June 6, 2015 By

What Typically Increases the Borrowing Costs

Secured loan refers to a kind of debt that would necessitate the debtor to provide an owned item e.g. a house or a car as a collateral to the loaned cash. In the case of secured mortgage or secured auto loans, the item purchased using the loan can also be kept as collateral. In this regard, the financial institution may hold the title of ownership to the item unless that loan is paid back in full, inclusive of interest charges. If the debtor fails to repay the debt, the creditor may obtain title to the asset offered as a security. Assets such as shares and bonds may also be pledged as a security.

Financial institutions usually offer different types of secured loans. These types include mortgage loans, non-recourse loans, foreclosure and repossession. For Mortgage loans, the house is provided as collateral to the debt. In the case of a default on mortgage loan, the borrower loses the property. For non-recourse loans, the lender may only demand the secured asset in the event of nonpayment. Non-recourse loans are secured by cars, ornaments or shares typically. In the event of nonpayment on a foreclosure loan, the creditor trades the house to cater for his loss. Foreclosures are applicable only to property. In a repossession loan; the creditor may trade the car to cater for his loss.

Loans are usually secured because of the risk of default by the borrower as the lender may not loan money on the word that the money will be repaid in due time. Hence, collateralizing the debt is a secure method for the creditor to advance a big debt. Additionally, when the debt is pledged to your house, the debtor makes sure that the loan is paid back, so that he obtains the title to his own house.

Moreover, when a loan is secured using an asset, lenders usually charge an interest rate that is lower than that of an unsecured loan. This is due to the reason that in case the borrower defaults on a secured loan, the lender may gain most of the amount owed back by gaining ownership to the asset.
Lenders may also propose lucrative offers to borrowers in the case of secured credit cards: https://www.lifeoncredit.ca/top-6-secured-credit-cards-for-canadians/. Creditors may also allow the debtors to prolong the debt term between 5 to 30 years. This proposal is useful for individuals who want to pay a small installment every period and disperse their installments over many years. However, doing this typically increases the borrowing cost and the interest paid on the loan thus increasing the total amount of loan repaid at the end. Mostly secured loans are thought to be very lucrative because of their ability to make adjustments in the duration of the debt and reduced interest rates.

Filed Under: Credit, Loans Tagged With: ,
January 20, 2015 By

Simple Steps to Make a Budget

When you are able to classify your expenditure, you can clearly elaborate debts to be paid and how you can get them paid effectively. Tackle high priority debts, pay them off and try not to get them delayed. You can also see from where you can gain some extra money; a part time job maybe?. You will be able to refine your budget in a month and able to pay more next time and similarly next month you will be able to pay a little more and soon you will be free of your debts. Remember, debts don’t get paid in a day; they do take time, so you have to be patient and follow your financial plan religiously.

piggyIt is not a simple job to get out of debt but it is not impossible. Following are some of the tips that might help you from inviting new debt onto you. Do not be proud of your multiple credit cards; use just one! Stop using all other cards like store cards, gas cards, etc. and if you have credit cards of more than one bank then you need to select one among them. You have to use only one credit card until and unless you control your expenses.
You should be able to maintain a budget diary, where you have to struggle to write down your daily expenditure. In this way, you will not be able to control spending but also can save substantial amount each month. You will have the record of your income & expenses and this would enable you to cut down your finances on luxury items.

After the budget diary (see here an example: https://www.lifeoncredit.ca/5-steps-to-debt-free-2015/), the next move is to divide your expenses into most needed subjects; such as bills, medical, food etc. However, there are few things where you can cut down your spending; like you want new clothes but you can go along without buying new ones for a while.
One sure fire way to get out of debt is to draft a realistic budget. Draft the budget according to the expenses you have made in the last month. Pinpoint commodities and activities on where you can save up money. Cut off on club memberships, gyms, extra luxury item purchases and start utilizing money only where they are most needed.

