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Understanding the Short-Term Disability Elimination Period

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Short-term disability insurance is a valuable resource designed to provide financial protection when you are unable to work due to a disability, illness, or injury. However, it’s important to grasp the concept of the elimination period when considering a short-term disability policy. In this blog, we will explore the short-term disability elimination period, its significance, and other essential factors to consider when securing this valuable coverage.

What is the Short-Term Disability Elimination Period?

The elimination period, also known as the waiting period, is a specific period of time that you must wait after a disabling event occurs before your short-term disability insurance benefits become payable. It is essentially a deductible of time rather than a monetary amount. During this period, you are responsible for covering your expenses, including medical bills and daily living costs, until your insurance benefits kick in.

Key Points to Understand About the Short-Term Disability Elimination Period:

Varied Lengths: Elimination periods for short-term disability policies can range from a few days to a few weeks, with 7, 14, and 30 days being common choices. The length of the elimination period you select will influence your policy’s premium.

Customizable: One of the benefits of short-term disability insurance is that you can typically customize your policy by choosing the elimination period that aligns with your financial situation and risk tolerance. Shorter elimination periods result in higher premiums, while longer periods lead to lower premiums.

No Retroactive Payments:

Short-term disability benefits usually do not cover the elimination period retroactively. This means that your benefits will begin after the elimination period ends, and you won’t receive compensation for that period.

Influences Waiting Time:

The elimination period significantly impacts when you will start receiving disability benefits. A shorter elimination period ensures quicker access to benefits, which can be crucial if you need immediate financial support during a disability.

Assess Your Financial Situation: When choosing your elimination period, consider your current financial situation. If you have an emergency fund or savings that can cover expenses during a short elimination period, you may opt for a shorter waiting time. Conversely, a longer elimination period might be suitable if you want to reduce your premium costs.

Workplace Policies: If you have disability coverage through your employer, you should be aware of your employer’s policy regarding the elimination period. Workplace policies may have pre-determined waiting periods that you should be familiar with.

Overlap with Sick Leave: For employees, the elimination period may overlap with available sick leave. Some employers allow employees to use accrued sick days during the elimination period, which can provide a financial cushion before disability benefits commence.

Documentation and Application: When applying for short-term disability benefits, it’s essential to provide accurate and thorough documentation to support your claim. Insurance providers may require medical records and other evidence of your disability.

Additional Factors to Consider When Purchasing Short-Term Disability Insurance:

Benefit Amount: Determine the amount of coverage you need to replace your income during a short-term disability. Most policies provide benefits equal to a percentage of your regular income.

Duration of Coverage: Short-term disability policies offer coverage for a limited duration, typically ranging from a few weeks to a few months. Evaluate your needs and responsibilities to choose an appropriate benefit period.

Policy Exclusions: Review your policy to understand any exclusions or conditions that may impact your eligibility for benefits. It’s crucial to know what is and isn’t covered.

Premium Costs: Short-term disability insurance premiums can vary based on factors such as the benefit amount, elimination period, and your age and occupation. Compare different policies to find the best balance between coverage and cost.

Final Words

Understanding the short-term disability elimination period is vital when purchasing this type of coverage. The elimination period determines how long you must wait before you start receiving benefits. It’s a customizable aspect of your policy, allowing you to align it with your financial situation and preferences. Careful consideration of the elimination period, along with other policy features, is essential to ensure you have the right short-term disability insurance to protect your financial security during times of disability.

5 Effective Tax Saving Strategies for Your Financial Success

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5 Effective Tax Saving Strategies for Your Financial Success

Taxes are an inevitable part of life, but with careful planning and smart strategies, you can minimize your tax liability and maximize your wealth. In this guide, we’ll explore various tax saving options, schemes, and investments that can help you optimize your finances and achieve your financial goals.

