Wednesday, June 30, 2010

Is Bad Credit Financing Possible?

Bad credit financing could be easy these days, especially because of the emergence of numerous poor credit loan providers around. However, the products available and the loan processing methods and requirements could be quite different compared to regular loans processing.
Financing For Poor Credit Is Possible These Days
Is it possible to secure any financing scheme from lenders if you have a poor credit record? While in the past, having a poor credit score is an instant ground for not being able to get any form of significant loan, these days, it is different. That is because many lenders now specialize in offering and providing bad credit financing options to consumers. Through the years, this segment of the banking and lending segment has been proven to be really lucrative and active.
How To Go About Getting Such Loan Product
How could you avail of any bad credit financing products? The first thing you should do is to check out newspaper and Internet advertisements to find specialized lenders that cater specifically to poor credit borrowers. You would surely be surprised at how numerous those lending businesses could be. The next task is quite logical: choose the best among those. You should evaluate available lenders very well so you could make sure you would get a good product with ideal rates and terms.
Any Disadvantage In Acquiring The Loan?
The top disadvantage of having a bad credit score is that the interest rates imposed to you by any lending company could be higher. Take note that such lenders are just cautious about the risks of agreeing to provide you bad credit financing. Thus, you should understand that bad credit loans usually command higher interest rates than regular loan products intended for borrowers with good credit status.
Prepare All The Required Documentations
If you really are in dire need for urgent cash, you should make sure you are well prepared long before you get into the loan processing proper. You have to show the lender that you could be diligent at least in this aspect for now. One good thing about bad credit personal loans is that most of them are low-documentation, meaning, they do not require much documents aside from the basic.
Do Not Apply For A Very Significant Amount Of Loan
Bad credit loans that are provided to borrowers are usually smaller amounts compared to those provided through regular, good-credit loans. Again, you should understand that the specialized lenders are still implementing several risk management provisions and providing minimal amounts of loans could be part of their strategies.
Check The Terms Of The Loans
If you are getting a small amount, it is advisable to shorten the loan term or maturity as much as you could. A month to three months could be ideal so you could make sure you would not incur greater interest costs. However, be sure you could shoulder your monthly payment schemes so you would not fall into further defaults. If you are able to repay the loan amount on time, you would surely have a good chance to improve your credit score.

Where Credit Scores Come From

Credit scores are extremely important to your financial well-being, but many people do not understand how they work and how to improve them. In short, your credit score is a number between 300 and 850 that is supposed to represent your creditworthiness. It's a simple and efficient way for banks, lenders, and so forth to determine whether or not they should offer you a loan. By following a few simple rules, you can improve your credit.
Your credit score can have a huge impact on the interest rates of your loans and credit cards, but most people do not know where it comes from or how to improve it. It is generated using a complex mathematical formula that calculates a number to represent your financial history. Banks and lenders actually report information about your financial habits to the companies that calculate credit scores to ensure it is accurate.
Despite the complexity of the formulas they use, the basics of your credit score are actually quite simple. In essence, the two most important factors are your ability to pay bills on time and your ability to use credit wisely. In other words, paying your bills on time boosts your score by demonstrating to lenders that you are reliable. Using credit wisely means keeping your balance as low as possible and making regular payments.
Bearing in mind that banks and lenders are businesses, it is easy to see why they are motivated to report information on your habits. When people do not pay their bills on time, lenders lose money. People who keep a high balance on their credit cards are at greater risk for not paying their credit card debt, meaning even greater losses for the company.
Keeping your credit card balance low and making regular payments are much easier when you have little debt and the financial means to pay them off. If your debt far exceeds what you can handle, filing for bankruptcy protection might be the most efficient way to restore your financial well-being and start fresh.

Saturday, June 19, 2010

Financial Adviser's Services

If you are a financial adviser, you will know that the best way for you to be spending your time is on client work that will earn you an income in a way that adds benefit to your clients. This benefits the client in that they build a trusting relationship with you and you are maximising your time by spending it on fee earning (or commission earning) work.

How much of your day do you actually get to spend, or in some cases do you use to spend on these tasks? In reality I find that financial advisers are distracted by other work which may be necessary to do but may not be necessary for them to do. This work could be done by paraplanners as it is mainly either pre-advice work that falls under the remit of a paraplanner, or administration which could be done by somebody else. The question then comes out from a commercial aspect, are you busy enough to justify paying somebody else to do the work. While the answer to that question really boils down to how much time you want to spend building your future income streams and, for some it may also be a lifestyle choice where people simply do not wish to work all the time.

The costs of employing people these days are high, along with the employment requirements that go along with it. There are alternatives though hiring people on fulltime contracts and an increasing marketplace is to outsource work from your firm to other professional independent firms that will manager the administration and paraplanning fully. There are several of these emerging and one is called paraplanning outsourcing sector and the benefit of this are that you can pay for work when you want to and not have fixed cost coming out of your business which financially may not be sustainable in the long-term. If you would like assistance with managing paraplanning or advice paraplanners then please contact as at Noble McCall and we will be happy to assist you.

Financial Advice: What is a fair fee?

The RDR has been very specific in this requirement for you to justify your fees as a financial advisor to your clients. So what is a fair fee? The FSA cannot tell you what a fair fee is that you should be charging your client as this is not in their remit but they can ask you to justify fees that you are charging. Obviously this then brings it in a way under the jurisdiction of treating your customers fairly.

Pricing is a sensitive subject. Historically there have been two pricing models which have generally been dictated by the insurance companies, this will not be the case in the future and it move down to you to decide on your pricing scales. I would suggest a fair fee should comprise the following main components:

• It should be justifiable when scrutinised
• It should be flexible if required
• It should cover all of your costs and have a profit margin added to the fee
• It should recognize the quality of work and level of advice that has been provided.

All of these things sound obvious and you might take them for granted but in truth in the past perhaps it had simply been dictated by the fact that if recommending a particular product, the income would be dictated by the commission offered but not necessarily take into account any of your own and your firms costs directly, it was a simply a case of take it or leave it.

How will your customers pay for your advice?

Customers will buy based on a number of factors:

• Their need for what you are recommending
• Their judgment of your ability to deliver what you are proposing, both now and in the future
• Their past experiences
• The quality of your explanation of the service that you are providing.

Most clients do not understand at the time of purchase, because they do not have time to think about it, they paying for your knowledge and experience. We are moving to a world where many products are similar and distinguishing features are few and so they are buying you. This means they are buying you and your history which means that you need to explain properly about yourself in a way that helps the client understand the quality of the work that you are offering and builds trust.

Clients who have paid low fees in the past will expect to pay low fees in the future. Clients who have paid high fees in the past would be happier with high fees in the future. The difficulty comes when you try to move a client from a low fee paying environment into a higher fee paying environment. This will be hardest task for financial adviser, you therefore need to have the background of quality of workmanship and the genuine belief in what you are delivering to prove that the client is justified in paying the fee that you are proposing. This may include ensuring that you have sufficient administration, paraplanning tools, paraplanners and research tools available to your firm to enable you to do this.

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