Filed Under: Banking, Credit, Debt Tagged With: , ,
December 15, 2014 By

How to Deal With Debt Settlement Companies

When a debtor constantly fails to pay his debt installments, creditors usually prefer to settle the debt or forgive some amount of the debt that one may owe instead of losing all the money owed if the debtor files for bankruptcy. Debt settlement is the process of negotiation carried among the borrower and the lender to lessen the amount of loan.  Debt settlement is usually considered a solution to unpaid debt payments of over a couple of months or an alternative to bankruptcy.

moneyUsually, the debt settlement procedure comprises of discussions between the organizations that specialize in debt settlement on part of the borrower and the lender to lessen the total loan to a smaller quantity. Mostly, the lender and borrower decide on a certain percentage of the overall unpaid loan to be forfeited by the lender. But, debt settlement cannot be carried out for all kinds of loans. Uncollateralized loans that are not pledged by real assets like vehicle or a house may not be forfeited.

Mostly, debt settlement is carried out by institutions that specialize in debt settlement or legal advisors who help lenders in negotiating debt settlement – click here for details. However, in return for their services, these debt settlement companies usually charge big service fees in the form of a percentage of the total debt owed, or a percentage of the debt amount forgiven along with initial sign-up fee and monthly service charges.

Although debt settlement appears to be the best lawful answer available to past due installments, it is not free from drawbacks. Once a loan is forfeited, the borrower may not be able to obtain unsecured loan like credit card loan or medical treatment installments  for a long time. Moreover, even if the debt settlement negotiations are successful, credit reports usually show some evidence of debt settlement hence lowering credit rating of the debtor. On the other hand, if the lender promises beforehand to give a ‘paid in full’ letter, debt settlement may not influence the debt score. Since debt settlement companies usually take money on a monthly basis and put the money in a trust account until a lump sum payment could be made to the creditor, the settlement process may take a few years. During this process the interest and fines may keep on accumulating and the installments may get bigger and bigger. The lenders may also seek professional help to claim the owed money or may prosecute the borrower so as to regain the advanced loan.

Due to the high service fee of debt settlement companies and the extended settlement period, the withdrawal charge of debt settlement companies is fairly high. After a few years of making payments to the settlement companies, clients may still be in the same position as before since most of the amount saved goes to the settlement companies as service fee.

Filed Under: Credit, Debt, Loans Tagged With: , ,
December 1, 2014 By

Credit Options for Customers

Customers of Capital One enjoy a large selection of products for their personal, shopping, travel, and other needs. Banks offer consumer cards and balance transfer options to clients who wish to consolidate their balances.

The choice of product depends on different factors, including loyalty and rewards programs offered, credit rating, online banking and other tools, grace periods, and others. Borrowers with excellent credit have access to exclusive benefits such as zero introductory annual fee, 15 percent off at participating merchants, discounts on business purchases, and more. Business cards offer discounts on entertainment and dining, business services, office supplies and staples, and more. Discounts are also offered on travel services and information technologies. With secured cards, the maximum credit line varies widely, ranging from $200 to $3,000, based on the security deposit. When applying for a secured card, applicants provide employment information, including income from public assistance, retirement, dividends or interest, self-employment, seasonal and part-time jobs, and salaried income. Consumers with bad credit improve their score and chances to qualify for unsecured cards. Maxing out credit cards also has a negative impact on one’s credit profile.

Types of Cards

Bank customers are offered plenty of options, including cards for average, excellent, and building credit. Customers choose from standard and popular cards with competitive rates and earn rewards toward tickets, merchandise, and even vehicle purchases. Miles can be exchanged for travel and airfare, gift cards, cash rebates, merchandise, and more. Individual customers have plenty of choice, including student and rewards cards. Student credit cards, for example, are offered to consumers with average credit and feature perks such as no annual fee, cash back on textbooks, gas, groceries, and other purchases, cashback bonuses for timely payments, and other perks. Specialty cards such as the Capital One credit card offer points toward Sony merchandise, games, electronics, and other items. Specialty cards feature travel perks such as discounts at resorts, preferred seating, and others. Cardholders are offered Visa perks such as upgrades at cruise lines and hotels and shopping discounts. Consumer credit cards are designed for small, daily purchases and bills, including discretionary, flexible, occasional, and regular expenses. Most credit cards help cover household expenses such as school lunches, meals out, property rent, child care, and others. Loans and home equity lines of credit, on the other hand, are designed for large purchases such as second homes, new and used vehicles, and others. Business and consumer loans by Capital One help finance large purchases and investments such as machinery, real estate, and other long-term assets.

