take place, almost all of them contain a New York confession of judgement.  If you see one of these in your loan documents, run.

Punishment for Paying Early

If they are going to charge a prepayment penalty, you should be wary.  Early payment is a good thing, even though the lender loses some interest.  It isn’t a deal breaker, but it should definitely cause you to look for other red flags and proceed with caution.

Obviously Seeking the Weak

Senior citizens, those with no credit or bad credit, minorities, those considered low income are all easy targets.  They are more likely that others to get tangled up with predatory lenders, according to a 2015 Center for Responsible Lending report. Stay away from lenders that advertise in a way that targets these populations.

Language such as “bad credit doesn’t matter” is a definite sign.  In addition, lenders that initiate contact unprovoked and those that try to rush your decision are bad news.

It’s a Bad Deal Now, but They’ll Fix It

Lenders that are searching for prey may try to get borrowers to sign on to a bad deal by promising to make it better in a future refinance.  Do not fall for this.  A bad deal is a bad deal.  Just walk away.

Loan “Flipping” is NOT the Same a House “Flipping”

Flipping a house in real estate terms can actually be very profitable.  However, loan flipping is something else altogether, and predatory lenders are great at it.  When they see you struggling, they offer a refinance.  While it may lower your payments, you end up paying points and fees again.  Eventually you end up owing more than ever on your house, car, or whatever it is you used as collateral.

It is a vicious cycle that can bury you quickly.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

The Payment Isn’t “All In”

This is typically and issue with predatory lending in mortgages.  Inquire from the beginning as to whether there will be an escrow account set up for your required tax and insurance payments.  Lenders that are not on the up and up will often make payments look super low because they do not include all the costs a borrower is responsible for.

What Are Some Questions I Can Ask to Help Discern Between Good Creditors and Predators?

Protecting yourself means recognizing these signs, they will not always be obvious.  Sometimes you need to look a little closer.  Asking these questions, whether to yourself or to the lender, can help you get to the root of the issue.

  • Is the offer too good to be true?

As with almost anything in life, if it seems too good to be true, it probably is.

  • What does the product truly cost?

If the lender doesn’t spell it out for you, do the math yourself.  If you need help understanding it all, find someone you trust that can walk you through it.  You need to know exactly what this loan is going to cost you.  That means all fees, points, insurance, and taxes need to be clear before you can make an educated decision.

  • Does the lender check my ability to repay?

It is ridiculous to think you will get a loan without the lender ensuring you can repay.  It doesn’t have be a credit check. If they do not at least verify income or employment however, there is almost certainly a problem.

  • Does the lender help me build credit?

Not all lenders do this, but if they do help you build your credit score, it is a point in their favor.

  • Does the lender require electronic payments?

While there is nothing wrong with paying electronically, the requirement that electronic payments are the only way you can pay should throw up a red flag.

  • Have others complained about the lender?

Check out reviews online.  Look them up on the Better Business Bureau’s website at BBB.org.  Find out if others have had a good experience with the lender, or not.

Is Anyone Doing Anything to Separate Creditors and Predators?

In recent years there has be a push by legislators to put an end to predatory lending practices.  There have been safety nets in place for far longer however.  What is being done?  Does anyone care?  Actually, yes, they do.

The Truth in Lending Act

It really started way before now with the Truth in Lending Act of 1968.  This Act requires that lenders clearly communicate the sum of all payments, APR, and amount to be paid in interest and fees.  In addition, the total credit that is being extended must be made clear.  All of this has to be disclosed before a loan contract is signed.

Another component of the Truth in Lending Act is that a borrower has the right of rescission.  This means that with certain loans, borrowers have three days to cancel after signing.

The Consumer Financial Protection Bureau

After the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Consumer Financial Protection Bureau was born.  The goal of the CFPB is to help oversee federal laws that protect consumers financially.  They have resources that can help borrowers learn to decipher loan terms and risks, and also help them report and resolve any complaints they may have against lenders.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Signs of a Good Lender

Telling the difference between good creditors and predators means more than just knowing how to spot the bad guys.  There are things to look for that can clue you in as to whether a lender is actually good, or if they are just not a predator.  There is a gray area, and even reputable lenders can fall into poor practices.

