by Ajay Oberoi | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management, Portfolio
When you think of loans it might scare you a little especially if you don’t know how to manage your loans. On the other hand, credit is a complex element, and based on your credit status you may think whether the loans will help or harm your credit score.
Certainly, both old and new loans affect your credit scores in different ways
- The loans can help you strengthen your credit provided you make your payments on time.
- In case you make late payments on loans then it can affect your credit.
- They lower the chances to borrow which of course won’t harm your credit score directly.
- They initially cause some damage to the credit but you can easily overcome the damage upon making timely payments.
Strengthening your credit
The credit means the records of a borrower. In case you borrowed any loans in the past and paid it on time then the lenders will lend you further loans thinking that you will follow the same pattern for future loans too.
When you decide to take a new loan it certainly provides you with an opportunity to make the payments successfully and strengthen your credit score. Even if you had a bad credit history in the past or couldn’t build credit, here is another chance to improve your credit with every month by paying on time.
Taking various types of loans also improves your credit. If there is a mix of different loans on credit cards it would be better to improve your credit. For example, a home and a vehicle loan, etc.
Again, make sure that you do not borrow just to increase your credit score. Try to borrow smartly only if you need it and pick the right loan for a specific need.
Missing loan payments affect scores
If you are not making payments against your loans that are either you are paying late or simply stop paying them, then the credit scores will fall quickly and you will face problems getting further loans.
Borrowing potential
New loans not just affect your credit scores but they also decrease your borrowing potential. Your credit history shows the details of the loan you are availing at present including the monthly payments that you need to pay against the loans. When you seek a new loan from the lenders, the lender would check your monthly responsibilities and then decide whether or not the loan can be given as to whether you can afford to pay for a new loan along with the existing responsibility of other loans payment.
In order to find out whether you are eligible for the loan or not, the lenders evaluate the debt and income ratio which helps them find out the portion of the monthly income you get is consumed by the monthly payments you owe. The less the amount is the better.
It means you don’t have to actually borrow to find out that your borrowing potential is affected.
A little drop in credit scores
New loans basically lead to a little drop in credit scores. In case you have good credit history then this drop is meaningless and might be short term. On the other hand, if you possess a weak credit score or you are trying to create a credit score as a beginner, the drop can lead to problems. So, do not collect debts prior to applying for a new loan which is an important one for you like a home loan.
Your credit history is checked by the lenders each time you seek a new loan. In this process, an inquiry is set up which shows that someone dragged your credit. Inquiries basically indicate that you are in a financial crisis, need a loan and this makes them drag your credit score down a little. If the inquiries are just one or two it is absolutely fine, but a number of them can seriously affect your credit scores.
If you are visiting lenders it is indeed a smart move and the best option to get a fair deal. You can finish your shopping within a limited period of time like if you are willing to buy a house and started comparing different mortgage lenders then make sure you finish your application process within 30 days. In case of auto loans finish the process in at least 2 weeks’ time.
The above-mentioned information would certainly help you find out how loans can affect your credit score, so make sure you make timely payments against loans. Any help for financial problems contact gtacredit.com or call 416 650 1100
by Ajay Oberoi | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management, Portfolio, Social Media
Do you want to get rid of debt? In that case, if you are getting a fixed income a consumer proposal can be the best option than getting into bankruptcy. The consumer proposal would help safeguard your assets and clear your debts to unsafe creditors.
The consumer proposal helps the interest increasing on the debt, halts collection calls and halts wage trimming. Under a consumer proposal, you can easily pay off a less and small part of the total debt you have with the help of a single monthly payment during a span of 5 years or lesser than that. You can pay for it anytime.
Let us understand what does consumer proposal mean?
It is an alternate option to bankruptcy created for those who are unable to pay off their debts to the unsecured creditors. You can create a new agreement with the help of a Licensed Insolvency Trustee with the creditors to pay off a lesser amount.
The monthly debts amount that you have to pay is completely based on the income you get and the amount that you can manage to pay as a debt payment.
