When it comes to loan options, it may seem as if the possibilities are never-ending. The finance industry has gotten very creative, especially in the past few years, but it may help to remember that there are really only two types of loans: secured and unsecured.

Secured loans

The word “secured” means that there is something of value backing up the loan. When you get a secured loan, you pledge a piece of property or something of financial value that the lender can seize if you don’t fulfill your payment responsibilities.

There are several different types of secured loan options. Two of the most common are mortgages and auto loans.

With a home loan, the house you buy is the collateral. If you don’t make your payments, your lender can foreclose on the home, force you to move out and then sell it to recoup its investment.

The same principle governs car loans. If you don’t make your payments according to the terms of the contract, the lender will seize the car and sell it.

Other secured loans include pawnshop loans, loans from investment accounts and insurance policies and prepaid or secured credit cards. In these cases, instead of using the loan to purchase the item that will be your collateral, you borrow against collateral you already own.

One advantage to many secured loans is that the interest rates are lower. When a lender has collateral backing up the loan, the risk of losing money is less, which means the lender needs less of an interest rate premium.

Mortgages generally have the lowest long-term interest rates, while car loan rates can be nearly as low. Loans on investments and insurance policies are usually lower than those on personal loans and credit cards. Plus, in many cases, you are paying interest to yourself.

A drawback to secured loans, of course, is that you can lose your collateral if you don’t make the payments as prescribed in your contract.

Unsecured loans

Unsecured loans are so called because you don’t need collateral to get the loan. Credit cards and personal loans are among the unsecured loan options.

With an unsecured loan, the lender has only your promise to repay, making the loans more risky.

Because of this, the interest rates on secured loans are generally much higher than those on secured loans. For example, credit card rates can be as high as 20 or 25 percent. This is one drawback of unsecured loan.

Another drawback to unsecured loans is that the amount of money you can borrow is usually a lot less than with a secured loan, which is due to the lack of collateral.

An advantage to unsecured loans is that they are relatively easy to get. Assuming you have a decent credit score, you can often get a credit card the same day you apply.

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The stigma of dealing with unmanageable debt can be very difficult to manage, particularly for the older generation who view debt very differently and as something to avoid at all costs.

But today many thousands of people are contemplating bankruptcy as their last solution, having found that they cannot deal with their escalating debts. This can be for a variety of reasons – a loss of a job, failure of a business, a divorce or separation or general bad luck and poor financial management over a sustained period of time. Regardless of the reason, bankruptcy is a serious procedure and one to be considered very carefully. The good news for most people is that there are alternative solutions to pursue at an earlier stage before bankruptcy becomes necessary.

Dealing with Debt

Large and unmanageable debts cause stress, pressure on relationships, worry and can lead to depression for those struggling to deal with the money worries on their own. So the first step to tackling the problem is to share it – ideally with a qualified debt counsellor.

Bankruptcy used to be the only real solution but now there are other options such as Individual Voluntary Arrangements (IVAs) and other structured debt-management plans, including debt consolidation.

Speak to Someone

A credit counselling agency will give you professional help and your adviser will work with you to understand your personal situation. This means taking a deep breath and totalling your debts, ascertaining your income and looking at your budget. They will help you to create a budget, so that you can see if it’s possible to get out of debt without needing further professional help. Often some good planning, support, discipline and a clear approach can help many people to pay off their debts without needing further services. They can transfer expensive credit-card balances to a single zero-per-cent-interest card, for example and refrain from any further spending with it. A cash-only lifestyle can also be very effective, along with identification of ways to increase income such as a second job, selling assets or working overtime.

If the debts do need a more structured approach and you can’t handle them alone, your advisor will enrol you onto a special debt-management scheme in which you repay your debts through a single monthly payment and have lower interest rates. Your debt advisor will negotiate with your creditors for you so you won’t be chased any further by them. At the end of the programme, providing you have stuck to the terms, you will be debt free.

There are also settlement plans under which a portion of your debt is waived so the principal becomes an amount you can afford to repay. Again, you make a single repayment to the debt-settlement company. Be aware that this will damage your credit score, as you’ll still be writing off debt.

Bankruptcy will continue to be the only option for some cases where other avenues are either left too late or are not appropriate. But the best course of action is always to seek out qualified and expert advice before you do anything else.

This guest post was written by Francesca, a UK-based freelance writer who enjoys sharing her knowledge on topics relating to financial matters. She writes on behalf of IVA Expert.

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If you’re looking to sell your business in the current economic climate, you’ll want to ensure that you maximise its value, particularly to recognise all the hard work you will have put in to build it up and take it from start-up to saleable concern. So follow these tips to start thinking strategically about how you will ensure full value on your business sale and make a tidy profit from it.