How To Save Tax: Understanding Your Tax Saving Options

  1. Tax Saving Investments:

One of the most effective ways to save tax is by investing in tax saving instruments such as Equity Linked Savings Schemes (ELSS), Public Provident Fund (PPF), National Savings Certificate (NSC), and tax saving fixed deposits (FDs). These investments offer tax benefits under Section 80C of the Income Tax Act, allowing you to claim deductions on your taxable income.

  1. Tax Saving Schemes:

Government-backed tax saving schemes like the Employees’ Provident Fund (EPF), National Pension System (NPS), and Sukanya Samriddhi Yojana (SSY) offer attractive tax benefits while helping you build long-term wealth. By contributing to these schemes, you not only save tax but also secure your financial future.

  1. Tax Saving Strategies for High Income:

For individuals with high incomes, tax planning becomes even more critical. Strategies such as income splitting, where income is distributed among family members in lower tax brackets, can help reduce the overall tax burden. Additionally, investing in tax-efficient instruments like Unit Linked Insurance Plans (ULIPs) and Real Estate Investment Trusts (REITs) can provide tax benefits while generating returns.

  1. Tax Saving on Salary:

Employees can avail tax saving benefits on their salary through components like House Rent Allowance (HRA), Leave Travel Allowance (LTA), and reimbursements for medical expenses. By optimizing these components and investing in tax saving instruments like the Employee Provident Fund (EPF) and National Pension System (NPS), individuals can significantly reduce their tax liability.

  1. Tax Planning:

Effective tax planning is essential for optimizing your tax saving efforts. By carefully evaluating your financial situation, understanding tax laws, and leveraging available deductions and exemptions, you can create a customized tax saving strategy that aligns with your financial goals. Regular review and adjustment of your tax plan are also crucial to ensure it remains effective as your financial circumstances change.

5 Effective Tax Saving Strategies for Your Financial Success

Best Tax Saving Investments: Making Informed Choices

When it comes to tax saving investments, it’s essential to choose options that not only offer tax benefits but also align with your risk tolerance, investment horizon, and financial objectives. While traditional instruments like PPF and NSC offer fixed returns with low risk, ELSS funds provide the potential for higher returns over the long term, albeit with higher market risk.

Additionally, diversifying your tax saving portfolio across different asset classes such as equities, debt, and real estate can help spread risk and optimize returns. Consulting with a financial advisor can also provide valuable insights and guidance in selecting the best tax saving investments based on your individual circumstances.

Conclusion

Saving tax is not just about minimizing your tax liability; it’s about optimizing your finances to achieve long-term wealth creation and financial security. By leveraging tax saving options, schemes, and investments, and implementing effective tax saving strategies, you can take control of your finances and maximize your wealth.

Remember, tax planning is a continuous process that requires regular review and adjustment to ensure it remains aligned with your financial goals and objectives. By staying informed, proactive, and strategic in your approach to tax saving, you can build a solid foundation for financial success and prosperity.

Homeowners Who Refinanced Recently Saw the Biggest Mortgage Rate Improvement in Decades

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Homeowners Who Refinanced Recently Saw the Biggest Mortgage Rate Improvement in Decades

When mortgage rates fell to around 6% in August, homeowners jumped at the opportunity to refinance.

In the months of September and October, more than 300,000 borrowers closed on a refinance, including nearly 150,000 rate and term refinances, per the latest Mortgage Monitor report from ICE.

This pushed refinance volumes to their highest levels in more than two-and-a-half years.

And more than a quarter of October mortgage lending consisted of refinances in a market long dominated by home purchase loans.

Perhaps most interesting, borrowers who refinanced in these months saw some of the biggest rate improvements in decades.

The Average Refinancer Obtained a Mortgage Rate About 120 Basis Points Lower

Homeowners Who Refinanced Recently Saw the Biggest Mortgage Rate Improvement in Decades

You’ve probably heard the phrase marry the house, date the rate. But if you haven’t, it was basically an argument to buy a home if you wanted one, and hope to refinance sooner rather than later to get a better rate.

