Finance, Loan, Debt and Credit.

July 31, 2013

Student Loan Consolidation July 1 Interest Rate Hike Nears

Filed under: Loan — Tags: , , , , , , , , — admin @ 12:46 pm

Student Loan Consolidation July 1 Interest Rate Hike Nears

The federal student loan consolidation program is heading down a path leading to interest rate increases. On July 1, 2006 interest rates are expected to increase and fixed rates no longer will be available.

With the changes set to occur in approximately two months it is important for college students to consolidate prior to the July 1 deadline. Following that date, the lives of student borrowers throughout the country easily could take a turn for the worse. With all the expected negative changes, students could find it impossible to consolidate their loans after July 1. By taking action now, student borrowers will save a lot of money in interest – money that could be used for more important things in their lives.

Instead of paying for rent and the necessities of life after graduation, borrowers who do not consolidate their student loans could find themselves with extremely high monthly student loan payments, not to mention thousands more in interest than is necessary.

Student Loan Consolidation Can Save Thousands

However, by consolidating student loans before July 1, borrowers can lock in a lower, much more reasonable rate, which, over time, will save thousands. The lower monthly payment also will enable student borrowers to breathe easier knowing they have extra cash to put toward other everyday needs.

With current ( student loan consolidation borrowers who still are in school can receive a 4.75 percent interest rate that will be in effect for the life of the loan if the process is complete before July 1. A 2.75 percent interest rate now is available to eligible borrowers. This low rate includes applied benefits that typically feature the use of Auto Debit and incentives for making 36 consecutive on-time payments.

Student Loan Consolidation Makes Life Easier

When college students graduate they oftentimes are left with numerous student loan bills of differing amounts all with high interest rates. After adding everything up, most students find they have exorbitant monthly student loan bills. With the high price of college, the interest rates on loans make things worse, especially for borrowers who do not consolidate their student loans. Those borrowers should take into consideration that they can ( consolidate student loans while in school or after they graduate.

The last thing students need after graduation is a pile of student loan bills to pay. Following graduation students have to find a job and a place to live. Along with rent and other everyday expenses, numerous student loan bills with high interest rates will make things worse. Student loan consolidation will bundle together all of a student’s loans into one easy payment, which makes life simpler. In effect, it also will save thousands over the years.

NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding as easy as possible. Learn more about ( Student Loans at

Useful Tips On Auto Loan Refinance

Filed under: Loan — Tags: , , , , , , — admin @ 12:46 am

Buying a car is unquestionably a unique experience. We are empowered with an apparently unlimited number of choices, including manual or automatic transmission, global positioning systems or anti-lock breaking systems, and the ever-important cup-holder option.
Often we also need to take out a loan when purchasing a new ride. Although we probably have the best intentions in paying off the loan, “things happen.” When we find ourselves falling behind in our car or truck loan payments, auto loan refinance is certainly an option worth considering.
When interest rates drop, refinancing over and over again pops into people’s heads. In fact, an auto loan refinance is perhaps easier to take out than you may imagine, and could save you a ton of money too. It could let you to refinance the remaining balance on your auto loan and lessen your monthly payments. You could effortlessly save thousands of dollars throughout the loan’s life.
There is scarcely any difference between auto refinance and refinancing a home and in the case of auto refinance; you have to exchange your existing car loan that was not so favorable for you with a new one that you can get on better terms and conditions. Taking this alternative can prove to be good for you when it results in reducing interest rates and simultaneously does not stretch your loan terms further than your existing schedule. Therefore, to get the best out of your auto refinance, you need to look for it to yield to you lower interest cost.
Auto refinance may have need of you’re completing a number of steps, and first off, you have to make contact with a lender who gives out car loans and validate the payoff amount of the car loan. Subsequent to having obtained this information, second off, you need to get in touch with various companies that are in the business of auto refinance, and you can simply contact the best two such companies via their websites. But, you also need to certify that such companies have annual percentage rate (APR) of less than one percent of their existing loan’s APR.
You furthermore need to make sure that you have submitted pertinent information as well as the VIN number of your vehicle as well as the name of the vehicle in an accurate manner. It more often than not does not take more than an hour to get your auto refinance application processed online and you should be receiving an email detailing the requirements of paying off your existing loan.
After all these steps have taken place, you must then notify your bank that the auto refinance company is the new lien holder and that they should be sent the title. You can then start on checking with the help of auto refinance calculators your new rates and in addition your financial obligations and the whole process should then not take more than a day or two to be completed.
More particularly on where you should go to refinance a car loan, Lending Tree is one predominantly favorable option. They are acknowledged as being the leading online lending and realty services exchange, and their realtors stand for major franchises and independents nationwide. You are presented with some great benefits by the company including the highest security standards, many online offers fast, and live customer support.
HSBC is a further company you can go through to refinance a car loan. They are recognized for being one of the largest banking and financial services organizations in the world and they presently service more than 110 million customers. They are a leading provider of auto loans for new and used vehicles and they service auto loans for other HSBC companies in addition including HFC and Beneficial branches.
By refinancing your car loan you be able to save yourself a ton of money, and by taking the time to discover the very best auto refinancing company, you can make the process as quick and easy as possible. Refinancing a car loan is more or less always a smart maneuver, more than ever for buyers who are looking to receive a lower interest rate and therefore reduce their monthly payments.
Just ensure that you go through the correct refinancing company and that you refinance your car loan at the right time sequentially to ensure that you get the best value possible.

