Personal Finance
Are you wondering, “can I get a loan against my house?” If you’re struggling with debt and own a home, you may be able to use a loan against your house to consolidate your debts and simplify your payments. However, it’s important to understand the risks and benefits of this option before making a decision. Here’s a step-by-step guide to help you navigate the process.
Understand the Risks and Benefits of Using a Home Equity Loan
Before using a loan against your house to consolidate debt, it’s important to understand the risks and benefits. One benefit is that you may be able to secure a lower interest rate than what you’re currently paying on your debts. However, the risk is that if you’re unable to make payments on the loan, you could lose your home. It’s important to carefully consider your financial situation and consult with a financial advisor before making a decision.
Determine How Much Equity You Have in Your Home
The first step in using a loan against your house to consolidate debt is to determine how much equity you have in your home. Equity is the difference between the current market value of your home and the amount you owe on your mortgage. You can find out how much equity you have by getting a home appraisal or by checking your most recent mortgage statement. Once you know how much equity you have, you can determine how much you may be able to borrow against your home. Keep in mind that lenders typically only allow you to borrow up to a certain percentage of your home’s equity, usually around 80%.
Shop Around for the Best Loan Terms and Interest Rates
Once you have determined how much you may be able to borrow against your home, it’s important to shop around for the best loan terms and interest rates. Start by researching different lenders and comparing their rates and fees. You may also want to consider working with a mortgage broker who can help you find the best loan options based on your specific financial situation. Be sure to read the fine print and understand all the terms and conditions of the loan before signing any agreements. Remember, taking out a loan against your house is a big financial decision, so it’s important to do your research and make an informed choice.
Use the Loan to Pay Off High-Interest Debt
Once you have secured a loan against your house, it’s important to use the funds to pay off high-interest debt. This could include credit card balances, personal loans, or other types of debt with high interest rates. By consolidating your debt into one loan with a lower interest rate, you can save money on interest charges and potentially pay off your debt faster. Be sure to make all your loan payments on time to avoid any negative impact on your credit score.
Create a Plan to Avoid Future Debt and Stay on Track
Consolidating your debt with a loan against your house is just the first step in getting your finances back on track. It’s important to create a plan to avoid future debt and stay on track with your payments. This could include creating a budget, cutting unnecessary expenses, and building an emergency fund. It’s also important to avoid taking on new debt while you’re paying off your consolidated loan. By staying disciplined and focused on your financial goals, you can achieve long-term financial stability.
Personal Finance
Buying a car is a pretty substantial purchase and many do not have the cash to purchase outright. Nonetheless, you have a few options to choose from, you could decide to go the traditional way by taking a loan. However, if you have a bad credit score your chances of getting approved for an auto loan are slim.
In such a situation, another alternative is rent-to-own vehicle financing. Purchasing a vehicle through a rent-to-own option allows people with a not-so-good credit score to get a car.
Let’s look at what rent-to-own car financing is, what makes it different and some considerations to help you decide whether a rent-to-own car is a right choice for you.
How vehicle rent-to-own works
Rent-to-own financing allows you to rent a vehicle for a set period of time usually between 12 – 60 months, after which it becomes yours. Rent-to-own generally requires buyers to make a down payment and then make payments on a regular basis usually on a weekly or monthly basis.
Qualifying for financing requires proof of identity, proof of regular income, and your place of residence. Unlike other financing options, rent-to-own does not involve checking credit scores meaning if you have a low credit score, you can still get a rent-to-own car.
What are the advantages of rent-to-own car purchases?
Ownership: With rent-to-own agreements the regular payments you make add up so that you own the vehicle at the end of the rental period. It generally requires a down payment too but be sure to check all the requirements needed to complete the program and own the car.
No Credit Checks: Compared with getting a loan rent-to-own are easy to get because it requires no credit checks.
No Interest: With a rent-to-own agreement, you pay no interest at all, because you have not borrowed any money. You are simply paying a rental fee towards the purchase of the over a certain period.
No effect on credit score: Your credit score is not affected in any way. However, if you are late on a payment you could be penalised with a late fee.
What are the disadvantages?
Expensive: With rent-to-own cars, you’ll pay significantly more for the car than it’s actually worth. Although there is no interest payment, rent-to-own car prices are usually marked up.
Frequent Payments: In most rent-to-own deals you pay back the loan weekly usually far more often than the average car buyer who takes an auto loan pays monthly.
No Warranty: There is no warranty covering a rent-to-own contract, so if the car breaks down soon after the agreement there is little to no protection.
No Protection: Many rent-to-own companies simply repossess the car immediately if a consumer can’t afford to pay or is a little late on a payment. As such, there is no consumer protection as many rent-to-own agreements do not fall within the scope of the NCA.
Before you decide to rent to own, be sure to read the contract carefully and make sure you understand all of the contract terms as regards insurance policy, termination, maintenance plan, payment fees, repossession and ownership. Better yet, consult an expert to walk you through the process. New Heights Finance is a trusted financial services provider and we can assist you with your application for rent to own cars through our vetted loan providers. Apply now.
Personal Finance
A legacy is something passed down from a predecessor to a future generation. There are many ways to leave a personal legacy. Regardless, one of the most powerful legacies you can leave is a financial legacy.
