Terms and Conditions: Uncovering Hidden Fees and Charges

The fine print of credit agreements often contains detailed information about interest rates, fees, penalties, and other charges that may not be prominently disclosed in the main sections of the agreement. Reviewing the terms and conditions carefully can help borrowers uncover any hidden fees or charges that could affect the overall cost of borrowing. Pay close attention to fees such as annual fees, late payment fees, and balance transfer fees, as well as penalties for exceeding credit limits or making late payments.

Interest Rates: Identifying Variable Rates and Rate Changes

Many credit agreements include provisions regarding interest rates, including whether the rate is fixed or variable and how it may change over time. Understanding the fine print can help borrowers identify any clauses related to variable interest rates and rate changes, including triggers for rate adjustments and caps on rate increases. Be aware of introductory or promotional rates that may apply for a limited time before reverting to a higher standard rate and any conditions that may apply.

Repayment Terms: Exploring Options and Flexibility

The fine print of credit agreements may contain information about repayment terms, including minimum monthly payments, repayment schedules, and options for early repayment or prepayment penalties. Reviewing these details can help borrowers understand their repayment obligations and explore options for managing debt more effectively. Look for any clauses related to repayment flexibility, such as the ability to change payment due dates or request temporary payment relief in case of financial hardship.

Default and Default Remedies: Understanding Consequences

Credit agreements typically include provisions outlining the consequences of defaulting on the loan or failing to meet repayment obligations. The fine print may contain information about default triggers, such as missed payments or breaches of contract, as well as remedies available to the lender in the event of default. Understanding these provisions can help borrowers anticipate potential consequences and take proactive steps to avoid default, such as contacting the lender to discuss payment arrangements or seeking financial counseling.

Legal Disclosures: Reviewing Rights and Responsibilities

Finally, the fine print of credit agreements often includes legal disclosures and disclaimers that outline the rights and responsibilities of both parties under the contract. These disclosures may cover topics such as dispute resolution procedures, jurisdictional issues, and borrower rights under consumer protection laws. Reviewing these disclosures can help borrowers understand their legal rights and obligations and seek recourse in case of disputes or issues with the lender.

In conclusion, understanding the fine print in credit agreements is essential for borrowers to make informed decisions and protect their interests when entering into a loan or credit arrangement. By carefully reviewing terms and conditions, interest rates, repayment terms, default provisions, and legal disclosures, borrowers can avoid surprises and pitfalls that may arise during the course of the loan. If you have any questions or concerns about the fine print of a credit agreement, don’t hesitate to seek clarification from the lender or consult with a financial advisor or legal professional. Being informed and proactive about the details of your credit agreement can help you manage debt responsibly and achieve your financial goals with confidence.

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Let’s consider the case of Alejandro, the owner of a fast food restaurant who wants to open a new location in a more populated part of town. That way he’ll improve his market share and his visibility. Can qualify for a loan? Certainly.

Raquel has a fitness center and things have been good for a while, but now, during the winter season, customers are coming less often and some are even canceling their membership. She wants to make some changes to increase client retention while at the same time attracting new clients. Her plan is to buy cardio and strength equipment and also to invest in a digital marketing campaign to target customers during the low season. She is convinced that this is the way forward but does not know how to proceed to secure the capital she needs. Can she get a loan? Of course, she can get it.

Luis is managing a car rental service and wants to develop specialized software that can make bookings easier. The customers will be able to see on the company site the cars available, check the prices, and make the booking online. He will have to hire a programmer or two to develop the software, implement it, and do quality checks to ensure that any errors in the application are addressed. However, he hasn’t worked with programmers before and is unsure if the costs of hiring them are worth it. He wants to provide the customers a better service but the details on how to do it and how to obtain capital are unclear. Do you think he can get a loan? You guessed it; he can also get a loan that is tailored to his needs and requirements.

If you are a minority business owner just like the people in the examples above, you need to be informed and do your own research on the alternatives of financing available to you. There are financial companies (you may want to see this option here for reference) out there that tend to offer loans to minorities. These companies in some cases are run by people with the same cultural background and can offer you better terms than traditional banks and institutions. You can check at Camino Financial the top 3 minority business loans: these loans have different features and requirements, like the maximum loan amount, interest rate and collateral required. But the three of them have something in common: they are offered by companies who want to help and support minorities. Their priorities differ from those of large banks since their main concern is not only to maximize profit and have a wide range of customers. Remember: being informed about your business loan options is the first step for a successful business.