July 30, 2013

Why Debt Consolidation Works?

Filed under: Debt — Tags: , , , , — admin @ 12:47 pm

Many people find themselves in difficult financial situations. We all become over extended at times. Each month it seems like our debt keeps growing. Our credit card balances never really lower even though we are making payments each month. We constantly feel the anxiety of the frustrations caused by debt. Finally we reach a point where we can no longer afford to keep paying high payments without seeing any reductions in our debt. The problem of never being able to get out of debt is two folds. You will never get out of debt by continuing to get into debt.
Getting out of debt requires paying off more than you spend. So you paid $200 last month on that credit card bill, but you spent $500 with your credit card to get your car fixed. Getting out of debt also requires planning and discipline in spending which for many people is the hard part. Debt consolidation aides in stopping the getting into more debt cycle by negotiating with your creditors a consolidation plan that may lower your interest rate and help you get out of debt in as little as 36 months.
What debt consolidation companies does is create a structure that helps you get out of debt by forcing you to stop using the credit cards that you have consolidated and by having a structured payment plan towards headed towards your goal of being debt free. How do you know a good debt consolidation company from a bad one? It is true that not all debt consolidation
companies are created equal. The first thing you need to make sure before you sign up with a debt consolidation company is to ask yourself whether the terms make sense. Keep in mind that debt consolidation companies are not miracle workers; however, there are keys signs that you should look for.
A good consolidation company will spell out the terms of the agreement in clear English. You may be required to put an initial deposit; however, you should get that deposit back after the completion of the program. Some consolidation companies do charge administration fees, but it should never be an exuberant amount. Finally, a good consolidation plan is one that you can afford with a defined end date. The problem with credit card debt is that you are never aware of when you will actually pay off that debt. Make sure that you know specifically the length of the program.
Critics of debt consolidation programs say that you do not need them to get out of debt but are they right? Well you do not need a personal trainer to get into shape, but a good personal trainer will give you the structure you may need to stay focused in order to reach your goals. A good coach will do the same. Let us be honest with ourselves. We all need to be coached sometimes, and if you are serious about getting out of debt, a debt consolidation program may be just want the doctor ordered.

E-file Tax Return: Easy and Faster Way to File Tax Return

As there are online tax filing software and services are available, paying taxes has become easy and convenient. The IRS provides you with Free File tax preparation software that lets you do your taxes for free but the only thing is you need to qualify for it. Anyone whose income is less than $57,000 can be eligible for Free File program and file taxes for free. You can e-file your state or Federal tax return for free using online tax return services if you are not eligible for free file program offered by the IRS.The IRS has introduced a fine option for doing taxes online. You can comfortably E-File Tax Return and pay for it later if you owe something on your income taxes. IRS e-file allows you to file both state and federal tax return online at the same time. This really makes the task function faster. The majority of the taxpayers have been choosing to file their return electronically because it is easier, faster, and convenient than paper filing process.You can do taxes on your own because using online tax software because it is not as complex task as paper filing. It only requires filling out online forms using relevant information asked by the software. You can also claim certain tax deductions and credits using inbuilt deduction search tool in the software. Unlike paper filing, the whole process of doing taxes online is very simple. If you have access to internet and have free tax software, you can file your return from your home at anytime you please. In this way, online tax filing is really convenient and hassle-free option of paying taxes.If you File Tax Return electronically before the deadline, the IRS may process your return file faster. The IRS service center has no reason to delay your return to get it processed if you e-file early. They do not have to spend time after getting your return file retyped if it is e-file. Moreover, you’ll get confirmation note of your file from the IRS within 48 hours. They also let you know about the reasons for rejection so that you can modify your return file and re-submit quickly. Paper filing does not have all these advantages. You can choose the direct deposit option to get your IRS refund. With this option, you can get your income tax refund in as few as just 10 days.With online filing systems, you have no excuse to sit back and to procrastinate. So, you should better e-file your taxes choosing the direct deposit option for receiving fast tax refund.