Filed Under: Credit Tagged With:
November 17, 2014 By

Options for Businesses Customers

The Bank of Montreal features a selection of financial and tailored services, including small business investing, payroll services, credit cards, and loans. Credit cards are of several types, standard, affinity, and rewards cards with points toward charitable donations, theatre and events tickets, products, and more.

BMO offers a selection of rewards credit cards with added benefits, including rewards miles, travel services, trip accident assistance, and others. Clients with rewards credit cards choose from merchandise in multiple categories, including kitchen, wellness and health, toys, and others. Points can be redeemed toward live events, award winners, and experiences, including kayaking, spa, and others.

There are specialty cards such as the BMO World Elite MasterCard that feature unlimited rewards, travel credit, VIP airport lounge access, and more.  The card features no markups, points toward investments, travel discounts, and other benefits. This is a premium travel card that features welcome points and unlimited rewards, with no seat or other restrictions. Other business credit cards include the BMO CashBack MasterCard for Business and the BMO Premium CashBack MasterCard.

In addition to rewards points, the Bank of Montreal offers a selection of financial products with cashback, no annual fees, no interest charges, and others. Personal credit cards feature different loyalty programs, no annual fees, and free rewards. Prepaid cards are available to customers with tarnished credit and go with low fees. Other fees apply, however, including fees on cash-like transactions such as lottery tickets, wire transfers, race track wagers, money orders, off-track betting, travelers checks, casino chips, and foreign currency.

Customers can choose from popular options such as the BMO SPC CashBack MasterCard and Air Miles World MasterCard. Students benefit from discounts on dining, merchandise, and school-related items. The bank also offers affinity cards that are designed for customers who support different causes. Affinity cards support causes such as community and education and establishments like the Canadian Scholarship Trust Foundation and the Canadian Art Foundation. BMO Amalgamated Transit Union is a specialty type of card with a low rate, concierge service, and travel discounts. With some affinity cards, the bank requires a minimum income of $100,000 for households and $60,000 for individual customers, but there are plenty of benefits, including 21 grace days and cash rebates. The Cancer Research Society card is one example and offers benefits such as reservations, entertainment recommendations, discounts, and more.

Cards for Business Clients

The Bank of Montreal offers credit cards that are specially designed for business customers. There is a selection of business cards with automatic rebates, no foreign exchange fees, and other perks. In addition to credit cards, businesses are offered term loans to buy real estate and equipment.

Filed Under: Credit Tagged With:
November 13, 2014 By

Uses and Types of Cards

Clients are offered standard and student prepaid cards, and the latter are designed to control spending. Gift cards are one option to give money to friends, relatives, and family. Youth cards are offered to parents to enable monitored spending, along with other consumer and business cards. Prepaid products are offered to start-ups and entrepreneurs, customers with tarnished credit, students, and frequent travelers. Issuers feature cards that are designed for college students, small businesses, and other customers. Prepaid cards feature quick approval and no income requirements.

To apply for a prepaid card, customers fill in their country, address, date of birth, and other information . The information offered is used to identify customers. There are issuers that charge АТМ withdrawal fees, balance inquiry fees, and teller cash withdrawal and foreign transaction fees. Some financial establishments charge fees for remote deposit capture. Issuers also charge check request and other fees.

How Do Prepaid Credit Cards Work

Issuers offer different prepaid options, including incentive cards, payroll cards, and general purpose cards. Customers use their cards at malls, fast food restaurants, stores, and other locations. Standard or general purpose cards can be used to pay recurring and one-time bills. Issuers offer prepaid cards with online bill pay, high cash deposit limits, and bonus points. Financial institutions offer open-network cards with consumer incentives and travel benefits, including the option to load different currencies. Issuers also offer rewards points that go toward fuel savings. Some issuers also offer cashback prepaid cards with shopping discounts, cash rebates, and other bonuses. Reloadable cards are easy to top up and offers generous incentives. Users can exchange their points for merchandise, including fashion and clothing, electronics, games, and other items. There are different categories to choose from, including special offers, cosmetics, furniture, and others. Prepaid cards are great for shopping, paying bills, or gas. Free direct deposit is a major benefit for holders.