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1. Your credit score – there’s always room for improvement

Before you even start applying for loans, make sure your credit score is the best it can be. A few of the easiest ways to improve your score is to register yourself on the electoral roll, check for any mistakes on your file, pay all your bills on time, or checking if your credit file is linked to another person. Your credit score is really important as it can determine what rate you could be offered, so make sure it’s in the best possible condition BEFORE you apply!

2. Calculate your loan first

Wouldn’t it be great if you could check what car loan you could be offered without harming your credit score? With the Car Finance Calculator from UK Car Finance now you can! You can use the car loan calculator to find out how much you can borrow and therefore which cars are in your budget, even before you officially apply!

3. Which type car loan is right for you?

There are a few different types of car finance and choosing the right one can be hard! If you want to own the car, then a Hire Purchase (HP) agreement is probably best for you. Alternatively, if you get bored of a car quite quickly then a Personal Contract Purchase (PCP) may be better suited.

4. Can you afford all running costs?

You’ve got the car you wanted on the best possible finance deal within your monthly budget, great! But have you factored in all other costs associated with running a car? You need to make sure you can pay for your finance deal, car insurance, car tax, fuel, and more (usually) within your monthly budget! This might seem overwhelming, but if you carefully plan, you would definitely manage. Like, if you can find more info on the best quotes available for the car insurance, you can save some extra bucks there! You don’t want to sell yourself short every month.

5. Know your finance jargon

It’s so easy to get bogged down by jargon that finance companies use in their agreements. If you’re unsure, why not use an online jargon buster? Discuss your agreement more confidently before you agree to anything! Also, if there’s something you’re not sure about, ask as many questions as you need. Car finance experts are here to help and want you to make a fully informed decision.

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It’s easy to get caught up in the aesthetic and practical features of your new motor, whether it be a car or a truck. Trucks are for transportation, long-distance traveling, and altogether looking hardcore. There are so many accessories to add to them, you can visit websites such as Peragon to find some examples. It is the same principle for cars which can be modified in a variety of different ways. However, while having a clear idea of what make, model, and color of the vehicle you want to buy, there are more important things you need to be aware of first. So, the good folks at Alpha Car Finance decided to share some tips on what you need to watch out for when getting car finance.

Know how much you can afford.

When you’re thinking about buying a car, it’s best to determine how much money you can afford to spend. You can search online for free tools like a monthly car payment calculator to know exactly how much you need to pay. Also, don’t forget to include other costs like fuel, vehicle insurance, and maintenance.

Know what option suits you best.

The last thing you want is to get into debt. Ask yourself first, “Can I afford to purchase the car outright?” If the answer is yes, the upside is you won’t have to pay high interest. On the flip side is, it can put a dent in your savings.

Buying a vehicle outright works best if you are willing to wait so you can save money for it. However, if you need a car straight away, then you may want to consider car finance. In this case, along with knowing the exact amount you will need, knowing your lender thoroughly also becomes very important.

There have been many cases where a creditor repossesses a debtor’s vehicle due to lack of payments; if it’s a case of wrongful repossession, you hold the right to approach a repossession lawyer for legal help. If not, then you may have to find other ways to get your vehicle back. So, before you ask for financial help, be thorough in your research.

Know your credit score.

Keep in mind that lenders will determine the approval of your vehicle’s financing and interest rate on your credit score. If you have an excellent credit score, then you should have no difficulty in getting approved and won’t receive a steep interest rate.

However, if you have a less than stellar credit rating, then consider looking for other financing options suited for people with poor credit history, like a car lease or a business car loan.

Don’t hesitate to negotiate.

This may seem obvious, but it’s not as easy to pull off. Car dealers are a crafty bunch, and they can trick you into negotiating payments. They would often ask how much you are willing to pay each month instead of negotiating the actual cost of the vehicle.

They do this because they will base the price of the car on the maximum amount of your monthly payments. And you’ll end up paying more than you should. So, haggle with the actual cost of the car and not your monthly payments.

Aim for a fixed rate.

Before you even set foot in a dealership, you should know whether you’re paying for a fixed or variable rate for your loan. Having a fixed rate will help you budget your daily expense easier compared to a variable rate which is more difficult to predict.

Avoid extras you don’t really need.

When you’re at the dealership, the shrewd car salespeople may bait you with additional accessories that you don’t really need, like a cool audio system and other bells and whistles. These car accessories cost more when you buy them at the dealership. So, it’s better if you shop around at a car accessory shop that is outside the dealership.

Don’t get carried away with your emotions.

