by admin | Nov 18, 2014 | Bond application, Debt management, Featured Articles, Short term loans
An alternative to Bond finance geared at small business owners. Small to medium business owners are finding it more and more difficult to qualify for bonds from South African banks who are desperately afraid of the high failure rate of new businesses in South Africa.
Banks are risk averse these days that if you are self employed, in a sales position without a fixed salary or any other employment where you have no guaranteed fixed amount of income, getting a bond is becoming almost impossible, even with large deposits and security, Crazy as it may seem, this is the reality of the home loan market.
Of course entrepreneurs like ourselves see opportunity where there is adversity and some have entered this market, offering self employed individuals the opportunity to purchase a home. Essentially you are offered creative finance from private equity companies who charge a fee and a slight premium on the money they loan to you. The idea is to make use of the bond alternative for 3-5 years at a slight premium, create a good payment track record and on the basis of that record, hand you back to the banks as a low risk customer.
In reality what the alternative to home mortgages are, are lease agreements where you lease the property for a period on a lease to own basis and once the loan is paid up, you take transfer of property. By doing this the finance company does not need to go through any expensive legal processes to repossess the property should you not make the required payments like a bank has to. They can simply cancel the lease and use the deposit to charge a cancellation fee.
Owning a home for a small business or self employed individual should not cost a premium. We are after all those that are creating jobs and stimulating the economy but alas, our government and banking institutions make it difficult for us. We chose this life because we get up and make things happen, so use those that make things happen, make it happen for you.
by admin | Oct 28, 2014 | Build and renovate, Debt management, Featured Articles
If you love to decorate and paint your rooms in your home, then this is the perfect project for you. Hardly anyone thinks about decorating the light switch covers or the plug covers to match the rest of the room or to add a little “this is my room”.
This project is so easy and cost effective, and will give your rooms that extra piece of character that it has never had before and don’t forget, with the holidays coming up, you can get the kids making the perfect home-made Christmas gifts. Just be sure to take a peek at their switches before you go about buying spares.
What you will need
Light switch plate / Plug plate
Mod Podge
Paint Brush
stanley knife or similar
Scrapbook paper
Hole punch
Instructions
This is just one idea for you, use glitter/stars/sports stars or whatever grabs your fancy!
Having turned your scrap paper upside down, place the switch/plug plate on top of the paper. Trace the outside and the inside edges of the switch/plug plate.
Next cut only half of the outside traced line (to account for the sides of the switch/plug plate). Do not cut out the centre yet, that comes a little later. Cut a diagonal slit at each of the outside corners (to be-able to fold easier).
Paint a layer of Mod Podge to the front of the switch/plug plate (use a paint brush or a sponge).
Next apply a layer of Mod Podge to the back of the scrapbook paper.
Press the paper to the switch/plug plate. Any excess paper you can simply fold over the plate’s edges.
Turning the switch/plug plate face down cut out the centre with the x-acto knife.
Paint a layer of the Mod Podge over the whole switch/plug plate (this is to seal the edges and to give a crisp look).
When the glue has dried you can install your newly decorative switch/plug plate back onto your wall.
If you want the screws to look the same keep reading
Using the punch, punch holes into the scrapbook paper.
Cover the head of the screw with Mod Podge and stick the punched paper to the screw
Now your switch/plug plate is complete and ready to use.
by admin | Oct 10, 2014 | Debt management, Featured Articles, Home loans
A second bond over your property can essentially be used for anything you wish to use it for but is most often used to add rooms, renovate, install paving or fencing. Typically people use their second bond to improve their homes but what we are seeing more and more of is people using the money from their second bond to settle existing debts and reduce their debt repayments. This is commonly known as debt consolidation
The reason people are able to use their second bond for anything or as a debt consolidation tool is that when you apply for a second bond, the bank values your property at current values and if there is an increase in value and the credit department is satisfied that you will be able to repay the increased bond amount, then they will give you the money.
If your application is turned turned down due to the amount of debt you currently have and your intention is to repay that debt with the money from the second bond and effectively reduce your monthly debt repayments, it makes sense that the bank should grant the second bond. In this case you need to prepare a file of all of the debt that want to settle with the second bond and do a spreadsheet showing the principle amount, monthly fees, interest rate and monthly interest charges and the capital repayment amount, giving you a total for each short term debt. Make an appointment with the bond originator or your bank and present the file and spreadsheet to them as a way of motivating the approval of the second bond.
When seeking loans from banks it is very important to show them that you are willing and able to repay the loan, are in control of your finances and are taking control of your financial destiny. Getting a second bond can give an indebted family a second chance and the money should be used very wisely.
