How to Take Advantage of Lenders

Often lenders are made out to be the enemy. It is understanding that some people will think this when they perhaps owe a lot of money, get lots of fees and charges for them and cannot seem to find good deals. However, there are some people that take advantage for lenders and gain a lot as a result of borrowing money. Below are a few examples so you can think about whether this is something that you might be able to do.

The way that businesses grow is to invest. They have to buy more stock employ more people or move into larger premises in order to be able to sell more. This means that they will need to pay for this. Although they could wait and save up to do this, they will be able to do it a lot more quickly if they borrow the money. If they forecast correctly then they should be able to make more money from their investment than they are paying in interest.

Mortgage Holders
Many people would like to own their own home rather than rent. Private renting is usually more expensive than mortgage repayments and so you can immediately start saving money. This will of course depend on the rent that you are paying and how much your mortgage repayments are. Once you own your home you will no longer have to pay anything monthly at all. There are some extra expenses that come as a result of owning your own home, such as maintenance, buildings insurance and things like this but the fact that the money that you have paid in can be got back when the building is sold, it usually increases in value and you do not have to pay rent means that in the long run you will be better off.

Credit Cards
Credit cards can be really useful as long as you pay off the full balance each month. You can set up a direct debit to do this for you and this will mean that you will not forget to pay it off and therefore never pay any interest. There are several advantages of using the card and paying this way compared with using a debit card or cash. Firstly, a credit card has insurance and so if you order items and they do not turn up, you will be able to get your money back through the card provider. If you order online the card is more secure than a debit card. You are not paying for items right away so you can get interest on the money that you would have spent and make yourself something back.

So you can see that there are situations where borrowing money can be really helpful. It can actually mean that you might be able to improve your financial situation compared to if you did not borrow. There are obviously many types of borrowing where this is not the case and you will have to be careful to make sure that you pick a loan that will work for you and your lifestyle.

Some people do struggle to be self-disciplined when it comes to money and this can be a problem if they have a credit card in some cases. They may spend more than they can afford to repay and this could mean that they will end up getting into all sorts of financial trouble It is worth thinking about whether you are likely to do this, if you do get a credit card or whether there are things that you can do to make sure that things do not get out of hand. You also have to be careful with a mortgage too, as if you buy a property that decreases in value or struggle with the repayments you could end up paying more than you otherwise would need to.

It is important to be really careful when you are considering borrowing money. There are many reasons that people borrow and many different types of loans and it is important to get it right. Make sure that you will gain financially from any borrowing that you are doing, both in the short term and long term, taking all of the costs of borrowing into account. Also make sure that you pick the right loan for you and compare those loan types to make sure that you get the one that offers you the best value for money. Do not borrow more money than you need as that will lead to unnecessary expense. If you have a long-term loan, such as a mortgage, then regularly compare it to others and switch to a better lender if you can.

There is a lot to consider and think about but it is important to realise that not all borrowing is bad. There are some good reasons for borrowing as well and you just need to make sure that you are borrowing for the right reasons and that you will make financial gains from doing so.

How to Repay your Overdraft

There are many people that have an overdraft. Most banks and building societies will offer an overdraft facility on a current account so that you can borrow extra money should you need it. Many people use them if they run out of money before they next get paid. When their salary goes into the account then it will repay the overdraft for them. They are very convenient, simple to use and often available even if you do not want them. Unfortunately, it can be all too easy to use them to borrow so much money that your income does not repay it or you struggle each month and get more and more overdrawn by the end of it. You may be in a situation where you need help in repaying.

 The idea of finding a lot of money to repay can be daunting and it is understandable that you might be avoiding doing so if you can. However, there is not really a need to worry as there are things that you can do. Do not expect it to happen quickly, but slowly over time you should be able to whittle down the overdraft.

Look at your finances and set budgets
The first thing to do is to be clear on what is going on with your finances. Find out what you are earning, what you owe on your overdraft and what you are paying out. Look at what you have to pay out and what you are buying that is not necessary. Set a budget so that you put aside money to pay all of your necessities and then keep only a little for luxuries if you need it so that you do not spend more than necessary. Hopefully this budget will be lower than your income so that there is money left to start reducing the overdraft.

Look at cheaper borrowing options
An overdraft can be an expensive way to borrow money. This means that there may be better options available to you. You might be able to get a personal loan, for example which will pay off your overdraft and that will have a lower interest rate so it will be cheaper. However, not all borrowing ill be cheaper and you could get yourself into trouble if you use a loan to repay the overdraft and then get overdrawn again. Then you will not only have loan repayments to make but an overdraft to worry about as well. Therefore, be careful to make sure that you are confident that this will not happen to you if you do decide to take a loan out.

Look for opportunities to make more money
It can be good to look out for ways to make some extra money which you will be able to put towards paying off your loan. There are many opportunities available and they are very varied so hopefully you will be able to find something that will be useful to you. Firstly, if you have a job then it might be possible for you to work more hours, ask for a pay rise or even try to get a promotion with a pay rise. These could help to increase your salary which you can use towards repaying the overdraft. You might even want to change your job to one that is higher paying.

This may not be an option for everyone though but there are other options. It could be possible to sell items that you own and no longer need which could raise some money that you could put towards the overdraft. If you own your home you may be able to rent out a spare room, garage, attic space or driveway in order to earn some extra money that way. You might be able to pick up some work online to get some extra money coming in as well.

Cut down spending
Cutting down your spending should help you to not build up your overdraft so much and should hopefully mean that you can reduce it as well if you spend less than you are earning. Reducing spending can seem really hard, but there are things that you can try which are not too difficult and take a small amount of time. For example, if you check how much you are paying for electricity, gas, phone, TV, broadband and things like this, you might be able to switch to a cheaper company and save money. Changing your insurance company might also reduce how much you are paying. You may also be able to compare prices which you are shopping to see whether you can pay less for your food, toiletries and cleaning products. Do try to cut down on buying luxury items for a while, so that you can use that money towards repaying hat you owe instead.