July 29, 2013

The Four Types Of Direct Student Loan Consolidation

Filed under: Loan — Tags: , , , , , , — admin @ 12:47 pm

As a student, do you find it hard to repay your student loans? While student loans are great in that you and I will probably not be able to afford a tertiary education without it. On the other hand, it can be difficult to pay the monthly payments on time due to the high interest rate and other external factors which can challenge your wallet.

If you have a difficult time in repaying your student loans, you might want to consider a direct student loan consolidation.

So what is a direct student loan consolidation?

In essence, it is simply exchanging or consolidating your existing outstanding student loans with higher interest rates for one loan with a more manageable, fixed interest rate. The interest rate is determined by the average of your loans, rounded to the nearest 0.125 per cent.

A direct student loan consolidation is especially useful if you know you are about to default on your monthly student loan payments. A direct student loan consolidation can mean a new start since it is considered a new loan.

When you consolidate your student loans under a new loan, your existing loans will show up on your credit card as paid off, thereby increasing your credit score.

Before getting a direct student loan consolidation, you need to know the types of plans for repaying. There are four major types. You may like to investigate more to consider which is best for your needs.

1. Standard Repayment Plan

Standard Repayment Plan allows you a fixed monthly payment for up to 10 years depending on the amount you owe.

2. Extended Repayment Plan

An extended repayment plan allows you up to 30 years. Obviously, the longer the period, the less amount you need to repay each month. Do note, however that you will end up paying more as a whole if you spread your payment over longer periods of time due to interest rates.

3. Graduated Repayment Plan

Graduated Repayment Plan usually have a repayment period between 12 and 30 years. The main difference between graduated and extended repayment plan is for graduated, the amount of your monthly payment will increase every two years.

4. Income Contingent Repayment Plan

If you have a job, then this plan may be what you are looking for. The income contingent repayment plan set a monthly payment based on your gross annual income. Other factors include your family size and the amount owe. The repayment period is usually 25 years.

A word of caution, if you are close to paying off your student loans, then a direct student loan consolidation may not be suitable for you since you will be paying more due to interest rates over the long term.

However, if you have difficulty in repaying your student loans and it is still years away from being paid off, then a direct student loan consolidation may be the answer. Not only do you pay less interest over the long term but it can improve your credit rating as well.

Is There A Home Loan Refinance Program That Lowers Your Principal Balance?

Filed under: Loan — Tags: , , , , , , , , , — admin @ 12:48 am

They are hard to find but the answer is YES. There is a home loan refinance program that can dramatically reduce the amount a homeowner owes on the balance of their home loan(s) – as long as the homeowner meets a few criteria discussed at the end of this article. This is NOT a loan modification that simply offers a temporary reduction in the interest rate and monthly payment. Using a Note Repurchase Program or Loan Balance Reduction Program, homeowners who find themselves owing more than their home is worth can literally shave up to hundreds of thousands of dollars off their existing loan(s) balance which results in a small instant equity position and a large monthly savings from lower mortgage payments. As if this wasn’t enough good news, the homeowners credit score is NOT negatively affected by this program.

Here is how it works. The company that is handling the Loan Balance Reduction, usually a team of lawyers and real estate professionals, will group a portfolio of existing notes of their clients from a particular lender, Bank ABC, and present the bank with an all-cash, take it or leave it, offer to purchase the entire portfolio of notes at a significant discount to current market value. If accepted, and I’ll explain why the banks are often willing to do this, the investor then turns around and underwrites a loan back to the original homeowner at 90% of CURRENT APPRAISED value. The homeowner has now repurchased their home for under present market value, saving a bunch of money from a lower mortgage amount AND monthly payment!

Now why would any bank in their right mind take so much less than what is owed to them? The answer is simple. Liquidity. Banks today need cash to lend (this is their business) and are required to have certain cash reserve levels by The Federal Reserve to stay in business. By removing a non-performing asset from their books it frees up cash that the bank can immediately turn around and use in their business activities. Rather than risk the increasing probability of having to foreclose and own these non-performing assets in a year or two, many banks are willing to take the immediate cash infusion.