In other words, the home is a keeper, but the mortgage is disposable. This didn’t work out well in early 2022 as mortgage rates nearly tripled from 3% to 8% by late 2023, but it worked out recently.

Per ICE, the average homeowner who applied for a rate and term refinance reduced their mortgage rate by more than a full percentage point in both September (-1.07%) and October (-1.17%).

This resulted in monthly savings of $310 and $320 respectively, which is a pretty compelling reason to refinance.

At the same time, nearly a third of these borrowers were able to reduce their mortgage rate by 1.5% or more, marking one of the best period for rate and term refis in decades.

As you can see in the chart above, the darkest blue shaded portion (that signifies a rate improvement of 1.5%+) jumped in recent months.

And the lighter shade of blue (1-1.49%) also skyrocketed, meaning it was a pretty good time to seek out a lower mortgage rate.

The reason why was because the 30-year fixed seemed to peak at around 8% in October 2023, and then fell nearly two percentage points in less than a year.

That big spread resulted in “some of the largest rate improvements we’ve seen over the past 20 years,” according to ICE.

In fact, this mini refi boom has only really been rivaled by the 2020-2021 refi boom and the low-rate environment seen in 2012/2013.

So despite being short-lived, it was pretty impactful for the borrowers who took part.

Most Refinancers Had Only Held Their Long for About 15 Months

refi by vintage

Do you ever think about how long you’ll actually hold onto your mortgage?

It’s an important question to ask yourself because it can determine whether it makes sense to pay mortgage points and/or which home loan type to choose.

After all, why go with a 30-year fixed if you expect to sell or refinance a few short years later? Why not choose an adjustable-rate mortgage such as a 5/6 ARM or 7/6 ARM?

Sure, there’s risk involved if the rate isn’t fixed, and the discounts aren’t always great, but it’s an important consideration to make instead of simply going with the default option.

Anyway, it turns out the average rate and term refinancer only held their original mortgage for 15 months prior to refinancing.

This was the shortest tenure in the nearly 20 years that ICE has been tracking the metric, which tells you folks finally nailed the date the rate strategy.

New Technology Alerts Lenders to Reach Out to Borrowers

While it seemed borrowers were on top of it, you might be able to thank new technology for that too.

Mortgage companies have gotten a lot better at reaching out to potential customers when mortgage rates drop.

There are automated systems that will comb a loan originator’s database daily and if rates hit a certain point, they can send out correspondence to prospective customers.

This might explain why in spite of mortgage rates rebounding higher by late-September, such a large number of borrowers were still able to snag big savings.

Speaking of, roughly $47 million in monthly payment savings were locked in by homeowners in just September and October alone, before rates bounced after the Fed rate cut.

I expect another refi boom to materialize soon if mortgage rates continue on their current downward path.

And chances are both borrowers and originators will be ready to pounce once again.

Colin Robertson
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September and October 2024 statistics are here

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Here’s a fresh take on the VIAINVEST performance report for September and October 2024

In September 2024, VIAINVEST published €11,928,910 in loans, with €11,736,351 successfully funded. Investors received €400,994 in interest, with rates reaching up to 13%. The platform’s client base also grew, totaling 41,427 registrations.

October 2024 saw similar activity, with €11,810,797 in loans published and €11,884,439 funded. Interest payouts to investors climbed slightly to €408,985, with the maximum interest rate remaining at 13%. By the end of October, VIAINVEST’s client registrations had reached 41,745.

September 2024

Loans published – 11 928 910 EUR
Loans funded – 11 736 351 EUR
Interest paid to investors – 400 994 EUR
Interest rate up to – 13 %
Total client registrations – 41427

October 2024

Loans published – 11 810 797 EUR
Loans funded – 11 884 439 EUR
Interest paid to investors – 408 985 EUR
Interest rate up to – 13 %
Total client registrations – 41745

These results reflect VIAINVEST’s continued growth and commitment to delivering strong returns for its investors.

