August 2011

Organizing Repayments

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Organizing Repayments
When you take out a new loan it is highly important that you make sure you are going to be able to afford to pay it back. Failure to do so can cause you to have to take out more loans to help you make repayments, can cause you to have to pay late payment fees and general trigger a downward spiral that results in your getting further and further into debt.
There are many factors that will contribute to your ability to make your repayments and pay back your loan. One of these of course is avoiding taking out loans that are too large or where the APR is unreasonable. Another is of course money management and making sure you always have enough money in your account to make the payments.
One often over looked aspect of being able to manage your loans though is organizing repayments. Your ‘repayment scheme’ is the term often used to describe the pattern in which and duration over which you will pay back your loans. In other words it means deciding whether you are going to pay back lots of very small lumps, or just a few very large ones. Likewise it also means …

July 2011

Debt Yield

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Debt Yield
Debt is a complex matter and there are many different terms and systems that you need to understand in order to have a firm grasp on the matter. However failure to understand debt can make the whole subject much more fraught and a lot of the difficulties that people have with debt come from a lack of understanding. No matter which side of the fence you are on – whether you are the lender or the borrower – understanding the various terms involved in debt is an important step to managing it more effectively.
One such term is ‘debt yield’ which is a phrase that we hear a lot but that no all of us fully understand. Here we will look at what debt yield is and how it affects us.
 
What is Debt Yield?
 
Yield means the return on an investor’s capital. In other words it is how much the lender expects to make on the investment. This is usually expressed annually written as a ratio/percentage alongside the value of the investment.
For instance in the case of investing in stock the yield would be how much you make in annual dividends. So in other words if you were to own a …

July 2011

Debt Free

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Debt Free
Being completely debt free means simply not having any debts to pay back, and technically this would mean being in a situation where you owed not a scent to anyone. However despite this, the majority of people would consider having only a small amount of debt as being debt free where it was expected. For instance someone who only owed money for their mortgage, or a student loan, might still class themselves as ‘debt free’ – as might someone who had purchased something on finance or who had just a little credit card debt left to pay. Under the very most rigid of definitions, very few people are ‘truly’ debt free. Nevertheless, those who are currently struggling with their debt would be happy with any measure of freedom from debt.
So what does it really mean to be completely debt free? The repercussions it has for the rest of your life are  greater than you imagine and it can feel truly like a burden has been lifted. Here are just a few things you will notice about being debt free:
 

Your money is your own – the amount of money you have in the bank is the amount of money you …

July 2011

Getting a Car Loan (When You’re In Debt)

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Getting a Car Loan (When You're In Debt)
   When you’re in debt this effects more than just your bank account and can create all kinds of difficulties. For instance if you are struggling with debt then you will have a lot of difficulty getting out loans (which is bitterly ironic as this is when you are most likely to need a loan) and this covers everything from mortgages to business loans to car loans. That can then in turn effect your life in a lot of other ways as it means you can’t buy that car you wanted, you can’t move home or you can’t start that business. Here we will look at how to get a car loan even with bad credit so that you at least have transport.
The first course of action you can take is to look for bad credit car loans which are designed specifically for people who have low credit. These car loan companies charge slightly more than other car loan companies, but this then means that those paying higher rates and completing their payments help them to make up for those who do not manage to make all the payments on time (which theoretically …

June 2011

Debt To Equity Ratio

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Debt To Equity Ratio
The debt to equity ratio is the ratio of shareholders’ equity to debt used to finance the company those shares are for. It’s a relatively complex concept, but it is central to understanding how to value companies and shares and to understanding how businesses are financed. To understand this better though, we need to understand precisely what the term ‘equity’ means.
Essentially equity is the value of a company when put on paper. That is the net money that the company owns made up of things like – how much money the company put in originally, and how much profit it holds currently which it has not yet paid out to the owners as dividends. This does not include assets, and it does not include and various other things are also excluded such as ‘accounts receivable’ (the amount of money customers owe to the company). Essentially this means that the equity is the net value of the company, and it is what you own when you buy a share. One way to calculate the equity of a company then should be the value of the share, times the number of share holders. There are various kinds …

June 2011

Debt Ceiling

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Debt Ceiling
The term debt ceiling refers to the maximum borrowing power of a government i.e. country. For many this is an abstract concept which does not resonate as the serious and pressing matter that it is. Essentially when the Federal Government experience large deficits through spending more than it is taking in (through taxation), then it must be financed by debt. In other words the government, like you or I, needs to borrow money from time to time in order to finance its various projects – cleaning up the schools or the streets, or implementing new programmes meant to raise money. However if the government is unable to issue more debt or to borrow more money then this means that it has hit the debt ceiling, and that in turn means it can’t go ahead with the various expenditures. If the debt ceiling can’t be extended and the government can’t cut spending to lower the deficit, then it will.
 
Of course part of the question here is – where does the government get this money and who is doing the lending? And how high exactly is this debt ceiling?
Well the answer is that there are many lenders and many …

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