Who qualifies for this program? In order to take advantage of this program a homeowner (including investment properties 1-4 units) must have a Loan-to-Value ratio of AT LEAST 125%. Meaning the total amount owed for all loans on the property must exceed the present value of the home by 25% or more. Secondly, the homeowner must have an income source and a debt-to-income ratio of 50% or less (based on the new lower mortgage payment!). The process takes approximately 2-3 months to complete and ALL credit quality qualifies, you can even be in the Notice of Default or Trustee Sale phase and be able to take advantage of this program.

If you meet the criteria listed above and would like more information about a Loan Balance Reduction Program, please visit me online at


July 28, 2013

4 Fatal Mistakes to Avoid When Applying for Debt Consolidation Loans

Filed under: Debt — Tags: , , , , , , , — admin @ 12:47 pm

Setting Unrealistic Goals

Before you set out to apply for a debt consolidation loan, consider the goals you’re trying to meet and think realistically when you’re doing so. How much do you make every month? How much do you spend? How much could you reasonably afford to pay every month to pay off your debt? How long do you want to give yourself to pay off the loan?

These are all things that you should be considering before you go ahead and apply for a debt consolidation loan. If you set your goals too high or simply are not reasonable when you’re making your goals, you may be setting yourself up for failure and may even end up hurting yourself more in the long run.

Providing Too Little Information

Anytime you apply for a debt consolidation loan, the consolidation company will ask you a series of questions pertaining to your financial well-being. What is your income? How much do you spend on expenses every month? Do you have children? Do you rent or own? The answers to all of these questions help the firm to design a plan that will allow you to work your way out of debt.

However, if you fail to answer any of these questions truthfully or simply don’t answer them at all, you may be putting yourself at risk. The company may fail to put the right plan together or may just not be able to help you at all. Provide as much information as possibly initially to avoid any confusion later.

Trusting the Wrong Company

Always watch your own back when it comes to debt consolidation. There are thousands of debt consolidation companies out there, many that are illegitimate and only out for a quick buck. Do your research and find a company that will help you and not just be there to collect fees for you.

Ask someone in your family or a close friend if they have ever consolidated a loan. Can they recommend you to someone or tell you more about how they chose their debt consolidator? This could prove to be very valuable information later on down the line.

Missing Payments

One of the worst things you can do during debt consolidation after you apply and receive a loan is to miss a payment. In many cases, companies have tailor-made a plan for you to help you pay off your debt. They’ve negotiated with your credit card company for you and gotten you a much lower interest rate. But, if you miss a payment, you’re proving that you cannot handle the loan.

Always make your payments on time to avoid extra penalties or losing your membership in the debt consolidation program. It is also a great way to make sure that you keep moving towards financial freedom.

Commercial loan workout— Right choice when refinancing not working

Filed under: Loan — Tags: , , , , , , , , — admin @ 12:47 am

With property value still slumping and businesses sinking, Commercial Mortgage Loan is going to remain a big issue facing the American economy. And there is also crisis establishing in the commercial Real Estate market and Commercial Refinance Loan. Commercial property owners who are finding hard to bear on commercial loan should consider commercial loan workout as an alternative when refinancing loan doesn’t work. This program is the right available choice and can be the deciding factor between foreclosure and continuing to successfully operate.

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July 27, 2013


Filed under: Tax — Tags: , , , , , — admin @ 12:46 pm

Rule of law and equality before law are hall marks of civilized societies. Laws in money matters are aimed at , inter alia, providing a fiscal balance in the society as well as funds for development of a nation as a whole. Tax laws should be effective to achieve these goals. And like all other laws what makes them effective is  the way in which people feel it runs with their interests and not against them.

In this article, as the title suggests, we would see why people do not file tax returns as required under the law. Are there lacunas in the law? Are laws irrational? Are they discriminatory? Do they promote inequality? Are they creating distortions in the system? Is it reflective of the general attitude of our society towards law of land? Or is trickle down effect of big-wigs’ flouting of the constitution of Pakistan? These and similar other questions are relevant to understand the behaviour of non-compliance of tax laws in general and non-filing of tax returns in particular. So in effect, it boils down to one question- is it worthwhile to file a tax return or is escape  the better strategy from the point of view of a (non-)filer of returns.

