HBOS Financial Services

03

Aug

How to tell your partner about your debts

2023-08-03 06:24 AM

Talking to your partner about money can be tricky, and if your financial situation includes debts, it can be even harder.Many couples avoid revealing their debts until they're combining finances or making plans with their partner. But doing this can mean keeping your money worries to yourself for a long time. This can be stressful for you and put strain on your relationship, too.Here are some pointers on how to tell your partner about this side of your financial life.It may not be an easy conversation, so make time to do it properlyDebt can be an emotional topic. So, it's important to allow plenty of time to talk it through with your partner. Find an occasion where you have no plans and no distractions. This will give you as long as you need to talk through your situation and answer any questions your partner has.Remember to protect your privacySharing information like account details and logins is rarely a good idea, even with people you trust completely. Things can change, and if your relationship ends on bad terms in the future, your partner could misuse any information they have access to. Keeping certain things private can help you protect yourself from this kind of situation.Start with the factsIf you're not sure how to open a conversation about your debts, start with the facts:How much you oweWhat kind of debt you have - e.g., credit card debt, or unpaid utility billsWhether you're being chased by creditorsIf you owe a lot, then saying the number out loud can feel daunting. You may be tempted to test the waters with your partner by telling them about some, but not all, of your debts. But this may mean you need to have another conversation about debt in the future, which could lead to them feeling you've been dishonest.Share your plan to get out of debtOnce your partner knows what you owe, the next thing to talk to them about is how you're paying it off. Sharing your plan shows you're taking the situation seriously, which can be reassuring for them. Consider talking about:What approach you're taking to pay off your debts. For example, are you following your own plan or using a debt solution?What help you have, if any. If you've spoken to a debt adviser, then telling your partner this can help them see that you're tackling this in a considered way with help from a professional.How much you've paid off, and how much is left. Sharing your progress can inject some much-needed positivity into the conversation. Even if you still have a long way to go before you're debt-free, it's good to show what you've achieved so far!Take responsibility for your decisions, even if you no longer agree with themTelling your partner how you got into debt can be upsetting. It may mean reliving a difficult period of your life, during which you had to make hard decisions about your finances. But by showing accountability for those decisions, even if looking back you would have done things differently, you're showing your partner you've learned from the situation you were in. And if you've learned from your experience, you may be less likely to repeat it.Explain how your debts affect your partnerYour partner will probably have some questions about your situation. You can get ahead of them by thinking about what they might ask and preparing answers. For example:Talk about the short-term impact of the situation. If you're putting every penny you don't need for essentials towards your debts, you may not be able to afford to do as much. Explaining this to your partner can help you manage their expectations and avoid disappointment.Consider the long-term effects of your debt. Your debts will have a lasting effect on your finances. They could make it difficult for you to borrow money for a number of years, which could affect your plans with your partner. For example, if you want to buy a house together, then only your partner may be able to get a mortgage, which could mean borrowing less and buying a different type of home.Tell them if their finances are affected by your debt. If you have joint accounts with your partner, then your debts could be affecting their credit score because of the financial association between you.Be clear about how they can support you. How they can help is a question your partner may have at the end of this conversation. So think about this ahead of time and tell them how they can support you. This might be accepting that life will be a little different until you've repaid what you owe, or simply cheering you on and helping to keep you motivated to pay off your debt.Know where to find helpTalking to your partner about your debts may make you realise you need help, either with your money or your relationship. You can get free, impartial advice from:StepChange provide free debt advice and access to debt solutions.Citizens Advice advise on all kinds of money topics.Money Wellness can provide free debt advice and help with debt solutions.MoneyHelper has a wealth of information and advice on all sorts of money topics.National Debtline can give you advice and support with all kinds of debt.Relate can help with relationship advice, including how to talk to your partner about money and debt.

