Category Archives: Debt Management

How Bridging Loans Will Let You Purchase a Home Credit Free… Well Almost

Bridging Loans have recently seen an upsurge in both popularity and take-up. Will they let you Advice on Bridging Loans | CreditFree.netlive a credit free life? Well, not quite, but the loan period is a short term one so worth a short discussion and overview. This is how bridging finance and loans work.

Let’s Consumers Buy Before They Sell

If you are on the mortgage ladder then you will probably be familiar with that feeling when you see another home that you want to buy, but can’t quite afford it as you’ve still not sold your existing property right? It’s a familiar scenario, and is exactly why bridging loans and finance have been devised for the UK housing market.

The premise is pretty simple really. For home owners and property developers that are stuck in a situation where their existing property has not yet sold, then bridging loan lenders will step in and offer short-term finance so they can complete the new purchase, and then pay the loan balance off once the old property gets sold. You can read typical terms and conditions for bridging finance on most lenders’ websites.

Bridging Loans Help Move the Chain Along

Many consumers in the UK now use bridging loans in this way where they can’t get shot of their old house quickly enough or are in a lengthy sales chain. This can sometimes mean that the new purchase is in danger of falling through and not completing… banks and classic mortgage lenders don’t tend to lend large amounts of money over short-terms agreements which is where a bridging loan or finance can help out.

In fact, bridging loans can sometimes be the only way in which keep the arrangement on track and are becoming very popular with property developers with large portfolios where they have a lack of cash assets, just property assets. You can read an excellent guide here to property finance basics which reveals a little bit of how the magic happens.

Be Aware of Bridging Loan Interest Rates

But before you jump head first into a bridging loan application please beware… as with any type of loan there of course is an interest agreement. But due to the short-term nature, size, and ways in which bridging loans are arranged, the interest rates will be extremely high. In fact, if you want to see for yourself how much you will end up paying back then you can use an online bridging loan calculator.

Now, what would happen if you did end up not being able to pay back your bridging loan? This can happen from time to time, particularly if the original house sale either falls through or takes longer to complete than expected. In the event of this happening, then bridging loans companies will start to kick in higher interest rates and fixed financial penalties. So in effect you could lose cash risk your property during the buying process, and even end up in huge money troubles. Is it really worth it?   In my view, only for experience property developers and investors.

(Please note, if you are having financial problems then I recommend the Support Line).

What the Experts Say

Finance experts have say that bridging loans should not be taken out by people who are essentially attempting to beat property chain issues. With the UK property market having some serious issues over the last half a decade and with home loan banks pushing back on how much they will lend to consumers, numerous property deals are now failing to work out. Just bear that in mind.

My Conclusion on Bridging Finance

So to conclude, be careful when considering bridging loans as a way in which to buy property. Obviously the title of my blog post was a little tongue in cheek where I mention you can do it credit free, but many users of bridge finance do view it this way as the loan is so short. It goes without saying that you could risk losing your home using this strategy if everything goes wrong.

Is that a risk you want to take?

Let a Debt Management Plan Save You from Drowning in Debt

Living in the 21st century has to be one of the most expensive points in time to be alive. From the time we graduate from college, to purchasing a car for work, and having to buy a home in order to raise our children, it seems like there’s more debt than paycheck to cover all of our expenses. And that’s not even taking into consideration that we still need money to pay for insurance, utilities, food, and even medical bills.

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A debt management plan could be the start to getting your finances under control and a brighter future

It’s no surprise that many Brits end up having trouble paying all their bills. By the end of the month, the debt is carried over to the following month, leaving a huge debt by the end of the year. It seems like no matter what we do, it’s hard to get the debt load back down again. We get roommates to help pay our rent, we sell our stuff to get extra cash, we even work over-time in an effort to get just a little bit ahead. But at the end of the month, the bills are piled up in the box. Can there be any help on the horizon to keep us from drowning in debt, or worse, sinking right to the bottom?

A debt management plan can help you to consolidate all of your debts into one manageable payment each month. You’ll find it easier to cover your other living expenses, when you have only one manageable debt payment to make.

There are a variety of different types of debt that can be consolidated into one lump sum payment, so you can relax and not be so stressed about mountains of bills. Credit card bills, car payments, and school loans can all be consolidated into one lump sum payment, once or twice a month. The loan advisors will help tailor a debt repayment plan to your needs, all at an affordable interest rate.

You could carry on the way you’ve been doing, or you could pick up the telephone and find out how a debt repayment plan can help you out. Sometimes even the stress of seeing all those bills on your plate can make you feel ill. It also costs money to send out multiple checks or make multiple payments online. Even if you save £10 each month, that’s £10 that can be put towards repaying one of your bills. Over the course of a year, you could have one bill completely paid off. Sometimes it can be hard to see the bigger picture, when you’re inundated with all your bills.

Most likely if you’re having trouble repaying your bills now, it’s only going to get worse, and your credit report may be suffering because of it. Later on in life you may wish to purchase a new car or a new home, but the banks will turn down your loan application, because of your past credit history. The sooner you sort out your bills now, the greater the likelihood that you’ll be able to create a better credit history for yourself further down the road.

It’s worth looking into a debt repayment plan, so you can consolidate your unsecured debts into one easy repayment, resulting in plenty of money left in your bank account to cover your essential living needs.

3 Mistakes You Must Avoid to Manage Your Debt

Debt is an unfortunate circumstance that many people find themselves in, especially if they are trying to handle more responsibilities than they can manage on their own. And while managing your debt can be difficult, it is not impossible to get yourself out. The following are three very common mistakes that you must avoid in order to better manage your debt and increase your chances of relieving it.

Ignoring your creditors

It is a very common instinct to ignore phone calls, emails and letters from creditors when you are in debt—the most common rationale for ignoring creditors is that if you ignore them, you will have more time to get yourself together. But ignoring your creditors is the opposite of what you should do if you are in debt.

Instead, you should actually call your creditors and explain your situation to them. Tell them if you’ve lost your job, or if you had a sudden emergency medical bill that has devastated your finances—most creditors are more than willing to work with you if you show them that you are willing to work with them.

Emptying out emergency or savings accounts

Another common mistake is to turn to emergency accounts or savings accounts and deplete them in order to cover debt. While this may fix the immediate problem, it will only create further issues in the future when you need those savings or emergency funds. To keep most of your savings intact, take out a manageable, minimum amount and put that towards more pressing debt rather than emptying the account.

Sticking to minimum payments

Minimum payments may seem like a great idea; after all, all you need to do is pay a minimum amount a month and you won’t be faced with debt collectors or creditors. The trouble with minimum payments is that they actually create more debt in the future by adding high amounts of interest to your debt every month. And if you are only giving the minimum payment for multiple lines of debt, you are setting yourself up for massive debt that will be even harder to solve.

Instead of paying the minimum, pay as much as you can every month, even if you aren’t quite reaching the full payment. This will help you avoid that crippling interest and go further each month to removing your debt.