The consumer proposal proves to be an ideal option for all those who are engaged in the process.
Type of debts that consumer proposal covers are
All the unsecured debts that you own are taken care of by the consumer proposal. It includes utility bills that are not paid, debt related to credit card, payday loans, and also the amount you owe to the Canada Revenue Agency. The consumer proposal is meant for all the debts below $250,000 (excluding mortgage). In case the debt amount is above $250,000 then you are entitled to the proposal – Division 1. You can visit gtacredit.com to get rid of debt with the help of a consumer proposal.
How do Taxes work in a consumer proposal?
Well, if you are planning to file your tax returns then it can be a cumbersome task if you are under debts or planning to file a consumer proposal. There are a lot of misunderstandings regarding the taxes you pay upon filing a consumer proposal and you may get in the trap of such misunderstandings as taxes are handled differently when it comes to consumer proposal rather than a bankruptcy.
The best source to get all your misunderstanding clear about your taxes is to seek help from a GTA CREDIT counselor or an Insolvency Trustee and you will get all the answers to your questions about your financial status and what exactly the consumer proposal has in store for you. The trustee helps you all through the process of a consumer proposal, for example, your assets, taxes, credit rating, etc.,
There are some basic things that you should be aware of how the taxes work while filing a consumer proposal.
In case of bankruptcy, you will need to cease the tax refund the same as you actually would pay a portion of your income as part of a legacy or any increment in your salary. On the other hand, the consumer proposal acts differently. You agree on certain payment terms with your creditors wherein you set a fixed amount to be paid on a monthly basis over a time span of 5 years. The agreement will not alter until and unless you choose to replace it with a new agreement that includes a quick rate for paying back the debt amount. The basic idea behind why a person should seek help via consumer proposal is to secure his/her increments in income in the near future.
Do you need to file taxes while seeking a consumer proposal?
It is recommended that you file the taxes while seeking a consumer proposal as if you miss filing taxes it could intervene in your agreement. In case of bankruptcy you need to file pre as well as a post-bankruptcy tax return.
When you opt for a consumer proposal or bankruptcy it is always better to seek credit counselling. Credit counseling helps you plan your credit and use it wisely and stay away from debt in the coming years.
You can get detailed information from the gtacredit.com or trustee as they help you create a consumer proposal and file the consumer proposal for you. They try to negotiate the amount with your unsecured creditors so they act as intermediaries between both you and the unsecured creditors.
They also help you learn how to utilize your credit and provide tailored counseling for dealing with your credit in the near future. They make sure that the agreement rules are followed by both the parties.
There are benefits linked to consumer proposal and they are
- No need to file bankruptcy
- Can protect your assets
- The unsecured creditors will halt any collection actions that they take against you.
- Any of the deductions on your bank accounts or wages will be cancelled.
- You can pay even lesser amounts to the unsecured creditors as payback amount. This entirely depends on how much you can pay based on your income. All these payment terms are taken care of while filing a consumer proposal.
- Once you file consumer proposals there will be no penalties or increased interest rates for you to pay.
The consumer proposal doesn’t include any disbursement of your assets like vehicles or house etc. in case you mortgaged your house then you need to pay the required amount to protect your house. The same applies to a car or any other secured loans. Remember, secured debts like car loans, home loans or mortgages are not taken care of in consumer proposals.
Upon completion of your consumer proposal, you are freed from all unsecured debt payments that are included in a consumer proposal. Basically the debt amount that you are supposed to pay in a consumer proposal is quite less as compared to the debt amount you owe.
A consumer proposal can help you with debts and you won’t find land in a situation where you find yourself under debts and it becomes impossible to overcome such situations. Any help for financial problems contact gtacredit.com or call 416 650 1100
by Ajay Oberoi | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management, Portfolio, Social Media
Well, the borrowers can do much about the rising interest rates in Canada other than just saving money and getting prepared to deal with the next hike. When it comes to saving money, it is easy for those who are not paying any interest in other assets as part of loans, which again is not the same as everyone. In case you are at the borrower’s end, it is obvious that you get stress out with the fluctuating rate of interest. Do not worry as here are some ways that can help you face the rise in interest rates smoothly.
