No Guarantor Loans: Pros and Cons That You Should Know

The UK online finance market is flooded with thousands of loans of different types. No guarantor loans are one of the most promising unsecured funds that people choose to fulfil their financial needs and overcome various crises. Now the question arises, are these funds viable and legitimate? Well, of course, these financing options are legitimate and approved by the Financial Conduct Authority (FCA). But, the problem is both certified and non-certified direct lenders offer these funds. The applicants have to be highly cautious if they want to get genuine and trouble-free cash.
No guarantor funds have various pros and cons that you should know before you apply:

Pros:

• No tough eligibility criteria. Any 18-75 years old resident in the UK can apply. CCJs, bankrupt, default, and bad credit customers are absolutely eligible.

• An easy and quick online application procedure with no hurdles. The applicants need to devote only 2 minutes to complete the application process. There is no need to go anywhere. No queues and no waiting.

• Loans for bad credit with no guarantor are especially designed for hopeless poor credit customers whose funding applications have been rejected by all traditional banks and other financing institutions.

• Gone are the days when you had to submit numerous documents to the lending company for getting the approval. Now, with the advent of financial technology (FinTech), paperwork has completely gone. You don’t even have to attach scanned copies with the online form.

• As the name suggests, you can access these funds without a guarantor. You don’t have to chase co-signers and plead them for co-signing your application.

• You don’t have to pledge any valuable assets to avail loans for people with bad credit.

• As the competition between the direct lenders is so high, you have a good chance to get an extra discount on the APR.

• You can get the fast approval as there is no credit check or the direct lending companies carry out the “soft credit check” only.

• Highly customised repayment modes don’t overburden the monthly budget of the borrower. You can repay the loan with no guarantor in easy installments.

Cons:

• Chances of a lending fraud are high as numerous non-certified direct lenders are offering bogus deals.

• The total cost is usually high due to the presence of extra charges i.e. lender’s fee, upfront fee, processing fee, and more.

Overall, no guarantor loans have various benefits that you can’t ignore. Yes, these funds have very few cons, but you can avoid them by applying to a reliable and certified direct lender.

Millie Brown is working as a lending consultant with a reputable direct lending company in the UK. He loves to share genuine information on various types of loans.

Invoice Factoring Vs Financing: Understand the Difference

Invoice factoring or financing? Cash-strapped businesses often find themselves in dilemma when they hear two strikingly similar terms consecutively. In a tight credit environment, companies are turning to certain non-banking alternatives so that they can smoothly run their businesses.

Out of all the tools available, invoice factoring and invoice financing are considered to be the most effective. These financing methods are getting more popular due to their non-complex nature. But businesses need to pick one to proceed successfully with their operations.

Let’s understand their meaning first…

Yes, they are different from each other. Factoring of invoices differs to financing of invoices in many ways.

In factoring, the commercial factoring company or lender purchases a business’ outstanding receivables. The lender can factor the advance anywhere between 70 to 90 percent at the time of the purchase. The balance – less factoring fee – is also released once the payments of the invoices are collected.

Under financing, the amount is secured by a pledge of those assets associated with accounts receivables. A borrowing base of 70 to 90 is established with a control management fee of 1 to 2 percent.

Coming to their differences…

Flexibility – Although the amount received is more or less same in both the cases, factoring offers more flexibility than financing, In the former’s case, business can pick and choose which invoices to factor. In the latter, the financing company will choose which invoice to clear.

Collateral – Invoice financing requires companies to submit all of its accounts receivables as collateral to the financing company. This is generally not the case with factoring.

Processing fee – Financing is usually cheaper than factoring. While only 1 to 2 percent is charged against the outstanding amount in case of former, it is 1 to 5 percent in case of the latter.

Both have their pros and cons. If you are a small business, factoring is the option you might have to go for because some invoice financing companies require a minimum of $75k sales a month to qualify.

Both these methods are a brilliant option to tackle your cash management issues. All you need to do is find the company which can fund you with the least processing charges. Factoring invoice companies can put a full stop to your cash crunch situations. They act like an engine of sales and growth and prevent hiccups that might halt business operations. The key here is to know when to get involved and when not to.