Knowing that, keep in mind that legitimate lenders will always check your ability to pay.  They may rely on a credit check or some other means.  In addition, they will not pressure you.  The best will actually offer tools to help educate you financially so that you can better understand the details of the loan.

Also, a good lender will have few complaints.  Consumers will almost always complain liberally if they feel like they were ripped off.  In addition to BBB.org, check out the CFPB Complaint Database and the Federal Trade Commission’s scam alerts.  While even good lenders get complaints occasionally, a long history of dissatisfied customers is a huge warning sign.

Other Ways to Protect Yourself

Like I said, the best way to know the difference between creditors and predators, and avoid becoming a predator’s prey, is to educate yourself.  Here are some additional sources for doing just that:

  • The Money & Credit page on the Federal Trade Commission’s website has tons of educational articles on a broad variety of topics including debt, credit and loans.
  • The Ask CFPB pageincludes answers to hundreds of questions related to personal finance, many of which you can apply to business finance as well.
  • The attorney general’s officein your specific state will be able to help if you need to submit complaints.  They can also help you understand consumer protections in your own area.

Learn the Difference Between Legit Creditors and Predators to Avoid Problems with Personal and Business Finance

Predatory lending is prevalent in the realm of personal finance, but that does not mean that business finances are unaffected.  Many business loans are dependent on personal credit scores, which a bad loan from a predatory lender can devastate.  This is one reason building business credit is so important.

The fact is, however, a bad loan is like a predatory parasite. It seeks out the weak, and once it attacks, it attaches itself to your finances and plagues every aspect of them, even slipping to the business realm if left unattended.  It can cause devastation that could last for years. Don’t let it happen to you.  Learn the signs, and make sure you can tell the difference between creditors and predators.

 

 

 

 

The post Creditors and Predators: 10 Ways to Avoid Falling Prey to Predatory Lenders, and 6 Questions to Ask Before You Jump In appeared first on Credit Suite.

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Creditors and Predators: 10 Ways to Avoid Falling Prey to Predatory Lenders, and 6 Questions to Ask Before You Jump In

How to Tell the Difference Between Legit Creditors and Predators Out to Eat You Alive

Watch any animal reality show and you will see what happens between predators and prey.  In a similarly menacing way, some lenders actually prey on unsuspecting borrowers.  Not only do they leave finances in ruins, but often the trail of destruction trails across their entire lives.  They basically eat their prey alive.  How can you avoid falling victim to these devilish creatures?  We are going to show you how to tell the difference between legit creditors and predators, so that you can survive in the credit wilderness.

Know Thy Enemy: What is Predatory Lending

According to Investopedia: “Predatory lending benefits the lender and ignores or hinders the borrower’s ability to repay a debt. These lending tactics often try to take advantage of a borrower’s lack of understanding concerning loans, terms, or financial literacy.”

Basically, just like predators in the wild, predatory lenders take advantage of the weak.  They look for those that are unassuming, easily tricked into coming closer, and without suitable defenses.  Then they pounce.

In the wild, predators often disguise themselves as something else.  Consider the venus fly trap.  To the fly, it looks like a flower.  The fly saunters over to enjoy the beauty, and snap!  It’s gone before it even knows what hit it.  That is the peril of a predatory lender.  It looks great, inviting even. Before you know it, however, they trap you.  The best protection you can have is to know the difference between creditors and predators.  Don’t be fooled.  Learn the signs and build your defenses.  Know thy enemy.

Common Signs that a Creditor is Actually a Predator

The only way to tell the difference between creditors and predators is to know the signs of a predator.  They are not that hard to spot if you know what tricks to look for.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Payment is King

If you are trying to get a loan and the “creditor” continues to emphasize what your payment will be, while downplaying how much the actual loan is, that creditor might be a predator.  While a monthly payment is obviously important for budgeting purposes, you need to know all the terms of the loan.

A lender can use many tactics to ensure your monthly payment is where you need it to be to fit your budget.  They can increase the loan period, adjust terms, and add balloons to make things look much better than they really are.  The result is that you get a really bad loan in exchange for a temporary lower payment.

