Saving Strategies for The Christmas Season

The holiday season can actually be quite stressful with family commitments, time and perhaps travel as well as the extra financial strain. You are able to reduce the financial stress with a good plan for the holidays. Also, with a plan in place, you can reduce your holiday expenses without it feeling like you are being overly tight for Christmas.

Here are some great saving strategies for the Christmas season.

Start to Shop Earlier

Getting your Christmas shopping started earlier will help to reduce the stress of shopping as you will have more time to find the best prices. Usually, the perfect present is actually not that expensive. By starting your shopping earlier, you can spend less because you have more time and will not panic purchase.

Start a Gift Exchange

If money is tight for you then it might be a good idea to do something similar to the normal gift excahnge with your friends and family. With a gift exchange, you don’t need to give everyone in your family an individual gift, but rather draw names to see who you are buying for or give a family gift instead of individuals.

With a gift exchange with either family or at work, you can set a limit on the amount that is to be spent. This limit should be reasonable and don’t be afraid to ask for a lesser limit.

Limit Your Holiday Travelling

You should look at your other obligations during the holidays and see which ones you are able to cut back on. You could choose to do the holidays at home and then visit family at a different time of year when it is cheaper to travel or if you are going on holiday then you can see where you might be able to make cuts, but still have a good time.

If money is tight, then prioritise which aspects of the holiday celebrations are the most important to you and limit the other ones, so you can make it happen.

Wait…There are more saving strategies…

Create a Holiday Budget

Having a holiday budget will help you to stay on track. Many of us will only budget for gifts and forget about the other expenses that might be involved like travel, food, cards and decorations. You need to make a realistic Christmas budget so that you can stay true to this and include everything.

Making the switch to spend cash for the gifts will make it easier to stay on budget. This is because you will become more conscious of the money you are spending. If you use a credit card it will lead you to spend more because it is a lot easier and it doesn’t feel like real money.

Also, keep an eye out for any sales and deals, which are usually rampant during this time so you will have plenty of choices.

Plan for Next Year

You can actually start planning for next year right now. You can save money each month for Christmas and you can even start to purchase gifts throughout the year.

This type of preplanning, will mean that you are spreading your Christmas expenses throughout the year and you won’t take such a big financial hit like you do during December.

You should keep track of who you have gotten gifts for, so you do not buy them more than one gift and store these gifts in one location so you do not lose any.

By already planning for next year, you can take advantage of sales throughout the year. It is not the best idea to buy clothing items or other things that change quickly, but you can get novelty items and other things that would be good gifts.

Don’t Deviate from the Plan

Planning now will help you to save money and will also reduce the stress of the holiday season. You should speak openly with your friends, family and co-workers and come to a reasonable understanding and you might actually be doing them a favour as well.

If you find that there are some people that are not wanting to make these types of cuts over Christmas then just spend less on each gift that you need to get.

If you do find that other people are not willing to make cuts over the festive period then find a way to purchase the gifts you need to, but spend less on each item.

You need to keep your Christmas shopping comfortable to what you can afford so you are not paying off any debt or interest on the purchases for the next year.

 

Reasons to Consider Debt Consolidation for Credit Card Debt

We all use short term unsecured debt, which is in the form of credit card debt and many of us have more than one credit card. Credit cards charge interest and other fees, which makes this type of debt expensive. Here are some reasons you may want to consider consolidating your credit card debt.

Interest Rates are High

One of the main reasons why people consider consolidating their credit card debt into one card is because of interest that is being charged on their existing credit cards is too high.

The credit card industry is competitive, which means that credit card providers do not all offer the same interest rate. This means that some credit card providers offer significantly lower interest rates compared to other issuers.

If it will be financially beneficial for you to consolidate all outstanding credit card debt into one credit card debt with a lower interest rate then you should consider doing this as you will be making savings.

The Annual Fees

Credit card issuers now ask members to pay an annual usage for the credit card. This annual fee can be pricey and they can quickly add up when you have more than one credit card and have to pay numerous annual fees.

However, if you are considering to consolidate your credit card debt because of this then make sure that the credit card provider is not adding this fee somewhere else through hidden fees or a higher interest, because you may find that the overall cost of funding the debt adds up to more than just paying the annual fee on your existing credit cards.

