What Can You Do If Your Monthly Income Suddenly Drops?

Whether it is due to a global or personal crisis, experiencing a sudden drop in monthly income is not uncommon. However, this does not mean that most individuals know how to mitigate the effects of a powerful financial hit. Although there is no easy way to get through difficult financial situations, there are ways to get the money that you need to at least maintain a decent lifestyle until you can get back on track.

This having been said, not all of these methods will work for everyone, but most of them should at least give you a starting point from which to rebuild your financial life.

Look for ways to reduce the cost of your debt

If you have active personal loans and credit cards, look at the possibility of getting a debt consolidation loan. These often span over several years and are great for taking your existing loans and repaying them so that you’re only left with one large one that you can pay over the span of 5+ years. Some debt consolidation loans can also be used to top off credit cards.

Giving up credit cards is a great way to get your finances under control.

Give up your credit cards and take out a line of credit

If possible, close any credit cards you have and take out a line of credit. Unlike the former, lines of credit are much more affordable. This is due to the fact that you gain access to a large amount of money, but you only pay interest for what you actually take out of the account. Furthermore, in most cases, if you put the money back before the end of the month, you may be able to get away without having to pay any interest at all.

Claim any benefits that you have access to

Depending on your situation, you may be able to claim statutory sick pay, or claim other benefits if you are either prevented to work by the employer or you are self-employed.

You should also apply for any welfare benefits that you have access to. During exceptional situations, certain local councils may even offer local welfare that can cover the cost of food, clothes, household items, and even bills.

Use any resources that you have at your disposal

If the situation is truly grim, there is also the possibility of going to the local food bank and gain access to their support. While you will not receive a wide variety of products, rather basic, cheaper ones, you should be able to get everything that you need in order to cook nourishing meals. You can also look to online lenders who offer money quickly to tide you offer.

During crisis situations, your children may also be able to get free meals at school, if you get certain benefits. Although they will only get one meal, it should be enough to relieve a bit of financial stress and give you the resources to buy other vital products.

Look for alternative income sources

Always look for alternative ways to supplement your monthly income. If you earn less or are laid off, every penny counts. Depending on your skills and education, you should be able to find secondary income sources. For example, if you can play a particular instrument, consider teaching others either face to face or by using an online platform.

Look at the job boards of popular freelancing platforms, start an online crafts store, or create webinars and teach others new skills that you’ve honed over the years. There are thousands of ways to make money on the side.

As a side note, when it comes to looking for alternative sources of income, one may not be enough. It is usually recommended to try to do at least 2-3 things, preferably ones that complement each other, such as starting a blog/vlog, establishing a brand and then selling merchandise or creating paid webinars.

Payday Loan Benefits You Must Know

The cost of living in the United Kingdom has gone up while salaries have remained the same resulting in people’s difficulty in making both ends meet. Many people have experienced being short on cash a few days before the next payday. Aside from scrimping having to stretch the budget, it has become almost impossible to save for future emergencies such as hospitalisation after an accident, payment for an urgent house or car repairs, utility bills, and other long-overdue debts. Borrowing from relatives and friends has become complicated with people experiencing the same difficulties. The availability of payday loans has offered a solution to people’s dire needs.

Aside from being a quick and easy way of resolving financial issues, a payday loan has the following benefits.

Applicants with Bad Credit Can Get Approval

People with no credit history or with a history of default payments may find difficult to get approval for loans in banks and other financing companies. However, payday loans do not require a good credit score. As long as you have a stable job, the lender can collect from your salary. A payday loan is a short term, making it less risky for lending firms.

Quick Processing

Processing of payday loan can take a few hours because of fewer requirements to check. You only need proof of employment, payslips, and proof of identity, which most borrowers already have. You can expect to have the funds in your bank account the same day that you submit your application.

Easy Repayment

Another benefit of a payday loan is the easy repayment scheme that borrowers can do online. You do not have to commute to the lender’s place during your due dates. Some firms would ask to withdraw payments directly from the borrower’s bank account for convenience.

Advance Payments Can Reduce Total Amount Due

Unlike other types of loans wherein borrowers cannot pay in advance, payday lenders allow borrowers to make advance payments if they want to have low interest. As a result, there is a reduction in the total cost of the loan.

Save Money

Getting payday loans to pay an old debt that incurs high interest is one way of saving money. An overdue credit card payment or overdraft can cost creditors in terms of penalties and annual interest percentage. Borrowing an amount to pay off these debts would stop the penalties and other charges.

