For well over a decade, my unrelenting focus has been understanding financial risk and developing practical strategies for managing the risk created by job loss, illness or disability, bear markets and funding thirty years of retirement. Since 1997, I have watched the job of managing those risks become increasingly complex.
One reason understanding and managing financial risk is more difficult is the world, in general, changes at such an incredible pace. Fellow speaker, Vince Poscente, calls it the more-faster-now culture. The other more sinister reason the job is more difficult is it seems so difficult to know who to trust. Over the last ten years or so, in the financial services industry in particular, so many have proven themselves so untrustworthy.
I am not just talking about the Enrons and Bernie Madoffs of the world. I am talking about the countless number of brokerage firms, insurance companies, mutual fund complexes, brokers and investment managers who continue to sell you products – like mutual funds or annuities – and lies – like market timing or stock picking – when all the evidence clearly says those products are only good for the people selling them. So let me give you some guidelines to help you sort out the snakes from the good guys.
The first criteria is transparency. Transparency means everything is up front and out in the open. It is the financial services equivalent of an open kitchen in a restaurant. Ask yourself these questions:
– Do you know exactly how the advisor is getting paid, how much and by whom?
– Can you see where the conflict of interests might be so you can evaluate whether they are coloring the advice you are receiving?
Requiring transparency will eliminate the vast majority of advisors working for banks, insurance companies, brokerage firms and almost anyone selling commissioned financial products. Why is transparency important? It is quite simple. If someone else is paying the bill, their interests will likely come before yours. Portafina Information
The second thing on your checklist is do they promise the impossible? Ask yourself these questions:
– Do they promise unrealistic returns?
– Do they claim they can predict which way the market will go or pick the stocks that will do better than average?
– Do they tell you that an investment is no risk, or change the subject when you ask about risk?
The introduction of the internet has revolutionised the finance industry, not only increasing the types of loans available, but making them much more accessible too.
One sector of the finance industry that has been impacted massively by the internet is the unsecured market and more specifically lenders offering loans to those with bad credit. Because of this, it has introduced a question; is there such thing as guaranteed bad credit loans?
Currently, there is no such thing purely on the basis that it would be irresponsible lending should a company lend money to everyone who applies, there is however a number of options available to those looking for unsecured bad credit loans, here’s an overview of each option:
A specialist bad credit loan offering amounts ranging from £1000 to £5000 over a term of 1 to 5 years. Guarantor loans require a homeowner guarantor to support the application and guarantee the monthly repayments should the borrower fail to do so. As mentioned the guarantor must a homeowner, they must also be receiving regular income and have good credit. Lenders will carry out a number of checks on the applicant regarding both their credit history and their income and outgoings. Each lender will have different applicant and guarantor criteria however if they do not have sufficient evidence the loan is affordable they will not lend.
Some guarantor lenders are now offering a tenant guarantor product, similar to the regular guarantor loan, they will require a guarantor to support the application, the difference being; the guarantor can be a tenant or non homeowner. The process is similar however the applicant and guarantor criteria is likely to be stricter due to the absence of the homeowner guarantor. online installment loans
A relatively new product offering small amounts of cash over a flexible period of time. Most instalment lenders will lend between £100 and £1000 over a term of 1 to 12 months. Installment loans do not require a guarantor which does mean the rates will be slightly higher than those of the guarantor loan. As mentioned, the loan term is flexible however it will be dependent on the affordability of the repayments.
A popular product amongst those with bad credit due to the speed of decision and payout. All payday lenders will be based online and will offer between £20 and £500 and are designed to be repaid at the borrowers next payday. With payday processes being 100% online, it means that both the credit and affordability checks are automated as oppose to manually underwritten. Because of this lenders will boast a 10 minute decision time and all being well the money can be transferred into the borrower’s bank account within the hour.
As you can see, each of these types of loans will carry out some form of credit and affordability checks in order to assess that they are lending responsible. Generally speaking payday loans have the highest approval rates; however they are far from guaranteed bad credit loans. All in all, it is unlikely that guaranteed bad credit loans will be something that any lender will ever offer, mainly due to the risk involved to both the lender and borrower.