Burst the Balloon

Speaking of balloon loans, those are also a common predatory lending practice.  They use them to provide unsuspecting borrowers with a low monthly payment for most of the loan.  Most borrowers do not realize that they are typically only covering the interest for each month.

In fact, usually the principle isn’t reduced at all by payments until the very end of the loan.  The final payment ends up being a large “balloon” payment that should pay off the entire principal of the loan all at once.  Most of the time borrowers are not prepared for this, and they end up either refinancing or defaulting.

Unpack the Packing:  Unnecessary Baggage

Packing is another practice that predatory lenders seem to lean towards.  It involves them adding extras onto the loan.  You do not need these extras, and they add them without your knowledge.  The most common culprits are insurance products that are not necessary for your situation.  You pay for them without realizing it, and they offer you no benefit.

Excessive Points and Fees

Predatory Lenders Credit Suite

It’s not uncommon for lenders to charge points and fees on a loan.  It is a practice that some use to increase profits.  As a general rule, one point is worth one percent of the loan balance.

Asking for more points and higher fees than is normal for the type of loan you are getting can be a sign of predatory lending.  If you feel that is what is going on, dig deeper.

How do you know what is “normal” and what is excessive? As a general rule, three points, or 3% of the loan amount or less, is a decent deal.  This includes appraisals and title insurance, which are necessary.  Research to see what is normal for your area, but know this is a good rule of thumb.

The New York Connection: Of Creditors and Predators and Judgements and Confessions

New York plays a unique role in the predatory lending drama.  Knowing this can provide a pivotal clue when trying to determine if you are about to become prey. In New York, state law is friendly to confessions of judgement. Cash -advance companies, which are a huge faction of the predatory lending family, almost always make borrowers sign one of these as a loan condition.

If a borrower signs a confession of judgment, they are basically agreeing to lose in a court battle if a dispute arises about repayment. Regardless of where these types of loans take place, almost all of them contain a New York confession of judgement.  If you see one of these in your loan documents, run.

Punishment for Paying Early

If they are going to charge a prepayment penalty, you should be wary.  Early payment is a good thing, even though the lender loses some interest.  It isn’t a deal breaker, but it should definitely cause you to look for other red flags and proceed with caution.

Obviously Seeking the Weak

Senior citizens, those with no credit or bad credit, minorities, those considered low income are all easy targets.  They are more likely that others to get tangled up with predatory lenders, according to a 2015 Center for Responsible Lending report. Stay away from lenders that advertise in a way that targets these populations.

Language such as “bad credit doesn’t matter” is a definite sign.  In addition, lenders that initiate contact unprovoked and those that try to rush your decision are bad news.

It’s a Bad Deal Now, but They’ll Fix It

Lenders that are searching for prey may try to get borrowers to sign on to a bad deal by promising to make it better in a future refinance.  Do not fall for this.  A bad deal is a bad deal.  Just walk away.

Loan “Flipping” is NOT the Same a House “Flipping”

Flipping a house in real estate terms can actually be very profitable.  However, loan flipping is something else altogether, and predatory lenders are great at it.  When they see you struggling, they offer a refinance.  While it may lower your payments, you end up paying points and fees again.  Eventually you end up owing more than ever on your house, car, or whatever it is you used as collateral.

It is a vicious cycle that can bury you quickly.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

The Payment Isn’t “All In”

This is typically and issue with predatory lending in mortgages.  Inquire from the beginning as to whether there will be an escrow account set up for your required tax and insurance payments.  Lenders that are not on the up and up will often make payments look super low because they do not include all the costs a borrower is responsible for.

What Are Some Questions I Can Ask to Help Discern Between Good Creditors and Predators?

Protecting yourself means recognizing these signs, they will not always be obvious.  Sometimes you need to look a little closer.  Asking these questions, whether to yourself or to the lender, can help you get to the root of the issue.

  • Is the offer too good to be true?

As with almost anything in life, if it seems too good to be true, it probably is.

  • What does the product truly cost?