Consolidation of Credit Cards as a Personal Loan

Many of us do not know how to budget credit card spending. We have a limit and seem to think that we need to spend all of it. However, if you spend your limit then you will be spending years trying to pay the debt back. Every month we have to make at least the minimum monthly repayment to the credit card provider. This can become highly stressful when you are trying to pay more than one minimum every month.

Due to this, a lot of people we look at consolidating their credit card debt through a personal loan, which can be paid back monthly.

A personal loan is cheaper than credit card debt, so if you believe it will take you more than a year to repay your credit card debt then a personal loan consolidation might be the answer.

Bad Credit Rating

If you have let your existing credit card debt get on top of you to the point where you are not able to make the monthly minimum repayments then your credit rating will take a hit, which means it will be harder for you in the future to get any type of credit, which could be another reason why you might want to consider debt consolidation.

They Are Paying You

The last reason why you might want to consolidate your credit card debt so you have one debt is because the credit card provider is paying you to. This might be hard to believe but the credit card industry is now so competitive, providers are now trying to get people to sign up to their card.

A credit card issuer may know that you have an existing credit card and may ask you to transfer your credit card debt balance to them and in return, they may reduce some of your debt from your outstanding balance.

However, check the interest rate and other fees on the new card before you make the switch and make sure it makes financial sense.

Wait…You might need to know this…

How to Consolidate Debt

Consolidating debt is not the right option for everyone, but it is able to improve your finances when it makes sense.

Always Do Your Research

Before you decide to consolidate and see if you qualify, you will need to know what you want to consolidate.

You will first need to check your balances and rates on your credit cards so that you are able to compare these to new options. You are able to consolidate all of your debt or just some of it.

You will then need to find what options are available to you. This can be done by filling out a simple form and then you will be able to check rates and how it will affect your credit score.

Compare the rates and decide how much you wish to consolidate. You do not need to consolidate all of your cards, but if your cards have a higher rate than the new offer then you might be able to save by combining them all.

Applying for a Personal Loan

Once you have found the option you like, then you will need to apply for the loan, verify your information and sign.

If you are applying for a personal loan to consolidate your debt then lenders will look at:

  • Your debt to income ratio
  • Your credit
  • Your payment history
  • Your lines of credit
  • Proof of employment and income proof.

Credit cards can be expensive when you have accumulated a good amount of debt. If you are struggling to pay this debt back then you can consider consolidating the debt so that it easier and cheaper to pay off your debt. You can move your outstanding debt to a new credit card or use a personal loan to consolidate your debt. Before you make any decisions read all the fine print and make sure that it is financially worthwhile to do this.

Who is LoanFinder?

Have you heard of LoanFinder? LoanFinder is an easy solution for you to borrow money online. LoanFinder offers an easy online loan application online, making borrowing money quick and simple.

With LoanFinder you can still get a loan even if you have bad credit, defaults or garnisheeing orders.

Your LoanFinder loan can be used for whatever you need it for whether it’s to help pay for your education, a vehicle, home renovations, a vacation, a wedding or anything else you may need.

LoanFinder offers a 4 in 1 plan that includes Financial Counselling Programme, Quarterly Credit Report, Legal and ID Assist and a Free Loan Finding Service.

With LoanFinder, you will have access to:

  • Loans of up to R150 000
  • A full credit report
  • Legal and ID assist
  • A financial counselling programme
  • Help to Improve your credit score
  • Monthly debt savings of up to 50%
  • Flexible repayment options from 12 to 60 months
  • Interest at 28%

With LoanFinder, you can find the loan you need for whatever you need it for.

 

Personal Loan Characteristics

Personal loans are a great way for you to pay for expenses that you may not have normally had the money for and you are able to pay it back at a rate you can afford. Here is a look at some characteristics of personal loans.

  • Personal loans are unsecured, which means you will not need to provide any form of collateral in order to take the loan. It also means you will not need to risk any of your assets in order to obtain the loan.
  • Personal loans usually cost less than a credit card or a cash advance loan. Payday loans involve application fees and high interest, but cash advances also require a fee for each balance transfer and interest.
  • You are able to use personal loans for anything that you want. You are able to pay for an unexpected expense, a car, home renovations or other such things.
  • You can use a personal loan for debt consolidation. This means you can combine all your debt into one loan that has one payment. This can make your debt more manageable as you only have one debt to focus on that has one interest rate.