Firstly, you should that the value of a business is predicated on a number of factors. The most important one is how you maximise and demonstrate value to potential buyers as part of your exit strategy. This will mean ensuring that your accounts and paperwork are in perfect order and paint the picture you want them to. You must tidy up all areas of the business so they show to their best advantage.

Quantifying the Value of your Business

You’ll need to understand your company’s worth before you can get a precise business valuation and it’s useful to have the assistance of an accountant for this task. Identify the assets that you’ll include in the sale and list the risks too so that you have a balanced picture. Keep this stage objective and fact-driven – you may be disappointed with the projected sales price, but it will give you a realistic expectation of what you’ll be likely to achieve.

Deal with your Stock

No one will want to buy a business with obsolete stock, so get rid of it. The same principle applies to long-term debtors – make them an offer or simply write them off so they can’t adversely affect the assessment of your business

Get your Records Straight

Buyers will be analysing your figures carefully and requesting the facts, so be prepared with high-quality balance sheets, cash-flow and income statements, along with the taxation position of your business. Also be sure to check your books before selling, as the CPA will need to audit your records beforehand for compliance reasons such as verification, confirmation and business performance. This evaluation of the business’s internal controls is a useful sales tool.

Legal Issues and Contracts

Check that your business structure and ownership is clear and that you can demonstrate compliance with the regulations that apply to your line of work. Also show that you are managing contracts well with suppliers, vendors and customers.

Processes and Systems

Many owners of small businesses store all their knowledge of business processes and systems in their heads. But when you’re selling your business, you need to detail everything so that the buyer will be able to pick up and run with the operation. Follow ISO standards for procedure detailing if necessary to demonstrate your quality commitment.

Have your Team Ready

You’ll also need to have your team primed and prepared to answer questions about the business from all aspects and angles to verify and provide more detail behind the financial statements and figures.

These are just the starting steps to prepare you for the journey that lies ahead if you decide sell your business. It will hopefully be profitable and ultimately satisfying as you begin your next chapter.

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It’s a debate that many of us have at some time or another in our lives: should we take the plunge and go for a stocks and shares ISA, or look around for the best regular savings account we can find? It can be a hard choice, particularly if you can only afford to save a small amount of money and so want to make the most of it to maximise your chances of good returns.

Let’s take a look at the key points of the shares ISA and ordinary savings accounts so you can decide which would be best for you.

The savings account

As you no doubt know, an ordinary savings account is very simple: once you have opened it, you can deposit money into it and you earn interest on that money. You have to pay tax on the interest you earn and the interest rate can vary depending on the account you have chosen, who your provider is and the Bank of England base rate. You can typically access your money whenever you want with a regular savings account.

The share ISA

By contrast, with a share ISA, you do not have to pay any tax on the dividends you earn. However, this type of account differs dramatically to an ordinary savings account because it is effectively a form of investment. This means that the money you put into it is invested in the stock market and the performance of the ISA is dependent on the performance of the market. Therefore, there is a risk attached to investment ISAs, as well as an annual investment limit, but there is also the potential for good tax-free returns.

Which should you choose?

Now we come to the question of which you should choose: the ISA or the ordinary savings account. A lot of this choice comes down to whether you are willing to take the risk on a share ISA as there is a potential for your investment to fall as well as grow. However, the best stocks and shares ISAs are very careful about where they invest your money and typically take steps to spread the risk, as happens with the FTSE all-share ISA.

This means your money has the best possible chance to grow, and when your ISA is performing well, you can typically expect benefits that outstrip the typical rates of interest you will find on a standard savings account. You might also like to consider the amount you will be saving every year: this is important because of the annual ISA limit. The limit for the 2011/2012 tax year is £10680, which is a significant amount that should be plenty for most people. If you want to save more than this, though, you might need to look at other options, too.

Overall, both ISAs and savings accounts have much to recommend them and so you simply need to choose the one that suits you best. Don’t forget, though, that you could decide to have one of each so you can spread your money – it’s all about making sure you’ve got the right savings products for you and ensuring that you are getting as much as you can out of the money you’re saving for the future.

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In the current economic climate, everyone is feeling the squeeze. There are, however, ways in which you can make your money go further, particularly when booking your holiday.

A combination of research, flexibility and patience are all invaluable when it comes to saving money on your travels in 2012. If you have these, then it is still possible to get some great deals and have a wonderful holiday without blowing the household budget for the rest of the year.

