5 Ways to Fix Your Finances

With the economic gloom showing no sign of lifting, stretching the average income to afford even the
essentials is a continual challenge. To pay your way, applying for a loan is one answer, but it’s always
worth looking at ways to pep up your finances without increasing your debts. So we’ve put together
five ways to help improve your financial health.

Shop Online

The internet offers far more competitive prices than high street shops, due to lower overheads. Always
use a price comparison checker before buying anything, and check for voucher and money off codes
before buying anything.

Set a Budget and Use Cash

Setting a strict budget is an obvious step, but to stick to it start paying for everything in cash. This will
both help you track your spending, and discourage you from spending too much.

Save Money on Credit

If you have good credit, consider transferring an existing credit card debt to a 0% card to save money
on interest. For other types of bad credit debt, consider a loan with a lower APR rate than your
existing rate, for paying off expensive payday loan debts for example.

Turn the Heating Down

As energy bills climb ever higher, turning the thermostat down by just 1ºC you can cut
heating costs by 10%.

Check for Benefits

Benefits are there for people with genuine need, so check your entitlement if you are really
struggling. Tax credits can top up a low wage, and housing benefit may help with rent costs.

7 Myths About Debt

Managing money isn’t easy. So getting into debt (and out of debt) is widely written about. But if you do an online search for ‘ways to get out of debt’ you’ll often be sent to websites offering to loan you money. And all debt is bad right? Well, not always – it’s how you handle it that counts.

So we’ve put together the top seven myths about debt, to help you understand how debt really affects you.

1) You’ll Never Be Able to Get A Loan

Having bad credit has traditionally been one of the main reasons that most people cannot access credit. But not anymore. There are now many lenders who will consider bad credit borrowers for short term loans. Peer to peer loans, guarantor loans or payday loans are all available to those who already have debt.

2) You’ll Never Get Out of Debt

Getting out of debt is a long slow process, but not impossible. By reining in your spending or increasing your income, you can make more funds available for paying off your debts. And there is always specialist debt help available. An independent and free debt management service can help you formulate a plan to pay everything off.

3) Always Make Minimum Repayments on Credit Cards

Although paying the minimum payment on a credit card is important for your credit record, remember that by paying the minimum amount, you’re extending the cost and length of your debt. Ideally, you should aim to pay off more than the minimum every month to actually pay down the loan.

4) Debt Consolidation is the only answer

There are hundreds of debt consolidation companies offering to help you clear your debts and save money at the same time. But a debt consolidation loan can still be a very expensive way to borrow, and often leads to worse debt. Work out how much you already owe in debt, and how much interest you are paying first. Often, it can be cheaper to take out a personal loan to clear debt.

5) You spend too much

It’s very easy to blame those in debt for overspending, but the reality is very different. Statistics show that the rising costs of basics such as food and housing, have pushed many people to the financial brink, and taking out a loan is often the only answer.

6) Credit Scores show everything

Your credit record can seem like Big Brother, but it doesn’t show all of your financial details. Your salary, parking fines, CSA payments, declined credit applications, credit file searches and defaults and bankruptcies over six years old do not show up on your record.

7) Your Bank Can’t Take Money Owed to Them From Your Account

Contrary to popular opinion, your bank is entitled to take money any money you owe them straight from your bank account without warning. This only applies if the same bank you hold your current account with have also loaned you the money you owe, but remember some banks are in the same group, for example, Natwest and the Royal Bank of Scotland, so an RBS debt could be taken from a Natwest current account.

Peer to Peer Loans Explained

Social lending has emerged as a popular alternative to traditional lending over the past few years, giving both lenders and borrowers cause to celebrate. But what exactly is peer to peer lending? And what do peer to peer loans give you that other loans can’t?

P2P Loans

Peer to Peer loans (also known as p2p) are based on the very simple concept of matching borrowers with lenders. Traditionally, banks hoarded savers cash, and made a certain amount of it available to lend to other customers. So although the idea isn’t new, cutting out the bank is. The availability of online peer to peer lending marketplace’s, makes it possible to connect those who want to save with those who want to borrow – leaving the bank behind.

The benefits are obvious. An individual who deposits their money for lending can earn far higher interest on their savings than from a bank, while borrowers are able to benefit from competitive lending rates. This is because social lending is far more efficient. A peer to peer lending platform does not have the same overheads as a bank, and is not taking big risks on the markets with their customer’s money.

P2P Lending Platforms

The principle of P2P loans is broadly the same, but most person to person lenders work in a slightly different way to each other. So it’s worth spending some time reading up on how each individual peer to peer lender operates.

Borrowers

Generally speaking most peer to peer lenders will credit check potential borrowers, but other p2p lenders will consider the overall circumstances of the borrower to make a considered decision on whether to allow them to borrow. Once accepted, borrowers are categorised into different levels, depending on how much they want to borrow, for how long, and their risk level. They are then matched with the most suitable lenders.