Disclaimer

1)This is marketing communication, not investment advice or investment research. Investments involve certain risks and costs. Legal information about SIA “Viainvest” and its services is available here: https://viainvest.com/en/company/legal/. 2) This is a periodic fact sheet provided for informational purposes. Data sourced from our own internal records. Past performance is not a reliable indicator of future results.

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Mistakes Physicians Make When Buying Disability Insurance

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4. Ignoring the Impacts of Financial Changes

As a physician, your income rises as you progress further in your career. The cost of living also goes up consistently, and the monthly benefit you choose now will buy even less in a few short years. That means you need to know how to get disability insurance coverage that keeps pace with the changes.

Future increase policy endorsements are an effective way to plan for wage growth and ensure your monthly benefits can meet your needs. These riders allow you to apply at specified times to increase your monthly benefits without additional medical underwriting or testing.

Most policies also offer Cost of Living Adjustment (COLA) riders that help offset the impacts of inflation. These policy endorsements are available in several different types, with options varying between carriers.

5. Focusing Only on Premium Costs

Among the leading pitfalls awaiting doctors when buying disability insurance is not buying enough. That mistake often happens because they remain laser-focused on premium costs, which multiple factors influence. It’s best to remember that the value of your coverage is the income protection and peace of mind it provides. Maximizing that value comes from creating a custom plan that balances benefits and affordability.

It’s vital to have an accurate idea of how much disability insurance coverage to get. Too little, and maintaining your lifestyle becomes challenging — especially when you factor in the costs of care for a disabling illness or injury. Too much, and you’re spending money that you could be investing elsewhere. The right amount will vary based on your current income, earnings potential and expenses. An experienced broker can help you determine what amount to apply for and how to cost-effectively customize your coverage for your needs.

6. Working With a Captive Insurance Agent

A captive insurance agent works specifically for one insurance company, typically for a combination of salary, benefits and sales commissions. They may be actual carrier employees or independent contractors for the company. As a result of this exclusive relationship, the agent will only present coverage options for that single company. They may even show you options from one or two other carriers but discuss why their company is the best for you. These policies may meet your needs, yet no single carrier has the best solution for every doctor.

That’s where an independent agent can help. These professionals work with a trusted network of insurance companies, giving you access to the market’s leading insurers and coverage. They’ll assist you with determining how much disability insurance you need as a physician and comparing the different discounts, benefits and riders. Since the agent isn’t tied to a single company, you also benefit from objective advice.

Get Unbiased Disability Insurance Advice From DrDisabilityQuotes.com

DrDiabilityQuotes.com is a truly independent insurance partner working with the industry’s most well-known companies. We specialize in helping medical professionals find and buy the right coverage for their needs. Our team gathers the quotes on your behalf, saving you the time of contacting each insurer independently. Once we have the numbers, we will thoroughly review your options with you so you can make the most informed decision possible.

Request your free quote online today to get started.

How to Improve Your Credit Score Fast

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How to Improve Your Credit Score Fast

How to Improve Your Credit Score Fast
Building credit swiftly is essential for unlocking better financial opportunities, such as more favorable loan terms and credit card offers. This guide helps outline effective strategies for improving your credit rating quickly, with clear, actionable steps to boost your score efficiently and meet your credit goals.

This is How to Raise Your Credit Score Fast

To enhance your credit profile rapidly, it’s crucial to understand how credit scores are calculated. These scores are determined by several key components:

  • Repayment Record: This is the most significant factor by far, making up 35% of your score. Consistently paying on time is vital for credit growth. Any missed or late payment can significantly lower your score, so it’s important to prioritize this.
  • Credit Usage Ratio: Contributing 30% to your score, this refers to the amount of available credit you utilize. Keeping your usage under 30% can positively affect your rating. High usage indicates potential risk, so aim to pay down balances regularly.
  • Length of Credit History: The age of your oldest credit account and the average age of all accounts represent 15% of your score. Longer histories are advantageous because they show a track record of responsible credit use.
  • Variety of Credit Types: A mix of credit products (e.g., credit cards, auto loans, and mortgages) accounts for 10% of your score. A diverse range of credit types shows that you can handle multiple forms of debt responsibly.
  • Recent Credit Checks: Each new credit application triggers a hard inquiry, which can impact your score, with hard inquiries comprising 10%. Minimizing these inquiries helps maintain a higher score.

