Business Finance Articles

Your First Financial Choice....

Denis Woods

Interest Rates for Hard Money Loans

Last Updated:

A real estate investor’s best friend is hard money loans. As trite as it may sound, the statement holds true. For real estate investors wishing to complement their investment deals, these loans provide a steady supply of income.

Whether an investor needs to rapidly close on an undervalued property or fix it up for a potential buyer, a hard money loan is a crucial tool to have in one’s toolbox. Hard money loans, like any other type of loan, come with fees. Understanding them is crucial to maximizing a real estate investor’s most valuable capital stream. This article will break down hard money loans and their potential interest rates. 

What are Hard Money Loans?

A hard money loan is a secured loan backed by real estate. Hard money loans are often known as “loans of last resort” or “bridge loans.” These loans are typically employed in real estate transactions, and the lenders are usually individuals or businesses rather than banks. Overall, a hard money loan is a short-term loan that allows you to raise money rapidly at a greater cost and with a lower LTV ratio. The funding time frame for hard money loans is shorter because they rely on collateral rather than the applicant’s financial situation. Hard money loan terms are frequently negotiable between the lender and the borrower. The most common kind of collateral for these loans is real estate.

The terms of hard money loans are primarily determined by the value of the property used as collateral, rather than the borrower’s creditworthiness. Hard money lenders are frequently private individuals or companies who find value in this type of potentially dangerous undertaking since regular lenders, such as banks, do not issue hard money loans. Property flippers may seek hard money loans if they intend to refurbish and resell the real estate used as security for the loan within a year, if not sooner. The increased cost of a hard money loan is countered by the borrower’s intention to pay it off quickly—most hard money loans are for one to three years—and some of the additional benefits they provide.

Requirements for Hard Money Loans 

  1. Borrower qualification 

While some lenders are asset-based, the majority of them are also concerned with how the borrower appears on paper. The borrower’s liquid reserves and creditworthiness are two key markers of how likely they are to repay the loan on time. Now, the particular factors used by lenders to determine the amount of money required in the bank or a specific credit score vary per lender, so it’s critical to be aware of this early on in the process.

  1. A worthwhile deal

Lenders in this group are business people that want to make the most money possible with each loan they make. The lender and the borrower are on the same page because the lender wants the borrower to succeed so that they can make money and repay the loan on time. The lender will initially check to see if the borrower meets the conditions they’ve set. After they will evaluate the contract to see if it’s feasible before approving the loan request. In other words, once the lender is convinced that the property and agreement make sense, the odds of getting authorized increase.

If you’re thinking about taking out a hard money loan, make sure to calculate the profit margin by comparing the property’s worth to the repair expenditures. Be sure the profit margin is big enough to not only pay off the loan but also make a profit, whether from pure profit from selling to an end buyer or cash flow from renting.

  1. Down payments 

Although not all lenders demand a down payment, many do. Yes, the loan will cover the majority of the buying price but the down payment demonstrates your dedication to the project. It also aids the lender in risk mitigation. After all, they are putting a lot of money into the project, so it’s only right that the investor shares in the risk by putting some of their own money into it as well. Oftentimes the lender will require some type of collateral, such as origination points, admin fees, doc fees, and other such conditions.

Hard Money Loan Rates 

The procedures and paperwork of hard money loans are frequently less severe than those of a traditional loan. Hard money loan rates are clear within days rather than weeks, and they can infuse more money into a transaction, requiring the borrower to put less money down. While this is one of the most appealing features of hard money loans, it is also one of their disadvantages. Granting loans with fewer underwriting standards and investing more money on a deal exposes the lender to greater risk.

As a result, in order to offset the risks, higher interest rates are imposed. Although these rates fluctuate, the average hard money loan interest rate according to Bankrate is 11-13%. These interest rates do vary, depending on the lender it may be anywhere between 6% to 15% annually.

The interest rates on hard money loans can be decreased by:

  • Improve Your Personal Credit: Financial literacy is measured by a good credit score. Improve your credit score months before you apply so the lender may be confident there will be no defaults.
  • With a hard money lender, complete and pay off various loans: To aim for less risk, the better track record one has with the lender, the more open-minded they will be to reducing the interest rate or original fee.
  • Increase Your Down Payment: When a lender supports a transaction at a lower Loan to Value Ratio, a down payment helps the lender lessen the risks involved with giving out loans to individuals (LTV). Increasing the down payment shows that the borrower is serious about the project and will be less likely to default.

