Business and Finance

Archive for September, 2010

Having a good credit history makes the entire process of availing loans an easy task. But that does not mean that with bad credit history, loans are not at all possible. Loan providers are now more liberal when it comes to offering financial assistance with bad credit. As a matter of fact, you can avail the loans as per your need and requirement. This means even if you are not having any asset to pledge as collateral. Bad credit unsecured loans are meant not only to provide you the monetary assistance, but also a way through which you get an opportunity to resolve the bad credit issues.

First of all, bad credit occurs when you fail or skip to make payments towards past debts. This can be due to various factors such as improper management of funds, loss of employment, sickness, transfer of job etc. It is because of these that your credit score plummets to a new low making it impossible for you to retain your original position. This also results in having credit problems such as CCJs, IVA, arrears, defaults, etc. However with these loans, things will certainly change for good.

As the loans are bereft of any collateral pledging, it paves the way for homeowners as well as tenants to go for it. However the amount under these loans is approved solely on the basis of borrower’s income and repaying capability. This where, you have to provide details about your employment and income details. Generally, the amount advanced is in the range of

The Federal Housing Administration or FHA manages the home loan system at the national level, being accessible to Americans from all states. With an FHA there are insurances against default, which means that in case the borrower does not have the possibility to pay for the mortgage, FHA will cover the rate. This allows people to lend larger sums of money because with the FHA guarantee comes a higher flexibility on the part of the borrowers. Although more people can qualify for an FHA home loan than for a regular home loan, not everybody is eligible.

While in first-time-home-buyer programs you will have a whole series of limitations, income is not an issue with an FHA loan. The amount you can borrow depends on the income and the home prices in your region. You can check the general home costs for your neighborhood on the Internet on a website like HUD.com. Then, the credit report should be at least average and the debt to income ratios must be satisfactory. If you have a decent credit report you can have access to an FHA home loan.

The down-payment with an FHA home loan can be as small as 3%, plus there is leniency during financial difficulties, and no prepayment penalties. Insurance premiums are a must with such a loan: you’ll first have to pay a 1.5% premium, continuing with monthly fees. The collected insurance premiums may actually work for the payment of the mortgage in case you default on the FHA home loan. The solutions available with the Federal Housing Administration are not suitable for everybody, and there are limitations to the system.

An FHA home loan will not work too well for someone who needs a large sum of money. Plus, the the ongoing fees and the upfront mortgage insurance premiums can prove more expensive than the private mortgage insurance. Most of the time, home buyers with excellent credits use more competitive offers in the private sector and do not apply for an FHA home. The way a borrower addresses home purchases varies from case to case, and this is also obvious in the evolution and the policies of the lending companies. Moreover, mortgages have received a heavy blow from the current financial crisis.

The credit card wizard is a popular application that generates credit card numbers for you. These are very useful if you want to test your shopping cart or application you are using to process online payments, and you definitely should do so before getting your website up and active.

Why go to all that work of getting your website launched, generating traffic, converting that traffic into sales-and only to find out that your shopping cart doesn’t work properly? Many people are overeager to get their sales letter up, their marketing in place, their products ready, and after all that work, lose money because their shopping cart doesn’t work.

This is something that happens to all too many people, and some simple testing with the credit card wizard could have easily alleviated this problem.

The credit card wizard works by installing the piece of software onto your computer, and all you have to do is follow the directions to create a fake 13-16 digit credit card number that you can use to test out your merchant account. Just input the number into the processor, and while the transaction will definitely be declined because the number is incorrect, you can at least verify that everything is in working order.

Where can you find a credit card wizard download site? just type it in on one of the major search engines, and many sites will come up offering a free download. If you were thinking you’d have to pay a fortune to get this, think again.

Finding this application really isn’t difficult, and you won’t have to search for long before you do so. The bottom line is, if you are online and have a significant presence, and your income is heavily dependent on it, or even if it’s just a hobby right now, being sure your credit card processor is in working order is crucial before you start actively promoting your website. Let the credit card wizard help you with this.