Understanding these elements allows you to tailor strategies for maximum impact on your credit score.

Strategies to Improve Your Credit Quickly

Stack of credit cards | How to build your credit score fast

Several proven techniques can help you enhance your credit efficiently. These methods can be applied individually or combined for faster results:

1. Obtain a Secured Credit Card

To get started fixing your credit, you need to understand how to improve your credit score with a credit card. A secured card requires a cash deposit as collateral, which then becomes your credit limit. Using the card responsibly—keeping balances low and paying bills on time—helps establish a solid repayment record and improves your credit. Ensure the card reports activity to all major credit reporting agencies for the best results.

When choosing a secured card, look for options with low fees and favorable terms. Some secured cards transition to unsecured cards after a period of responsible use, further boosting your profile. Secured credit cards are particularly beneficial for those with no credit history or a low credit score.

2. Become an Authorized User

Being added as an authorized user on a friend or family member’s credit card is another effective approach. If the primary cardholder has a good payment record, this positive information can be added to your credit profile, enhancing your score.

Ensure the account has a strong history of timely payments and low credit usage. Verify that the card issuer reports authorized user activity to the credit bureaus. This strategy can boost your credit score fast even if you don’t make any charges on the card yourself.

3. Apply for a Credit-Builder Loan

Credit-builder loans are specifically designed to help individuals build credit. The loan amount is held in a secure account while you make monthly payments. Once the loan is repaid, the funds are released, and your on-time payments are reported to the credit agencies, which can substantially improve your score.

Many credit unions and online lenders offer these loans with flexible terms and low rates. Explore different options to find the best fit for your needs. Regular payments on a credit-builder loan show your ability to handle debt and help establish a positive repayment history.

4. Use a Personal Loan to Diversify Credit Types

Adding a small personal loan, or if needed a bad credit loan to your credit portfolio can enhance your credit mix, which is beneficial for your score. However, it’s essential to manage this debt responsibly by making timely payments and avoiding overextension.

5. Request a Credit Limit Increase

Increasing the limit on an existing credit card can improve your credit usage ratio, as long as you maintain your spending at the same level. For example, if your credit limit increases from $1,000 to $2,000 and you keep your balance at $300, your utilization drops from 30% to 15%, which positively impacts your score.

To request a credit limit increase, contact your card issuer and ensure that your request doesn’t trigger a hard inquiry, as this could temporarily affect your score.

Additional Tips for Quick Credit Improvement

Tile letters spelling out “Build Your Credit” | How to build your credit score fast

  • Review Your Credit Reports for Errors: Obtain your free annual credit reports and check for inaccuracies. Errors such as incorrect balances, payments not reported, or accounts that don’t belong to you can hurt your score. Dispute any inaccuracies you find to ensure your report is accurate.
  • Reduce Existing Debt: Lowering overall debt can decrease your credit utilization ratio and enhance your profile. Focus on paying down high-interest debt first to improve your financial situation while boosting your credit rating.
  • Use Rent-Reporting Services: If you rent, consider a service that reports rent payments to credit bureaus. This ensures your timely payments contribute to your credit. While not all landlords report rent to credit bureaus, a rent-reporting service bridges this gap and can benefit your credit profile.
  • Keep Old Accounts Open: Maintaining older accounts helps lengthen your credit history. Even unused cards can contribute positively to your profile if kept open with a zero balance. Closing old accounts can shorten your credit history and increase your credit utilization ratio, so it’s often better to keep them open.
  • Set Up Payment Reminders: Timely payments are critical for maintaining and boosting your score. Use reminders or automatic payment settings through your bank or credit card provider to ensure bills are paid promptly. A missed payment can remain on your credit report for up to seven years, so avoiding them is essential.
  • Diversify Your Credit Mix: A varied credit portfolio, including installment loans and credit cards, can positively impact your score. If you’ve only used credit cards, consider adding a small personal loan or an auto loan to diversify.

