How to Buy Your First Home Right after Graduating From University

One of the biggest issues that most individuals have after they graduate university is the fact that it is difficult to keep up with all the monthly expenses. In most cases, these consist of student loan payments, rent, transportation fees, utility bills, and others. The fact that graduates usually have no financial history, thus do not yet have a good credit score. Furthermore, most of these expenses need to be paid even during the time that individuals are either unemployed or looking for a job. This having been said, the biggest monthly expense, for most people, tends to be the rent.

What most do not realise is the fact that they can purchase a home, right after they graduate, even if they do not have a high enough credit rating for a loan. This can be done by having someone co-sign the mortgage. Here is what a co-signed loan is and how you can apply for one:

What Is a Co-Signed Mortgage?

Regular loans come with terms and conditions that are based on an individual’s credit report. However, fresh university graduates usually have poor credit ratings or a short financial history, both of which are not enough to qualify them for a proper mortgage. Getting a co-singed mortgage means that an individual applies the loan (the money is borrowed in under his name), but also finds someone else to guarantee that the money will be repaid without any issues. A co-signed loan uses both the credit report of the borrower as well as that of the co-signer.

Generally speaking, the co-signer acts as a safety net that ensures the lenders that they will get the money back even if the borrower cannot repay it. The primary advantage of a co-signed mortgage is the fact that it enables almost anyone to get one, regardless of their financial situation or their credit rating.

Who Can Become a Co-Signer?

The restrictions that establish who act as a co-signer can differ from one lender to another. However, in most cases, relatives will be eligible for this role. They are also the safest choice for most individuals because it allows the borrowers and co-signers to stay in contact at all times. For the most part, borrowers tend to choose their parents or siblings as co-signers. Regardless of who you choose, keep in mind that the person should have a good credit rating and have built up his credit score so that you may benefit from their financial stability.

What Are the Other Advantages of Getting a Co-Signed Mortgage?

Having someone to co-sign your mortgage offers several advantages, on top of the fact that it is possible to get the loan even with a low credit rating.

First of all, the borrower benefits from the co-signer’s credit rating, meaning that he is likely to get a lower interest rate and better overall terms and conditions. Furthermore, getting a co-signer, especially a parent also offers a lot of peace of mind, since he will be able to make the payments that the borrower is unable to. This can be of great help to graduates who also have to repay their student loans while paying their mortgage. Secondly, a co-signed mortgage can help increase the credit score of the borrower, allowing him to build up his financial history and make it more likely that he will get great deals in the future.

Lastly, getting a co-signed mortgage may allow some individuals that already have a good credit rating to get more money and, as a result, purchase a larger home.

The Ins And Outs of a Covid-19 Bounce Back Loan

As the Covid-19 pandemic continues to sweep the globe, businesses from all over the country have experienced a considerable reduction in their income. While it may be easier for large businesses and multinational corporations to mitigate the effects of the pandemic, smaller businesses may not be able to recover without help.  As a result, the government has developed a BBLS, short for “bounce back loan scheme”. These loans are designed to help small and medium-sized businesses access financial support during the Covid-19 pandemic. Getting the loan is not particularly difficult, however, the information related to it is rather scarce. This having been said, we will look at who can gain access to a BBLS, what it offers, and what to do if a business is not found eligible.

What Is a Bounce Back Loan Scheme?

A BBLS is a lending scheme that enables small and medium-sized businesses to borrow between £2000 and 25% of their turnover. There is also a £50,000 upper limit that borrowers need to consider when applying for the scheme. One of the biggest advantages of a BBLS is the fact that the funds are entirely guaranteed by the government. Furthermore, the borrower does not have to pay any fees or interest in the first year. Once 12 months have passed, the company will be charged a yearly interest rate of 2.5%. It is also important to mention that if a company has used the scheme in the past, but has not borrowed enough money to reach the upper limit, it is possible to re-enrol in the program and gain access to more funds.

Lastly, please keep in mind that the program is only available for a limited time. While this limit is subjected to change, depending on the course of the pandemic, the current deadline is January 31st, 2021.

What Are the Eligibility Conditions?

The eligibility conditions for the BBLS are relatively clear. To apply for the program, a company must:

  • Be based in the United Kingdom;
  • Have been created before 31 Dec 2019;
  • Have been negatively impacted by the Covid-19 pandemic;

The authorities have also specified several restrictions that entrepreneurs must take into consideration. Generally speaking, the program is not available to banks, insurers, reinsurers or any public sector body. Furthermore, primary and secondary schools that are funded by the state cannot qualify for the BBLS.