03

Aug

Agri-loan, key to farming success

2023-08-03 06:21 AM

Starting today's article with statistics provided by the Bangladesh Bank.According to IFPRI, 19 percent of farmers take loans from relatives. 15 percent from the landowner, 11.4 percent come from moneylenders and 3.6 percent from various associations and cooperatives. Farmers get the largest share of the loan from the Krishi Bank, which is about 15 percent. Large, medium and small farmers together get 36 percent of the total loan while marginal farmers get about 5 percent. The total percentage of loan all the farmers get is 36 percent. Sharecroppers, the farmers who cultivate other people's land on lease, do not get this loan. As a result, they have to rely on loans from other sources, including NGOs.Small NGOs and associations began to form in the districts and upazilas from the 80s to the early 90s of the last century. Along with other developmental activities, these institutions started a micro-credit programme. Institutions thrive mainly on interest earned from loans. But there is no such change in the farmer I have witnessed. The farmer falls into a debt trap and sometimes carry the burden of prolonged loans that they take from NGOs and local moneylenders. Farmer Rafiqul Islam from Natore, at one of the open-air discussion among farmers and policymakers, popularly known as 'Krishi Budget Krishoker Budget' (Farmers' Voices in Budget, aired on Channel i), said he has never seen any political person become poor while doing politics, but the farmers are not well off doing their profession, which is farming. "We don't have capital, no one thinks about our market, no one talks about us," Rafiqul angrily said. Such anger doesn't only come from Rafiqul, but almost every farmer bears the same agony. Most importantly, the moneylenders expanded their business by capitalizing on the poor state of the farmers and they never want them to get out of this vicious circle of borrowing money from the locally-rich and powerful people.

03

Aug

Dealing with Delinquent Business Loans: Protecting Your Finances and Credit

2023-08-03 06:18 AM

Closing on a business loan often brings a sense of relief and excitement as you secure the funds to grow your business. However, it’s not uncommon to find yourself overwhelmed after a few months or years, realizing that you’ve taken on more than you can handle. With over one-third of Americans struggling with delinquent debt and the risk of loan defaults, taking immediate action is crucial when you fall behind on loan payments. This article provides essential information on delinquent loans, defaults, and practical strategies to protect yourself and minimize the associated damage.Understanding Delinquent LoansA loan becomes delinquent when you miss a payment, even in just one day. If you miss payments or cannot make them for an extended period (typically 90 to 120 days), the lender may classify the loan as default and initiate collection procedures. Both delinquent loans and defaults have negative implications for your credit. It’s important to note that the timing of your delinquency rarely matters. For example, if your payment is due on February 1 and the lender doesn’t receive it that day, the loan becomes delinquent on February 2.Consequences of Delinquent LoansThe consequences of a delinquent loan depend on your lender’s policies and the terms outlined in the loan agreement. However, there are three typical outcomes:Penalty Rates & Late Fees: Loan agreements often permit lenders to charge late fees after a few days grace period. Some agreements also permit the lender to increase the interest rate on overdue amounts, known as a “penalty rate” or “default rate.” Late fee structures vary among lenders, so it’s essential to understand their specific policies to avoid surprises.Negative Impact on Credit Score: Once you are 30 days late on payments, lenders can report the late payment to credit bureaus. Beyond this period, a late payment can decrease your credit score by nearly 100 points. In addition, poor credit score makes qualifying for future business loans more challenging. Late payments can remain on your credit report for up to seven years, even if you pay the lender after the item is reported.It’s worth noting that this 30-day rule does not apply to business credit reports, as lenders can report late payments to commercial credit bureaus even if you are just one day late.Increased Contact from LendersWhen you have a delinquent loan, expect frequent calls and emails from your lender urging you to make payments. Lenders prioritize collection efforts while the deadline is fresh in your mind. As delinquency continues, it becomes more challenging for lenders to collect the debt.Delinquent Loans vs. Defaulted LoansA loan transitions from delinquency to default when you have an outstanding balance for an extended period specified in the loan agreement. Typically, lenders wait 90 to 120 days before considering a loan as default.How to Identify Defaulted LoansWhen a loan goes into default, the lender will send you a written notice stating that you have breached the loan agreement and must immediately repay the entire loan balance. The lender might also sell or transfer the debt to a collection agency, escalating collection efforts to recover the outstanding balance. If the lender believes they won’t recover the money, they can charge off the loan, removing it from their books. However, you remain responsible for paying the debt.Actions After DefaultThe lender’s subsequent actions depend on whether the loan is secured or unsecured. Secured loans have collateral or personal guarantees backing them, while unsecured loans do not.