Monitoring Your Credit Progress

Couple using laptop | How to build your credit score fast

Regularly tracking your credit score is essential for assessing your progress and refining your strategies:

  • Access Free Reports: Use services like annualcreditreport.com to review your credit reports for updates and verify that positive activity is reflected.
  • Use Monitoring Tools: Credit monitoring services can alert you to changes in your report and detect potential issues early. Many credit card companies provide free monitoring as a perk. These tools can help you keep an eye on factors like payment history and credit utilization, allowing you to spot opportunities for improvement.
  • Track Key Metrics: Focus on your repayment record, credit usage, and recent credit checks to identify areas needing attention and where progress is being made. Monitoring these key metrics helps you make informed financial decisions and adapt your strategy as needed.
  • Use Score Simulators: Some platforms offer simulators that show how financial decisions may affect your score. For example, you can see how paying down a specific balance or opening a new account might influence your credit rating. This feature can guide your credit-building efforts and help you make smart choices.

Avoiding Common Pitfalls

Stressed couple | How to build your credit score fast
To ensure your credit-building efforts are successful, avoid these common mistakes:

  • Late Payments: Missing payments can severely damage your score. Even one missed payment can have a lasting impact, staying on your report for up to seven years. Set up automatic payments or calendar reminders to avoid this.
  • Taking on Excessive Debt: Overextending yourself with too much debt can hurt your score and make monthly payments difficult. Stick to a budget and only take on debt you can comfortably repay.
  • Applying for Too Much Credit at Once: Each credit application triggers a hard inquiry, which can temporarily lower your score. Space out new applications to minimize the impact.
  • Maintaining High Balances: High credit card balances increase your usage ratio and can negatively affect your score. Paying down your balances as much as possible will help keep your utilization low.
  • Falling for Quick-Fix Scams: Be wary of services or individuals claiming instant credit repair for a fee. Legitimate credit improvement requires time and consistent effort.

Building Credit with Wise Loan

Two men shaking hands | How to build your credit score fast

Smart financial decisions are essential for improving your credit score quickly. Wise Loan offers products that can help when managed responsibly, reporting on-time payments to credit bureaus. With flexible repayment options and transparent terms, Wise Loan can support your credit-building journey.

Apply today to take advantage of Wise Loan’s solutions and start building a strong credit foundation for future financial stability. Their loan products can assist in establishing timely payment records, which are reported to credit agencies, enhancing your score.

With these strategies, rapid credit improvement is within reach, empowering you to secure better opportunities and more favorable terms.

The recommendations contained in this article are designed for informational purposes only.  Essential Lending DBA Wise Loan does not guarantee the accuracy of the information provided in this article; is not responsible for any errors, omissions, or misrepresentations; and is not responsible for the consequences of any decisions or actions taken as a result of the information provided above.

Switzerland Central Bank says ready to support Credit Suisse

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Switzerland Central Bank says ready to support Credit Suisse

Switzerland Central Bank says ready to support Credit Suisse
The Swiss National Bank said on Wednesday it was ready to provide financial support to Credit Suisse after shares of the country's second-largest lender plunged 30%.