In 1985, 1st PMF Bancorp was founded as a family run lender providing factoring, but as our clients’ businesses expanded globally, PMF Bancorp expanded its services to provide credit and financing support for our clients domestic as well as international business needs.

What to Know About Loans

If someone wants to take a loan and asks for your advice, you probably are more than willing to help, but do you really know what a loan is, what you should know before plunging into the ocean of loans. Now we all know loans are available for the purchase of houses, consumer electronics, refurbishment, education, marriage, health and many other reasons that are not possible in your current budget.

The Big Question

This brings us to perhaps the biggest question that needs an answer. That question is- Is it worth taking a loan for vacations if it is paid back? The answer is NO. A loan is meant to make funds easy in the pocket but not for entertainment purposes. A loan should only be used for productive reasons and a vacation is not on the list. A loan should only be used for buying a commodity like house, car or to pay a big utility bill.

Point to Consider

One should consider taking a loan only if it is really required. After all, there is no sense in paying interest for a long period, unless required. If you still need to take a loan, do consider the below questions:

1- Who can get a loan: Generally, as long as you can pay the loan back, you’re eligible. Even a minor can under guardian supervision. A bank makes a decision according to your monthly income. If you are taking from an outsource, then it depends on your income or what you are keeping against the loan, like a loan against gold or property.

2- Rate of interest: Usually the first place to take a loan from us the bank you have an account with. Though this seems like the best way to avail a loan, still if you do a little research on other possibilities like online possibilities, is not a bad option.

3- Suitable EMI: If you avail a loan from the bank, the EMI is set basically according to the monthly payment you have with you after deducting any taxes like income tax etc. A suitable EMI deduction for you should be 10% of your monthly income so you still have an adequate amount of money for other bills and expenses. Hence, a little money management can help you increase the EMI to 30% and clear your loan sooner.

4- Loan Against Property/Gold: Loan against property or gold is given on part of the full value of the property or gold. Say your gold item is 15,000. You can easily get a loan of 10,000 on it.

What It Really Brings to the Table

In today’s time of rising costs of goods, many people are always ready to bargain. What if you are falling short on funds and could not bargain with a money provider? If you are going through the financial difficulties, there is no doubt that taking out a loan will be your last choice. However, you may try to borrow funds from your friend or family member once. The chances are high that you will go back empty hands as your loved ones also have their own concerns. In that case, what you can do is to seek the assistance of a loan.

The reasons can be many due to which you require an easy loan option. Whether you are getting it for a personal need or you just simply need to fund your business expenses, the loan will surely help you to achieve your goal without any setback. In fact, the loan gives you an opportunity to execute your plans and overcome the financial pressure.

Some Questions that May Disturb You

Now you might be wondering which kind of loan alternative comes easily? What about getting the installment loans? Will you consider these loans when it actually comes to borrowing funds without any hurdle? Interested to know more about how such loans can help you out of the crisis? Before you proceed, it does make a sense to know that the funds are acquired on certain factors and your past credit record is one of them. But the need for funds can pop up anytime even if you have a poor credit score. Financial emergencies never ask about your credit score before entering your life. Fortunately, you can easily borrow the money with these loans irrespective of your poor credit score.

There is no denying that the installment loans for bad credit borrowers offer quick financial assistance. No matter how you want to use the money, the loans ensure that your adverse credit score will not stand in the way of your financial well-being. As your credit score is not satisfactory, the loan works effectively by providing you with the cash and also give you a chance to boost your credit rating. The loan is unsecured and you require no collateral to qualify for. If in case you desire to borrow a large amount, then the lender will ask for security. In fact, there are a few lenders, who are ready to serve these loans on better terms and this is what matters in the end.

