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Monthly Archives: October 2016

Must know about Personal Finance For Students

The applicant has to fulfill the eligibility conditions for availing this finance. These conditions are that you should be above the age of 18, you should have an active bank account and you should be a UK resident. You can opt for personal finance for students for meeting your various needs like mobile bills, college fees, tuition fees, for buying books and so on.

They are available through the offline as well as the online mode. The offline mode can consume your lot of time. Thus, applying through the online mode is beneficial. You just have to fill up the application form and after approval the amount gets credited into your account.

They are finances which offer you financial backing without any worries. They are granted to you in the secured plus the unsecured form. Thus, you do not have to worry about collateral if you are going for the unsecured form.

They are available in the secured and the unsecured form. The secured form requires you to place collateral. You can avail an amount extending from £500 to £100000 and this amount has to be settled within 1 to 25 years. The unsecured form does not require placing of any kind of asset or collateral. You can fetch an amount extending from £1000 to £25000. The amount has to be reimbursed within 1 to 25 years.

About Mistakes With Personal Finances

Credit cards are always kind of an iffy subject when it comes to finances since they can be helpful but way more harmful to you in the end. No one should ever rely on a credit card as their main way to pay for things. Doing this can lead to large credit card bills that you may not be able to pay off and of course it can lead to you falling into debt. When it comes to all of the different types of cards out there, make sure you know the difference and which one you are using. Some people are unsure of the differences between a debit card and a credit card. Credit cards are pretty much a loan. Banks lend you a certain amount of money, how you use it is up to you, as long as you pay it back. A debit card is attached to your personal checking account. When you use this card, the money is taken out right then and there with the money in your account.

Of course an easy way to mess things up is by spending more than you are making. If you do this, don’t be surprised when you end up in debt. Try to live within your means to help prevent falling into debt. What I mean is, if you only make $25,000; don’t buy a million dollar house or car. It is also advised for you not to live pay check to pay check. Doing so can create some sticky situations, but there are always those times when that’s the only option you have. Just, as stated before, live within your means by not spending more than you make.

Some people simply don’t try and save money. Saving money doesn’t just happen; you have to consciously work at it. Also, saving money isn’t just coupon cutting and finding good deals; you should have a savings account that you regularly deposit money into. Your savings account allows you to think about your future and hopefully give your safety and security for the future. Life has shown us many times that it can often be unexpected, so expect the unexpected. Cliche I know, but it is true. They say it takes a person an average of six months to find a new job, so they should keep at least six months worth of salary saved up just in case. Also, saving your money can set you up for the future, whether that future is college, a new house, or a new car.

Between Personal Loans with Credit Cards

When purchasing a new car or house, the solution is relatively simple. You would compare the various Home Loans and Vehicle Finance options available at the different financial institutions to find the best deal.

Smaller, once-off purchases, however, can be a little more complicated to manage. Say, for instance, you need to buy a new microwave. While this may not seem very expensive, it’s unlikely that most people would have that extra R1 000 plus on hand. So what are your options?

The two most common options available are Credit Cards and Personal Loans, both of which have their pros and cons when compared to each other. Let’s look at both options in more detail.

Personal Loans

Personal Loans are cash loans deposited into an individual’s account by a financial institution, such as a bank. These loans come with repayment terms and conditions that are determined by the lender. Personal Loans are very easy to apply for provided that the requirements of the financial institution are met and your credit rating is decent.

Personal Loans are finite, meaning that you cannot spend more than the amount loaned to you and once you’ve repaid the loan, the debt is settled.

Credit Cards

Credit Cards allow you to borrow money from financial institutions via the use of a small plastic card. These institutions, and your ability to repay the money used, determine the credit limit of your card. Credit Cards function similarly to an overdraft facility on a current account but you can typically spend more on a Credit Card and at better interest rates.

Unlike a Personal Loan, Credit Cards are a revolving debt i.e. you can continuously use and repay the credit limit amount on your card.

Which one is right for you?

Both Credit Cards and Personal Loans afford you the freedom to choose where to spend the money loaned to you.

If you need to make a purchase of no more than a few thousand Rand, which you are able to pay off quickly, then a Credit Card is the way to go. The quicker you pay off money used on a Credit Card, the less interest you will end up paying. Because Credit Cards are a revolving debt, you can use them whenever necessary.

If however, you need to make a larger, once-off purchase of R15 000 or more for example, then a Personal Loan would be the better option for you. The reason being that Personal Loans mostly have better interest rates than Credit Cards.

Bank Won’t Tell You

1. Bigger is not Always Better
You might be a proud account holder of one of the biggest banks in the nation, satisfied with the customers benefits like large network of branches, ATM service, etc. However, these candies don’t come for free. In 2006, 54 percent of the revenue of the top ten banks was generated by fee and service charges, as compared to smaller banks, who squeezed only 28 percent from the same. So large banks often mean bigger fees.

2. You Might Face a Hard Time Dealing with Overdrafts
Nearly all banks offer the facility of withdrawing money from an ATM or making purchases through debit cards, even when there is no cash left in your account to cover the costs. If you think this is a blessing, think again. You are normally not notified about the overdrawing, thus you continue spending or withdrawing. Every time you do that, you are charged with a fee of around $30.

3. We Give Commission to Employees and Tellers for Paving You to Investment Products
For sending the customers towards the investment products, an area which sells products which are not FDIC insured, the tellers get a “referral fee.” A commission is received by employees who sell non-deposit products.

4. We Don’t Mind Bouncing Cheques
The troubled economy has had losses pouring in from different sections, so the banks claw on to any revenue source they can lay their hands on. Your bouncing cheques are sunshine in winters for them. Some banks may charge you a $12 fee if you cheque is bounced. But on an average, the fee is around $26. Some institutions may even slap you with $35 fee.

5. We are not Immune to Robberies
So you think that the bank is the safest place to keep your cash in? Think again! According to the FBI, there were 10150 bank robberies in 2001. That is approximately one robbery in every 52 minutes.

6. We Might Mess Up Your Accounts if we Merge with Another Bank
According to SNL Financial, the period from 1990-2003 witnessed as many as 4800 bank mergers. Mergers won’t bother you much except for the new cheque books, ATM cards etc. However, sometimes mergers may result in lost accounts, lost deposits, dropped level of services etc.