We are an Introducer Appointed Representative of Quint Group Limited, who are a credit broker, not a lender. OinkMoney.com Introduces customers to Monevo Ltd who are an Appointed Representative of Quint Group Ltd for the purposes of obtaining a loan. Oink Money does not provide any loan or consumer credit products directly.
Monday 14th of August 2017
Money can be a tricky old business. There are plenty of financial myths out there that have somehow managed to survive, standing in the way of our success and leading us to make poor financial decisions. With borrowing money now a normal part of modern life – whether it’s a small loan or a long-term mortgage – it’s important to know what’s true and what isn’t. Borrowing money is no bad thing: it can create opportunities and provide a certain amount of flexibility in your life. But too much debt can also be crippling. Here are 7 common lies we’re told about borrowing money – and the truth behind them.
We’re sorry to say they do. In fact, old credit agreements can stay on file for as long as six years, impacting your credit rating and your chances of being accepted for a loan or mortgage, for example. For this reason, it’s important to try and resolve your existing debts as soon as possible.
If you have a negative mark on your credit file, such as a missed payment for example, you can help to clear your record by requesting a ‘notice of correction’, which gives further information and context to any borrower who may be reviewing a future credit application.
Before you make the decision to borrow money in order to make an investment, it’s important to be sure that you will have enough money coming in to cover the regular payments. You should never rely on the hope that the money you invest will generate enough cash to pay off the debt – at least not right away.
Obviously, if you’re wealthy this gives you an advantage. But that doesn’t mean it’s out of the reach of people with lower incomes. It just means that you might not be able to borrow as much as someone with a higher income. Leveraged investing can still be an effective strategy, regardless of whether or not you’re super rich.
Yes – lenders do want to see that you have the ability to manage credit well and stay on top of payments. There’s no specific ‘golden number’ of credit cards you should have to demonstrate this skill, but it’s certainly possible to go overboard.
If you take on too many financial commitments, you could be viewed by lenders as a risky prospect. Of course, it’s a good idea to have at least one or two, in order to build up your credit score. Just don’t let it get out of hand – and make sure you are able to follow through on the repayments.
Surprised? Yes – you don’t need to be completely debt-free in order to start saving money. In fact, all the more reason. Should you lose your current income for whatever reason, it could put you in a difficult situation to have to borrow money to keep paying off debts. Having some savings set aside for emergencies – even £500 or so – could save you a lot of grief in an emergency.
Debt, in and of itself, doesn’t have to be a bad thing. While it is mostly viewed as negative, debt can also be used strategically for good. So we can classify debt into good and bad.
The reason debt can be bad is that most of the time it isn’t used properly. If you’re not careful with it, it can get out of hand and leave you struggling to repay what you owe. This is most often the case with personal debt and things like credit cards. But if used properly, it can enhance both your life and improve your credit rating, allowing you to purchase assets that grow in value over time (such as a home mortgage) and from which you can deduct the interest.
You may find when you look to borrow money that you are eligible to borrow more than you really need. If this is the case, don’t be swayed into taking the whole lot. Remember – the more you borrow, the higher the interest and repayments will be. This applies to all types of loan, whether it’s a mortgage or a credit card.
Borrowing money can be a real boon to your financial situation if you do so responsibly and with a clear plan about how you will pay that money back. Borrow too much, and you could end up paying a heavy price. So take stock of your situation, perhaps enlist the help of a financial advisor, and work out what you can afford to borrow. Conventional wisdom is not always the most accurate, so be sure to educate yourself before taking the leap.
If you’re borrowing money with the intent to invest, then it’s really important to make sure that your interest costs will be tax-deductible – because in claiming the deduction for the interest, you will make tax savings. This is one of the key benefits of leveraged investing, and it has the potential to affect your rate of return.
Generally, you should be able to deduct interest when you’re borrowing in order to generate income, but if it turns out that the interest costs are not deductible, then the venture may not be as profitable as you hope.
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OinkMoney.com Introduces customers to Monevo Ltd who are an Appointed Representative of Quint Group Ltd for the purposes of obtaining a loan. Oink Money does not provide any loan or consumer credit products directly. We do not make short term loan or credit decisions.
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