More about the Loan Features

After clearing your doubts, you might be excited to avail the loans. To meet your purpose of having a financially satisfied life, it seems vital to know a little more about the features of this credible financial resource. Every loan alternative has different features and qualities. The first thing that you should know about the loan is that the lenders do not usually prefer to verify your credit record and this is what provides instant financial respite to those who have been denied for money. If you are in a struggle to win over the situations that increase financial burden, there is good news for you that you are not obliged to convince any person to act as your guarantor. Providing collateral is also not obligatory if you are planning to avail loans for the short term emergencies.

Now guess what feature is going to surprise you next? One of the great features of such loan alternatives is that you can apply in both secured and unsecured format. The loans are multidimensional and can be used to meet short term expenses as well as your long term desires. The loans are the best alternatives to payday loans as they are offered with the flexibility and a simple repayment schedule that do not put an extra burden on your monthly budget. For securing guaranteed approval on these sorts of loans, you are not actually supposed to undertake any stress.

Help Yourself by Finding the Right Lending Company

Since your repayment schedule is fixed, you can easily make your budget and pay back the borrowed amount in scheduled time. To qualify for the installment loans, you only require to be employed, have a valid number and have an active savings account. Now you do not need to stress over where the instant cash flow will come from and start searching online for the right lending company.

Applying for the loans is quite easy since the entire process is online and you do not need to take off from the work. The online application will proceed quickly and you can receive the exact amount of money that you need on time. Look for the genuine lender, who is interested in assisting you to meet your borrowing needs and brings you the desired financial relief.

You can simply make the use of the internet to find out the ideal loan deals at convenient lending term. This means that a comprehensive research will indeed help you to get the affordable loan product and achieve the financial goals.

Easy Loans UK is providing customised loan deals to ease the financial burden of people, who are struggling to deal with the emergencies. We are offering an easy loan with attractive terms and you are not required to arrange any document.

Other Hidden Fees To Watch Out for With Invoice Factoring Financing

The simplicity of invoice factoring financing often gives merchants the opportunity to extract more money from businesses. Business owners interested in factoring their invoices often end up paying more than what they are supposed to. This is made possible with the help of various hidden fees which merchant can try including in the processing of invoices.

Some additional fees that can be charged beyond the discount rate are:

Application fees – A business owner is required to fill out an application describing all the details of the company, details of invoice, and client info. While this process generally requires no additional charges, spammy companies make it mandatory for their customer to pay this amount when they are looking for factoring their invoices.

Overdue fees – Often merchants charge you an overdue fee for those clients whose payments are not yet cleared. Since there is already an unpaid invoice with the client, companies take this opportunity to include another malicious fee.

Credit check fees – During preliminary approvals and verification process, clients run a background check on you as well the client on whose name the invoice was issued. A credit check in another responsibility of the factoring company and no money is charged in the process.

Mailing fees – For all mailing and document related work, companies also try to include mailing fees. If the factor contacts your clients and follows up for payment, you are not liable to pay any charges whatsoever. There are no mailing fees associated with A/R financing.

If you are charged with these or related fees anywhere else, it means you are not at the right invoice factoring financing corporation.

The only fee associated with factoring is the processing fee, which generally is 1-5%. Although there are a lot of determinants in case of factoring, the processing of this method is very simple and fees is one. Other than that, there are no significant fees that discount invoicing companies charge their customers with.

Watch out for these fake features and make sure that your company is not among the ones where unnecessary fees pile up as most fees should be paid after funding is working smoothly, not before funding starts. Authentic companies understand your business and, therefore, asks you for the processing fees only. Keeping all things similar, you need to make sure that you get the maximum out of your invoices. Go for companies who offer simple, transparent pricing with no or zero hidden fees.

In 1985, 1st PMF Bancorp was founded as a family run lender providing factoring, but as our clients’ businesses expanded globally, PMF Bancorp expanded its services to provide credit and financing support for our clients domestic as well as international business needs.

How to Cope With Loan Rejection and a Poor Credit Rating

A lot of factors including your credit score, past credit history, debt to income ratio and credit appetite determine your credit worth; while credit score is considered as a major factor for approval of loan. With low score, your chances for loan approval are also low.