Pros and Cons of Hard Money Loans

Pros: When compared to applying for a mortgage or other traditional loan through a bank, the approval procedure is typically a lot faster. Since the lender is focused on collateral rather than an applicant’s financial situation, the private investors who fund the hard money loan can make decisions faster. For example, lenders will spend less time looking at a loan application to verify income and review financial documents. The process will be significantly easier if the borrower already has a relationship with the lender.

If the borrower defaults, hard loan investors may have a better value and opportunity to resell the property themselves, thus they are also less concerned about receiving payment.

Cons: Hard money loans often have lower LTV ratios than standard loans, ranging from 50 to 70 percent (vs. 80 percent for regular mortgages), because the property itself serves as the only guarantee against default. Keep in mind it can go higher if the borrower is an experienced flipper.

In addition, interest rates are typically high. The interest rates for hard money loans can be considerably higher than those on subprime loans. The average interest rate for a hard money loan in the United States is 11.25 percent, with prices ranging from 7.5 percent to 15 percent.

The last disadvantage is that, due to regulatory scrutiny and compliance restrictions, hard loan lenders may refuse to offer finance for an owner-occupied property.

How to Improve Your Chances of Being Approved a Cash Advance

Last Updated:

When you need to borrow money in an emergency, you want to see that you’re approved as soon as possible. Anything that delays your approval—or rejects it outright—can throw your finances in a tailspin.

So, what can you do to boost your chances of getting approved for a cash advance, installment loan, or line of credit? While you can never absolutely guarantee approval, these three things can put the odds in your favor.

Understand How Your Credit Score Factors into Eligibility

Your credit score is a significant factor in borrowing money. Generally speaking, a high credit score is favorable for your approval—most financial institutions are willing to grant you funds when you can show off a high score.

Despite the pandemic, Experian, one of the major credit reporting agencies, reports the average US credit score increased in 2020. Every state saw a boost in their averages, but these increases weren’t equal.

Washington, DC experienced the biggest spike of 10 points, while Texas was middle of the road with 8 points. North Dakota, meanwhile, reported the smallest change of 3 points.

Not everyone has good credit, however. Can you still borrow when your score is below average? Yes, some financial institutions are willing to work with people with bad credit, although you may have to pay high rates and fees.

Consider Location — Even When Borrowing Online

Most personal loans originate online, so there’s a good chance you’ll be opening your laptop or mobile phone to borrow money. When you do, look at where your money is coming from. Your lender has to be accredited to lend money in your state before they can legally offer cash advances.

This may not always be apparent. The Internet makes it possible to access websites from all around the world, so you could feasibly get pretty far into the research stage of a lender only to realize they service the UK.

If you live in Texas, this is a frustrating problem. You’ll have to scrap your research and refocus on installment loans or lines of credit from a financial institution accredited in Texas. Simply making this switch will improve your chances. After all, you can at least apply to get an installment loan online in Texas, but you probably won’t get very far into your application with that lender from the UK.

Clean Up Your Finances

This final yet integral step is most helpful if you’re sporting a less-than-stellar credit score—although it may be hard to achieve if you need to borrow money urgently. Building credit history takes time.

But just because you can’t see results today doesn’t mean you shouldn’t act on it now. Figure out how you can pay bills on time and keep your credit card usage low. These are two of the biggest factors influencing your score.

Paying down other debt is another step in the right direction. While your debt load may not factor into your credit history, it may influence a lender’s decision if you have deep debt that surpasses your income.

Bottom Line

Approval is never a guarantee, but you can improve your chances by following this advice. These tips will help you figure out whether you fit a financial institution’s eligibility requirements.

Bad Credit History? Improve yours to secure car finance

Last Updated:

Your credit history will affect every aspect of your financial future. However, keeping your credit in good standing can be difficult from time to time.

No matter the reasons for your bad credit history, there are ways to improve it to secure the finance you need when getting a new car.

Finding finance with a bad credit history

If you have a bad credit history, you might be concerned about how to get car finance. Once you have assessed your financial situation, you might be able to access bad credit car finance.

There are things you can do to improve your chances of receiving the finance you need. We take a look at the top tips to improve your credit history below.

Tips to improve your credit history

Check your credit score and report

First, you need to understand your credit history. Obtain your credit report and score, as it will help you assess your credit history and where to make improvements.