29

Jul

Rev Up Your Journey: A Guide to Car Loans

2023-07-29 11:32 AM

I wouldn’t say it’s harder to get a mortgage if you’re self-employed, but it’s less straightforward than for an employed person. You’ll find that lenders will ask you for more documentation. They’re potentially going to look at your income a little bit more closely, compared with an employed person who will just have to provide payslips and maybe some bank statements.One of the outcomes of Covid last year was that it took a while for mortgage providers to start lending to more self-employed clients. There were minimum deposit restrictions in place. Some lenders still have these – they will ask for a 25% deposit if you’re self-employed.But most are going back to the norm now.Lenders vary in terms of how much they will lend self-employed people and the type of self-employed clients they will accept. That just means you need to do a bit more research before you apply to a lender.What if I only have one year’s accounts?You should still be able to get a mortgage with just one year’s accounts. The majority of lenders usually want two years’ history as self-employed, but some will accept a year’s self-employed income.There are even lenders who in some scenarios would accept the self-employed from day one. For example if someone who had one year’s accounts as an accountant decided to be a self-employed builder, they might struggle because there’s no work experience history. But an employed accountant moving to become a self-employed accountant is more likely to be accepted with a year’s accounts.Imagine a doctor that has worked for the NHS for five years is buying into a local, established practice. Many lenders would consider that from day one because the practice already has history. So it is definitely possible to get a mortgage with one year’s accounts, and sometimes less.As brokers we’re here to help. We’ve got a really good understanding of which lenders are most suitable for every type of client.Are self-cert mortgages still available?Thankfully not, but we have seen some companies try to set up self-certs abroad. I would avoid those companies like the plague.Self-cert mortgages are not a good idea – back in 2008 a major factor in the credit crunch for the mortgage world was self-cert, and so they’re not available anymore.Can you get a joint mortgage if one person is self-employed?It does help to have someone else on the mortgage who’s employed, particularly when it comes to credit scoring. It will also increase the amount you can borrow, because the lender will base the loan on your combined incomes.One thing to do before you apply for a mortgage if you’re self-employed is to have a look at your credit score and register on the electoral roll. Some lenders might score you more harshly when you’re self-employed as the risk to them is higher.With mortgages for the self-employed a broker really comes into their own – we can look at all the different options.What’s the difference in mortgages for a sole trader and a limited company director?A lot of this is to do with how the lenders treat you – firstly in terms of how they calculate your income. If you’re a sole trader or running a partnership, the lender will usually take two years worth of your tax returns. They’ve got various names: tax calculations or SA302s. The lender will usually work off your net profit, which is your income after your expenses. They will usually take either an average of your last two years’ net profits or use your latest year if there’s a steady increase.The main difference for a limited company is that even though you’re self-employed, you’re actually employed by your limited company and receive your income via salary and dividends. The majority of lenders will use your two years’ salary and dividend figures from your tax calculations.But there are also lenders that will disregard your salary and dividends and go for your net profits instead – that will often allow you to borrow a lot more. So, as a limited company the way lenders can view you will vary considerably.How much can a self-employed person borrow on a mortgage?Where affordability can vary is whether the lender uses the average of your last two years or your latest year. The average income might work out at, say, £25,000 but if your latest year is £40,000 that could be quite a big difference.But it’s with limited companies that we see the biggest difference in affordability. A limited company director may have taken a salary and dividend of say £40,000 – some lenders will take that as the income. But perhaps their net profit is £100,000 a year. Other lenders will take that as your income – which means a massive difference in how much you can borrow. NatWest or Halifax will use salary and dividends while Coventry and HSBC, for example, will use the £100,000.If you want a rough idea of how much you could borrow, the very general rule is about 4.5 times your income, up to a maximum of about 4.75 and, in some very rare instances, up to 5 times.

29

Jul

Unlock Your Dream Home: Explore Our Home Loan Options.

2023-07-29 11:29 AM

28

Oct

USA mortgages: ‘How did a $42,500 loan turn into a $477,000 debt?’

2020-10-28 12:57 AM

Cooper’s parents died in 2021, and their house was last year valued at $750,000, so – as things stand – he and his sister will have to hand over most of that to the bank. He says he feels certain his late parents did not realise that that $42,500 loan could spiral to close to $500,000 and “cost their kids their inheritance”.However, the bank says it recommended at the time that customers took independent financial advice to ensure they understood the product and that it was right for them, and adds that in this case, solicitors were instructed by the borrowers.The Coopers are among hundreds – probably thousands – of families whose lives have been blighted by shared appreciation mortgages (Sams). This was a type of home loan that was only on sale for a brief period, between 1996 and 1998, and only available from two banks, Bank of Scotland and Barclays.These loans were ostensibly aimed at helping “asset-rich, cash-poor” older people release some of the value locked up in their homes. They typically allowed people to borrow up to 25% of the property’s value, and usually there were no repayments to make during the lifetime of the loan.In return, people were required to pay back the original amount when the mortgage was repaid, or when they died and the house was sold, plus a share of any increase in the value of their home.This share was usually worked out on a three-to-one basis – so if you borrowed 25% of the value, you would be in line to hand over 75% of the future growth in value.Of course, in the years since those mortgages were sold, house prices have rocketed, leaving people facing massive repayments if they want to move – or, as in the case of Cooper, leaving the offspring of those who signed up with a huge and costly headache.

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