You should always take your time and shop around for a personal loan and compare them, so you can get the best loan terms that fits well into your budget.

 

The Best and Worst Ways to Use a Personal Loan

It is not always a bad thing to borrow money and it can actually be very helpful in certain situations. A loan can help you to build your credit, buy something that you need and gives you the freedom to arrange payments that you are able to afford. However, before you take a personal loan, you need to consider what you will be using it for and if it will be beneficial or if it will just leave you in more debt.

The Best Ways to Use a Personal Loan

Debt Consolidation

Debt consolidation is where you move all your debts into one new loan, which means you won’t need to juggle multiple accounts anymore as you just need to focus on the one loan.

You are able to use a personal loan to pay off all your creditors, which will then consolidate your debt and you will only need to pay the personal loan back.

Personal loans will usually have a better interest rate than a credit card and your monthly repayment might be lower because the term of the loan will be longer.

Buying a Home

A personal loan can also be used to help with the purchase of a home. You can use the loan to make the deposit on a house or to help with other expenses like closing costs.

This is seen as a good investment because you will be able to build equity in your home as you make your mortgage payments. Once, you have finished paying the mortgage, your home will become a valuable asset.

Home Maintenance

Your home is a good investment and it is important to protect it and to make sure it stays in good shape. This will include maintenance and repairs for any unexpected problems. If your roof is leaking, for instance, and you are not able to afford it then you can take a personal loan to cover this cost. It will then prevent further damage to your home and the value of your home will go up.

Repairing a Car

A car is another big investment, as it gives you the freedom to go where you need to and will affect your job and your life.

If you need a new car to get to school or to work, then you can use a personal loan to buy a car. You can also use a car loan, which is secured by the car. You should only get a car that is reasonable for your income level.

You can also use a personal loan for car repairs because if you don’t have your car, your job will be affected.

Starting a Business

It can be pretty expensive to start your own business and many of us will not have the funds available to do this, which is where a personal loan comes in. New businesses can be risky, but you are using a personal loan to create a way to make money, which will help you to pay your loan back.

Medical Expenses

Your health is vital and it is a good idea to invest to make sure that you stay healthy. Medical expenses can be extremely high and often your insurance or medical aid won’t cover all of these. If you are struggling to pay your medical bills then you can get a personal loan to pay for them.

All the good ways to use a personal loan involve investing in things that will benefit you in the long term. However, there are bad ways to use a personal loan.

You might be wondering about how you shouldn’t use a personal loan…

Worst Ways to Use a Personal Loan

Holiday

It can be very tempting once you have a personal loan to go away on the holiday of your dreams, but using a personal loan for this, is one way, you can be sure that you will end up in debt.

Using a personal loan to go on a once in a lifetime trip is not a good idea, because when you come back you will need to pay off the loan and this can take years. Is a two-week holiday really worth years of monthly payments?

You should only really take a holiday when you have some extra money to use.

Extravagant Weddings

Another bad way to use a personal loan is to use it for a lavish wedding. There are actually many couples that will go into debt for their wedding day. Getting married should be a memorable experience, but you shouldn’t start on the wrong foot.

Keep your wedding spending in control and don’t feel like you have to go overboard for it, because you will need to pay it back.

If you really want a lavish wedding then you should save for it, instead of going into debt for it.

Holiday Season

The holiday season can be a hot bed for temptation because you want your loved ones to have the best Christmas ever, but don’t fall into the trap. You should not get a personal loan in order to buy gifts, because you will be in debt for the rest of the year.

Gambling

If you are going to go into debt then it needs to have a reliable outcome. You should then not get a personal loan for when the outcome is out of your control like gambling, which is highly unpredictable.

Stock Market

This is also true of the stock market, which is like gambling. The stock market is volatile and you are able to lose everything in a matter of minutes. You may have the funds to invest in the stock market one day, but you should not take a personal loan in order to do it.

Everyday Expenses

If you have bills that are piling up, you need to buy groceries or clothes then you shouldn’t even consider taking a personal loan to pay for these. Instead, you should draw up a budget and see what you are able to cut back on in order to be financially sounder.

Wait…If you want a personal loan there is more to know…

Finding the Right Personal Loan

Check Your Credit Score

The terms that you are able to get for your personal loan will depend on your credit. You will be able to borrow more and pay less for a loan when you have a good credit score. You should then check your credit score before you start shopping for a personal loan.