It’s pretty common for people to defer thinking about legacy planning till when they are approaching old age. It is a well-known fact that death is a reality and one never knows when it’s their time. Though it is discomforting to think about dying it is equally important to have a plan in place in the event of your death.
No matter how much you are worth, legacy planning is an important part of your overall financial and retirement planning and it’s never too early to get your affairs in order. Read on for four important steps to get organized and leave a lasting financial legacy.
1. Take a Personal Inventory
Having accumulated all kinds of assets and other things over the years it is crucial you make a list that accounts for all your belongings from your home to your personal items. This is usually the first step in getting organized so as to ensure you are not forgetting and leaving out anything of immense value.
2. Life Insurance
Life insurance protects you and your loved ones from the financial uncertainty of death or severe illness or disability. Getting life insurance is a cost-effective way of ensuring the financial security of your family or beneficiaries in the event of your passing. This is important if you have children or other family members who are dependent on you for financial support. It will provide an income for them in the event of your untimely death. If you have one already, do ensure that your beneficiaries are up-to-date and listed correctly.
3. Prepare a Will and Testament
Having a will is a significant step in securing the financial future of your loved ones. A Will is a legal document that coordinates the distribution of your assets and wealth after your death. A Will declares who the beneficiaries of your assets are and how your assets should be distributed. Having a Will protects your family or loved ones and makes it much easier to sort everything out when you die. In the absence of a Will, the process can be time-consuming and stressful as assets will be distributed according to state laws and the courts.
If you are yet to put your will together, get in touch with us for assistance over here.
4. Select The Right Estate Administrator
Your estate administrator or executor manages and administers your Will when you die. As such it is essential that you select an individual who is trustworthy, reliable and responsible. Many people appoint an executor such as their spouse or child without giving it much thought. To ensure your wishes are followed it makes sense to consider carefully who’s best suited for it.
Bottom Line
Putting your affairs in order can be a difficult thing as no one likes to think about dying. Nevertheless, failure to put a plan in place can make life difficult and strenuous for your loved ones.
Personal Finance
South Africans have always experienced tougher economic conditions than other countries so its no wonder we are savvy when it comes to saving money. With economic conditions being tougher than ever before, many South Africans are cutting back on their expenses in order to save money and make it through the month. In fact, 55% of all households are still bearing the brunt of the strain the Cover-19 pandemic have put on their finances.
Here is a list of the top expenses South Africans cut back on in 2023:
Most consumers have cut back on luxury and big-ticket purchases like appliances, cars and luxury brands, delaying the purchases until their personal finances recover. They have also cut back on subscriptions and memberships like gym and mobile phone contracts.
On the flip side, households have put more money into emergency savings funds, into cutting down debt and into retirement funds. 85% of households are very concerned about how they will manage to pay their bills and debts going forward if things don’t improve.
If you find yourself in a real financial bind and need access to cash quickly, apply for one of our loan solutions today:
Personal Loans – got a clear credit record and need up to R150k fast? Apply for a personal loan.
Pension Bridging Loans – waiting for your pension or provident payout? Apply for a pension cash advance and get some of your money early to ease financial stress.
Loans Against Assets – use art, jewellery, handbags and luxury items as security for a secured personal loan. Get them back once your loan is paid up.
Loans Using Un-bonded Property – is your property valued at over R2 million and fully paid up? Use your home as security for an equity release loan of R1 million or more.
Personal Finance
When we rang in the New Year, who would have guessed we would face a global pandemic that would creep into every country and continent across the world. That some of us would lose businesses, lose our jobs or take massive salary cuts. We are living in extraordinarily difficult times.
The business gurus and commentators say there is a new ‘normal’ we all need to get used to which includes working from home, working in shifts or teams and often as a result, reduced hours. Unfortunately, this new way of doing business has resulted in company retrenchments, dismissals and forced resignations across almost every industry, with some being harder hit than others. As of today, hair & beauty salons, restaurants, certain manufacturing concerns and gyms to name a few can only operate under reduced capacity and with major restrictions in place. Many businesses have been unable to bring in an income since lockdown in South Africa started on 26 March 2020.
When faced with this situation, UIF registered employees can claim from the Unemployment Insurance Fund. The problem with UIF is that it does not pay out the full wage or salary. This leaves an income shortfall. Families expenses are generally fixed and there is very little opportunity to reduce monthly living costs. For example: school fees, rent, bond repayments and food are all fixed costs.
The good news is that there are a number of temporary financial solutions available to the public:
1. Pension Loan
If you have given notice to your pension fund or provident fund that you want to make your policy paid up, it is possible to secure a short- term Pension Bridging Loan from accredited private lenders.
2. Property Secured Loan
If your home is bond-free or has a bond that is less than 40% of the property value, it is possible
to secure a Loan Against the Property in some circumstances, to help you free up cash to cover expenses.
3. Loan Against a Movable Asset
It is possible to use your valuables like gold, diamonds, art, antiques, jet skis, cars, bakkies, motorbikes and other loose assets, as security for a loan.
When faced with the daunting prospect of retrenchment, do not panic. There are temporary financial solutions that enable families to make it through the tough times. For more ideas and financing solutions click here: www.nhfinance.co.za