If you have ever been given the opportunity to settle bedt and effectively been allowed to breathe again by using your second bond as a debt reduction tool, you will know the value of reducing the capital amount with every spare penny that you have, just in case you might need a cash injection in the future. We just never know what could occur, a family member might need help, you may be retrenched or want to start a new business or your child may need to go overseas to compete and chase their dreams. having access to cash at any time from your second bond could just be what makes it all possible.
by admin | Oct 9, 2014 | Debt management, Featured Articles, Short term loans
If you are labouring under numerous different debt repayments that are high interest short term loans like clothing accounts, short term loans, vehicle finance or just owe someone you know money that you would really like to pay back as soon as possible then consolidating your debt using the equity in your home could be the right choice for you.
When you have many small accounts, each of them has a service fee/monthly fee (not interest), maybe a card fee and of course interest at a rate that is probably higher than prime plus 10 or 12%. When you add up all the fees and interest you will be shocked at what it actually costs to borrow such small amounts or how much it costs to buy on credit from stores. You may have a child on the way or inflation has just got the better of you, you may have a family member that needs help or a medical issue that is costing a lot more than anticipated.
It is at times like these where we fear that we are not going to be able to service all the short term debt that we have which may end up with us being listed with a credit bureau, that we need to consider debt consolidation using our bonds.
What you are effectively doing when consolidating your debt, is taking all of the small amounts that you owe and paying them off with the money available to you in your home loan. Your home loan is a much lower interest bearing loan than any credit facility or short term loan and can very effectively reduce your repayments by as much as half or even more. What you do need to be aware of, is that you are now paying off a short term debt over a much longer period when you consolidate your debt using your home loan.
Debt consolidation is meant to get you over the hump, avoid getting a negative credit report and allow you to breathe while you plan your way forward. Once you are over the hump you are able to make additional payments into your bond without any penalties for early settlement and effectively free up capital again in case you need it.
by admin | Sep 1, 2014 | Debt management, Featured Articles
If you, like so many South Africans are feeling overwhelmed by the debt trap that you got yourself into due in part to the lending policies of many banks, then you are an ideal candidate for debt consolidation. Debt consolidation is NOT debt review, it is you personally taking responsibility for your debt and deciding that the best thing for your peace of mind and your sanity is to get out of debt.
The first thing to do is to acknowledge the debt that you have.
Take every last debt, no matter how big or how small, wether you owe the money to a friend/family member, a bank or a store. Write down every single debt that you have along with the amount you are paying or should be paying towards the settlement of these debts.
As you do this exercise you will likely be astonished at how much you should be paying! Good… now tell yourself that once you have settled these debts, you will never get yourself into the same predicament again.
There are a few things that you can do to begin with.
1. Pay off your small debts
Take your list of debts and select the smallest and easiest debt to pay off, no matter what it is and pay it off. Put a large red stripe through it and keep that list somewhere that it is easily accessible. It is amazing how seeing the completed stripe on a page insires you to remove the next one. Soon you may even find yourself have a glass of water instead of a coffee and paying that R20 into another debt.
2. Take your debts and see your bank, acknowledge that you are in over your head and try to work with them to get a debt consolidation loan.
What this effectively means, is that the bank lends you 1 amount to cover all or part of your debts so that you have 1 affordable loan payment each month. The reason that it is likely to save you money on interest is that the short term loans, store cards and credit cards is very high and by taking 1 loan, settling all of the high interest loans and paying back one single loan is a whole lot cheaper.
Also remember that for each returned payment or debit order there is a cost attached it, so by reducing your payments from 10 small payment to 1 consolidated loan payment you will be saving a whole lot just on bank charges. This may seem insignificant to you, but this is probably due to you not knowing what those bank charges are all about.
Start consilidating your debt and moving towards a debt free life.
by admin | Sep 13, 2012 | Debt management, Featured Articles
Use the debt reduction calculator to determine how long it will take to pay off all of your debt or find out what the result will be if you pay an additional amount towards your debt.
EXAMPLE CALCULATION
These are really important things to know when managing your debt. For example, If I have a personal loan of R25 000 at 12% interest and I am paying R700 per month towards that debt, I will have paid it off in 3 years and 9 months, R6085 of which will be interest.
If I pay an additional R200 towards the loan, I will have paid it off in 2 years and 9 months and saved R1650 in interest.
Start planning to reduce your debt and become debt free!
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I am sure you are amazed at how much you can save by making small extra payments on your home loan. Start today and experience debt free living sooner rather than later. Even in these low interest environments the saving that you make by paying extra into your bond is still beating the overall investment market and the risk is zero, so you go figure it out… but whatever you do, take every last penny you have and pay it into your bond.