For example, late payment penalties for a credit card can amount to £25 a month while the overdraft can amount to £20. If you take £100 payday loan and pay your credit card and overdraft, you would stop worrying about the penalties while paying less APR on your loan.

Short Repayment Period

The repayment period dramatically affects the cost of the loan because you would be paying the APR throughout the life of the loan. A 25-year loan would cost more than a 6-month loan. Aside from the monetary cost, payday loans would mean less stress when a payment is due.

Accessible at All Times

As long as you have access to the internet, you can apply for a loan anytime you get short of cash, including during weekends. You can also make payments any time of day or night, saving you from delayed payment charges.

Regulated Lending

In the UK, the Financial Conduct Authority serves as a watchdog for erring lenders. The agency also regulates the annual percentage rate and the terms and conditions of credits. Borrowers would never have to suffer from high APR or unlawful penalties and charges,

The next time you need cash immediately, consider applying for a payday loan. Application is easy, and processing is quick. You would also enjoy some benefits that you cannot enjoy with other types of loans.

Instalment Loan: Its Features and Benefits

Residents of the UK have many options when it comes to getting a loan when they are in a tight money situation. Many lending and financing companies offer quick loans that are payable in a short time. If a borrower thinks that he cannot pay back a loan in 6 to 12 months, which is the case for a payday loan, he can take an instalment loan. But, what is an instalment loan?

As the term implies, instalments loans are credits that a borrower can pay in instalment basis. Instead of paying the amount that you borrowed in a single payment, you can pay it in several months. Some borrowers might opt to pay in three to six instalments while others may grant 24 months instalment of two years. Because you can divide the loan repayment into several instalments, you would be paying insignificant amounts every due date, making it easy to pay back the amount that you borrowed.

Instalment loans also have some benefits as follows:

You Deal with Direct Lenders

When you take an instalment loan, you directly deal with the lender instead of using a broker. One benefit of a direct loan is that you do not have to give your personal information to a broker who might share it to a third party, which can compromise your personal information and privacy. Instead, the direct lender would ask you to create an account so that you can log in to the website directly.

Some brokers earn a commission for every borrower that applies for a loan through them. The lending company could pass on the cost to the borrower, which could result in high application and processing fees.

Fast Approval and Release

When the direct lender is the one evaluating your loan application, approval can only take a few minutes after perusing your documents. After the approval, the lender would notify you that he has deposited the fund to your bank account or that your check is underway. The speed of the process would save you from worrying whether the lender would approve your loan or not.

Applicants with Bad Credit Are Welcome

Most people that apply for small loans are first-time borrowers and do not have any credit history yet. Borrowing from other lending companies might not be possible because they have no record yet. Taking an instalment loan is the easiest and fastest way of starting to build a credit history. Lending companies of instalment loans are willing to lend you money as long as they see that you are capable of making the agreed instalments.

Most Lenders Do Not Require Credit Check

In the UK, a credit investigation of the applicant is not an essential requirement. Nevertheless, some lenders take the initiative or conduct credit investigation to protect borrowers from getting caught in a cycle of debts that can destroy them in the future.

Fixed Interest Rate

The fixed interest rate of an instalment loan allows the borrower to predict the amount that he must allot for his debt payment every due date. He does not have to wait for the monthly notice of how much he must pay. As a result, he could make advance payment if he can spare more cash.

Bigger Loan Amounts

The amount that one can borrow from an instalment loan is more than the maximum amount that they can get from a payday loan. You can apply for £100-£10000, allowing you to have the amount you need for costly emergencies such as hospitalisation, education, and house repair.

If you need cash for some exigency, taking an instalment loan can help you meet your financial needs at an affordable interest rate and repayment schedule.

The Most Efficient Ways to Protect Your Money from a Financial Crisis

Whether we like it or not, financial crises do occur every couple of decades. Some are more powerful than others, however, all of them have the potential to destroy entire economies and to take your money away in the process. This can happen by lowering the value of the money that you already have or by increasing the interest rates and prices to the point where you will have to spend everything just to stay afloat.

Regardless of how serious the effects of a crisis can be, once you feel that one is close by, it is important to know how to protect your finances or you may find yourself on the verge of personal bankruptcy faster than you can say “financial crisis”.

This having been said, although you cannot completely negate the effects of a financial crisis, there are several methods that you can use to protect your money during periods of time when the economy is freefalling. Here is what you should do:

Understanding the effects of a financial crisis.

Create a decent-sized buffer

The first step towards protecting yourself from the effects of a financial crisis is to create an effective buffer. This essentially means that you will have to put money on the side and create an emergency fund, of sorts. This buffer is meant to act as a safety net in case of an emergency, preventing you from using credit.