Savers

As with borrowers, most peer to peer lending platforms will ask the saver what type of risk they want to take, how much they want to lend, and for how long. To protect savers, the money is normally spread between different borrowers to minimise their risk. All parties normally remain anonymous to each other.

Benefits of P2P borrowing

The main reason people are attracted to p2p lending, is the feel-good factor. The human side of lending and borrowing between individuals rather than through a financial institution appeals to borrowers and lenders alike. However, as a practical solution, p2p borrowing is another option outside of traditional lending, and is often a cheap way to access credit. As with all loans, this is dependent on the applicant’s credit rating, and bad credit borrowers may have to pay more, but borrowers are normally allowed to pay off their loan early if desired, and lenders can earn greater interest rates than putting the money in the bank. As mistrust for the traditional banking sector grows, peer to peer lending may soon overtake the banks as the most viable way to save and borrow.

How to Find a Bad Credit Loan

Taking out a loan is a big decision to make, especially if you already have existing debts or a low income. So it’s really important that you choose a loan wisely. However, choosing a loan can also be a minefield if you suffer from a poor credit record. Your choices will be narrower still, due to most lenders being reluctant to lend to subprime borrowers since the credit crisis.

However, bad credit loans are available, and applying for a short term unsecured loan when you have a poor credit history shouldn’t be too difficult – but the catch is that you have to be willing to pay higher APR rates. This is how some people get into worsening debt. So it’s more important than ever to know what you’re signing up for, and some of the catches to look out for.

Understanding APR Rates

The first thing to look for is the affordability of a loan. If you have bad credit, then a loan is going to be more expensive, but it’s still important to shop around. By law, lenders have to advertise an APR rate to show the cost of the loan. This figure should include all normal fees for supplying the loan, such as administrative costs, as well as the interest rate on the loan. However, it’s important to remember that it is a ‘representative figure.’ This means that it is not necessarily the rate you will be offered for the loan you apply for. Lenders only have to award that rate to 51% of their customers, so the rate you get could well be different.

It also makes sense to bear in mind that the APR figure is calculated for a whole year. So a £150 loan for two weeks, even from a payday loan provider charging 4,214% APR, would cost you £27.25 – so you’d pay 18% interest. That is a lower rate of interest than most unauthorised overdrafts. So although it’s not ideal to take out loans at such high rates, as a short term loan, it isn’t quite as exorbitant.

TAR (Total Amount Repayable)

A far better way to work out the cost of a loan is to ask the lender for the Total Amount Repayable. This figure would normally include the entire interest payable throughout the life of the loan, and the fees and charges payable.

Hidden Fees and Charges

Unfortunately, some lenders hide their fees and charges from the unwary customer. You need to know exactly when you will be charged, and how much if you default. This will increase the cost of the loan, and in some cases, the money may be taken straight from your bank account, so you could also be hit with bank charges.

Early Repayment Terms

If possible, choose a lender who will let you repay the debt before the end of the loan term without charging a penalty. This will enable you to save money.

For a payday loan or a short term loan, contact us for more information.

Remember, Remember the 6th of Movember

We are now six days into Movember, so its time for a PiggyBank Loans mo update.

We have a new member to our hairy bunch. Julian, our Financial Director, has
decided to join in the fun! So now we are five.

So far none of us are looking particularly ridiculous, but that will definitely come in
time. Darren has started incredibly well and already has a fully-fledged mo, Julian,
John, Frankie and I still have some way to go to really show the mo.

Even the mascot of PiggyBank loans, Hamm Pig, has decided to get in the spirit of
Movember and grow a mo. So everyone here is doing their best to get behind this
incredible feat for a wonderful cause.

Here is an update from a couple of members of the team:

Dan

‘I’m enjoying the mo growth so far, although it is a bit blond/grey/ginger, which
makes for an interesting combo. My girlfriend has moaned a little, but she is trying
to be supportive. I’m thinking about buying some just for men to really make my mo
stand out from the crowd.’

Frankie

Given my lack of progress on the facial hair front, I decided to do a bit of reading up
on what exactly it is that Mo Sistas do. As well as regularly complimenting my team
on their progress, I thought it was time I brought something a little more measurable
to the table.

Welcome please, the “Mo Swearing Please” Jar. It’s not that we’re foul mouthed
here at PiggyBank, just… expressive. However you look at it, it’s filling up quickly.
Watch this space 🙂

Julian

‘I joined the PiggyBank Loans team a little bit late, but I’m very proud to be involved
in Movember this year. It is well worth making myself look ridiculous for this great
cause.’