It’s easy to make a purchase based on a whim, and buying a car is no exception. After you’ve taken your dream ride for a spin, felt its nice leather seats, and gotten high on that new car smell, it can be hard to let it go. Don’t let your feelings get in the way. Be prepared to leave the dealership if they are not willing to negotiate.

Over to you. Have you recently purchased a new car? How was your experience? Any tips you’d like to share? We’d love to hear them. Please leave a comment.

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Data from the Central Bank show 421 homeowners either volunteered or were forced to hand over the keys to their property in the third quarter.

A total of 141 owner-occupier properties were repossessed by court order and the remaining 280 were voluntarily surrendered or abandoned.

A number of bodies, including the Economic and Social Research Institute, the Central Bank and, most recently, the European Central Bank (ECB), have highlighted the relatively low level of repossessions in Ireland.

Mario Draghi, president of the ECB, said last month that the inability of Irish banks to repossess homes on the scale in other European countries was one of the main reasons why standard variable rates were higher in Ireland.

There were 1,678 properties in banks’ possession at the beginning of the third quarter.

The Central Bank figures also showed that 43 per cent of owner-occupier mortgage holders in arrears were at least two years behind on their repayments.

A total of 79,562 family home mortgages were in arrears at the end of September, of which 34,551 were in the most serious category of arrears of 720 days or more.

There was a marginal decrease in the number of borrowers in arrears of more than 720 days with 429 mortgage accounts moving out of this classification in the third quarter; a decline of 2.3 per cent on the previous quarter.

The overall number of homeowners in arrears also declined, by 2,530, but 56,350 remained in arrears of more than 90 days. This represented a quarterly decline of 2.1 per cent of mortgage loans in arrears of three months or more.

More than 10,000 owner-occupier mortgages were held by unregulated loan owners, commonly referred to as vulture funds.

Bernard Sheridan, director of consumer protection at the Central Bank, has said that the regulator was particularly concerned about this cohort of loan owners.

While there was no evidence of vulture funds raising interest rates on the thousands of loans they have acquired from traditional lenders, he has warned that the Central Bank would be powerless to prevent any such moves.

Michael McGrath, the Fianna Fail finance spokesman, welcomed the overall reduction in mortgage arrears but expressed concern over the high level of arrears among borrowers whose loans were owned by vulture funds.

“One of the most alarming aspects in today’s figures lies in the arrears rate among mortgages held by subprime lenders and mortgage funds. The typical restructure options used by banks are not being used to the same effect among [these loans owners] and you would have to fear for mortgage holders in this situation.

“Vulture funds now own about 10,000 family home mortgages. Of the total mortgage book of €1.9 billion, mortgages worth some €1.3 billion are in arrears. This underlines the scale of this problem.

“These funds are generally not directly regulated by the Central Bank. The borrower’s contact is with an intermediary who does not make the final decision regarding a restructure proposal or whether to commence repossession proceedings.”

So-called non-bank entities held 45,678 mortgage accounts for primary-dwelling homes and buy-to-let properties combined. About 70 per cent were held by regulated companies.

The number of owner-occupier loans in arrears of more than two years was significantly higher among non-regulated companies, reflecting the poorer quality loan books they have acquired.

About 38 per cent of the owner-occupier loans owned by vulture funds were in arrears compared with 19 per cent of the home loans held by regulated credit retail companies.

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Buying a car on finance could wipe tens of thousands off how much you can borrow on a mortgage, experts have warned. The number of people paying for a vehicle with a loan has ballooned in the past few years. A record 2.7 million new cars were sold in 2016 and more than 85 per cent of private car registrations were bought through some kind of finance deal, according to the Finance & Leasing Association.

Mortgage regulations dictate that lenders have to factor in the cost of car loan repayments when deciding on offers, and even monthly vehicle repayments of £200 can lead to you being offered £40,000 less on a mortgage.

“I am not sure people realise that the loans can make such a difference when they are factored into the affordability calculations, especially when they have other unsecured debts,” says Aaron Strutt, the product director at Trinity Financial, a mortgage broker.

He cites the example of one couple who had a combined salary of £75,000, two children, and a car loan, which cost £280 a month. Without the vehicle repayments they would have been offered a mortgage of £287,695, even after taking their credit card repayments and the cost of childcare into account. Yet their car commitment took a heavy toll and they were offered only £246,560. “It is also not unusual for people to have two cars on finance,” says Mr Strutt.

Another client earned £31,000, but was paying £330 a month for his car. It meant he could borrow only £116,800 on a mortgage, compared with the £154,000 he would have been offered without the debt.

As well as hire-purchase deals, new cars are often bought through personal loans. Personal loans mean that you get the money upfront and can buy the car outright from the dealer, and then pay off the loan over a period of one to five years. The downside is you need to have a strong credit rating to be eligible for the best rates.