Pay your bills on time

Consistently paying all your debts on time will help you improve your credit history and get car finance. Lenders will want to see that you are reliable in making repayments.

Pay off credit card debt

The more credit card debt you pay off, the better your credit history will be. Ideally, try to pay off above the minimum every month to clear your debt quickly.

Avoid applying for new credit

It can be tempting to apply for new credit to pay for old credit. Avoid doing this as it will continue to harm your credit history. Especially if you get rejected for multiple lines of credit.

Dispute inaccuracies on your report

Once you have assessed your credit report, make sure you report any inaccuracies with the credit score provider. You can then work to get false credit information removed from your report.

Stick to a savings plan

When applying for finance, a larger down payment can improve your chances of being approved. Make a savings plan and stick to it. You can then use your savings as a deposit or to pay off bad debt.

Get on the electoral register

Joining and staying on the electoral register can improve your credit score significantly. This is an easy step to take as it doesn’t take long to register on your local electoral roll.

PPP Data Reveals What Businesses Needed Funds For

Last Updated:

When the pandemic first hit in 2020, small businesses were inconvenienced. Small businesses started letting go of their employees, struggling to keep their doors open and keeping their lights on. The small business administration sought a way out.

They partnered with the US Treasury Department and launched the Paycheck Protection Program in April 2020. The program loans were offered to approved businesses through lenders to give small incentives to keep their employees throughout the pandemic.

According to Lantern by SoFi, “PPP loans may be forgivable if they meet certain qualifications pertaining to how funds are used.” The terms were that the loan was spent to pay the employees and keep the workforce. In the first round of the program, about 85% of the qualified recipients received $150,000 or less.

After the program was closed in august 2020, many businesses continued to struggle. Fortunately, Congress passed the 2021 Coronavirus Response and Relief Supplemental Appropriations Act, which saw a massive $659 billion set aside to help small businesses maintain their workforce.

Who Can Get the PPP Loan?

Since Congress approved a new round of funding, many people are asking who can qualify to get a PPP loan. According to PPP loan data, real estate and construction businesses made up the largest percentage of PPP applicants. If your business did not receive the first round of funding and it needs it, the government is encouraging you to apply for the loan if you are not enrolled.

If your business received a loan in the first round, you can also apply for a new loan if your business is not out of the woods yet. Seasonal businesses like hotels and restaurants can receive additional benefits. In the second round, the businesses can receive a PPP loan 3.5 times more than that in the first round of PPP loans. The multiplier in the first round of loans was 2.5.

PPP loans are meant for only small businesses and not any publicly traded businesses. The SBA has defined these small businesses as the ones that have not more than 500 employees or companies with 300 employees or less looking for a second round of funding.

Congress has defined the small businesses that qualify for PPP loans at this round of the program. In the first round, there were many questions about the businesses that qualify. The businesses that qualify with their structures include:

  • S-corps
  • C-corps
  • LLCs
  • Private nonprofit businesses
  • Faith-based organizations
  • Tribal groups
  • Veteran groups
  • 501(c)(3) nonprofits
  • 501(c)(6) organizations
  • Independent contractors

What Your Small Business Needs to Qualify

Beyond your business structure, a few key details will be asked for qualifying for the loan.

  • How much you incur in payroll and proof. (IRS form 941)
  • Basic business information like name tax ID number, and address
  • Some background information about your business including the business owner, any existing loans, and citizenship information.
  • Business Bank statements
  • Your driver’s license
  • A nullified business check for your account information.

If you are applying for the second round of funding, your business must not have more than 300 employees. You should have also used up all the money you received in the first loan. You must also prove that your business has suffered a 25% revenue loss in any quarter of 2020 if compared to the same quarter in 2019

A Quick Guide to 401(K) Rollovers

Last Updated:

A 401(K) rollover is transferring funds from one retirement plan to another. If you receive a distribution from your retirement plan, you are given a 60-day time limit to roll it over to an IRA or to a new plan, from the day the distribution is given to you.

This quick guide will tell you everything you need to know about rolling over your 401k plan including how it works, when to do it, and the advantages of rolling it over.

How Does a 401k Rollover Work?