Compare the Interest

Personal loans have two kinds of interest rates. The first is variable rates, which go up and down depending on the market. A fixed interest will remain the same through the term of the loan, which can help you to budget.

Fees and Penalties

The overall cost of your loan will be affected by the fees and charges. You need to know and calculate origination fees, loan approval fees, prepayment fees and any other fees that the lender charges.

Shop for a Loan

Before you start looking for a personal loan, you need to ensure that the lender you are using is trustworthy. You should look for reviews of the lenders and find out what others are saying.

You should also take the time to compare lenders, so you can find the best personal loan that is available. You are able to find sites that will source the best personal loans for you and allow you to easily compare them.

Personal loans can help in all sorts of situations, but they should only be used on things where you will gain a benefit at the end of it. You should not use a personal loan for careless spending, as this will only create debt and not give you anything valuable in return.

What is a Debt Consolidation Loan?

If you have lots of different debts and you find that you are struggling to keep up with the repayments, then you are able to join them together into just one loan that will lower your monthly repayments.

In essence, you will borrow enough money so that you are able to pay off all your current debts and just owe money to the one lender that will only have one interest rate.

You are able to get a secured debt consolidation loan, which is where the amount that you borrow is against an asset like your home. This would mean that if you are not able to pay the loan back then you will risk losing your home.

An unsecured debt consolidation loan is where the amount that you borrow is not secured against an asset.

How Does a Debt Consolidation Loan Work?

A debt consolidation loan will need you to live modestly and you will have to exercise a great deal of discipline.

The amount that you owe doesn’t change with a debt consolidation loan, it is just able to pay off the debts you have with a new loan that you will need to pay back.

You are then replacing a number of loans with just one loan, that will hopefully have a better interest rate and monthly repayments.

Before, you choose to take a debt consolidation loan, you should look at your ability to repay the loan. You will need to determine how much you can afford to put towards it every month and if you will be paying a secured or an unsecured debt. Debt consolidation loans are generally geared towards unsecured debts like medical bills, credit cards etc.

You might be wondering if there are different types…

Types of Debt Consolidation Loans

There are actually a few different types of loans you can use to consolidate your debt.

Home Equity Loans

This is a loan that is taken out using the equity in your home as collateral. You will need to have a fair amount of equity in your home as well as good credit in order to get this type of loan.

The interest rates on a home equity loan are lower than other types of loans, but the problem is that your home will now be at risk if you can’t afford to pay the loan back.

Credit Card Balance Transfers

A balance transfer involves transferring credit card balances to one credit card that has a lower interest rate. You will find low balance transfer interest rates, which are promotional rates that will come to an end after a certain period of time. If you do choose to transfer your balances then you need to know when the special low rate ends and the normal interest rates come into being.

If you want to use a credit card balance transfer for debt consolidation then the credit card will need to have a large enough credit limit that is able to hold all of your credit card debt.

The problem with this is that your credit score will take a hit and will cause a negative effect.

Personal Loan

You are able to use a personal loan for debt consolidation if you are able to borrow a large enough amount. A personal loan is an unsecured loan that offers fixed payments over a fixed payment term.

Once, you have been approved for a personal loan, you can use it to consolidate your debts. However, if you have a bad credit rating then you will find it difficult to get approved for a personal loan or may have a high interest rate.

Debt Consolidation Loans

You are able to get a debt consolidation loan, which is for the purpose of consolidating your debt. You are able to get this type of loan from a bank and other financial institutions.

A debt consolidation loan will ideally have a lower interest rate than the rates that you are currently paying on all your debts, but be aware that the lower monthly repayments might be because the repayment period is for longer, so you will be in debt for a longer period of time.

Wait…There are few things that you still need to know…

How Does Debt Consolidation Affect My Credit?

You have the opportunity to improve your credit with a debt consolidation loan as long as you use it as a financial plan and not just as a way to shift your debt around.

Once, you have taken out your consolidated loan, you will have paid your multiple debts in full and you can just focus on paying the new single loan.

If you are taking out a debt consolidation loan then we can assume that your credit has taken a hit. Your credit score will not immediately improve and may first take a dip, but once, you start making timely payments on the new loan then you will be creating a positive effect on your credit rating and over time it will improve.

Advantages and Disadvantages of Debt Consolidation

Advantages of Debt Consolidation

With a debt consolidation loan, you will have lower monthly repayments as you are spreading the loan over a longer period of time.

