Monthly Archives: October 2019

Borrowing to open your own business – Cash Loan

As we know today, it is very wise to have your own interest. Then we can create a company that will deal with the field that is most familiar to us.

It is important to be aware of the subject, which results in good insight, appropriate knowledge on how to manage business, knowing the ins and outs of customers’ expectations. However, mere intentions and even great insights on the subject are not enough.

To get started, you need to have the right capital

To get started, you need to have the right capital

And initially we are talking about money, because they are necessary when creating a company. You have to rent or build a place, hire people and get the right tools and equipment, and all this costs a lot. So where do you get the funds? Well, we can get a chance for funding from a bank or other institution granting loans. Of course, for such an entity to grant us a loan, we must meet certain conditions that are clearly defined.

To receive such a grant called a loan, we must provide documents that certify that we are able to repay the debt incurred within a specified period. A loan is a form of financing that we have to pay back, taking into account the additional costs, i.e. interest. These are called the interest rate, and its amount depends, among others, on the amount collected and the time regarding repayment.

However, we cannot speak here about the issue, which turns out to be EU funding, because here we often receive cash that we do not have to pay back. Then, the most important thing is to meet the conditions set out in the contract, and therefore conduct the business as intended, which is also defined by a certain period of time.

The bank’s main credit institution

The bank

The bank is not the only institution that grants us credit, but it is undoubtedly the entity that most often grants loans. Cash loans granted by banks are a form of interest-bearing loan. It is from these interest that the bank benefits. The customer may have several loans, however, he must provide documents proving his solvency, and therefore should not have debt. It is true that we take out a loan to pay off another debt, but the bank will not grant us such a loan if it is not certain that we can pay it back.

Cash loans are granted for a given period after which we have to pay back the debt. It looks like that after presenting all the documents and meeting all the required criteria, the bank pays us a certain amount of money in cash. It can be both a transfer and direct collection of funds.

Pursuant to this transaction, the customer signs a contract, which includes both the period in which he should repay the loan and interest, which will be added to the loan. Cash loans last for a period of several months up to about 8 years. However, most often it is a term of 1 to 2 years. It is also worth mentioning that this amount can be returned once or in installments.

Parties concluding a credit transaction

Parties concluding a credit transaction

Two parties must participate in collecting the loan. One is the institution that grants the loan, and the other is the customer who collects it. Therefore, no guarantor or other third parties, here referred to as parties, are needed.

A bank or other credit entity is called a lender here. However, the person taking the loan is a borrower. So in a sense we are talking about the institution as a creditor and the client as a debtor. It is worth remembering that such an individual customer as well as a group of people or even a company can be a borrower. Most often, however, we are talking about one person.

How high credit can the borrower take? Its value depends on the client’s net income. According to this criterion, the bank can determine whether the borrower has the so-called creditworthiness, which proves that the applicant is credible and solvent. We must provide proof that we will earn and work within a certain time so that we can pay the debt. However, if we open a given business, and we do not work and earn ourselves, the loan must be taken by a person who has this job and stable income.

Use their buffer or borrow? – Take out Loan

We at Good Finance cannot stress enough how important it is to have a buffer if you want a safe and stable economy, not least if you own a car that may require expensive repairs or a villa where you may need to buy a new hot water heater if it wants really bad.

This with buffer is also especially important for those who have small margins because if you are hit by a large unforeseen fee, there is otherwise a big risk that you have to take out a loan to cover the expense. Or at worst, you might have such a poor ability to pay that you can’t get a loan at all and what should you do then? Stand without a car or hot water?

Without a buffer, you may be forced to take out a loan – if you get

bank

Some who find it difficult to get a bank loan due to poor payment ability are forced to take a sms loan instead and, as you know, the interest rates for these loans are significantly higher than for a bank loan. Now, Good Finance does not think that this with the interest rate is the biggest problem since the difference in the total loan cost between a loan of USD 10000 that you repay within a month and a private loan with the sum paid off in a year is not so extremely big, the big problem is being able to repay a sms loan of USD 10000 in 1-3 months.

