Types of Debt Instruments

by admin on September 20, 2014

People who have gone through some major event such as loss of job, prolonged illness, or divorce usually apply for a secured credit card. To this, borrowers are advised to make sure the card issuer reports to all credit reporting agencies. If they do not report, the borrower has lost a key benefit. As a rule, if you start getting offers for unsecured credit cards after having made on-time payments for several months, you will know that the card issuer is reporting. Make sure the credit card issuer does not flag the report as secured or prepaid credit card because you will find it difficult to rebuild credit this way. How long does it take before financial institutions offer you an unsecured credit card? Banks and credit card companies want to keep their customers and will qualify them for an unsecured credit card after making regular payments over a certain period of time. On average, it takes about a year to build credit and qualify for an unsecured card. Two types of debt instruments are taken into account when assessing the borrower’s credit history – personal loans and revolving credit such as personal lines of credit. Borrowers who have bad credit are often required to offer collateral as an additional guarantee. Thus, risk is less of a factor. People who apply for a secured credit card deposit money with the credit card company. The issuer can seize the deposit if the borrower is unable to keep up with payments.

To build or rebuild credit, borrowers need to have a good record with both revolving credit and installment loans. At the same time, borrowers with credit problems and histories of late or missed payments are viewed as high risk. They are either turned down by mainstream lenders or are offered unfavorable terms and hefty interest rates. That is why borrowers resort to Canadian secured loans. Those who have some valuable asset to offer against the loan stand a better chance of having their loan application approved. Many financial institutions are willing to offer a lower interest rate to borrowers who offer collateral. Borrowers find their monthly payments more manageable, and it is easier for them to budget. Regular payments, on the other hand, help rebuild credit.

Using a prepaid card or a secured credit card is another way to rebuild credit. Secured credit cards are offered by mainstream banks, many credit unions, credit card companies, and other financial institutions. Some banks offer unsecured credit cards only. Many banks started offering unsecured credit cards with higher fees and interest rates and lower limits. Still, it pays to shop around because using a secured credit card is a good way to rebuild credit.

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What Financial Institutions Look into

by admin on August 9, 2014

Finance companies and banks look at a number of factors, including retail accounts, mortgage and consumer loans, and others. Other factors that financial institutions take into consideration include the applicant’s debt-to-income ratio and repayment history. Customers with a history of delinquencies and excessive debt are often turned down. These factors tell banks whether applicants have good or poor financial discipline. Applicants are asked whether they work part- or full-time or are self-employed. Persons who are employed full-time and have additional sources of income are likely candidates. The easiest way to obtain a secured card with a high limit is to deposit a large sum of money to serve as a guarantee for prompt and timely payment.

Credit unions and banks are in tight competition and offer cards with competitive rates and terms.  The interest rate and credit limit are subject to change.

Secured Credit Cards Canada

While banks assess penalty fees for missed payments, they also increase the limit of customers with timely payments. Financial institutions look at different factors, including recent hard inquiries and others. Banks are interested in whether customers have accounts in good standing. A number of factors influence credit card approval, including collection notices and foreclosures.

Secure a High Limit

One of the ways to secure a high limit is to improve your credit score by making regular payments.When choosing a card, make sure the payments are reported to the credit bureaus. Inquire about details such as the credit limit, minimum payment and finance charge, and others. Look at different credit card offers and details such as APR, rewards, over-the-limit fees, and others. Ask about the transaction fees and extras that go with the card. And while many issuers offer cards with reasonable limits and other benefits, applicants who have declared bankruptcy and borrowers with outstanding lines of credit are often turned down by providers because they are considered risky.  Contact several banks and inquire about the options available and details such as the billing cycle, balance transfer fees, and others. In general, banks look at your financial habits, types of credit used, and other factors.

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How to Find a Rewards Card with Attractive Features and Benefits

August 3, 2014

Airmiles and rewards credit cards feature plenty of added benefits to attract more customers. Different banks and credit unions offer rewards cards, along with supplementary cards and other perks. In addition to complimentary bonus points and attractive redemption plans, rewards cards offer many benefits such as exclusive offers and store discounts. Cardholders enjoy added security […]

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Other Types of Business Loans and Alternatives

July 22, 2014

Business loans are offered to start-ups, entrepreneurs, corporations, and new and small businesses. Many businesses apply for government financing because of the longer payback period. Types of Financing Applicants for business funding can choose from disaster and real estate loans, micro-loans, and others. Private lenders are also a source of funding, offering lines of credit, […]

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Products for Creditworthy Customers

April 29, 2014

The selection of credit cards includes secured, balance transfer, and specialty cards with insurance policies, promos, concierge services, and other perks. Clients with good credit can choose from different products, including low-interest loans and credit cards. There are different options to choose from depending on your lifestyle and payment habits. One option to consider is […]

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Mutual and Hedge Funds Investing

April 25, 2014

The main benefits of hedge funds include portfolio diversification, capital preservation and growth, and reduced risk of losses. Hedge funds offer downside protection meaning that they help improve the customer’s return and risk profile. One problem to bear in mind is that these funds charge a lot of money in performance and management fees. Another […]

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Alternatives to Debt Consolidation

April 23, 2014

Many borrowers look for different ways to lower their monthly payments and become debt-free faster. Consolidation loans come with longer repayment terms which is why payments are more affordable. Weighing the Pros and Cons A secured loan is one option for borrowers, and they are usually offered a lower interest rate and a longer repayment […]

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Personal Loan to Pay Tuition

April 16, 2014

Applying for a personal loan is one way to finance the purchase of big-ticket items, go on vacation, pay tuition, and more. Banks offer loans to help borrowers with their home improvement projects, extensions, and recurrent expenses. Customers are offered travel loans with different repayment schedules that suits their budget. Borrowers can use the funds […]

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Options for Borrowers with Poor Credit

April 15, 2014

Consumers can choose from different types of loans, including secured and unsecured. Traditional and online banks and finance companies offer unsecured loans. Loans are reserved for creditworthy customers with solid income. There are different types of unsecured loans, including used and new car loans, consumer, and student loans. Banks and car dealerships offer auto financing […]

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Small Business Start up Ideas

April 14, 2014

Individual lenders and peer-to-peer platforms offer plenty of financing options. Some microlenders are an excellent choice because they report payments to the bureaus and offer loans of up to $35,000. They advertise quick approval, no hidden fees or teaser rates, and competitive fixed rates. There are many benefits for borrowers, and one is that they […]

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