What Are the Benefits of the Bounce Back Loan Scheme?

The loan scheme enables companies to get a loan that has a standard length of 6 years and can be repaid early without having to pay any fees. It is also important to keep in mind that this term can be extended by another 4 years, and the repayments can be put on hold for a maximum of 6 months, provided that the borrower has made a minimum of 6 repayments).

What Happens If a Lender Turns You Down?

The Bounce Back Loan Scheme is offered by a large number of lenders, however, each of them is free to assess the eligibility of potential borrowers. If a lender does not find your company eligible for the program, consider getting in contact with another lender or using the services of a broker to find other ways to find appropriate financing. Keep on mind that a business cannot apply for the Bounce Back Loan Scheme if it is already claiming under CBILS, CLBILS, or the Covid-19 Corporate Financing Facility. Furthermore, if a business applies to the BBLS and gets approved, then it will no longer have access to the other programs mentioned above.

What to Do If You Cannot Manage Your Debt Due To the Ongoing Pandemic?

The Covid-19 pandemic came without a warning and left many without jobs or with severely reduced income rates. This is a serious issue in itself as a growing number of individuals have been left unable to keep up with their monthly expenses. However, the situation is even direr for those who also have an outstanding debt that they need to pay, especially when it comes from secured loans. Missing even one or two monthly repayments can cause serious damage to an individual’s credit rating rendering him unable to access a variety of banking services in the future. This having been said, repaying one’s debt, especially during the pandemic is not as strict as some may think.

·      Try Setting a Strict Budget for Yourself

For some, the inability to manage their debt during the pandemic is a result of improper budgeting. While it is true that the income rates of many individuals throughout the country have been reduced by a considerable amount, spending money without having an expense plan is a sure way to go into debt. If you have one or more forms of debt that you cannot keep up with, the first step towards solving the issue should be to look at what you are currently spending money on. Creature comforts such as Netflix subscriptions and other similar services should be the first to go, followed by other unessential expenses. If you regularly shop at the same stores, look for discounts and coupons. Keep in mind that you should always pay your rent and utility bills first, then set aside an amount of money for groceries, and use everything that is left to repay your loans. If budgeting does not solve the issue, there are ways to find adequate help.

·      Look for Governmental Help Programs

The government is currently offering a multitude of programs that are designed to help employers, as well as employees, get through this difficult period. Go online and look at what help programs you would qualify for and apply for them. Depending on the situation, your employer may also qualify for one or more financial help programs that are meant to make it easier for them to pay their employees.

·      Ask the Lender If You Have Access to Any Useful Programs or Loan Schemes

It is also important to discuss the issue with the lenders. Most of them will have offers that are designed to help borrowers keep their debt under control. In most cases, you may be allowed to postpone the monthly repayments for a certain amount of time, however, some lenders offer debt refinancing solutions regardless of an individual’s credit rating.

·      Consider Refinancing a Loan

Normally, all lenders offer borrowers the ability to refinance their loans, especially during financially difficult times. Be sure to ask the bank clerk if you can refinance your more expensive loan and do so immediately. This may be enough to reduce the cost of the debt enough to make it easier to keep under control.

·      Apply for a Debt Consolidation Loan

If everything else fails, you can get a debt consolidation loan. This will allow you to reduce the cost of all the forms of debt that you might be currently repaying, as well as give you more time to return the money. However, it is important to keep in mind that these loans are secured. This means that borrowers must offer collateral (usually in the form of a real estate property such as a home) to apply for them, making them both very useful as well as somewhat dangerous.

How to Find a Secondary Source of Income during the Pandemic?

  

The ongoing Covid-19 pandemic has reduced the income of many individuals throughout the UK. While there are efficient governmental loan schemes that are designed to help companies get through these troubled financial times, regular individuals do not have access to as many resources. This has pushed a large number of people to use their credit cards more often, take out payday advances, and even use personal loans for regular monthly expenses. These methods may work, but they can only be sustained for a short time before borrowers are forced to repay the money and find themselves in debt. Even if we are to ignore the danger of not being able to repay the loans, the regular use of credit cards and payday advances can cause serious damage to an individual’s credit rating.

