SCFM - School of Business, Finance, Marketting Online » personal finance

A Guide to Bad Credit Finance Options

scfm — Mon, 26 Apr 2010 07:13:09 +0000

You shouldn’t worry too much about bad credit finance options, because there are several financing options available regardless of your credit history… some of them charge higher interest rates or require some additional security, but in the end may be just what you’re looking for.

Vehicle financing

If you’re looking for a bad credit finance for a new or used vehicle, your best option is most likely going to be to visit a finance company as opposed to a traditional bank.

Some finance companies are more likely to offer bad credit finance options for vehicles than others, and the financing will usually depend upon the type of vehicle being financed, where the vehicle is being purchased from, and what sort of insurance and driving record you have.

Other factors that will be taken into consideration include your annual and monthly income, any cosigners that you might have for the loan, and any recommendations or referrals that you might have.

Home financing

Finding someone to offer you a bad credit finance for a house or other real estate can sometimes be tricky, but generally real estate shouldn’t be too difficult to finance.

Major factors in getting a mortgage lender to approve you for bad credit finance options include your income, any insurance that you will purchase for the house or real estate, the amount of a down payment that you’re willing to offer, and any references of former landlords that you can offer.

Mortgage lenders for bad credit finance loans can be found online, at finance companies, and at some real estate and property management services.

Other financing

Should you be seeking bad credit finance options for other items (such as collectibles or electronics), you might find your search to be a little more difficult.

Car Finance Places You on the Top Gear While Buying a Car

scfm — Fri, 23 Apr 2010 07:13:04 +0000

Car financing has taken a new spin with regard to providing investment for buying a car. So, how do you finance a car? If this question leaves you baffled, then you have to go a long way in the process of buying a car. The term ‘financing’ in relation to buying a car connotes either rendering loan to buy the car or lease the car to you. You are probably concentrating on the former meaning. Many people are in favour of talking car finance from dealership for it seems like a convenient option. It seems easy; you select a car, fill out a credit application, and drive away with your car – all in a day’s work. Car finance through dealership will give you car finance on weekends and even at nights when other banks and credit unions are closed.

Seems convenient, isn’t it? But there is a catch. The dealer will be certainly charging you more for your car finance. Usually car buyers are overcharged by 3% on their car finance. A great number of complaints about car financing are related to dealers. 0% APR is not only attractive but lures the buyers to acquire up car finance not meditating if it is feasible for them. There are very few people who can actually get a 0% APR. Thus car finance deals usually fall midway thereby making car finance experience an extremely distressing one. You are buying a new car and probably for the first time, you certainly want it to compliment your enthusiasm. There are few elementary things that need to be kept in mind before taking that crucial primeval step in car buying.

First and foremost in car buying and financing is checking your credit score before you apply for a car loan. Many people are unaware of the fact that they even have a credit score. You can expediently check your credit score online. So, if you have bad credit history then probably you will be paying more interest rate for your car finance. If your credit score drops below 550, then probably apply for new car finance is not such a good idea. First repair you credit score. Repairing credit score requires little effort, helps you repay your debt and retain your credit report. Online car finance companies can get you car finance loan even if your credit score is lower than required. Your car finance loan can get approved in minutes. Online car finance companies have revolutionized car finance procedure. With lowest online car finance rates, no application fees, or down payments car finance companies provide a formidable competition to car dealers. Car finance companies have set a standard for providing car finance that is worth opting for.

Liquid Fund v/s Short Term Fixed Deposits

scfm — Wed, 17 Feb 2010 06:01:41 +0000

These are two instruments which are used to earn some interest on money lying idle in bank or money which has been set aside for a purpose.

We understand what are fixed deposit what many investors are not aware of is liquid fund

Well Liquid fund as the name suggests are Mutual Fund Schemes keep our money “liquid” [almost cash]

These liquid funds are debt funds that work in money market instruments [It is a market for short term borrowing and lending. Overnight, two day, ten day, a month paper is what is bought and sold.]

For ease of understanding we will compare two products in each category.

Two things come in to play while comparing the two product categories:

1. Return on Investments

2. Tax Treatment

1. Return on Investments

Fixed Deposit

A Fixed Deposit will give a known rate of interest for a known period. So say a 61 – 90 days fixed deposit in HDFC Bank will fetch you a return of 5.5% for a senior citizen.

Liquid Fund

A Liquid Fund the rate of return is not known in advance instead it fluctuates based on the NAV .However the risk is minimal and the typical return for a decent Liquid fund would range from 5-7% .For example the DSP ML Liquid Plus Regular Fund has given one year return of 8.67%

2. Tax Treatment

Fixed Deposit

The interest on Fixed deposit is taxed by adding it to the assesses income .Hence if you belong to the highest tax bracket you will be taxed at 30%, thus wiping out a huge chunk of return.

Liquid Fund

A Liquid Fund has an advantage here if you opt for a dividend option the dividend is tax free in the hands of the investor that’s right.”NO TAX” for you. In some schemes like the HDFC AMC’s Treasury plan you get daily dividend on the investment made thus giving you the freedom to remove money on any day you need it.

Conclusion:

While the fixed deposit scores in terms of reliability of return .Liquid fund scores on the liquidity, rate of return and tax treatment. Presha Investments recommends liquid funds for those who are income tax assesses & need to park funds for shorter tenures

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