Often times we get to know about low credit score only after loan rejection. Once your loan application is rejected it becomes difficult to get it approved by another lender soon. In fact it can take enough time to improve your score and improve your loan eligibility. Thus, in face of urgent cash requirements, you need to take some financially prudent steps to deal with loan rejection and improve your credit rating.

Some of the common reasons for loan rejection

Bad credit history and low score: When you fail (or delay) to pay your past loan instalments or credit bills, the lender assumes that you are incapable of repaying the loan on time.

Low monthly income: When you have high debt to income ratio, your monthly income appears insufficient to manage the additional debt burden.

Errors in application: Whether intentional or otherwise, flawed details in your application would result in loan rejection.

Too many unsecured loans: When you have more unsecured loans as compared to secured loans, your application for personal loan is bound to be rejected. Herein pledging collateral can help you get a secured personal loan. In fact a lot of borrowers even opt for online secured homeowner loans (second charge) despite bad credit.

How to improve your loan application and avoid future rejection?

Look beyond main street lenders: Post loan rejection, it is important to work on your profile before applying for loan to other lenders. If your requirement for funds is an urgent one, consider applying to private loan partners online. Unlike main street lenders, the FinTech players have less stringent eligibility criterion.

Use online eligibility calculators: You can either check your loan eligibility online using eligibility calculators available on various loan brokers’ websites or contact a broker and ask for referrals.

Pull out your credit report: You must also analyse your credit report. Sometimes errors in report also lead to loan rejection. Herein disputing the error can help you improve your score and get the loan approved later on.

Check your score: When you pull out your credit report, it doesn’t make any footprint in your credit report as it raises only a soft query. The better is the score, the better deal you would get.

Build good history: One of the best ways to improve your score is building good credit history. You must ensure timely repayment of loans and credit bills. Consider using automated repayments via a bank account for this. Most people fail to realise that delayed, partial or rolled over credit card bill also negatively affects their score.

Do not exhaust your credit limit: Crossing your credit limit every month is another common mistake. To keep your score healthy, do not use over 30% of the credit limit each month.

Do not make multiple loan queries: When you apply for multiple loans in a short period, it makes you look credit hungry to lenders. Thus always enquire for loans after assessing your credit needs.

Keeping track of all these details along with proper documentation, you can certainly get instant loan approval. Not to forget you can also use a licensed loan broker’s advice to locate the best deals available near you. You can compare and choose the best fit loan according to your credit needs.

Why You Need a Low Interest Rate Business Loan

Refinancing is one of the best things you can do for your business because it reduces your loan costs overall. However, this is not the only benefit that your business can enjoy. There are many things that you will enjoy with refinancing and they include:

  • Reduction of interest rates

This is a very common goal for many businesses that have short-term loans or even a cash advance. The cost of short-term loans makes them rather unsustainable for a long time. A small consolidation loan has a lower APR than other short-term financing options.

  • Low monthly payments

This option comes with much lower monthly payments and this eases the strains that you may be having to your cash flow. This, in turn, means that you will have some extra cash to put into your operating expenses and any other opportunities that may come unexpectedly. You may find that you do not need any more borrowing in the near future. These loans have a longer payment term and a lower APR.

  • Additional borrowing

When your business gets this kind of financing, you may qualify for another loan. This is due to the APR that has been lowered and a much longer repayment period that increases the debt service coverage ratio of the business. It is not uncommon for a business to need some more working capital when they are consolidating their debt. This additional capital helps them to handle anything that comes unexpectedly. This prevents the business from getting a short-term loan that is rather expensive in future.

  • Cash flow management simplification

There are different ways in which this kind of loan can help you with cash flow management. Instead of juggling different creditors at the same time, you will only have to deal with one account. The other thing is that you will only have to make a single payment per month. Because of the longer payment period and a lowered rate, your monthly debt is lowered greatly.

  • Free up the credit lines

There are revolving business lines of credit such as credit cards and they are extremely useful tools for management of cash flow. They allow the business to be flexible in spending since they are interest-free as long as the card is paid every month. When you build a balance, then you end up losing that flexibility. If you lose this, then the debt repayments can also be quite expensive.