Carry out a stress-test on your portfolio
Here stress test basically means checking your portfolio to find out whether it can deal with the rise in the rate of interest. This can be checked people who are interested in investing in properties should focus on the future rather than paying more attention to the low-interest rates that they find currently in the market.
If you are on buying end then don’t look at the current numbers. Focus on the various rates that are available currently in the market. Explore the market to find out the different rates of interest.
You can also check if your portfolio can deal with the rise in interest rates to start paying the increased payments right from now. Try to set a budget that can pay the increased rates. You can either pay your mortgage in a lump sum that will be equivalent to the amount that would come out as a result of increased rates as it will help you be prepared and comfortable paying more money to the mortgage. Else you can reduce other bills and pay an increased amount as payment for other bills. It will be like budgeting that particular payment.
You need to be committed to doing budgeting, paying higher amounts, etc.
Focus on the market conditions
You may lose your focus especially when your attention is divided among different investment properties. Make sure you keep an eye on what is happening in the market and check if the market is beneficial for you currently or for future investments.
You can just go through newsletters, news that you get from mortgage brokers. It will help you know about the market conditions. It is always better to change your plans as the market conditions change because that would be a smart move and you won’t end up losing money.
Prepare yourself for the rise in the rate of interests
Try to pay off as much debt amount you can pay before there is a rise in interest rates. In case the debt you have to pay off is less make sure you pay it back and get rid of the entire debts at once. This will not only reduce your financial burden but will also help you prevent the stress of paying higher loan amounts.
Here is how you can prepare yourself for the rising interest rates.
- Reduce your expenses so that you can save money to pay back your debt.
- Try to make payments for debts that have a higher rate of interest so that you will end up paying less money against interest.
- Try to merge the debts having higher interest rates like debts related to credit cards with that of a loan that has a lower rate of interest but maintains the payments to be the same
- Try not to get the highest mortgage/line of credit that others offer you.
- Think about how borrowing extra money can restrict your potential to save money to meet your goals.
- Find additional methods that can help you make more money to pay the debts.
- Also, maintain some funds that can help you in case of an emergency that can come unexpectedly and add to your costs.
- Make all payments on time to avoid paying extra money as penalty charges.
- If required, you can go to the bank you have an account with to apply for a loan that is- debt consolidation plan. In case your loan gets approved then you will get a larger installment amount which can help you pay your small debts.
- Plan a budget and reduce the living costs, household costs as much as possible and you think is an unnecessary expense.
- If you are not paying your debt, then deposit that money in your account.
Talking about the rise in interest rates in Canada it becomes a little difficult to deal with the rise without pre-planning. You should plan your financial goals for the future before time runs out. It is always recommended that you start paying some extra money against interest every month to finish paying your debts quickly. You can make it a practice and see how things work and you will be debt-free within less time span than expected. You should think about your financial situation before you apply for any credit card. You can easily manage things with proper planning and handling money the right way.
You can also seek help from financial experts to know how rising interest rates can influence your finances before you take any decision that involves money. The financial experts will help you calculate the interest rates based on your loan amount and income so that you can decide whether to go investments or not. The idea is to get a clear idea of how rising interest rates can change your finances. It is better to plan your future financial goals as this rise in interest rates can affect your goals to a great extent. So, prepare yourself for the rising increased rates so that you do not land up facing a financial crisis.
Do not ignore the fact that the rising interest rates can affect your overall lifestyle and you need to be prepared for it in advance to help maintain your current lifestyle. Just focus on market conditions and speak to your financial expert to give you proper guidance on how to manage your finances. Any help for financial problems contact gtacredit.com or call 416 650 1100
by Ajay Oberoi | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management, Social Media
It is your payday and it feels so great when you get money isn’t? You can see money in your account to again buy things you need or dine out in a restaurant etc. if you are someone who loves going out and spending money after every payday then you may fall in short of money even for the essentials at the end of the month.
