These are bills you don’t have to pay off quickly

A sudden, steep but highly anticipated recession means we are all desperate to raise money over and over again and whatever we do, we need to pay off that debt as quickly as possible to strengthen our finances for turbulent times ahead. .

For the most part, this is absolutely correct advice. But not always.

Those with serious debt problems should seek advice from charities such as StepChange, which can develop personal plans for amortization or debt relief.

But if you haven’t and managed to manage your bankroll with unexpected cash in Covid, or if the crisis has left you in annoying but largely manageable levels of debt, here are a few strategies you can use.

Repayments: credit cards and overdrafts

We’ve always known credit cards are an expensive way to borrow money, but now, with the new reverse overdraft fee rules that generate a typical interest rate of 40%, overdrafts in particular are very expensive, although they don’t always realize it.

You’re right to pay it off as quickly as possible, and of course that applies to business cards, thresholds, or payroll loans – the most expensive form of mass loan out there.

Although the “snowball” method of paying off the smallest debt for the first time is gaining popularity with its psychological surge, experts urge debtors to focus on paying off the most expensive debt first. This is likely your overdraft. Clean it up and consider canceling setup if possible. It’s not worth it.

With a 0% reduction on old credit card balance transfer transactions, the days back and forth between free credit transactions without ever being paid back are fast fading away.

Millions of people take vacations to pay off debts. What happens when you finish?
Start by putting the balances on all of your cards below half of the total available balance to reduce the impact on your credit score. Then pay it off quickly and firmly.

Maybe you’ll pay it off: mortgage and personal loans

Long-term loans with lower interest rates sometimes don’t even feel like debt, they just sit in our brains under a file called an “Account”, as if we need something constant in life that we can’t escape.

However, paying a few pounds a month on a mortgage or loan can significantly shorten the term and thus the amount of interest you end up paying. But there is a warning.

First, these products often have an early settlement fee (ERC). Mortgages, in particular, are often a burden if you pay more than 10 percent of the amount you owe over a certain period or in the first few years.

Car loans often impose similar fines depending on the type of funding you have arranged to finance. A fixed rate may be required to pay off car financing and may be covered if early settlement is possible.

Second, as soon as you return the money, they leave. So, if you find yourself in the midst of a corrosive economic pandemic, for example, and you need extra cash to filter you out, this is not a flexible product to return some money even if you are a model borrower. By now, you are probably already exercising your vacation options.

Set up an emergency fund of between three and six months for your usual living expenses before embarking on an overpayment journey.

Another question that arises is whether paying off long-term debt at a low interest rate is the best way to use your money. Horrible cash savings today, even with fixed rate offers that block your money for several years, may not be able to pay you back more interest than you saved on a loan.

On the other hand, investing money can outperform our current very low interest rates, especially with such a long investment horizon. Getting the advice of an independent financial advisor is certainly something, although some investment vehicles have ridiculous management fees given today’s volatile stock market.

Don’t pay: student loans

Around 130,000 UK-based alumni made additional voluntary payments worth £ 2,740 each in 2019/20. Another 10,600 returned for an average of £ 4,310 before going into debt.

But it might be a useless exercise.


Student loan companies have been accused of promoting unnecessary payments
Students, starting university this year and receiving full tuition fees and maintenance loans, could owe more than £ 61,500 on departure, Hargreaves Lansdowne estimates. To get it back in full, they will need a salary of £ 53,100 – provided they don’t take career leave or get a raise.

Coming back to the real world, the average annual payout is now under £ 1,000 a year – just £ 120 in the last decade.

Unsurprisingly, the Institute for Tax Research (IFS) found that only 17 percent of graduates will complete their loan in full.

“It’s very worrying to send your kids to college to run into tens of thousands of pounds in debt – and nobody likes the idea that most of it will pay off in their fifties,” said Sarah Coles, a personal finance analyst at Hargreaves. Lansdown.

“However, if we focus on official student loans, we might lose money – and ignore the really problematic commitments students accumulate along the way.

“Most graduates will only pay back their student loans after they are written off. However, many are so worried about taking on debt that they make additional payments.

“For some, this would be a sensible approach based on careful calculation, but for many there is a real risk that this additional payment will be a waste of money,” he warned.

“During their studies, they’ll borrow thousands of pounds which can be returned to bite off.”