If you would like to donate to our endeavors you can do so at http://uk.movember.com/team/677845 and we would collectively love you for ever.

PiggyBank Loans and AFC Bournemouth

Every CEO of a start-up has many high points and low points of the journey. Which is why they call it the ‘start up rollercoaster.’ The low points need to be learned from, so the don’t happen again, and the high points need to be celebrated.

So with this in mind I’m delighted to announce that PiggyBank Loans are
sponsoring AFC Bournemouth!

Although I’m a Tottenham fan, AFC Bournemouth is my hometown club. Many Saturday afternoons in my younger days were spent at Dean Court, watching the likes of big Steve Fletcher banging in the goals and Jimmy Glass, a rock between the sticks.

Here at PiggyBank Loans, we are very conscious of our corporate responsibility, and we believe that being involved and having a presence in the local community is very important to us. So we made the decision to have a pitch side banner at our nearest professional club and also have a few other elements of advertising around the ground.

This has to be one of the highlights of the start up journey so far for me. Okay, it’s not going to bring in huge amounts of customers, but to have a presence at my hometown football team and to even be slightly involved in professional football makes me incredibly proud. From a marketing point of view, this presence will help build our profile in our local area, which is a great thing for us.

Fingers crossed for a great season for the Cherries. With Eddie Howe back at the helm, ‘Arry behind the scenes, and of course all the great work that the Chairman does for the club, promotion to the Championship is a real possibility.

Come on you Cherries!

Repairing Your Credit Score

It’s well known that having a bad credit record is detrimental to being able to find an affordable loan. As far as lenders are concerned, your credit record is a good indicator of your financial health. As such, lenders, who take a risk by lending to those who may default means that the APR rate of loans is typically very high. Repairing your credit score then, will go a long way to helping you access more affordable loans, allowing you to borrow and save money at the same time.

So, if you have bad credit, some simple steps you can take to mitigate the damage of a poor credit record, and improve your score are outlined here:

Order your credit report

Knowledge is power, so ordering a copy of your credit file is the first step. The big credit references such as Experian have a duty by law to provide you with your credit record, and it costs only £2.

Correcting your Report

Fraud and mistakes are some of the most common errors on a credit report, so examining your file for evidence of misinformation is essential. Even small mistakes can have a big impact, so check your report very carefully. If you do find any errors, the credit reference agency has a duty to correct them within 28 days. You are also allowed to add a note to your file explaining any defaults, known as a ‘notice of correction.’ However, be aware that a notice of correction can sometimes delay any credit applications you make, because the lender has a duty to read them carefully.

Pay Your Bills on Time

Yes, it might be difficult, but lenders are looking for evidence of a reliable stream of regular payments. Utility bills, council tax payments, credit card repayments, store cards, and recently, even rent payments are recorded. If you end up in court for non-payment of bills, a CCJ will have a serious effect on your credit rating, and make applying for any type of credit in the future virtually impossible.

Register to Vote

Registering your name on the electoral roll provides proof you genuinely exist and live at your address. This makes a big difference to your credit score.

Take out a Bad Credit Loan

Taking out a bad credit loan will help you rebuild your score if you repay the debt, but be wary of falling into further debt by making sure you can afford it. Credit rebuilding credit cards or guarantor loans are one answer, but guarantor loans are a serious risk and commitment for the guarantor, and the temptation to spend on a new credit card is also a risk. Peer to peer lenders often take a more compassionate and human approach to assessing creditworthiness, as well as offering a decent APR. So they can also be an option. As with any type of loan though, it’s vital to ALWAYS make the repayments on time to rebuild your score, and avoid accruing further debt.

Avoiding Pay Day Loan Debt

The Consumer Credit Counselling Service, have recently reported a threefold increase in the number
of people applying to them for help with payday loan debt. Many companies within the payday
loans industry do not file customer borrowing information with credit reference agencies, which
makes it possible for customers to take out multiple loans. The net result is more people than ever
accruing unmanageable debts, and with some payday loan companies charging APR rates of over
4000%, it’s not difficult to see how damaging this kind of multiple debt can be.

So how can you avoid falling into a payday loan debt trap?

Ask yourself if a loan is absolutely necessary. If you are borrowing money to cover essential expenses
then you probably do need a loan. But if you are simply borrowing to fund non-essential items, then
you should really be questioning your decision to take out a loan.

Do not take out multiple loans. Payday loans can sometimes be useful as a short stop gap if there
is no other choice, but taking out more than one payday loan at a time will lead to even greater
financial problems.

Always check that the lender you are applying to runs credit checks. A responsible lender will not
allow a customer to borrow if they cannot comfortably repay their debt.

Consider other types of loan from lenders who do not charge such a high APR rate. Social lenders
and Credit Unions offer far better terms.