Below are 5 tips to help you save money when booking your holiday in 2012

Tip 1 – Book early or late

Booking either early or late are well-known ways of saving money. Tour operators offer incentives for those who book up to a year in advance, because they need the cash flow and have up-front expenses. By getting you to pay in advance, their cash-flow problems are solved, so they can afford to provide incentives.

Booking early is particularly advisable if you have a set time that you need to go on holiday such as during the school holidays.

Late holiday deals are different. Tour operators will have rooms and flights that they have already paid for. The closer it gets to the departure date, the more willing they are to offer good deals as this means that at least some of the money they have had to spend is recouped. Last minute holidays are ideal for those who have a week set aside for a holiday but are flexible on the destination.

Tip 2 – Be flexible and avoid peak time travel if possible

Being flexible is one of the best ways to save money. This can apply to both countries and particular destinations within a country. You may find, for example, that a smaller resort down the road from a bigger and better known one offers you access to the same facilities but at a much reduced cost.

It is also a well-known fact that prices rise sharply during peak times, especially high season and the school holidays. Therefore, if you can it is best to travel off peak. Even a week before or a week after the school holidays can make a big difference.

It is also worth checking when the school and public holidays of your destination are. If your visit coincides with a major public holiday you could find that other costs increase, such as hotel rooms and restaurant prices.

Tip 3 – Consider building your own holiday

In recent years, there has been a trend for people to move away from the traditional package holiday and put together the elements of their own break. The rise of low-cost airlines and the ease of finding accommodation on the internet have helped to fuel this fashion.

However, if you are watching the budget then it is well worth adding up all the different components of your holiday and considering what is included in a package deal before making your decision as to which is better value. It is vital you compare like for like and consider everything before making your decision.

If your package includes flights, transfers, accommodation and food, then you need to compare the cost of the alternative flights and getting to your hotel, the price of the accommodation and your budget for food and eating out.

If it seems that a package is the best deal, then research could help you drive down the cost even further. This is because different travel agents often have different prices for the same tour. The internet is a vital tool in helping you to compare and contrast different deals for the same package.

Tip 4 – Consider exchange rates

Currency rates are notoriously subject to fluctuation and can have a big impact on the cost of your holiday. It is always best to look for holiday deals that allow you to book the main parts such as flights and accommodation in sterling so that you can budget for this. If you pay in local currency, then a move up or down by a few points could have a big impact.

The value of the local currency also has an effect on spending money. For example, Europe has become increasingly expensive due to the high value of the euro in relation to sterling. A country outside of the euro zone could offer much better value.

Although the costs of getting there are higher, as they tend to be further away, a holiday in a developing country is usually cheaper because the prices for accommodation, eating out and entry fees will be much lower.

Tip 5 – Travel lighter

With some airlines charging travellers for hold luggage and other airlines having strict weight allowances that can result in additional charges should you exceed them, it is certainly worth packing light for your trip if possible. It can be tempting to pile clothes into your suitcase but more often than not you’ll return home from your trip with unworn items of clothing so try to be ruthless when packing and only take what you think you’ll need. Not only can packing light save you money, it can also make carrying your suitcase a lot easier!

It is still possible to go away on a budget if you have the time and patience to search out the best holiday deals. Being as flexible as possible over your time of travel and destination will provide the best deals.

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Improving your finances is one of the best things you can do in 2012. There are so many benefits but getting started isn’t always as easy as most people hope. Here are ten different suggestions to get the ball rolling towards a brighter financial future.

Improving Finances at Home

Everyone pays some type of homeowners insurance. Just like mortgage rates, it is possible to shop around for the best deal. Not all companies offer the same premiums or the same benefits so make a few calls or check online for a better deal.

Organize your finances. From the bills that come in the mail each day to the credit card applications that make their way into your home, everything needs to have a place. Keep everything together to avoid lost paperwork. Anything that has personal information on it should be shredded once you are done with it.

Living below your means is a simple way to spend less and save more. Whatever you bring home on a weekly or monthly basis should be all that you need to live. From there, begin to weed out expenses that are unnecessary. Save the extra cash for an emergency fund.

Try not to waste less money on the food that you bring home. Every time you make a trip to the grocery store you are tempted to bring home something that you just don’t need. Try to cut out the extras and make a list before you go.

Make sure that everyone at home is on the same page when it comes to finances. The only way to make a positive difference is to work together as a team. Whether you are saving or paying off debt, everyone needs to be aware of the goal. Even refinancing with the goal of lowering mortgage rates should be discussed between the adults.