You should consider consolidating the credit card loan to make the payment a lot more affordable. You will have freed up the credit line very easily your line of credit can be put to work once more. This braces you for any unforeseen situations.

  • Predictability of the payments

Most of the consolidated loans have a variable interest rate, meaning that payment may change from time to time. You may not be able to budget the amount of each repayment deadline. This may be frustrating, especially when you have to pay more than you anticipated.

When you have a consolidated business loan, the interest rate is fixed, meaning that you can budget your loans all through the period.

Bank Versus Non-Banking Financial Corporation (NBFC)

Quality Education is always worth our time, effort and importantly investment. Important decisions like this requires a thorough run through of options so that you are well informed of the pros and cons of your decision. The choice between Banking and Nonbanking corporations are commonly debated among the public either because of misinformation or lack of information. This article will aid to be a quick guide before you decide on who to go to for educational loans.

The key difference between bank and a NBFC:

Understanding the undergirding difference between the two may settle a lot of shadows for us.

Banks

NBFC

Banks are overseen by the Reserve Bank of India

These corporations are regulated by the Companies Act 1956

They are entitled to be part of your payment process.

They cannot accept or issue deposits, drafts or cheques

However, the commonality between them is that they both can offer loans! Now the key difference being established, the services provided by each can be compared.

  1. Loan Eligibility:

NBFCs have the longer rope in sanctioning your loan compared to the banks. NBFC determines loan eligibility based on your repayment capacity, credit score etc. While banks on the other hand makes you eligible based on your collateral, say home value. Bank loans exclude cost involved in stamp duty and registration procedures, while NBFC will craft plans to include these costs within your loan.

  1. The paperwork hassle:

Banks have stringent and thorough process with paperwork, NBFC on the other hand have been able to achieve the same end through relaxed paperwork process. You may want to look out for both these options when choosing an educational loan.

  1. Credit Score friendly:

Banks and NBFC favor loans to people with high credit score, however, in comparison to the bank, NBFC is friendlier to people with low credit score. You could choose what best aids your credit score.

  1. Customized services:

If caught up with the busy schedules while looking out for educational loans, you may want to consider accessibility to information and the time taken to access services from the lenders. NBFC will come handy for busy schedules, as they provided customized services and assistance in terms of visa counselling, counseling, door step services etc. Banks on the other hand do not owe you that benefit.

  1. Processing time:

Time is the most essential factor is any case. Delays and uncertainties can be frustrating and anxiety inducing. The loan approval process is shorter with NBFC compared to public sector banks, unless you have a favored relationship with your branch manager by being a long-term customer. Incases otherwise, NBFC save you from sweating in the waiting time.

An informed choice always saves time, effort and investment. Each of the method have its own pros and cons, considering what is at stake in each method and what is there to benefit in each will help you arrive concretely at a smart decision.

What Additional Benefits You Should Look For in Factoring Company

You look forward to an invoice factoring financing company hoping for a hassle-free experience and a faster cash in hand timing. The method is the most popular when businesses are looking help with their cash flow needs. However, there is much more than what you can expect from your factoring company.

A factoring company can be helpful for a business in more than one way. Besides funding accounts receivables, factoring companies can help with the following:

Establish your customer’s creditworthiness – Invoice factoring companies have the credit history of most of the clients associated with your business. This means, if you are unsure about dealing with a particular customer, you can run a detailed background check with the help of your factoring company and know if the client is suitable for long-term business. You can gain insight about different clients in your market and choose to do business with them wisely

Reassurances of not having long-term contracts – Long-term contracts are something not every business wants to get stuck to. Businesses find it difficult to manage invoices that are due for many days. With the help of a factoring company, they don’t have to get into dealing with different kinds of clients. All they need is to factor the invoice, and rest assured, they don’t need to worry about long-term contracts whatsoever.

Factor if need be – Not all invoices do you need to factor. This information can be achieved only with the help of a factoring service provider. Just because you factor most invoices doesn’t mean that you have to factor all of them. It is highly likely that certain invoices can be paid instantaneously by your customers and there is no waiting period.