Tagged : / / / / / / / / / / / / / / /

Best student credit cards for September 2020

Whether students are on campus or homeschooled this fall, there are still a lot of costs to return to school. And when checking accounts are no longer available, many of these purchases must be debited to the credit card. But it’s not always easy for a student to get one – especially if they don’t have a steady income.

The reward is a catch-22: important to have but hard to come by – unless you already have one. Student credit cards solve this puzzle by providing options for those with a limited credit rating. Credit card companies take the plunge in the hope that most students will work full time and remain profitable customers for years.

Most credit cards require applicants to have a good credit rating (around 650 or more) and at least several years of credit worthiness. However, you don’t need one to get a student credit card, although some evidence of experience and financial responsibility will help. The publisher checks income sources – including from part-time jobs or parental savings – as well as information on checks and savings accounts to get an idea of ​​the applicant’s savings and expenses.

Apart from the lenient eligibility requirements, the best student credit cards offer the following features:

Special rules for new loans as a minimum late payment fee and no APR penalty
Lower credit limit – usually between £ 500 and £ 2,000
Cashback price
“Fair” APR – usually between 15 and 20%
We have evaluated 19 credit cards offered specifically for students. We have selected four cards that stand out on a number of criteria including APR, credit approval, cashback rewards and easy eligibility requirements. Check out our photos below, as well as some answers to frequently asked questions about student credit cards at the end of this article. We will update this list regularly.

How do student credit cards work?

Student credit cards offer individuals with limited or no credit the opportunity to start building a credit history. They usually have a lower credit line than regular credit cards and have no annual fees. And they often have features that are useful for beginners, including delaying payments, increasing credit limits over time, and resources for credit training. Compensation amounts can be lower than standard refunds and travel credit cards, making student credit cards a lower risk and financial instrument for compensation.

Is a Secure Credit Card a Good Choice for First Time Credit Cardholders?

Secure credit cards provide a way to build or repair credit. However, they are more suitable for people with bad credit ratings than non-credit ratings. Secure credit cards also require prepayment of your credit limit. For a £ 1,000 loan, you have to give the bank £ 1,000. In fact, the bank will return the money on your own – sometimes for an annual fee or high interest rates. If you have no other options, a secure credit card can be used. However, this shouldn’t be the first choice for a starter loan.

Tagged : / / / / / / / /

Student Loans

Student funding is the official government fund for tuition fees and living expenses.

Student loans cover course fees and are paid directly to your university or college.

Maintenance loans are designed to help with living expenses such as room and board. The amount you earn depends on your household income, where you live and where you will study. Usually it is deposited directly into your bank account at the start of each period.

Both must be returned upon graduation and earn above the minimum wage.

You will need to apply to the student finance authority in your country. You can do this online at gov.uk/apply-for-student-finance, depending on whether you live in England, Wales, Scotland or Northern Ireland.

Now I go to another university

How many maintenance credits you get depends on where you live. If you’ve signed up for funding but now need to update your details – for example, changing your university – the easiest way to do this is by logging into your student finance account.

How many maintenance loans do I get?

According to currency tip site Save the Student, the average is £ 6,480 per year. Every country in the UK has its own set of rules so it depends on where you live. Complicated and very dependent on household income. For example, in the UK, the maximum loanable for live-at-home students for 2020-2021 is £ 7,747 and the minimum is £ 34, £ 10. If you don’t live outside of London the maximum and minimum amounts are £ 9,203 and £ 4,289 . If you don’t live at home in London that’s £ 12,010 / £ 5,981. In general, you will get the most if your annual household income is below £ 25,000 while the minimum is above the threshold between £ 58,000 and £ 69,000.

My family has experienced a sharp decline in income due to the coronavirus

You may qualify for a higher level of funding. Again the rules of how they differ. In the UK, you can file an “Income Statement for the Current Year” if you believe your household income for the tax year (2020-21) is at least 15% less than the tax year you are inquiring about. to provide details (for those departing in the coming weeks this is 2018-19). This is a similar system in Wales. In Scotland, the Scottish Student Awards Board may reconsider funding for students based on current income projections if income figures fall to a lower grade. Northern Ireland’s income must have decreased by 5% or more to be revalued.

Tagged : / / / /