• Lower your monthly payments
  • Reduce stress and live your life
  • Avoid personal bankruptcy court

Research before Investing in P2P Loans

People today are learning about a new way to borrow or lend money online. Investing in P2P loans or Peer to Peer lending is to help people to investor without hurting their credit score. The online websites still provide consumers with the same coded security and privacy that banks have with online banking. The consumer is able to diversify their current income and receive profitable returns similar to having a stock portfolio.

Investing in P2P Loans

People who are interested in this type of investing of money will need to take time to research all the pros and cons to see if it is what they to reach a financial goal. Consumers in North America will find that credit borrowers and loaner that want to build a financial portfolio. The information below is there to help in your research and make conscious decisions on financial planning.

Credit Rating: Does It Matter?

A person’s credit rating is important but is not the only thing used to guarantee a payment. The people who are interested in investing in P2P loans will be based on individual basis on what the loan was used for when it was issued along with the financial history.  A main reason people can receive this P2P loan the funds from a network of people in businesses, the private sector along several financial firms. These loans were to provide consumers a way to consolidate loans with a comparable interest rate that was affordable for the public sector.

However a person that has a high credit score may seem to be the one individual that might invest in a peer to peer loan or P2P but not receive it simply because they are not reliable with any payments.  So when it comes to investing in 2P2 loans people should look on the websites that offer signups for new investors and the Better Business Bureau.

Returns Can Be Reinvested Into Other Accounts

Since this a loan, you and others may wonder how the borrowers can receive any returns.  This is where it is similar to shares bought and sold in companies that participate on the stock market. The reinvesting would be used in a portfolio especially for people that are reaching their late 50’s and early 60’s. This way the borrow could make lower payments each month and reinvest into an IRA so they can receive a return. The person who borrows money would have considerable advantage of using these compound earnings to see a financial growth for the future. This would benefit their financial portfolio along with tax advantages not just in a traditional style IRA but in a Roth IRA.

People who live in the United States and Canada will find that having an account that allows tax deductions a financial strategy. However people need to remember that the P2P loans are taxed in the United States and Canada at a marginal rate.

You May Ask Who the Lenders Are.

The competitions of online and traditional financial firms have increased because of the availability of the notes that are being bought by individuals.  So why are people afraid to invest or reinvest in loans that use notes. This is simply no one likes to lose money especially people who have a high net worth. Loans of any type along the process of buying or selling stock can be a financial risk.

It is important to know all the risk and even reinvesting in P2P loans people still can default on the loan. The reason people are interested in the P2P loans and notes is a way assets can have some principal protection compared to the stock market. Presently finding the right assets to reinvest for growth can be difficult in this economy. People are trying to find the best yet with less risk for financial stability. They are hoping that this will help provide a better portfolio and when it does come to retirement it will help them. If you or others that are looking into this a form of income for the standard of living you will be disappointed.

The peer to peer loan or P2P is not income it is still a loan that individual’s can use to start a new business or use it for expensive merchandise. The loan is based on individual financial status and why they need the loan at any amount for the purchase. The reasons vary and the notes that are reinvested are to provide some financial stability that can be paid off in 2 to 7 years.

Consumers that use this plan of financial planning will need to be comfortable with the idea of not being able to get their money out. On the other hand if they place the notes into a traditional IRA or a Roth IRA there are specific age and governmental regulations that need to be followed especially y in the United States.

Tips for Getting Out of Debt

tips for getting out of debt

Do you remember when your parents bought you your very first bike? Remember that excitement you felt to show off the new Huffy to the neighbors? Inevitably with the first bike came the first fall, complete with knee scrapes and a bruised backside. But no, that never stopped you, or anyone for that matter! You hopped right back onto that bike and began to ride again, learning new tricks! You became such a good rider that falling was a distant memory!

And while getting back up and dusting yourself off may seem insurmountable, getting out of debt isn’t all that much different. Yes, the stakes are much higher, but the desired outcome is actually quite the same, start over and try again, learning new tricks along the way. Read on to learn the top 10 tips for getting out of debt to kiss that debt goodbye!

 

Budget Budget Budget!

First and foremost, start a monthly budget! Budgets help you:

  • Determine your true monthly income;
  • Compare this to your true monthly debt;
  • Map out a plan; and
  • Pay down existing debt.

This process is imperative to starting the process of getting out and staying out of debt. It is difficult to develop a plan without knowing what you have to start with and where you need to go.

Paying Down the Debt

Once a budget is in place, you can start to knock down your bills. The best suggestion to get out of debt is:

  • Start with accounts with higher interest rates, allowing you to start paying the actual balance faster and ridding yourself of the debt.
  • Pay down the balances to approximately 30% of the available balances.
  • Cut the cards!  Any cards less than a year old with a high interest rate should be paid off and tossed.  The young age of the account will do minimal, if any, damage to your credit if it is deleted.  Only keep cards that are used and needed.

Credit cards can ruin any true plan to get out of debt.  By ignoring the high interest credit cards, you are allowing the credit card companies to take your hard earned money away from you and line their own pockets with it.  The faster these cards are paid down and destroyed, if possible, the closer you are to living a debt free life!  Furthermore, creditors determine whether you are a good risk based on t he percentage of debt to available balances you maintain.  30% is typically the cutoff point before you are considered to be a higher credit risk for the good credit, such as cars and homes.

Cash Only, Please

Stop using the credit cards to pay for life!  Getting out of debt is easier if you don’t rack it up in the process.  It is important to keep three credit cards open to raise your credit, but only charge on them small items that can be quickly paid off, like groceries, not the large 60″ LED TV!

And since, you are living on cash, you must remember, No more shopping sprees. Based on the new budget, you learned what your true flexible spending is.  Don’t overdo it, and then need to run up the credit cards again.  Spend within your spending limits! By cutting extra expenses, like that daily Venti Double Latte from Starbucks, you may find you actually have more money than you thought.

In keeping with finding new room in your budget, don’t go backwards by taking out a loan, such as a debt consolidation loan, to help get out of debt.  That is simply trading one debt for another.  And worse yet, it actually lowers your credit score!

Saving and Earning More Money

Staying out of debt is much easier than getting out of debt:

  • Look for bargains and deals;
  • Use coupons whenever available;
  • Search the web for coupons and deals
  • Negotiate when making a big purchase
  • Use barcode apps when shopping for high priced items; or
  • Invest in a coupon book.

You may also want to earn extra money by:

Sometimes, the additional income earned by bargain hunting and an extra job can allow not only for getting out of debt, but for building the all-important savings! Once savings are restored, it is easier to avoid future debt pitfalls.

And When All Else Fails…Call for help!

When all else fails, remember there are professional non-profit agencies that specialize in helping people get out of debt. These companies are adept at negotiating with creditors and achieving more manageable balances with lower interest rates. While these arrangements may affect your credit for the three to five years you are in the program, when you have finished paying the debt down, you emerge with a clean slate and sparkling credit!