Thus, before considering your invoices for discount financing, get the status of payment date of the invoice with the help of the factoring company. If the payment date is arriving soon, you can submit the invoice directly to the client instead of discounting the same. Thus, you can factor only when you have to..

Invoice factoring services can be availed for a variety of other purposes. With the help of right company, you can save a lot on your invoices. Also, you could gain insight on various topics that can help you take wise business decisions. In fact, the best business advice can be achieved from those who know the market inside out. The benefits you can avail from your money lender is immense, provided you ask.

In 1985, 1st PMF Bancorp was founded as a family run lender providing factoring, but as our clients’ businesses expanded globally, PMF Bancorp expanded its services to provide credit and financing support for our clients domestic as well as international business needs.

5 Golden Rules to Always Borrow Loans Like a Boss

In an ideal world we all would like to have enough money for each of our requirements; wherein there is never a need to visit a lender to meet the cash gaps. It sounds too much of convenience and happy living. Isn’t? However the reality is not that sweet and most of us have little choice in the financial matters. We have a multibillion lending industry thriving on the vast gap between the consumer needs for credit, after all.

With the advent of FinTech industry it has become easier than ever to borrow the required funds, say, in a matter of few hours you can avail loans of your choice. Many lenders even boast off to extend the financial assistance instantly (within a minute) too! The service and processing is as hassle free as it can get today.

Although the channels for borrowing have mushroomed to abridge the walls between lenders and borrowers, the basic rules for applying a loan are broadly the same. You should never borrow more than what you need; and ensure loan affordability at the same time. Here is a quick list to state 5 absolute rules for choosing a right loan so that you are never enslaved by a debt in your lifetime.

1. Borrow according to your repayment capacity

Whether you are a Christian or not, it is not about a belief in faith; it is pragmatic to not borrow beyond your means. Always raise a loan after assessing your repayment capacity. Borrowing more than permissible credit limit or borrowing more than 50 per cent of your income hurts your credit score and credit worth.

In the present time it is not uncommon to borrow despite a low score as a lot of loan offers are always available. Irrespective of loan availability you must strictly borrow if you need one.

2. Try to borrow for short-term; do not borrow for longer term unnecessarily

While it always advisable to ensure the affordability or ease of payment of the loans, you must at the same time ensure that you are not extending the payment duration simply to keep the instalments low. For, larger would be the tenure; greater would be the cost of loan. While raising a loan you must try to save as much on the loan interest as possible. In case you have temporary fund hassles, you can begin the loan with small instalments; and later on, either prepay or refinance the loan to save the additional payment of loan interest amount.

3. Be disciplined in loan repayments

One of the most common reasons to destroy one’s credit score is to delay the credit bill repayments. A lot of people realise the mistake after a loan rejection. It is thus advisable that the sooner you automate the loan repayments and credit bills the better it is for your credit health. Also you may deliberately align the same repayment date for a number of accounts so that there are lesser hassles to manage the repayment date. Always keep in mind: A single day delay is same as a week’s delay. It is thus important to pay before the deadline lapses.

4. Try not to borrow for investment or unaccounted risks

Loans should not be directed to pay for investments or volatile risky payouts. For, it is a liability that must be returned on time with loan interest amount. So loans are not meant to fund your fixed deposits or equity funds. Also, it is important to think critically about the loan purpose as a debt should always be used for significant reasons in life.

5. Keep a tab on your credit report

Once you apply for a loan, it is important to keep a strict vigil on your credit report. You must look for ways to increase your score. In case you are running a rolled over credit bill for a few months, you must first of all clear the balance on this card. It would save enough on the interest component.

Similarly if you have multiple loans running simultaneously consider consolidating your debts and reduce your monthly debt burden. Herein you can also consider using an experienced loan broker’s advice to use cheaper loan alternatives such as a secured loan against property or a homeowner loan to reduce your monthly debt repayment burden.

Keeping all these factors in mind, as you assess your credit health and apply with confidence, your loan application is bound to be accepted, making you a boss of your own financial decisions!