You should create a buffer fund regardless of what money you already have in your savings account. The purpose of this fund is to allow you to go through the coming crisis without having to tap into your life’s savings.

Make a comprehensive, functional budget and follow it to the letter

Planning is extremely important when the economy is unstable. In other words, you will have to create a detailed budget and to plan your monthly expenses. This will give you a better picture of how much you’re making and spending spend each month and on what products or services.

Once you create the budget and plan your expenses, keep to it no matter what. Keep in mind that going through a financial crisis means that you have to spend as little as possible.

Reduce the amount of money that you spend each month

Once you create a budget and analyse what you spend money on each month, it’s time for a little housekeeping. Go through your expenses and eliminate all non-essential services or products. For example, if you have satellite TV, Netflix, and Amazon Prime Video, it is probably time to shut down two of the services and only keep the cheapest one.

This also applies to luxury products. In this situation, everything that isn’t vital to your regular day-to-day life should be considered a luxury product. Pause any online services that you do not need for work or school and only buy food, basic personal care products and cleaning supplies.

Prepare for interest rate rises

The interest rates for variable-interest loans and mortgages will unavoidably rise. Although you cannot change this fact, you can prepare for it. When planning your future expenses, take this rise into account and try to approximate how much your debt will cost you.

Overpay your mortgage whenever you get the chance

Whenever possible, make sure to overpay your mortgage. This will give you a bit of wiggle room if the price of the property falls. If you have a lot of equity in your home, you should be fine even if house prices were to fall by 10-20%.

Conclusion

Generally speaking, the best way to save your money from the effects of a financial crisis is to spend as little as possible, while also preparing for most expenses to go up. Create a decent-sized buffer, budget your monthly income and expenses, and eliminate all unessential spending.

How To Apply For Bad Credit Loan In UK?

Applying for a loan is easy for those with good credit standing. In the UK, lenders can check a loan applicant’s credit score through some of the agencies that rate the credit-worthiness of people applying for credit. People that get a good rating have higher chances of getting a loan compare to those with low scores. Lenders consider it risky to invest on borrowers that might default on their payments. However, there are lenders that offer bad credit loan or a loan for borrowers that cannot pass the credit score requirement of traditional financing companies and banks.

When you are in dire financial need, here are some guidelines in successfully applying for a bad credit loan.

Know the Basic Requirements

Before applying for a loan, make sure that you meet all the requirements. In the UK, applicants for bad credit loan must be at least 18 years old and a legitimate resident of the United Kingdom.  An existing bank account is necessary because the lending company deposits the funds to your account. You can make payments through automatic transfer from your account to that of the lending company. The last requirement is proof that you are capable of paying back what you borrowed. The lender would ask you for a copy of your pay slip or of your bank statement. Submitting all these documents can help speed-up the application process, which could only take a few minutes to an hour.

Make sure you educate yourself on the basic requirements when taking on credit.

Be Aware of Your Credit Score

Bad credit lending companies are not strict when it comes to a borrower’s credit rating. Nevertheless, having a good credit standing can assure you of loan approval. If your credit history does not look good, do something to improve it, such as making prompt payments once you got your bad credit loan. A good credit standing would allow you to take bigger loan amounts.

Shop for the Best Loans for Bad Credit

Find the best bad credit loan offer by comparing different lenders. One important thing to consider is the loan amount, which may vary from lender to lender. Decide how much money could resolve your problem and apply for that amount. Asking to borrow beyond what the lender specifies can lead to the rejection of your request to borrow money. 

Knowing how much annual percentage rate the lender charges could help you get a loan that you can easily pay. Bad credit loan companies do not have the same interest rate and going for one with the lowest would be to your benefit.

Check the repayment terms. Most bad credit loans are payable within 3 months to 36 months. When deciding on the repayment term, always consider your financial circumstances. If you have a good salary, you can opt for a 3-month repayment plan and longer if you have a low net income.

When applying for a bad credit loan, you can choose between a personal loan and a secured loan. A personal loan would not require you to secure the loan with your valuable property such as your house or your car. Because it is not secured, you can only qualify for small loan amounts. If you need more money, you can mortgage your house or your car. However, you would face the risk of losing the house or the car that you used as security because the lending company can seize these properties if you cannot pay your loan.

Another way of getting a bad credit loan easily is by having a guarantor or someone to cover the loan if ever you cannot complete the payments. You can ask a relative or friend to be your guarantor.