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Archive for June, 2010

Could An Individual Voluntary Agreement Be The Answer To A Serious Debt Situation?

Friday, June 25th, 2010

Debt is a huge problem all over the world, since the credit crunch the situation has spiralled out of control leaving many people in financial difficulty even close to bankruptcy. If bankruptcy feels like the only way out, there is another option available and that is with an individual voluntary agreement otherwise known as an IVA.

So what is an individual voluntary agreement?  This is when a licensed insolvency practitioner supervises a legally binding agreement between the creditor and the borrower.  It is the job of the insolvency practitioner to look at the debtors standing situation for instance his monthly earnings and outgoings this way he or she can work out how much the borrower can realistically afford to pay the creditor back.

An IVA can help the debtor solve his or her financial problems by reducing the total amount that is owed, however the creditor normally has to make a sacrifice on the total amount that is owed to them. It is not an ideal option for the creditor but at least the company will be getting some of the money back that is owed to them. An IVA is a better alternative then bankruptcy and can take a lot of pressure off the debtor.

The borrower and the creditor will be talked through the agreement and once both parties have agreed the amount to be paid back, a contract will be put together for both of them to sign. When the contract is signed, it cannot be altered and the creditor is no longer able to pester the debtor for money. When the debt has been paid back in full, the borrower can find that up to 70% of their debt has been removed.

An Individual voluntary agreement does come with its restrictions, so they are not a viable solution for everybody. To qualify for an IVA you would need to have an unsecured debt of £15,000 minimum and proof that you are not able to pay this debt would be compulsory. The term of an IVA depends on the individual, but they are normally paid back within a period of 3 – 5 years. The individual will also need to prove that they are in long term employment and that they are able to afford to live on the money they are earning.

Final Thoughts

IVA’s are great for individuals that are on the brink of bankruptcy, however IVA’s should be looked into with caution, as it can still have a long term adverse effect on future finances not to mention the credit rating.

Posted in UK Finance | No Comments »

Simple Advice On How Bad Credit Loans Work

Tuesday, June 15th, 2010

Obtaining a bad credit loan isn’t as difficult as some people may think. It is common for people to have an adverse credit history, because of this it may take some time searching for a lending institution that is willing to help, there are solutions available for people who have found themselves in this financial situation.

When applying for a loan, the lender will take a look at the borrower’s credit history and rating, they will look at the risk involved and how probable it would be to get their investment back. The creditor will determine the interest rate on the applicant’s credit rating. If the applicant has a bad credit score then the rate will understandably be higher than someone with a good credit rating.

When looking to obtain a loan, look into everything, knowing what you are taking on and making sure that the loan can be afforded, this way it can help to stop you from being left in more debt than before taking out the loan. Getting a loan should only be used to take pressure off existing loans not to add to the debt.

It is essential to keep an eye out for predatory lenders, they prey on people that are in need of a loan because they have bad credit, their desperation can force them to agree to sign unacceptable terms. Anybody looking to get a loan should make sure that they thoroughly read through the agreement, especially the small print and make sure that everything has been completely understood before signing the contract.

When looking to obtain a loan it would be wise to ask yourself why you need this loan. If a loan is needed for personal enjoyment then maybe it would be wise to re think your motives, for example, if you are looking to get a loan to buy a brand new car, an alternative could be to use your savings to buy a used car.  If an individual is unable to repay their loan then it could ruin his or her credit score for a number of years.

To benefit from the world of loans when looking to obtain one with bad credit, would be to try and restore one’s credit beforehand.

Closing Comments

Obtaining a loan of any type should be thought about seriously.  For people with bad credit it could make matters worse if it is not seriously thought about. Researching loans online can be time consuming, however gaining some background knowledge on the world of loans can help you to find the best deals and negotiate rates with your creditors.

Posted in UK Finance | No Comments »

Online Personal Loans for Bad Credit Consolidation

Thursday, June 10th, 2010

It has become so much easier to find relief for bad credit these days as anyone can simply search on the internet for online personal loans which they can avail of. As the economy struggles to improve on a global scale, more and more people are finding themselves in dire need of financial help. Payments for a mortgage, credit card bill, and other loans are taking a back seat in monthly disbursements as various businesses are resorting to scaling down employee numbers or decreasing the number of hours that each worker is allowed to render. As though things are not worse enough, a lot of people presently suffer from having huge amounts of bad credit, tarnishing their credit history and resulting to a low credit score.

Once a borrower begins accumulating instances of missed payment deadlines or has stopped payment for a loan or credit card account altogether, a situation of bad credit ensues. Bad credit immediately affects a person's credibility as a borrower, often rendering him or her ineligible to seek further assistance from banks or credit card companies. This then leads people with bad credit to assume that there is no way out of being buried in debt except to file for bankruptcy and concede all their possessions.

Consumers need to be told about how bad credit should not be viewed as an unsolvable situation. Procedures such as debt consolidation can be exceedingly useful in rescuing bad credit and restoring a borrower's worth to banks and other financial institutions. With the help of bad credit personal loans, borrowers can opt for combining all outstanding monetary obligations down to only one account that allows for smaller, fixed monthly repayments throughout several years if so required. Homeowners are more than likely to be approved for secured personal loans and with better terms too, in line with how much their property is worth. There are also unsecured personal loans for individuals with no collateral to offer although, higher interest rates are to be expected as well as limitations on how much money can be borrowed and the length of time to be accorded for repayment.

Finding the best bad credit personal loan there is can be made simpler by getting help from an online lender or loan broker. Selecting an online debt consolidation company to work with, on the other hand, must be done cautiously so as to avoid unreliable advice. With the courage to ask for help, anyone can look forward to resolving bad credit in no time.

Posted in Bad Credit, Debt Consolidation, Personal loans, UK Finance | No Comments »