Gatehouse Bank expands online DIP options   – Mortgage Strategy

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Gatehouse Bank expands online DIP options   – Mortgage Strategy

Gatehouse Bank expands online DIP options   – Mortgage Strategy
Gatehouse Bank has boosted its online decision in principle options, making it available for UK expats and international residents.
The Shariah-compliant lender says the move will allow qualifying home purchase plan and buy-to-let customers to get a decision in principle in around ten minutes. This feature is already available to UK residents.
The facility is also available for landlords looking to finance houses in multiple occupation, multi-unit freehold blocks, or properties under a limited company name.
Once customers have obtained a decision in principle they will be prompted to upload supporting documentation through a secure platform, which will be reviewed by the bank’s direct adviser team ahead of any application calls.
Gatehouse Bank head of customer propositions Gemma Donnelly says: “Being able to independently obtain a decision in principle at a time that is convenient for them will substantially improve the customer journey, especially in instances where time difference is a factor.”

Fannie Mae shares five housing market predictions for 2025

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“From an affordability perspective, we think 2025 will look a lot like 2024, with mortgage rates above 6%, home price growth easing from recent highs but staying positive, and supply remaining below pre-pandemic levels,” said Fannie Mae chief economist Mark Palim.

Mortgage rates, though expected to decline modestly, are forecast to remain above 6% for much of the year. Palim noted that volatility in mortgage rates could offer temporary opportunities for buyers to lock in lower rates, but overall affordability will remain a challenge.

“Heightened mortgage rate volatility may present opportunities for would-be homebuyers to take advantage of temporary lows, and we may see stretches where housing activity is boosted by lower rates — but, on average, we expect mortgage rates to remain elevated and a hindrance to activity,” Palim explained.

The “lock-in effect” continues to play a major role in suppressing housing turnover, with homeowners reluctant to sell and lose their current lower mortgage rates. This dynamic has contributed to the stagnation of existing home sales, which remain near 30-year lows.

However, Fannie Mae’s report highlighted regional differences in housing activity.

What can I use a LendingCrowd loan for?

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What can I use a LendingCrowd loan for?

Even the most successful companies may need a cash injection
to reach their full potential – and that’s where a business loan can help.

With LendingCrowd, you can use a business loan to refinance existing debt, making your outgoings more manageable. We can also finance loans for stock, cashflow, expansion, a new contract, management buy-out or an acquisition.

Refinance

It’s common for businesses to take on different forms of
finance over time to meet varying needs. For example, a short-term loan to
purchase a new piece of equipment, an overdraft to deal with seasonal cashflow
issues, and a credit card for day-to-day spending.

Refinancing your current finance arrangements with a
business loan could make life easier, as you’d have just one monthly payment to
make. You could also spread your repayments over a longer period, lowering your
monthly payments.

Buying stock

There may be times when businesses need to buy large amounts
of stock in advance, for example retailers that depend on peak trading seasons
for the bulk of their sales. A business loan could help to cover the upfront cost
and prepare for the busy season ahead.

Expansion

If you’re looking to expand your business, for example by
launching a new product, moving to larger premises or growing your team, the
initial costs may seem daunting. A business loan could help to fund your
ambitions by spreading the cost of your investment.

Before taking out a business loan, always consider the
following points:

Repayment terms: The length of time you will have to
repay a business loan can range from a few months to several years, so you’ll
need to be mindful of the need to make ongoing monthly repayments during the
term of the loan.

Personal guarantees: If you provide a personal
guarantee on a business loan, you are personally liable to repay the debt if
the business is unable to do so. It is important that you consider getting
independent legal advice to ensure you understand the terms of any personal
guarantee required by a lender.

Terms and conditions: If you breach any of the terms
and conditions of a business loan, this could affect your business’s ability to
borrow money again. For example, lenders will generally inform credit reference
agencies when repayments are missed, so it’s important to understand the terms
and conditions before you take out a loan and make sure you keep up to date
with repayments.

It’s important to make sure that taking out a loan is right
decision for you and your business. If you ever find that you are in
financial difficulty, you should let your lender know as soon as possible so
you can work together to find the best solution.

It takes just minutes to apply for a LendingCrowd business loan – start your journey today.

Please note: all applications are subject to LendingCrowd’s
risk appetite and will be subject to clearance of AML and Cifas checks.

Article author

What can I use a LendingCrowd loan for?

Gareth Mackie

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