If you choose to roll over your 401(K) plan, you have 4 options to choose from. Your plan administrator can help you decide which option is right for you. The four options that you have are:

  1. Leaving it the way it is
  2. Cashing the plan out
  3. Rolling it over in an IRA traditional and/or Roth IRA
  4. Transferring it to a new plan(if applicable)

The way the 401(K) rollover process works is by first deciding the type of account that you want. You have the option of transferring to your new employer’s retirement plan or moving your funds into an IRA. If you decide to create an IRA, you need to either open an IRA at a bank or through a brokerage firm. If you choose to roll your money over into a Roth IRA, you will need to roll it over to an IRA first and then you can transfer that to a Roth IRA.

After opening your account you will need to begin the rollover process by completing the necessary paperwork and funding your new account. You will need to get with your new plan administrator, bank, or brokerage firm to find out what is needed to complete the rollover process.

Before beginning the Rollover Gold IRA process, you can elect to have a direct rollover from your old account to your new account. This means that the funds will not touch your hands like they would in an indirect rollover and you will avoid a possible early distribution penalty and 20% tax withholding.

When is 401(K) Rollovers Necessary?

There are several reasons why an individual may elect to roll over their 401(K) plan. The most common reason is the termination of employment(voluntary or involuntary). However, some people will roll over their 401(K) plan when they are about to retire or when they want to consolidate their retirement plans instead of having multiple 401(K) accounts.

There are some people that will roll over their 401(K) into an IRA to take advantage of more investment options. IRAs do not have limitations on moving investments around and they are known to have lower fees.

Benefits of Rollovers

If you cash out your 401(K) you face taxes and penalties that can be avoided by rolling over your distribution. There are other benefits with 401(K) rollovers depending on the rollover option you select.

According to the IRS, distributions are taxable and subject to a mandatory 20% withholding if they are not rolled over into a new qualifying plan within 60 days from the date of distribution. In addition to this, if you are under the age of 59; you will be taxed an extra 10% for early distributions.

If you keep your retirement assets in a plan with a former employer, you don’t have to do anything and you do not have to pay taxes until you withdraw the funds. If you transfer distributions into a new 401(K), you not only avoid tax penalties, your 401(K) contributions and assets are protected against creditors and you can borrow against your assets if you are ever in a financial bind. 401(K) rollovers to an IRA opens the door to a wider selection of investment options versus a 401(K) plan.

Bottom Line

After reading this guide, you should have a better understanding of how 401(K) rollovers work. The main thing to remember is that you have a 60-day window to decide on how you want to handle your distribution before it becomes taxable. If you are undecided on the rollover option that you want, you can always leave some of the funds in your previous account and transfer the remaining funds in a new 401(K) or IRA.

4 Financing Options For Your Commercial HVAC System

Last Updated:

HVAC is an acronym for heating, ventilation, and air conditioning technology. As its name suggests, an HVAC system heats and cools enclosed spaces. In commercial establishments, HVAC systems contribute to the comfort of workers and clients alike in larger rooms such as restaurants and large businesses. In this case, the equipment is usually more powerful and involves several parts to operate efficiently. 

Major Parts of The Commercial HVAC System

The main parts of the industrial HVAC system include the following:

Purchasing a commercial HVAC system is costly, and the process of acquiring one can be overwhelming, especially if you don’t have too much money to spare. Though that may be the case, some enterprises can’t efficiently operate without this heating and cooling system. So, if you don’t have enough money to purchase one, you need to weigh other financing options.

This informative article provides detailed financial options to help you pay for HVAC systems. Your primary options include the following:

Personal Loans

This is usually the fastest and most affordable way to fund your commercial HVAC system. Before applying for a personal loan, familiarize yourself with these factors:

The application procedure of these loans involves an evaluation of one’s income, employment type, and credit. Many personal loans are usually unsecured, and every lender has their regulations. As a result, it’s a noble idea to visit several lenders. This allows one to weigh various policies and secure the most convenient financial offer.

Credit Card Financing

This is another funding option for your commercial HVAC system. However, your credit limit needs to be high enough. If you want to offset your balance quickly, get miles and cashback, evade interest charges, or even receive reward points, credit card financing is the ideal plan for you. 

On the contrary, if you’re unsure about your ability to clear the balance promptly, you’re better off with another financial option. This is because you’ll have to deal with high interest rates. At the end of the payment, you’ll have to shell out a considerable amount of money.

Credit cards are fairly easy to obtain. They’re considered more flexible compared to loans since they don’t have fixed repayment schedules.  An outstanding way to benefit from a credit card is to obtain a new one, offering a 0% interest rate in the introductory period. The longer the promotional time, the better. This will help you evade interest rates as long as you’ll pay for the industrial HVAC system before the end of the promotional period. 