If you fall short of money because you do not have any savings then even your bills will be due. Now, here is how you can get rid of falling in short of money at the end of the month with simple tips.
Keep a check on your expenses
It is essential to manage your money properly and keep track of where the money is going. Just take a notepad and a pen to write down your expenses and remember all of them which also includes the hidden expenses that occur throughout the year. They can be travel expenses, gift expenses on holidays, subscriptions, and other medical expenses.
You can divide the list of expenses over twelve months which will help you find out the actual cost of your living standard. Now, you can categorize these expenses to know which ones are essential and which are not. The list will help you know the two categories that are essentials and nonessentials. This will also help you reduce your expenses on nonessentials or completely eliminate them like salon trips, coffee shop visits that you may be indulged infrequently.
Remove the unnecessary expenses
It may be the most difficult thing to do while planning a budget, but it works, and is necessary to stop spending money on unnecessary things. Once you check your inventory and list out the unnecessary expenses try to eliminate them as they cost a lot in the long run.
If you are not very keen on eliminating them completely then look for economical options like coupons or discounts, which can be used while dining out or for any entertainment activities.
Keep a track of your money
After sorting out the expenses and removing the unnecessary items, you can keep a track of the money for which you can check the bank statements, receipts, etc to check where the money is being spent the most. This will help you set a budget and follow the same. You can also use online tools that help you monitor your budget.
Some people follow the traditional pattern of keeping track of budget expenses that is by writing on a paper. This works too as long as you stick to your budget goals.
Liability is important
Taking responsibility is important. You can also let your friends remind you of your goals and keep a check on how much you spend. You can also go with a cash envelop old method. You can keep an envelope for each category that belongs to spending. You can keep some cash as per your budge in the envelope. When you end up spending the money placed in the envelope it means you have to stop spending now.
Make sure you reduce the spending every month which will automatically save money and you won’t run out of money before the end of the month.
Money for Emergency
When we discuss money to be saved for emergency it means you will have some funds for emergencies. It is the best practice and an easy way to stick to the budget and do not fall short of money before the month gets over. Make sure you save some money for emergencies but do not try to spend the money from this fun just because you end up spending more on other things like buying shoes or groceries etc. The money saved for emergencies means for emergency situations only like an unexpected visit to the hospital, car repair, etc. The emergency funds help you cover the unexpected costs without affecting your budget. In case you use your emergency funds to handle emergencies, then make sure you fill in the money taken back to the emergency fund so that you do not face problems in the future.
Do not worry or blame your income which may be less as a properly planned budget can help you deal with low income as well. A budget can help you find out if you are earning enough to pay for your basic necessities like food, bills, etc. In case you feel the income is really less do not waste time thinking about it, just upgrade or shift to a better job. Try to learn new things that will help you earn enough money to bear all your expenses. Your proactive approach can help you fulfill your goals.
Some people earn more still they are short of money before the month ends, this is because they are spending more money on unnecessary things like eating out often, buying things that you do not need or planning frequent trips that cost a lot. All these things lead to problems at the end of the month. Make sure you pay your bills on time so that you don’t have to pay extra for late payment.
Do not keep any bills pending. Once you pay your bills you will be able to evaluate how you can spend money on necessary things and save money in the end. If you think you want to buy something, start saving money to buy the product so that you don’t have to disturb your monthly paycheck to buy the product. Determine whether you need a particular thing before you place the order. It is always necessary to determine whether it is a want or a need before you make a purchase.
Make sure that you remain true to yourself and money saved is money earned so do not waste your hard-earned money to buy unnecessary things. Any help for financial problems contact gtacredit.com or call 416 650 1100
by Ajay Oberoi | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management, Portfolio, Social Media
Some people do not get a steady income like salespeople, freelancers, or people who are self-employed. They actually face a lot of problems due to fluctuating incomes. It is a nightmare to plan a budget when you have no idea about how much you are going to earn each month. This is a serious problem for those who work on a commission basis or are self-employed.