If the lender doesn’t spell it out for you, do the math yourself.  If you need help understanding it all, find someone you trust that can walk you through it.  You need to know exactly what this loan is going to cost you.  That means all fees, points, insurance, and taxes need to be clear before you can make an educated decision.

  • Does the lender check my ability to repay?

It is ridiculous to think you will get a loan without the lender ensuring you can repay.  It doesn’t have be a credit check. If they do not at least verify income or employment however, there is almost certainly a problem.

  • Does the lender help me build credit?

Not all lenders do this, but if they do help you build your credit score, it is a point in their favor.

  • Does the lender require electronic payments?

While there is nothing wrong with paying electronically, the requirement that electronic payments are the only way you can pay should throw up a red flag.

  • Have others complained about the lender?

Check out reviews online.  Look them up on the Better Business Bureau’s website at BBB.org.  Find out if others have had a good experience with the lender, or not.

Is Anyone Doing Anything to Separate Creditors and Predators?

In recent years there has be a push by legislators to put an end to predatory lending practices.  There have been safety nets in place for far longer however.  What is being done?  Does anyone care?  Actually, yes, they do.

The Truth in Lending Act

It really started way before now with the Truth in Lending Act of 1968.  This Act requires that lenders clearly communicate the sum of all payments, APR, and amount to be paid in interest and fees.  In addition, the total credit that is being extended must be made clear.  All of this has to be disclosed before a loan contract is signed.

Another component of the Truth in Lending Act is that a borrower has the right of rescission.  This means that with certain loans, borrowers have three days to cancel after signing.

The Consumer Financial Protection Bureau

After the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Consumer Financial Protection Bureau was born.  The goal of the CFPB is to help oversee federal laws that protect consumers financially.  They have resources that can help borrowers learn to decipher loan terms and risks, and also help them report and resolve any complaints they may have against lenders.

Hit the jackpot with our best webinar and its trustworthy list of seven vendors who can help you build business credit.

Signs of a Good Lender

Telling the difference between good creditors and predators means more than just knowing how to spot the bad guys.  There are things to look for that can clue you in as to whether a lender is actually good, or if they are just not a predator.  There is a gray area, and even reputable lenders can fall into poor practices.

Knowing that, keep in mind that legitimate lenders will always check your ability to pay.  They may rely on a credit check or some other means.  In addition, they will not pressure you.  The best will actually offer tools to help educate you financially so that you can better understand the details of the loan.

Also, a good lender will have few complaints.  Consumers will almost always complain liberally if they feel like they were ripped off.  In addition to BBB.org, check out the CFPB Complaint Database and the Federal Trade Commission’s scam alerts.  While even good lenders get complaints occasionally, a long history of dissatisfied customers is a huge warning sign.

Other Ways to Protect Yourself

Like I said, the best way to know the difference between creditors and predators, and avoid becoming a predator’s prey, is to educate yourself.  Here are some additional sources for doing just that:

  • The Money & Credit page on the Federal Trade Commission’s website has tons of educational articles on a broad variety of topics including debt, credit and loans.
  • The Ask CFPB pageincludes answers to hundreds of questions related to personal finance, many of which you can apply to business finance as well.
  • The attorney general’s officein your specific state will be able to help if you need to submit complaints.  They can also help you understand consumer protections in your own area.

Learn the Difference Between Legit Creditors and Predators to Avoid Problems with Personal and Business Finance

Predatory lending is prevalent in the realm of personal finance, but that does not mean that business finances are unaffected.  Many business loans are dependent on personal credit scores, which a bad loan from a predatory lender can devastate.  This is one reason building business credit is so important.

The fact is, however, a bad loan is like a predatory parasite. It seeks out the weak, and once it attacks, it attaches itself to your finances and plagues every aspect of them, even slipping to the business realm if left unattended.  It can cause devastation that could last for years. Don’t let it happen to you.  Learn the signs, and make sure you can tell the difference between creditors and predators.

 

 

 

 

The post Creditors and Predators: 10 Ways to Avoid Falling Prey to Predatory Lenders, and 6 Questions to Ask Before You Jump In appeared first on Credit Suite.