Our Little Bit For Charity

As one of the most responsible short term lenders in the market, it’s safe to say that we all have a strong social conscience at PiggyBank loans. This November we have decided to help raise awareness of prostate and testicular cancer by participating in Movember.

During November each year, Movember is responsible for the sprouting of moustaches on thousands of men’s faces in the UK and around the world. The aim of which is to raise vital funds and awareness for men’s health, specifically prostate cancer and testicular cancer.

So Darren, John, Frankie and I have all joined forces to grow a mo and use our collective energy to raise as much awareness and money for Movember as we can.

Let’s meet our team of mo growing heros-

Dan

I’m Dan, the CEO of PiggyBank loans. I’m supporting Movember this November because although big steps have been taken towards changing attitudes and habits relating to men’s health around the world, there is still much to be done to catch up with the women’s health movement. Via the mo, I aim to spark conversation and spread awareness of men’s health. I will be aiming for a handlebar mustache to maximize me own embarrassment, and thus raise more money and awareness.

Darren

I’m Darren, IT Director for PiggyBank Loans. So here we are again! Movember comes around so quickly each year. Having participated a few years ago I enter this year’s Movember with some trepidation. My mind is already cycling through the options. Should this year be a repeat of previous years with a subtle gangster pencil tash, should it be a classic Tom Sellek straight out of the 1980s or does this year bring the full guns blazing handlebar. One thing is certain; my wife is going to hate it! Anyway mustache, things to do, tash to grow.

Frankie

I’m Frankie, Head of Customer Service for PiggyBank Loans. I’m really excited to be getting the opportunity to partake in Movember for the first time this year. We don’t believe that any problems are impossible to solve at PiggyBank, so we’re not letting something as insignificant as my XX chromosomes stop me getting involved! So in Movember, I’ll be ditching “PiggyBank Frankie” in favour of “PiggyBank Frank” and donning an array of suitably extravagant tashes – all in the name of charity 🙂

John

I’m John, Senior Developer for PiggyBank Loans. This is my first Movember participation. Normally for me to grow a top lip slug I would need a 3 month run-up. I’m looking forwards to winning the least impressive mustache award, and to people questioning if I am actually taking part. But hey, what is a little personal humiliation in the face of raising money for charity.

So that’s us! 🙂

If you would like to donate to this incredibly worthwhile cause, check out our team page at http://uk.movember.com/team/677845

Thanks!!

P.S. We will keep you up to date with our Mo-growth via this blog and our twitter @piggybankloans

10 Tips to Regaining Control of your Finances

If managing your money seems like spinning plates, you’re not alone. Over 12 million people in the UK do not feel in control of their finances, leading to bad financial decisions and increased stress.

Denial is a big factor. Facing the truth about your financial situation can be uncomfortable and stressful in itself. Our natural inclination is to ignore problems and hope they go away. But studies show that dealing proactively with financial problems makes us feel more in control, ultimately leading to increased feelings of wellbeing.

So what can you do to take charge of your money? Our 10 step plan sets out some simple ways.

1.Work out your Income and Outgoings

The first step is to take a good hard look at your finances. Use an online budget calculator to set out your income and expenditure. Make sure to include everything. If you’re having trouble remembering how much you’ve spent, keep a spending diary for a week. This will help you build an honest picture of your spending.

2.Understand Your Debts

Now you know what you earn and spend, you need to analyse your debts. Again, be honest with yourself and write a list of all your debts.

3.Prioritise Your Debts

Most debts are classed as priority or non-priority, so if you are struggling, pay your priority debts first. These are the debts that would cause you to lose your home or be criminalised if you do not pay.

4.Contact your Creditors

By letting your creditors know you are struggling, they can try and help you. Often it’s possible to come to a re-payment arrangement. Creditors really appreciate you being honest with them – so don’t just ignore them.

5.Pay off your Debts

If you have savings, it’s better to pay your debts than have money sitting in the bank. This way, you will avoid expensive interest charges.

6.Take Out A Loan

It’s never a good idea to get into more debt, but if you owe money to a creditor who charges high interest rates, it might be better to borrow at a cheaper rate, to pay off your debt. However, you will need a good credit record to benefit from competitive interest rates.

7.Increase your Income

It’s not always easy, but finding some way of making more money will go a long way to tackling your financial problems. Taking in a lodger, or offering a useful service can all be done in addition to a regular job.

8.Save Money

Price comparison sites are great for comparing the cost of utilities. The chances are you’re paying more than you should for services such as gas and electricity and broadband. Shop around to find a better deal.

9.Seek Debt Advice

Taking professional debt advice can help you tackle your debts. Always seek help rather than ignoring the situation.

10.Benefits

Make sure you are not missing out on any benefits you might be entitled to. There are many useful online benefits checkers, or contact your local job centre for advice.