There is also a lower interest rate associated with a debt consolidation loan, so you will have a lower cost of debt overall.

As there are lower repayments, the debt becomes easier to manage. Also, by placing all your debt into one loan, you won’t have to try and juggle multiple payments with different payment amounts, due dates and interest rates.

Disadvantages of Debt Consolidation

If you have secured your debt with a home equity loan or mortgage then you will be risking your home if you fall behind on your payments.

As a debt consolidation loan extends your debt over a longer period of time, your cost of debt will increase.

If you have a bad credit score, then you may need to seek the help of a co-signer in order to get the loan.

Debt consolidation loans shouldn’t be rushed into and you should consider all of your options first. A debt consolidation loan can help if you find you are way in over your head as you will find it a lot easier to pay just one single loan with a lower monthly repayment and a lower interest rate.

What is a Personal Loan and What are the Benefits?

There may come a time in your life where you might need money for one thing or another, whether you have a bill that needs to be paid, you want to pay for car repairs, renovate your house, expand your business and whatever other reasons you may have.

There are a number of ways that you can get the money you need. You can ask family or friends, sell some of your assets or you could take a loan.

There are a number of different types of loans to choose from, but a personal loan is one of the best options.

What is a Personal Loan

A personal loan is a loan that is granted to serve personal needs by a lender or a bank. a personal loan is referred to as an unsecured loan, because you will not be required to put up any assets in order to secure the loan.

Once, you have taken a personal loan, you will need to repay it by paying fixed amounts each month over a certain period of time.

You will get to decide the amount that you would like to borrow and over the term that you would like to borrow the money for. However, the lender will make the ultimate decision on your loan.

The amount that you will need to pay back will be the initial amount that you borrow as well as the interest that has accrued over the term.

You might be wondering why you should take a personal loan…

The Benefits of Personal Loans

There are a number of benefits associated with personal loans, so here is a look at the ones that you need to know.

Personal Loans Are Available Quickly

A personal loan is usually processed quickly, which means they are perfect for emergencies. If you have an expense that needs an immediate payment, then you will be able to get the money you need.

A personal loan doesn’t require much paperwork and there isn’t a lot of protocol involved. You will need to speak to your lender, fill out the required forms and the funds are given to you within a few days as long as you have met all the conditions set out by the lender.

Personal Loans are Flexible

Personal loans are more flexible than other types of loans as they do not have any restrictions on what you can spend it on. You are able to use a personal loan for anything that you want.

The lender is also not interested in what you want the funds for and what you are going to spend the money on as they are more interested in your capability to repay the loan back by the intended due date.

People take personal loans for all sorts of reasons like medical treatments, education fees, holidays, weddings and other such things.

Personal Loans have Lower Interest Rates

When you compare a personal loan with other loan types, personal loans show to have lower interest rates, which can be fixed. A fixed interest rate means that it doesn’t change over the course of the loan or according to the current market.

This has led to there being stiff competition between lenders as they all want to attract customers with low interest rates. However, make sure that you always read the fine print before taking a loan.

A lender will also assess your risk, which means that the interest rate is determined by your ability to repay the loan. If you have a high earning job, no other loans, a good credit score and have a relationship with the lender then you won’t have any problems in getting the best interest rate.

You can further lower your interest rate by changing it to a secured loan, but this means that you will put up an asset against the loan.

Personal Loans Have Planned Repayments

Personal loans are fixed term loans, which means they offer the same interest rate and repayments over the term of the loan. This will help you to budget every month as the repayment will never change and you will know exactly what you owe beforehand.

If you are able to repay the loan before the intentioned due date then you are able to pay it off. However, make sure that the lender doesn’t charge you a settling fee for doing this. Your credit rating will improve when you pay your loan off by the intended due date or before.

With so many benefits, it is easy to see why taking a personal loan is a good option if you need to get some money to help you through an emergency or if you just need something.

However, you need to keep in mind that a personal loan will also increase your personal risk, because you are taking on a financial liability that you will need to repay as well as the interest rate that will accrue through the term of the loan.

There are a number of personal loan lenders to choose from, but remember that you can’t just get a loan. You will first need to qualify and be approved for the loan, which means that your credit score can come into play, so make sure you meet all the requirements of the lender before you apply, so you have a better chance of being approved.