In many ways, the best way to get through the reduced income caused by the pandemic is by finding other ways to earn money with a minimum amount of effort. For most individuals, employers have adopted a work-from-home policy, which has given them considerably more free time than before. This can open up a wide array of possibilities:

·      Join a P2P Online Lending Platform

P2P online lending platforms are great for individuals who need to borrow money but do not have a good enough credit score or have had issues with the bank. This having been said, these P2P platforms can be used the other way around. Most websites allow new users to choose if they want to register as borrowers or lenders. If you have a bit of money saved up, it is possible to invest it by giving other individuals loans. Keep in mind that this will not produce a lot of money, however, it is a passive source of income, which means that the user is only required to create the account, deposit the money and the platform will do the rest. Furthermore, P2P online lending platforms have safeguards in place that are designed to protect lenders, which means that you will not lose your money.

·      Start an Online Store

One of the most reliable ways to make money during the pandemic is through eCommerce. There are several platforms that allow users to create online stores for free and most of them also offer website builders that are easy to use. The secret to making money from a web store is finding a good target audience. Go online and look at what kind of items people are buying regularly. Then, simply find a manufacturer, create and send in your branding materials and this is where the difficult part ends. Whenever a client places an order, direct it to the manufacturer and ask them to send the product directly to the customer’s address. You can then use the money to pay the manufacturer and keep the rest, all without having to ever physically handle the products.

·      Take Out Online Microloans

While they might not fall into the category of income, microloans can be certainly used to supplement the amount that you may be currently earning. There are several apps that give users the ability to borrow small amounts of money, usually between £10-£150, at relatively low interest rates. However, the money must be returned in a maximum of 30 days. Regardless of this, microloans can be powerful tools for those who want to use their credit cards as little as possible. This is because these applications do not report the transactions to credit registers, which means that they will not affect an individual’s credit rating.

4 Most Important Things to Consider When Financing a Car

For most people, buying a car without using some kind of financing method is not possible. While most lenders have started offering deals that can only be used to purchase vehicles, things are not always as simple as they appear. Generally speaking, buying a new car is never as simple as choosing the model as going to the lender and getting the required loan. There are several things to consider both in terms of whether or not you will get the required loan as well as related to how you will have to pay for the car. Unfortunately, there is very little information regarding the financing options that individuals have when they are considering buying a car. This having been said, we will look at the 4 most important aspects that you need to consider before purchasing a car.

Know Your Financial Limits

This is probably the most important aspect of buying a new car. A large number of people tend to go for the vehicle that they want, as long as they know that they can get the required financing for it. Unfortunately, they do not give any thought to the fact that once they take out a large car loan, they will be stuck with potentially expensive monthly repayments. Depending on your credit score, lenders may limit the amount of money that you can borrow or they can attach higher interest rates to the loan. Either way, it is important to first decide what kind of financing you can comfortably repay. Alternatively, you could seek out bad credit finance options online which you may have more chance of being accepted for.

Consider All the Options That Are Available to You

There are several options to consider when buying a new car, the most important of which is if you want a new vehicle or a used one. Buying a new one is more expensive; however, it is likely to be more affordable in terms of maintenance. On the other hand, it is possible to get a used car that has low maintenance costs, provided that you do a bit of research and find inexpensive spare parts.

From a financial point of view, you will have to decide if you want to buy the car or lease it. Generally speaking, individuals who want a car that they will drive for a decade or more, will be better off buying one. One the other hand, those who simply need a city car that they will drive sparingly may find it more advantageous to lease it.

Shop Around and Make an Informed Decision

Whether you decide to buy or lease a car, make sure that you take to as many sellers and lenders as possible. If you need to take out a car loan, keep in mind that your credit rating will have a big impact on the terms and conditions of the deal. Furthermore, if you intend to lease the car, you will have to carefully choose a deal that suits your needs. In most cases, driving a leased car for more than the limit specified in the agreement will bring about extra charges.

Take All the Potential Costs into Account

Regardless of how you want to get the car, you will have to take into consideration that there are costs other than the leasing or purchase ones. Depending on what vehicle you choose, the maintenance costs can take up a large chunk of your monthly income. Make sure that you create a rough budget and at least estimate what you would have to pay on top of the purchasing or lease price. Your lists of expenses should include insurance costs, license plate fees, and oil changes.