If you have not been able to save up for a buffer and need money really quickly, you can of course turn to a sms lender who pays sms directly but before you do you have to be absolutely sure that you can repay the loan otherwise you can end up really sticky.

Remove the buffer or borrow?

Remove the buffer or borrow?

It is therefore very important to save for a buffer so that you do not have to take out a loan that you have to pay interest on if you suffer any costly unforeseen event. But how do you do if you have a buffer and are thinking of buying a car for example? Should you burn all your buffer on a car instead of taking out a loan for which you have to pay interest? We don’t think so. It is never good to stand without a buffer if something should happen and since the car loan is not very expensive today it is probably better to take a loan and keep its buffer, however you may be able to cover the down payment with it.

Here we show you what we think you should borrow and not borrow:

Do not lend to this

bank

  • Computers, tablets, cell phones and hobbies. These kinds of consumer goods should you try to save together or cover with part of your buffer if you have to.
  • Unforeseen expenses such as broken hot water heater, washing machine, dishwasher, car repair and other necessary pain. It is above all this that you should use your buffer for.
  • Buying a cheap used car because your old car has been paved and not worth repairing.
  • Also, do not lend to the entire housing’s cash stake, but you should also not pay the entire stake with your buffer if it means it disappears completely.

Borrow to this

  • New or better used cars. This kind of thing is usually so expensive that your entire buffer probably smokes if you use it and it is not good.
  • Purchase of housing. Yes, who can afford to buy a home with their own money?

Have you ever thought of a credit monitoring service?

The state of your credit depends on a variety of factors, including your use of all credit derivatives and loans, scams and all types of credit accounts you have, and even for how long are open. Any of these factors can negatively affect your credit rating and that’s why it’s so important to keep an eye on your credit report. Credit monitoring can help you do that.

 

What is credit monitoring?

credit monitoring?

Currently, not only do all our financial decisions affect our credit, but it affects our financial options. Your credit is a determining factor that governs whether you qualify for certain financial benefits and products. Loan approval, interest rates, leases and insurance premiums can all be greatly affected by your financial health. A credit monitoring service can help you manage your finances, keep track of your credit rating, make sure your credit accounts are all in order and even help you deal with fraud. If you frequently request copies of your credit report and credit rating from Equifax or TransUnion, monitoring your credit could be exactly what you need. Credit monitoring allows you to access your credit history, which means you can check your credit report regularly without having to request a new copy and pay other fees. Once you sign up for the service, you will have access to your own account where you will be able to view your credit report and receive alerts regarding your credit information.

Credit monitoring:

  • Helps you keep track of your credit rating
  • Allows you to monitor all your credit accounts
  • Keeps you informed when a new credit account is opened on your behalf
  • Warns you when you miss a payment
  • Inform you of any questions and changes regarding your credit

 

Credit monitoring and identity theft

Credit monitoring and identity theft

It is wrong to think that a credit monitoring service can help prevent identity theft. However, such a service can help you react faster and help you manage the situation if someone tries to steal your identity.

Unfortunately, if a criminal intends to steal your identity, he will surely get there. Once new credit is requested on your behalf, the credit monitoring service will notify you. This can help you take immediate action and limit the damage that could be done. Such a service will also facilitate communication with the creditor in case of identity theft. You will also be able to access all the information from your creditors in one place.

 

Who should use a credit monitoring service?

Who should use a credit monitoring service?

Anyone who actively uses credit can use a credit monitoring service. Know that you must pay for this service. If that worries you, maybe it’s not a good service for you. While everyone can benefit from credit monitoring, it can be even more beneficial for some.

  1. If you are very concerned about identity theft and are looking to protect yourself.
  2. If you need help keeping track of your credit accounts.
  3. If you are looking to improve your credit rating.

Credit monitoring is a great financial tool that can help you reach your financial goals, get back on track after a bad time, and even alert you to suspicious activity.