Manufacturer’s HVAC Financing Option

There are HVAC appliance manufacturers, retailers, and dealers who give in-house funding for their goods on-site. The programs usually involve credit cards or personal loans given via the retailer or manufacturer.

Credit cards will involve in-person discussions at the bank. This is usually time-consuming, though, as the money isn’t processed immediately. At times, you’ll have to wait longer than you anticipated.

Personal lenders in this category are usually quick and require minimum requirements. The loan may be approved on the same day of application. After a few days, you can already access your money.

Home Equity Financing

When the existing demand value on your house outperforms the balance of your mortgage, then you might qualify for equity financing. This is a very convenient method for paying for your commercial HVAC system.

The home equity funding option offers low-interest charges compared to personal loans and credit cards. This is because the loan is secured by one’s home. Nevertheless, should you fail to make monthly payments as expected, your house risks foreclosure. Borrowing money against one’s home equity can be done in the following ways: 

Home Equity Loan

When one’s house is worth more than what they owe it for, they can apply for a home equity loan. It’s a loan secured by one’s home equity. This loan is also referred to as a second mortgage.

You’ll receive a lump sum amount and pay interest on the total loan at the beginning. Charges on this loan are usually lower compared to unsecured loans, as your home is utilized as collateral. In addition, the interest you pay may be taxed. This is applicable when you use the loan to improve, build, or buy your home. When the loan is used for personal expenses, it isn’t taxed. 

Home Equity Line of Credit

This is identical to using a credit card because you’ll be given a credit line, which means that you borrow according to the limit set. The credit line is usually determined by the following:

The interest charges are usually low for this option compared to unsecured loans. This is because your home is used as security. This is beneficial as it helps you finance your commercial HVAC systems. However, when you’re unable to make timely payments, you may end up losing your home.

Cash-out Refinance

Instead of paying for a second mortgage to finance your commercial system, the current mortgage is usually refinanced. This gives you an opportunity to get an additional loan, but for a higher amount. The bad news is that there are hidden fees and costs for a new mortgage. As a result, it’s usually costly in comparison to a home equity loan.

Takeaway

To sum up, though an HVAC system is vital for your enterprise, it’s costly. There are maintenance, installation, and repair charges to consider. These systems call for customization so that they can suit your office demands. For these reasons, you should weigh the financial options discussed above to choose one that will pay for your industrial HVAC system.

What are the Best Ways to Invest in Gold and Silver?

Last Updated:

Gold and silver have been kept as luxury items for centuries. These precious metals have been kept by civilizations since the beginning of time. Although, some people claim the value of metal instruments has lost its intrinsic value as compared to the past. But, however, the value of gold and silver has survived the political crisis and turmoil. Investment in gold and silver are still strong and seem to flourish as we move to the future. 

Why Invest In Gold

Gold-Tiles

People tend to keep precious metals as an item for security, especially in the case of any chaos or political unrest. Even in times of crisis; when real estates, bonds, and stock markets go down, people flock to precious metals for financial sustainability.  

Strictly speaking about gold, it holds a high value of liquidity, with minimal liability, and risks. To add more, it is very scarce and holds high life. On the other hand, silver founds immense applications in industrial uses, which highly affects its price and outlook. Comparatively, silver can be traded more easily as compared to gold, making it more volatile and liquid.  

Benefits of Gold and Silver Investment

silver investment

Investments in gold can help prevent inflation. Powerful countries often use 10-15% of investments in gold at any time. Although investments in gold and silver have fallen since last years, the future of investments can never go down.

It is also important to know that gold has been considered as a tool for financial standardization. Many forms of financial representations are compared with gold to determine their actual value. The paper currency, digital currency and even some stock currencies are also compared with gold. 

Inspite, crypto and other digital formats, investments in gold and silver can be made on the following basis: 

  • Jewelry 48.5%
  • Investment 29.19%
  • Central Banks: 14.84%
  • Technology: 7.48%

US Dollar vs Gold

Gold has been considered as a barrier against inflation. This is mainly because gold is priced in US Dollars. When the prices of the US dollar go down, people tend to buy more gold as an opportunity for reliable gold investment. This creates a sharp increase in the price of gold demand, which can strengthen its price. Moreover, people tend to buy this commodity as a luxury item as well. This always keeps the value of gold in high as it can be easily sold and bought.