Change Your Financial Tools

Could you be missing out on work related benefits? Check to see if you have a 401K plan that you can set up. Ask about discounts on things like gym memberships. Don’t skip over the opportunity to save or spend wisely with the help of your employer.

Rethink your choice of bank. You may find that everything from the value of a savings account to mortgage rates are better at another bank. Compare what you have now to other opportunities.

Set up an automatic savings plan with your bank. Instead of relying on yourself to deposit money into the savings account each month, let the bank withdraw it automatically. It makes it much easier to save.

Check the interest rate on your credit card as well as the benefits of using it. If the interest rate is too high, consider finding a new card. If a rewards program is available, check to see what types of rewards you may be eligible for. Make sure you are taking full advantage of the benefits.

Paying off debt will easily improve your finances over the course of a year. When you aren’t making those minimum payments you keep more cash in your pocket. This means more savings or even the opportunity to invest. Do a remortgage search, or check into decreasing your mortgage rates as, for most people, this is their largest source of debt.

Looking for Quick Loans ? Fast approvals and low rates on all wonga loans from £250. Apply online now and get approved within minutes.

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If you are looking for ways to raise cash, make sure you look through your kitchen draws and cabinets for hidden treasures you never knew you had.

Silverware is common in many people’s kitchens and depending on how much silver cutlery, flatware, plates and other such items you have collected over the years, you may be sitting on a veritable silver mine!

Given silver’s skyrocketing performance in the past few years, now is a great opportunity to cash in. As of late 2011, silver has climbed to be worth over $30/ ounce, so if you have some fancy candelabras floating around, you might be surprised how much sterling silver is worth nowadays.

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If you’re in business in Australia, the probability is that you’re paying more tax than you should. The problem is that most business people don’t have the time or the knowledge base to really manage their tax properly. If you ask tax accountants in Sydney, you’ll be told that most businesses really could do better and reduce their tax significantly if they adopted structured tax management programs.

The problem

The strange but irritating fact is that there are a lot of perfectly legitimate tax allowances in Australia across all business sectors, and very few people ever bother to investigate their options.  That’s quite a problem, and the baffling thing is that for anyone who’s done small business accounting the basic ideas of tax minimization are pretty obvious.

For example:

• Every business has an effective tax rate. The amount of tax paid is defined by the gross tax payable less allowances and deductions.

• So consider a situation where a huge range of allowances and deductions are never claimed. Ridiculous, isn’t it?

• Now consider the fact that these allowances generally average around 8-15% of the total tax bill and can be quite a lot higher depending on business accounting practices, the industry involved and the type of business activity. The situation has gone from ridiculous to utterly absurd.

It really is rather grotesque. The Australian Taxation Office (ATO) can’t be accused of keeping these allowances and entitlements a secret, either. The ATO, in fact, goes to notable lengths to make sure businesses are able to access information about these entitlements. The trouble is they don’t. Australian businesses are doing themselves no favours with their taxes.

The solution

Actually, if you’re doing business in Australia, you can get all the help you need with your taxes with a phone call to professional tax consultants. The magic words here are “tax minimization”, and they don’t means some idiotic tax evasion scam. They refer to fully customized “designer” tax management programs.

Tax minimization is actually two processes:

1. Taking advantage of all the entitlements and allowances applying to a business. This process involves a truly detailed, fully researched study of the business and creation of a working operational methodology to ensure the business claims everything it’s entitled.
2. Developing the first process to create an optimum level of taxation. This may involve some alterations to how business transactions are recorded (most businesses don’t even know how to record their legitimate expenses properly for tax purposes) and in some cases industry-specific practices to take advantage of tax benefits.

To give a slightly horrifying, but appropriate description- Many businesses don’t even know that the apps on their business phone systems can create quite a range of tax entitlements. If you’ve got mobile EFTPOS, ecommerce or other functions on your business phones, you’re quite literally staring at extra tax entitlements. That’s how basic, and how thorough, tax consultants can be about finding tax benefits.

Do your business a favour- talk to professional tax consultants about tax minimization, and talk to the ATO. You’ll find they’re very much on the same page.

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Occasionally in life we are lucky to have a large lump sum of money through inheritance, prudent saving, bonuses, or perhaps even a lucky OZ Lotto win. It is always tempting to spend money when we have a large amount of it but it is far, far wiser to invest it in a sensible place and watch it grow so that you can reap the benefits of it for a longer period of time. Making a wise investment with your money can lead to greater wealth in the long run and this article will demonstrate how.

Property Investment

Property investment is one of the safest ways to invest your money because the market does not fluctuate massively. This type of investment is a long-term investment but it will never cease to provide returns because there is always a need for housing. As long as you make a wise investment and utilise property valuation software and surveyors, then you can expect to receive returns on your property until you are ready to sell it on.