The most competitive rate on a £5,000 unsecured loan paid back over three years is 3.7 per cent, from Hitachi Personal Finance. It would mean paying back £5,285.53 over the course of the loan. A rate of 3.8 per cent on the same £5,000 loan is being offered by three providers, Ikano Bank, M&S Bank and Cahoot. It would mean paying back just over £5,293.

Cheaper rates are available on larger loans. The best rate on a loan of between £7,500 and £15,000 is about 3 per cent, from lenders including M&S Bank, Cahoot, Clydesdale and Yorkshire, and Zopa.

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Interest-only mortgages, usually available to wealthy homeowners, are about to become an option for everyone for the first time since the financial crisis.

These loans all but disappeared from the mortgage market after the credit crunch, when they were considered part of the irresponsible lending that led to the financial crisis.

Since then they have made a gradual reappearance, but were limited to people with high incomes and deposits who could demonstrate a clear method of paying back the loan other than having to sell the property.

This week, however, Santander announced that it will be withdrawing its £50,000 salary requirement (£70,000 for joint incomes) for an interest-only mortgage within the next two to three weeks. The bank is also to increase the age limit for borrowers from 65 to 70. However, it is likely to require a 25 per cent deposit, and equity of at least £150,000 in the property if it is used as the repayment vehicle.

“Interest-only may not be right for everyone, but appetite has grown in recent years,” says Miguel Sard, the managing director of mortgages for Santander UK. The monthly savings from paying off only the interest, but not the capital, can be considerable. For example, you can save £20,000 a year in repayments on a £500,000 mortgage at a rate of 1.84 per cent.

It is a move that has shocked other lenders who may have to follow suit, says Aaron Strutt, of the Trinity Financial Group. “Up until recently lenders have been constantly lowering their rates to increase business. We’ve reached a point where rates can’t go any lower, so they have to ease their criteria.”

Lenders are also feeling the pinch because the number of buy-to-let loans has fallen and the housing market is slowing in some areas. Santander’s latest management quarterly update showed a fall of £1.2 billion in net lending over the previous year, from £2.7 billion to £1.5 billion.

According to the Council of Mortgage Lenders (CML), only 1 per cent of people applying for a new mortgage managed to obtain an interest-only loan. This figure rose to 4 per cent for people who remortgaged.

Last year Halifax, the UK’s largest and most cautious bank, accepted the sale of a mortgaged property as a way of paying off an interest-only loan. It was a massive change of heart from a lender that previously required borrowers to have a pension pot of £1 million as a repayment vehicle.

The CML says the number of interest-only loans fell from 2.5 million in 2012 to 1.7 million in 2015. Some people who managed to get an interest-only mortgage in 2012 are struggling to remortgage to another interest-only loan, so Santander’s announcement may well come to their rescue.

Alan Smith, is in this situation. He is worried that he will have to sell his house in Littlehampton, West Sussex, where he has lived with his wife, both 73, for the past 25 years. “We remortgaged some years ago and have an interest-only mortgage that expires next year,” says Mr Smith, who is a surveyor. Their house is worth £300,000, with £193,000 outstanding. The only way we can make repayments is to sell the house, but we don’t want to and are desperate to find a way of staying. We have already asked the lender if we can extend the mortgage, but it wasn’t able to help. Ideally we need somebody to buy the property and to allow us to rent if from them.”

Interest-only best buys
Santander
0.99 per cent fixed for 18 months with 40 per cent deposit and £1,499 fee. Minimum £50,000 income or £70,000 joint. Equity of £150,000.

HSBC
1.44 per cent fixed for three years with a 40 per cent deposit and £999 fee. One applicant needs to earn £100,000 and a valid repayment vehicle is required.

HSBC
1.79 per cent five-year fixed with a 40 per cent deposit and £999 fee. One salary of £100,000 and a valid repayment vehicle is required.

TSB
1.19 per cent two-year tracker with 40 per cent deposit and £995 fee. No minimum income but there are strict criteria for the repayment vehicle.

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Ministers have admitted that the performance of Concentrix, which gets paid for every incorrect or fraudulent tax credit claim that it stops, has become “completely unacceptable”.

Figures released by HMRC yesterday show that in the past six months, up to 6,000 people had their tax credits wrongly stopped by Concentrix, and 64 per cent of all claims made against it were successful.

Last night HMRC told  that as a result of the failings uncovered, Concentrix would not have its contract renewed when it expires next year.