Gold Investment Forms

Investment in gold can be carried out in physical and non-physical formats.

Physical Formats: Investments in gold or silver can be done in various physical formats. This includes jewelry, bars, and coins made from gold. These precious metals can be found in jewelry stores and as well as from online markets. Normally, these investments are for long-term use and can be used for personal use and as well as getting bank loans. 

Jewelry: About 49% of gold produced in the world is used to manufacture jewelry. Therefore, investment in jewelry is an important element of the gold business. This serves dual benefits of both aesthetic and investment purposes.  

Gold Coins: These coins are issued by governments or private dealers not more than 1% to 5% of their underlying value. But a rapid increase in their value hiked the demand to 10% in 2020.

Bullcoin: Bullcoin can be considered as an investment of gold in a non-gold form. Coins made from Bullcoin can be used to represent an equivalent amount of gold status. Often, these coins are very difficult to liquidate in the short term, it can be used as cumbersome to store, transport, the numismatic value of the equivalent amount of gold.

Non Physical Formats: Investment in gold for nonphysical formats include various platforms. They are used as tool for investment by big investors. Major nonphysical formats of investments include the following.

Mutual Funds: This investment mode includes mutual funds that can be used to buy the ownership of these metals virtually. These investments are particularly ideal for those that want to buy precious metals without knowing the raw material and technicalities of the game. Mutual funds thus allow the customer to mutually invest in buying digital forms of gold and silver. 

Certificates: Gold certificates are an excellent way of investing gold. People can get certificates for an equivalent amount of gold value. However, this form of investment is not normally used for gold or silver investments. It depends upon users buying preferences. 

Mining Stocks: People often buy holding stocks in the mining company, as an indirect mode of investing in gold and silver. When the price of these precious metals goes high, the stock of these companies rises. The investment in these companies should be based on market fluctuations and predictive analysis. 

Exchange-Traded Funds (ETFs): These funds allow investment in gold and silver in the same way as on equities on the stock exchange. The only difference is that ETFs only deal to trade in either gold or silver. This allows users to have a Demat account and a trading account. These investments help to invest in these metals   with 99.9% purity.

Sovereign Gold Bonds (SGBs): Sovereign gold bonds enable the conversion of equivalent amount of gold into bond approximates. This enables help to develop a platform that can help them to bring the gold and silver share to the masses. 

Future Speculations: People can also invest heavily in precious metals based on future speculations that provides them the opportunity to invest in platinum, gold, or silver. This sets a basis of contracts that enables the people to invest at low rates in present, and get high rates of return for future. These contracts are known as ‘Over the Counter’ trading, and particularly great interest for big investors.

Gold Derivatives: Gold derivatives help to develop a system that is available on Multi Commodity Exchange (MCX). These can be contracts based on gold derivatives that use the value of gold as an underlying effect. 

Good Opportunity for the Feature

Investments in precious metals will never stop, regardless of any situation. Great returns of investment are available for precious metals that range from 25% to 80%, backed with solid financial and protection schemes.  

5 Tips If You Can’t Pay Back The Secured Loan

Last Updated:

When you’re taking a loan, your intention is to pay it back as per the offer. However, the unexpected happens and you’re not able to meet your part of the obligation.

Secured loans are attached to your home as security. If you’re unable to pay, the lender can apply to the courts, sell your home and recover their money. 

With secured loans, the risk is low, and therefore, the loans are offered at a lower interest rate. You can also borrow more than you would qualify for through a personal loan. 

What’s a Secured Loan?

This is a loan attached to your property or home. If you cannot pay the debt, the lender has the right to repossess your property. 

As mentioned above, it’s easy for lenders to give you a higher amount with a secured loan than you would ordinarily qualify for. 

That often turns out to be a challenge if you fail to pay your debt. 

If you cannot pay your secured loan, you must talk to your lender the soonest time possible. That way, you can put an affordable arrangement in place and reduce the risk of losing the property your loan is secured against. 

These five tips will help you pay back a secured loan you’re struggling with and avoid stress.

Talking To Your Lender

Talking to your lender is the foremost thing you need to do when you have a problem repaying your loan. It may be embarrassing talking about your money woes with strangers, but the lender can come to your rescue when in financial difficulty. 

If you feel you’re going to miss a payment for one reason or another, then it’s prudent you contact the lender in advance. That will help you avoid any dire consequences. Explain your predicament to the lender and let them advise you on what to do. They may agree on a reduced repayment, a freeze on interest and charges until you’re in a stable financial position. 