The income they get depends entirely on their monthly sales or projects they get. Well, if you are among those who earn a fluctuating income and find it really difficult to plan a budget, then read on to find out how you can still plan a budget.
Identify the minimum amount you earn
Before you start creating a budget with fluctuating income, you need to identify the minimum amount you earn. Also, determine your minimum expenses on a monthly basis. For all those who earn a fluctuating income, plan their budget keeping in mind their expenses related to basic necessities like house mortgage or rent, groceries, utility bills, groceries, childcare, transportation, etc.
While following any budget plan it is really important to find out how much you need to make to bear your bills. But, in this case, this step won’t work as the income is not steady. To create a budget for fluctuating incomes just write down the list of essential things and monthly expenses on a paper.
Out of the expenses you have listed there are some fixed expenses like rent, mortgage, etc. Now, try to figure out the expenses that change. They can be grocery bills, traveling expenses, utility gas, etc. Also, write down debt repayments, savings, investment, etc. You may think that these bills aren’t crucial to survive still they are quite important.
Calculate monthly expenses that are optional
After you filter out the essentials then try to list all other things. While writing down the optional expenses consider the bill for cable television or any other payments you make for entertainment, hobbies, cash spent on sports, or money spent to dine out.
If you are unable to find out the approx spending on non-essentials then pull out some credit card or bank statements to check. Also, try to find out something that had overburdened your pocket in the last few months.
Create emergency fund
In case you hold some savings already then nothing like it. It is always better to have savings of money for 3-6 months. It helps especially when you have a fluctuating income.
It is always better to create an emergency fund to fight days when you don’t earn a sufficient amount or say nothing. Savings can bridge the difficulties in crucial times.
Staying on income from last month
Once you created a budget for your fluctuating income and included your unnecessary expenses then you will come to know the amount of money you need for the month without disturbing your savings. You can deposit the money you get the previous month to your savings account.
You can start putting whatever you earn in short term or long term savings whichever suits you. This helps you stay on income from last month.
Credit a salary for yourself
It is again a step ahead of how you were advised to put your money in a regular savings account in the very first month. Here you will be paying salary to yourself. You may be wondering how is that possible isn’t it? Think about times when you were working hard and earning a fluctuating income but here you will award yourself with a salary.
You can follow the budget for fluctuating incomes and eliminate optional spending which will save money for you. Now you will not end up spending more than earnings.
Pay bills depending upon the income you earned last month
The money you need for your fluctuating bills, as well as nonessentials, is there in checking account. The right budget that comprises of your expenses and bills for the month is what you have now.
Now you will start paying your bills as per the budget you created that consists of debt payments or paying savings. If you need an individual account for long term savings then go for it. You can also put some cash back to the regular savings accounts every month and see how money grows.
Mark all your bids as paid and put a zero at the end
As not all bills will be due at the start of the month, you need a proper system to keep track of your spending as the month passes.
Make sure you pay every bill right at the beginning of the month. Pay your mortgage or other bills in the second week of the month. If you are planning to spend on entertainment then make sure you do not spend more. Keep your bills marked as paid
It is not easy to plan a budget with a fluctuating income, but with a proper budget, you can accomplish the task. While you create a budget for fluctuating budgets make sure you find ways that can help you get a steady income. Also, if you succeed to earn more in between, try to save money for the days when you either earn less or absolutely nothing. Do not rely on monthly income; try to save for 3-6 months to have a stable amount in your bank that can back you for at least a month during no or less work.