“We want to reassure customers who have had their tax credits stopped that we will prioritise their cases,” Jon Thompson, HMRC’s chief executive, said. “While it’s right that we ensure that tax credits customers only receive the money to which they’re entitled, it is vital that those customers have a high level of service. That’s why we decided not to extend our contract with Concentrix and HMRC is redeploying 150 staff so that customers can get through to advisers and resolve any issues.”

In a robust statement Concentrix blamed HMRC for failings in the contract.

MPs have been inundated with complaints from constituents whose benefits have been wrongly stopped — sometimes without notice.

Citizens Advice said that the number of people coming to them with tax credit issues has increased sevenfold in a year and warned that people were getting into debt through no fault of their own. In one case a woman’s benefits were cancelled because she was told that she was in a relationship with a man at her address who she had never met and who she subsequently discovered was dead. Another mother had her tax credits cut by £100 a week despite sending three letters to the company with the documentation it required.

At the same time checks by HMRC revealed that Concentrix was routinely breaching the most basic performance standards set out in its contract — up to 120 times in the past year. These included answering less than 50 per cent of calls within five minutes at times, with some claimants waiting up to an hour on the phone to speak to an adviser.

The company had also taken up to two months to open and deal with some letters sent by people who were about to have their tax credits cut. Under the rules claimants can have their benefits cut within a month if they do not provide evidence that their claim is valid.

Concentrix is operating with callous indifference to the thousands of people it is plunging into hardship

Frank Field, chairman of the work and pensions select committee, described the contract as a nightmare for those affected. He said that he had raised his concerns with Downing Street. Louise Haigh, the shadow cabinet office spokesman, said she had been contracted by 540 people after putting out an appeal on Facebook. “Concentrix is operating with callous indifference to the thousands of people it is plunging into hardship,” she said.

Speaking in parliament, David Lidington, the leader of the Commons, said that the “state of affairs and the number of contract breaches” by Concentrix were completely unacceptable.

Concentrix insisted it had acted professionally at all times and within HMRC guidelines, adding: “The HMRC statement not to renew the contract attacks our professional credibility . . . To be clear, we have answered significantly more calls than planned with HMRC. Throughout the contract we have not been incentivised to make wrong decisions for claimants and in fact would be penalised heavily for failure to adhere to HMRC policies and procedures.” It said it had saved the taxpayer nearly £300 million in tax fraud.

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Savers at up to 130 credit unions will be ordered to reduce their balances to below €100,000 from January amid concerns that deposits greater than this amount will be at risk if another credit union collapses.

Almost 200 credit unions hold savings that exceed the €100,000 protection limit provided by the deposit guarantee scheme.

Only a third of the credit unions, however, have regulatory approval to hold deposits of this size.

Finance minister Michael Noonan has warned these credit unions that amounts over €100,000 will have to be returned to members unless they receive approval from the Central Bank of Ireland.

“For those credit unions that are not approved to retain individual member savings in excess of €100,000 . . . this means all individual member savings in excess of €100,000 held by these credit unions must be returned by January 1, 2017,” he said in reply to a parliamentary question.

According to the Central Bank, 195 credit unions held six-figure deposits from members amounting to €165m in total at the start of this year.

The deposit guarantee scheme, which has a compensation limit of €100,000 per saver, has paid out €33m to members of two failed credit unions since 2014.

They include 9,700 members of Rush credit union in Co Dublin, who have received €22.3m from the protection scheme since the Central Bank obtained approval on November 2 to appoint provisional liquidators.

It is believed they were compensated in full because none had balances in excess of €100,000.

Jim Luby and Tom Rogers of McStay Luby were appointed as joint provisional liquidators of Rush credit union earlier this month.

More details of the credit union’s failure, including allegations of misappropriation of funds and suspected money laundering, will emerge tomorrow when the High Court is expected to order that the credit union be wound up.

Concerns about the lack of protection for large balances led the Central Bank to impose a savings cap of €100,000 per member on credit unions from the start of this year.

Credit unions had lobbied unsuccessfully against the limit, claiming it was unfair when there is no equivalent limit on bank deposits. Credit unions are often in direct competition with banks so they use tactics like seo artifical intelligence tools and lower fees to compete. However, this limit will put credit unions at a noticeable disadvantage.

Exemptions were granted for credit unions with member balances that exceeded €100,000 before the savings cap was imposed.

They had until July 27 to ask the Central Bank to be allowed to hold on to these deposits but only about a third have met this deadline.

“Although the review process is nearing completion, it is ongoing, thus the Central Bank cannot provide a final figure at this time,” Noonan said.

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