Tighten your Financial Belt

When things are not working out financially, you’ve to engage another gear, and the first thing you do is review your spending.

 Find below ways you can trim your budget with little effort;

Cut down the Cost of Energy: Turn those lights off, shorten your showers; do more during the non-peak hours. 

Pause on Groceries:  Check your last month’s bank statement; what is it you paid for without thinking? Is it Amazon Prime, Netflix, and others that add up so fast? Remember you’re cutting them to reduce your expenses for the time being, and then you can pick them up later once you get financially stable. You may even find out that you didn’t need them in the first place, and they were the reason for your current situation.

Though your lender may even lessen things for you, so your problem is solved, kindly consider adjusting to your new budget. It’s an opportunity for you to save and work out on an emergency fund. Thus, in case a financial storm hits another round, you’ll be ready to take it head-on.

Consolidate Your Debt

You are suffering financial downtime because of the many loans you have with the same or different lenders. You may therefore need to do debt consolidation. That would mean you get a new loan facility and clear off the smaller debts. Managing a single debt is relatively easy- and you suffer only a single interest, unlike when you’re several debts. 

When you merge your loan balances, you may opt for a personal loan instead. With unsecured loans, your properties are not tied to the debt and thus less risk involved. 

But before you decide on consolidating your loans through refinancing, think of the early repayment charges that may apply. Again, find out about the loan term and the interest rate- personal loans have higher interest rates than secured. 

Before you sign the refinance document, make sure you can make repayments on time. If you miss your repayments, then your future borrowing is doomed, and your credit score reduces significantly, and you may have challenges borrowing in the future. 

Sell Something

What’s more precious than peace of mind? And that peace can only come if you’re financially stable. If you have some precious jewelry, an expensive car, or some property, you can sell and use the cash to clear your loan or reduce the principal amount.

A reduced principal amount will significantly bring down your repayments, and thus you can repay your loan without breaking a sweat. Anything you own and don’t use anymore can be disposed of, and use the proceeds to clear the debt. 

Sometimes, you may have to sell something that you treasure so much and buy it at a later date when you get back on your feet. 

Use Savings

You’ve some savings stashed away for your dream car or the education of your children some years to come. This is an amount you can use to get yourself out of the financial abyss and save again when things are up. 

What’s the need of having thousands of dollars in your savings account, and your million-dollar home is about to be auctioned? Take the bold step; use your savings to pay up the overdue amount.  When your secured loan is overdue, it could mean you are going to lose your treasured property to the lender. But you can make bold steps like disposing of some of your assets,  and use the proceeds to repay the loan. But most importantly, talk to your lender to help you out.

Factors that affect the Gold rate in India

Last Updated:

Gold is one of the most trusted and revered investment avenues in India. It is one of the most auspicious metals considered imperative for festivals, weddings, and other occasions. Temples in the country are famous for their golden idols guarded against thefts while most Indians view gold as a form of future security and safety against financial emergencies. Gold has lived up to its high reputation for several decades now although there are periods when it starts losing some sheen. Prices of gold have often gone downwards and customers have bought gold in higher quantities with the hope of earning higher dividends when prices start rising once again.

Here are some of the key factors influencing the prices or rates of gold in India throughout the year. The prices of gold are substantially impacted by developments in global markets as well. India is one of the world’s biggest consumers of precious yellow metal and any movements in prices globally will naturally have a direct impact on prices in the country too.

Major Factors Driving Gold rates in India

Here are the factors worth noting in this regard:

  • Inflation- Gold has considerable value owing to its steady nature in comparison to currency and is deployed for hedging against inflation as a result. Be it purchasing online gold or physical gold, investors prefer holding onto gold in place of currency for the future. Hence, demand for gold goes up with rising inflation and vice versa. The prices of gold increase owing to huge demand from Indian customers. This is also applicable to global inflation.
  • Global Shifts- Global shifts in gold prices will naturally impact gold rates here in India as well. This happens since India is one of the world’s biggest gold importers. Global movements are thus reflected through gold prices in the domestic market. Gold is often subject to higher demand in times of turmoil since people see this as a safe haven than currency or other financial products. Gold buying usually goes up when the confidence of people comes down considerably in the Government and financial markets. It is thus often called the crisis commodity.
  • Gold Reserves of the Government– Central banks of almost all top countries hold onto gold and currency reserves alike. The Reserve Bank of India and also the U.S. Federal Reserve are two such examples. Whenever central banks in big countries start holding their gold reserves and acquiring even more gold, prices of the yellow metal naturally go upwards. This is because cash flow in the market is higher while the supply of gold comes down as a result.
  • Jewelry Market Trends– Indians have a special fascination and liking for yellow metal. Right from birthdays and festivals to weddings, gold jewelry is revered in most households in India. Prices of gold go up during festivals like Diwali and also during the wedding season in the country. This is because of higher consumer demand and a mismatch between supply and demand of gold, i.e. higher customer demand vis a vis lower supply of the commodity in question. Gold is also used in smaller quantities by various manufacturers of electronics for devices such as computers, televisions, GPS devices, and more. Gold is used for gifting in India along with jewelry and ornaments and also to hedge against future inflation. These contribute towards increasing domestic demand sizably for gold periodically and India has to then import sizable quantities of gold as well. Industrial demand for gold comprises roughly 12% of overall gold demand in India.
  • Rates of Interest– Interest rates levied on financial services and products are linked closely towards gold demand in India. Gold prices presently are excellent indicators for rates of interest in the country and their current trends. With higher rates of interest, customers usually tend to sell off gold for getting more cash in hand and an increased supply of gold will naturally lead to lower rates for the precious metal. At the same time, lower rates of interest will mean that there is more cash in the hands of customers and higher demand for gold will be witnessed likewise. This will lead to higher prices of the precious metal subsequently.

On a closing note

There are several other factors at play when it comes to influencing gold prices or rates. There are numerous aspects influencing gold production and future costs of production, thereby impacting prices directly. Yet, the core takeaway here is that in spite of multiple factors behind gold rates, it ultimately comes down to the relationship between demand and supply. The basic mismatch between these two factors is one of the key reasons behind the movements or shifts in prices of the precious metal. This mismatch may however take place owing to diverse scenarios which can be observed in a variety of market conditions.

The Pros and Cons of Working as an HR Manager

Last Updated:

HR managers perform a series of crucial functions. They help to administrate everything that concerns personnel, which might mean everything from payroll to individual performance reviews. They help to ensure that the organisation is meeting its legal obligations when it comes to working conditions. They help to foster dialogue within the company, ensuring that staff feel comfortable raising issues. Finally, they play an active role in shaping the broader culture of an organisation.

With all of that in mind, you might still be wondering whether the role will make a good fit for you and your skillset. Let’s take a look at some of the pros and cons.

Pros

Salary

If you work in HR, you can end up earning a great deal of money. This is because, as we’ll see, you’ll play a big role in shaping the success of the organisation.

Communication

If you’re looking for a role where you deal with people, and you’ve got decent communication skills, then HR will allow you to flourish.

Experience

Working in a Human Resources department is an excellent way to gather experience. You’ll be exposed to a range of different situations and challenges, and the overcoming of those challenges will equip you for future management roles. Often, the best way to gain this experience is through an interim job.

Authority

An HR manager is often among the most important decision-makers in a given organisation – rivalling even the nominal leaders of the entire business. The decisions they make are often enormously consequential. Thus, if you relish the opportunity to make a real difference, HR might provide a chance to do just that.

Satisfaction

You’ll be able to see the results of your contribution quickly. You’ll build a company culture that makes the organisation a great place to work, and for many this can be immensely satisfying.

Cons

Stiff Competition

Given all of the advantages we’ve listed above, it’s probably unsurprising that the competition for a place in this niche is fierce. You’ll need to excel if you’re to secure a foothold – and you’ll also need a little bit of luck.

Tough Conversations

If you’re working in HR, then you’ll occasionally have to hold a difficult conversation. This might be a disciplinary, or it might be notice of a firing decision. For this to be possible, you’ll need to maintain an emotional distance from the people you’re supervising, which can be tough.

Legal Liability

Decisions made by HR managers can sometimes land the firm in legal hot water – and thus you’ll need to know your stuff, and be able to pay attention to small details.

Blame Game

HR often finds itself blamed by other sections of the business when things start going wrong. You’ll therefore need thick skin, and to be able to fight your corner.

Stress

There’s always a new situation to manage when you’re in HR. Given the demands on your time, and the often-intense nature of the work, you might find yourself suffering from stress in the long-term.