Filed Under: Credit Tagged With:
October 23, 2014 By

Borrowing Solutions for Business Owners

Toronto-Dominion features flexible and convenient borrowing solutions designed for commercial clients, small businesses, and individual borrowers.  From LOCs, mortgages, and credit cards to certificates of deposit, IRAs, and money market accounts, there are standard and custom products for customers with different requirements and credit profiles. Clients are offered standard, secured, and rewards cards with cash rewards and competitive rates. Platinum and premium cards feature aeroplan miles, welcome bonuses, and merchandise. Bank clients are offered rewards in different categories, including personal care, fitness, and accessories. Toronto-Dominion features a selection of commercial and consumer products, from personal loans to cross-border banking.  TD offers plenty of rewards, from gift cards to kitchen appliances such as presses, stick mixers, popcorn makers, and food choppers. Customers can choose from different point levels, from 5,000 to 100,000+ points. run

There are plenty of attractive rewards, from green cleaning supplies and electronics to flashlights and sleeping bags. In addition, customers can exchange points for travel experiences such as free nights, cruise discounts, and resort credits and top destinations such as:

  • Aruba,
  • Punta Cana
  • Cancun.

Retailers feature kids products and accessories, including toys and baby strollers. Clients benefit from flight rewards, low-cost companion tickets, and priority check-in. The bank even offers the option to deposit and convert miles. Some customers choose to donate their miles to charitable organizations such as the Bear Valley Rescue Society and Air Canada Foundation. Bank clients are offered exclusive access to post-show parties, meet-and-greet events, concerts, and others. Airmiles cards feature added perks such as expert insights and travel advice, discounts on business class airfare, and others. Customers with excellent credit can choose from cashback, low interest, and other cards. Gift and prepaid cards are also available, including reloadable and non-reloadable options. TD Bank also features U.S. dollar cards with low annual fees, discounts on car rentals, purchases in U.S. dollars, and comprehensive coverage.

Businesses are offered specialty cards that offer the option to request employee cards. In addition to aeroplan cards, customers are offered the  Venture Line of Credit Visa. The bank offers business rewards cards with office and travel rewards, including cruises and flights, drawers, fire chests, and others. Participating retailers offer hundreds of rewards, from electronics and office supplies to equipment such as printers, safes, trimmers, shredders, and others.

Filed Under: Banking, Credit
October 14, 2014 By

Selecting a Credit Card

ccr-mCaisses populaires, unions, and big and small banks in Canada offer credit cards to customers from all walks of life. Banks usually run a credit check to ensure that they deal with creditworthy customers.

Financial institutions in Canada accept applications by residents and citizens of the age of majority. Clients who filed for bankruptcy do not qualify. The interest rate offered depends on your credit rating. The application requirements vary from one bank to another, but rewards cards with many perks and incentives require high income. Many banks allow customers to add users free of charge. Banks offer Visa and MasterCard products to applicants, but the perks and rewards programs that go with them are usually reserved for creditworthy customers. There is a wide array of cards offered by Chase, Laurentian, Canadian Tire, and other establishments.

Different cards are offered to students, and issuers request contact and personal information as well as school information such as class year, enrollment status (part- or full-time), and school name, city, and state. Issuers that offer student cards also request information such as family member or alternative contact information, and financial details such as outstanding loans and balances, types of accounts held, additional income, annual wages and salary, and monthly rent or mortgage payments. Provide your permanent and current address if you live on-campus.

Banks offer rewards, airmiles, cashback, and other cards to business owners. As a rule, Canadian issuers request financial information such as occupation, business phone number, tax identification number, name of business, and others. Financial institutions require information such as monthly housing payments, social insurance number, and other details. Some issuers are interested in whether the business is seasonal. Customers who apply for a balance transfer card are asked about their payment address and credit card number. Some banks allow more than 1 balance transfer. If applying for a balance transfer card, there are financial establishments that allow up to 3 transfers. With some banks, customers are asked to specify whether they apply for a card with the maximum credit limit. Some banks offer the option to check your application status online.

The choice of card depends on many factors, for example, whether you meet the minimum or pay the full balance. Look at factors such as minimums, expiry dates, billing cycles, and others.