If you can find income coming from more than one source, it will help you earn a stable income or constant money incoming to your account. Try not to spend on entertainment or things that are not essential. You have to go slow and figure out things that need money on a priority basis. You can create a budget plan for fluctuating income and follow it too. With little dedication and smart planning, you can achieve your goals with irregular income too. It may sound a bit difficult, but it works and with the time you will get used to it. Any help for financial problems contact gtacredit.com or call 416 650 1100
by Ajay Oberoi | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management, Portfolio
With increasing options to spend money in the market living within one’s budget is becoming more of a challenge for people with defined monthly incomes. Making it through the month with a paycheck as your sole source of income is trustworthy indeed, but it can become a challenge at times. It is not necessarily a huge change or demand. Sometimes the slightest of happenings out of the ordinary lifestyle can disrupt your budget which makes the last days of the month a problem to survive through.
It all begins with the day you get your paycheck! It feels like the day to the party which if lasts a bit too long into the month becomes troublesome. So, to avoid that the simple solution is management. As you tend to organize every part of your lives, you should also tend to your finances with the same care and concern. It requires skill and smart living to get there, but it is not that much of a difficult thing to achieve. It may sound strange, but a few steps to alter your living and you will be managing quite reasonably within your paycheck.
The simple steps to take involve:
The first step to saving money is to understand your money. It begins with learning about your sources of income. You must understand your earnings and keep in mind all the money that you bring in. Once you know your sources of income, add up all the money you are earning to get the exact amount you get in hand for the month.
It also includes respecting your income and staying loyal to the sources of it. Work with dedication and keep yourself invested in your work that pays. Remember, the concentration will result in better work output which can promise a raise in your paycheck which means more income!
Once you know what you are earning it comes down to the next part. With finances, it is the expenditure. You earn money to spend it of course and thus, you must keep track of your expenses. Keep a list of all the times your actions result in a decrease in your income. It is an expense to list down.
You must stay true to your list and not cheat. Do not leave off the expenses you do not want to account for. No matter how much you wanted to spend money on that, it still counts as an expense so it must be list down.
- Filter the Living Expenses
Now, once you know your income and you have recognized all your expenses, here comes the difficult part. It is time to be a little hard on yourself. Overview that list of expenses and highlight your living expenses only. Living expenses, you ask?
They include the money you spent on your essentials. The money that goes into providing for the necessities of your life, count them all. They include all your utility bills, food expenses, and others that you just cannot avoid. Highlight all of these expenses and review the ones that remain on that list you made.
That remaining list must have many expenses that you might not want to give up, but that needs some serious dedication to survive within your paycheck. So, it might be a difficult thing to do, but take that step and cross them off the list. Remember, you have to live within the paycheck!
When it comes to finances it is not just about the income and the expenses. Financial management has another integral ingredient to it. The one people mostly forget. This third and vital part of the management of finances is your savings. For a successful budget, savings is a must. You cannot live without saving some amount of what you are earning.
Organize your expenses in such a way to ensure that the savings do exist. While tracking your expenses you must cross out all the unnecessary ones. Continue to do that throughout the list even if your expenses are less than your income because that is when your savings come into play. You will get the amount of savings from that check on your expenses.
Remember! No one can come and help you out with your finances. You cannot be dependent on your financial management on someone. You earn money. You spend the money. It has got to be you who saves the money as well. The motivation and determination to do that come from within.
Once you know you have the dedication to make it work, take the next step. Save your money on the little tasks you hire people to do for you. A little fixing, a little renovation or a little cleaning around; do it yourself. Work on it on your own and get the work done, It will not only help you stay active but also help you save money.
You go out shopping? Well, the smart thing would be to steer clear of the places you cannot resist yourself. Plus, you need not be the first one to buy the trendy stuff out there. Wait your time out, no one is judging you and buy those same articles in sales. Wait for the sales and save money.
- Hold Yourself Accountable
Do not just plan it out, but make sure you execute. Do you know what makes execution unavoidable? It is the process of accountability. Review your success with financial management and even ask your friends to help keep an eye on you for that matter. Force yourself to follow the plan you design for cutting back on expenditures. Thus, judge your own actions to make it work it to the end of the month in good condition.
Thus, stick to these steps and you will surely survive the month well within your paycheck while saving some for emergencies.
Any financial trouble visit gtacredit.com or call 416 650 1100