Debentures are loans, secured by a corporation, municipality or government. Bonds and debentures are instruments that provide for a maturity at which time the principal will be repaid. In addition to the payback of principal, the borrower will pay interest at stated intervals, usually semi-annually.

There are four common types of bonds and debentures:

1. Government bonds and debentures
2. Corporate bonds and debentures
3. Domestic bond funds
4. International bond funds.

In this article, we will discuss the overall concepts of bonds and debentures

a) Security

*Bonds are considered as secured debt. If the borrower defaults, the assets can be seized to satisfy the bondholder.
* Debentures, on the other hand, are unsecured, but are supported by the general credit of the corporation, municipality or government issuing the bonds. When issued by governments, there is the ability to raise taxes to honor their repayment obligation.

b) Contract features

Bonds and debentures are prominent players in the debt market. They come in 3 maturity durations.

i. Short Term: three years or less.
ii. Medium Term: three to five years.
iii. Long Term: more than ten years
and the most common features in the contract are
i. Identify the Term to maturity.
ii. Show interest payment structure.
iii. Provide a coupon rate.
iv. Indicate the valuation and pricing.

In bonds and debentures, the issuer is the borrower and the lender is the bond owner. when bonds are sold on the secondary market, the ownership changes. Each bond that is sold requires the presentation of a prospectus. Prospectus is a document that lists the name of the issuer, bond features, assets securing the loan and other details. In addition, a prospectus also gives the company background, purpose of the bonds and other information of value to the buyer.

There are types of bonds, but the two most common are Bearer Bonds and Registered Bonds.

i. Bearer bonds are owned by the holder and are issued with coupons for interest payments.The holder may sell the bond at any time.

ii. Registered bonds are registered with the issuer who keeps a record of the owner. They may only be sold by the registrant and interest payments are made by check to the registered owner.
Other Corporate Bond types include

i. Redeemable bonds.
ii. Callable bonds.
iii. Retractable bonds.
For bonds of these types, the principal amount borrowed may be paid back anytime prior to maturity and thirty days notice is generally required before exercising the option.

c) Bond and Taxation

If a bond is sold before maturity, it can be sold using any of the following three methods

i. At Par: yield will be identical to the coupon rate.
ii. At Discount: yield will be less than the coupon rate.
iii. At a Premium: yield will be more than the coupon rate.

Bonds are taxed on a bond year basis and attract taxation in two ways

i. 1. Capital Gains. The adjusted cost base of a bond is the purchase price plus any sales commission less any accrued interest paid. Any profit is considered a capital gain and any loss is considered a capital loss.

ii. Coupon rate or interest earned

d) Government bonds

Government bonds are debentures. The investment risk is nil due to the federal government’s ability to increase taxes which will generate additional income to make bond payments. These bonds and debentures are subject only to interest rate risks. Government bonds can be used to satisfy the following investment objectives:

i. Provide income.
ii. Ensure safety of principal.
iii. Very Liquid.

They are taxed on a bond year basis and are eligible for any deferred tax saving plan.

I hope this information will help. If you need more information, you can read the complete series of the above subject at my home page:

Being unemployed is a huge burden itself, having plenty responsibilities to attend to and not being able to support the family and look out for it’s needs can be a very stressful situation. The problem is where to get finance while in search of a new work to regain a steady income.

Moreover, this situation tends to make the unemployed doubt to use his house (if he is a homeowner) as collateral due to the risk of repossession. He doesn’t know when he will be able to have enough earnings to repay the secured loan without sacrifices so, his doubts are understandable.

Unsecured Bad Credit Unemployment Loans

This is when unsecured unemployment loans help going through this situation. These loans are meant for those who have lost their job and need to get a loan to pay for everyday expenses while they focus on getting another job and returning to their normal life. Even if it is long term unemployment, there are loans available to cover for it.

The main issue when it comes to unsecured unemployment loans is the loan repayment. The lender will focus on the requirement of providing a loan repayment source. This happens because there is no collateral securing the loan so there is a high risk involved for the lender.