Filed Under: Credit Tagged With: ,
October 10, 2014 By

Air miles Cards for High Income Earners

Airmiles cards feature sports offers, access to entertainment and events, and discounts. Many issuers also feature unlimited air miles for discounted airfare and free travels, flexible points redemption, and premium rewards such as tours, cruises, packaged holidays, car rentals, and hotels, and others. Financial institutions also partner with major Canadian and other airlines and offer bonus points toward air travel. The Royal Bank of Canada offers promotions, flight deals, and extra points. Long haul flights to Alaska and Hawaii require between 45,000 and 55,000 rewards points. Some issuers offer rewards points that can be converted to air miles and used toward international and domestic flights.

There are air miles credit card and charge cards that offer points toward taxes and airfare and related surcharges. Many cards go with perks such as reservations for ship, train, limousine, and air travel and access to activities such as skiing, scuba diving, and others. Specialty cards feature free international shipping and discounts at luxury restaurants. Travel cards feature exclusive dining experiences, discount admission for amusement parks, room upgrades, and other benefits. Most cards feature variable APR, companion reward flights, and the option to double miles. Additional cards are offered to close family members such as domestic partners, siblings, parents, children, and spouses. Travel cards offer attractive rewards, but some financial institutions charge high returned check and annual fees. Ask about the fees and interest if you only pay the minimum. On the positive side, some issuers offer secured airmiles credit cards to help clients repair their credit. Airmiles cards are offered by Canadian credit unions, small banks, companies, and big banks such as CIBC, Toronto-Dominion, Royal Bank of Canada, and others. Specialty cards offer benefits such as executive services, entertainment, and points toward travel. Issuers offer platinum and other specialty cards with benefits such as discounts toward accommodation, hotel upgrades, and others. Specialty cards feature shopping assistance, access to special events, and hospitality services. Cardholders benefit from perks such as free nights at luxury hotels, beverage and food vouchers, and additional cards.

To qualify, credit card companies usually require solid income and employment and very good or stellar credit. Applicants fill in information about their combined and personal income before tax and their employment status, i.e. homemaker, retired, unemployed, temporary, or salaried professional. Provide information about your monthly rent or mortgage amount.

Filed Under: Banking, Credit
October 7, 2014 By

Specialty Cards by Scotiabank for Discounts, Special Deals, and Rewards

Scotiabank offers convenient banking and borrowing tools such as currency and account services, credit cards, and lines of credit. There are business and personal cards by Visa and AMEX that go with attractive rates, cash back, and other benefits.

The bank features hockeysecured and standard credit cards with special features, promotional offers, and access to special amenities. Points are redeemable for merchandise such as disc players, briefcases, home entertainment systems, bangles and necklaces, LED smart TVs, and other merchandise. Participating merchants also offer rewards such as dinnerware sets and casseroles, wine gift sets, 4-slice toasters, electric slow cookers, and other kitchen appliances and items. Merchants offer plenty of rewards, including training bikes, travel gear, and other merchandise.

An activity and sleep tracker, for instance, requires 16,700 rewards points. Retailers also feature zoom cameras, iPads, disc players, and other items. The bank also offers a newsletter that features special offers and rewards.Clients can also choose from a selection of specialty cards that feature points on entertainment, dining, and shopping. Some no fee cards go with 1 percent cash back on recurring payments and purchases and low introductory rates. Customers enjoy exclusive access to experiential tours, seating at high-end restaurants, and winery tours.

There are specialty cards such as the ScotiaHockey Visa (http://scotiabank-credit-card.creditcardreview.ca) that offer points toward tickets, gear, and other NHL merchandise (http://shop.nhl.com/).

Scotiabank features online tools for enhanced shopping security and point redemption. Some products feature low fees of $15 – $30 for supplementary cards . Customers are also allowed to pay for large purchases such as utility bills and premiums. Clients are also offered 4 percent cash back on certain categories such as groceries.

The Bank of Nova Scotia features premium business cards that earn cash back on insurance, internet, and other payments. Many business cards feature a long interest-free period of at least 25 days. Business cards also feature benefits such as unrestricted travel options. Customers can choose from specialty cards with investment vouchers, comprehensive insurance, and brand-name merchandise. Consolidating card payments helps save on service charges.

Filed Under: Banking, Credit Tagged With: ,
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