There are several benefits to property investment over many other sorts of investments because of the control you have over its management and its stability. One of the biggest advantages, however, is the fact that you can invest an even greater amount than you actually have and borrow the rest against the property you are buying. You can invest as much as 80% more than you could alone through the aid of a mortgage, allowing you increase your standing rapidly without the need for further stringent saving.

There are several ways to invest in property but one of the most prudent and fastest returning is the investment in off plan property. This investment involves investing in an as yet unconstructed property based on the plans provided by the developer. Whilst this sounds riskier, it is a tried and tested method which enables developers to reduce their risks and investors to increase their returns.

Stock Market Investment

Undoubtedly, stock market investment is the best, fastest and most tested method of investment. You can expect large returns from the stock market but unfortunately you can also expect large losses. Managing a stock market investment is a difficult process which requires time, understanding and effort, but success in such a market is guaranteed to come with a large reward.

Unlike with the housing market, very few people grow up with a link to the stock market in their lives. The result of this is that whilst you can walk into a house and know if it is nice or not, most people cannot look at a stock trend and discern whether their investment will grow or shrink. Thus, it is vital to educate yourself on the workings of the stock market before investing in them and it is wise to consult a financial advisor before jumping in.

There are definite bonuses to investing in the stock market but it is a time consuming investment. You will, however, never need to wake up in the middle of the night to deal with a burst sewage pipe, and you will have a greater ability to withdraw your funds than when investing in property.

Invest in Something

One thing that is for certain is that an investment is a far wiser use of your money than a purchase of the Lamborghini Diablo that you have always wanted. When you are fortunate enough, or sensible enough, to have a grasp on a pot of money, do not let it sit there and do not spend it; instead plant a seed and watch your money grow.

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Soon after the Standard & Poor’s downgraded the top notch credit rating of the US and cut it by one notch (AA+), there have been grueling discussions about the impact of this harsh decision on the investor’s market. Though there were predictions of a rise in the interest rates on personal loans, there are still no signs of any drastic change in the rates. However, the debtors have already gone through a scary erosion of confidence and this has made them rush towards debt settlement firms as this is the only way in which they can repay their debts without even having to pay back the entire amount.

If this is such a famous option, then why do the financial experts advise against it? They say that debt settlement should always be avoided unless there is no other option but to file bankruptcy as this leaves a huge mark on your credit score and the taxes that you pay on the forgiven amount may offset any kind of savings that you may obtain through the debt settlement. A less drastic measure such as a debt management plan through a credit counseling agency can be a better option to resolve your debt dilemma but when you have no other option but to go for settling your debts, you must educate yourself on some dos and don’ts.

• Don’t wait and be proactive: When your payments are behind by at least 6 months, your accounts tend to be charged off. Don’t wait until this moment comes. In real, a charged off account is the term that is used by a creditor when the chances of recuperating the money from the debtor is slim. If you want to contact your creditors and alter the repayment term, this is the time. Don’t delay as this may start hitting your credit score. As long as your debt account is not written off, you can certainly settle the debt and free yourself of the bondage of debt.
• Don’t neglect the consequences: Any settlement for which the forgiven amount by the creditor is more than $600 becomes taxable. For instance, if a debtor was to settle a $10,000 for $6,000, the $4000 amount becomes subject to tax under the IRS. Apart from the tax consequences, this option also has a tough impact on your credit score and your future ability to borrow new lines of credit is also jeopardized.
• Do prepare yourself to show the financial cards: Before your creditors agree to settle your debts, they will ask you for documentation of income, assets and all your existing debt accounts. The motive behind this is to ensure that the debtor is actually going to repay the debt after it is settled or he is just planning to save his bucks through the particular concession that is being done by the creditor.
• Don’t make a promise that you can’t abide by: If your creditor is letting you pay back the amount over a stipulated period of time, make sure you set the payments at a level that can be managed effortlessly. Don’t set up an unrealistic plan. Not being able to make the payments even after the debts are settled will portray a bad reputation.

Your creditors are required by law to report your debt settlement payments to the credit bureaus and your task should be to cross-check whether or not the payments are accordingly reported to the credit rating agencies. Ensure that the debt collection agents stop contacting you once you’ve repaid your debts in full.

Author Bio: Jack is a financial writer and enjoys writing articles on the global financial situation, making money online, the stock market, debt consolidation, and mortgages along with other finance-related topics. He is also associated with some online financial communities like http://www.twitter.com/debtcc.

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