Nevertheless, there are many sources to hold up repayment: Disability living allowance, other allowances, income support, and redundancy pay from the employer. You might as well offer a co-signer which will greatly improve your chances of getting the loan approved.

This kind of loans can also provide a grace period in which you won’t have to pay any installment. The idea is that during this period you can concentrate on getting a new job which is the source of income lenders prefer. Knowing that an unemployed person can have unstable jobs for a period of time, these loans usually include the possibility to request a stand-by period even when the repayment has already started.

Interest Rate and Purpose

The interest rate on this kind of loans is an issue for they are high risk loans; the interest rate tends to be very high. However someone who is looking for this kind of loan should contact as many lenders as possible and ask them to provide loan quotes. After comparing them, the decision will be much easier. The best source of information on this kind of bad credit loan is the internet. By doing a search online you’ll be able to find many financial sources dealing with this kind of loans.

Summing up, these loans are for emergencies, it’s not a permanent source of finance and thus should be repaid as soon as possible. However, in such a desperate situation, it’s good to know that the finance industry has created a solution that allows those who are unemployed and have bad credit to get finance to meet their daily needs.

Stability has always been an important role when it comes to investments because of the volatility and fluctuation of the stock market. One type of investment that is most often used for stability is a BOND. What is a bond and what are the benefits of owning them? Are there risks to owning bonds and if so what are they?

What is a bond? By definition a bond an investment in which an investor will lend his money to a corporation or government entity in exchange for the bond. The bond defines the time period of the loan and the amount of interest that is to be paid to the investor and the specific intervals in which it is to be paid. The interest on some bonds have special tax-free status both at the Federal and State level.

Bonds also are given a credit rating based on the credit worthiness of the issuer. In general, the better the credit rating the lower the interest rate paid to the investor. The lower the credit rating the higher the interest paid to the investor.

Most bonds are given a “par value,” usually $1000. If the value of the bond is under the $1000 then, “it is selling at a discount.” If the value of the bond is over par value then it is said, to be “selling at a premium.” Bonds quite often are sold to fund large projects such as new hospitals or new facilities for utility companies.

What does this mean in plain language? I will use the example of a cow. There are 2 reasons to own a cow…beef and milk. The interesting thing about the price of beef is always fluctuating up and down. So if we own a “beef” cow then we would be concerned about the price of beef so that we can determine the best time to sell that cow at the market.

If we own a “milk” cow do we really care about the price of beef? No because we own the cow for it’s milk. If we own a good producing “milk” cow then we will own that cow for many years and the price of beef will not concern us. How does this illustration help us?

“Bonds carry a different kind of risk and it’s important to understand it.”

Stocks are like “beef” cows. We will be concerned about the price of the stock when it is time to sell it. Bonds are like “milk” cows in that we only want the investment for the “income” or “milk” it produces. For example…Let’s imagine we buy a $100,000 bond from a well known corporation. It has a AAA credit rating and pays 6% annually for 20 years. That means that in any given year the value of that bond, were we to sell it, could be more or less that $100,000. However, every year we will receive and income check in the amount of $6000 to either be spent or reinvested in some other investment. Regardless of the value of that bond we will get 6% of $100,000 every year for the life of that bond and at maturity we get $100,000 back regardless of what we paid for it. So what are the risks?

Bonds are subject to credit risk. That means that the bond is only valid as long as the company that issued it can pay the interest and the par value back. Just like a loan from a bank there is always the risk that it won’t be paid back.

Secondly, bonds are subject to inflation risk. Inflation is the annual increase in the costs of goods coupled with the decreasing value of the dollar. In other words our $1 won’t buy next year what it will

buy this year. The average inflation rate over the last 50 years is 3-4%. So, if we are earning 6% on a bond and inflation is 3%, then after 2 years we begin to lose value on the money because our primary investment does not grow. While bonds are great for income during retirement over time we lose the purchasing power needed to maintain a cost of living. Bonds should be a part of your portfolio whether they are in your mutual funds or you own them directly. The important thing is to understand the their role and their risks.