Who are required to file return of income tax?

According to the Income Tax Ordinance, 2001,  the following persons are  required to file tax returns.

 (a)       Every company irrespective of income earned.

 (b)        Every  person other than a company whose  taxable income for the tax year 

            exceeds Rs. 100,000/- 

(c)        Every person who was charged to tax in any of the two preceding tax years.


(d)      Every person who owns immovable property with a land area of two hundred

          and fifty square yards or more.

(e)     Every person who  owns any flat located in areas falling within the municipal 

         limits existing immediately before the commencement of Local Government laws

         in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory.

(f)     Every person who wants to claim a loss for carry forward.


Prior to finance Act, 2005 the following persons were also required to file returns:

 (a)    Every person who was a subscriber to telephone whether mobile or landline.

 (b)    Every person who was an owner of a motor vehicle.

 (c)    A member of a club having either admission fee of Rs. 25,000 or monthly 

         subscription of Rs. 500/- 

(d)    Everyone who took foreign travel other than for Umrah, Hajj or Ziarat.

 Some of the criteria looked ridiculous, however they remained on statute book for a long time. If data of the CBR given in the Year Book 2004-05 is correct, then it is a cause for great concern. Total number of NTN holders in a population of 152.5 millions is only 2.28 million. Out of NTN holders, only 1.23 millions filed returns in 2004-05. Whereas return filers are only 1.23 million and details are given by the CBR as under:

 “Whereas the share of return filers to NTN holders has been around 54%, the share of the same to live cases has been 72.4%. Segregating this information into individuals and corporate categories it has been observed that within the former category (salaried and business persons and AOPs) having NTN, nearly 50% had filed their returns and within the corporate sector, the compliance rate has been around 55%. However, the compliance rate of private companies was at least five times superior to that of the public (listed) companies where it was in the range of only 10%. Incidentally, the compliance rate of the foreign companies has been extremely low at around 3%. Since this situation requires immediate correction through further research, CBR has already embarked upon an extensive effort to streamline the income tax base including the list of withholding agents.”  

 Whereas as per SECP total number of registered companies as on 31st December, 2004 was 45028, total returns from this sector during 2004-05 were only 12526 (27.8% of registered ones) which indicates the huge task CBR faces and requires skilled staff instead of wasting time in planning what to do about 11000 officials feared to be redundant as a result of so called reforms.

 CBR thinks further research is needed for correction of the situation as if it were not evident. CBR  keeps harping on the same string that tax base is small and it is trying to broaden the tax net. Far from truth. Pakistan has a very large tax base. Courtesy of the CBR’s policy of withholding and collecting taxes at source, almost everyone is now either tax payer or tax collector (Unpaid Tax Collectors). Even if sales tax is ignored, see the “net” of indirectly collected direct tax. The following data will indicate the number of taxpayers in Pakistan which denies claims of CBR.

 Total population                                                      152.5 Million

 Labour force                                                             45.76 Million

 Unemployed                                                               3.52 Million

 1/3rd labour force below poverty line                  15.00 Million

 If all the balance labour force is assumed to earn taxable income, it would be 27.24 Million. Now let us see how many tax payers are there in Pakistan on account of tax collection at source from 3 venues only.

 Profit and loss account holders/

 Fixed or Term deposits                                                       20.00  million

 Telephone subscribers  cell phone users                         23.20  million

 Commercial and industrial connection of

 electricity (KESC not counted)                                            2.20  million           

 Tax on cash withdrawals (all accounts)                            26.00 million

 Apart from it, tax is also collected/deducted at source on rent paid, value of imports and exports, payments made for supplies and services rendered, salaries, brokerage and commission, from motor vehicle owners, etc.

 In my humble view instead of broadening the tax base it is time to narrow the tax base. Instead emphasis should be on recovery of “due tax” from the persons who should pay tax as required under the law of land. Emphasis should be on getting returns filed where they are due.  Mindless imposition of withholding taxes is not panacea to broaden tax base. Why people do not file returns when tax is deducted at such a large scale? The possible explanations might be as under:


 2.      Many of them do not want to be in the “tax net” because they  understand their  actual tax liability would be much higher if caught in the “tax net.”  Such behaviour is not irrational even though it may seem unethical. 


3.     They believe the government is not worthy of more taxes as their money is          not spent on them. Corruption and leakages in the system, low priority to            social sectors , huge unproductive expenditure on large sized federal and   provincial governments and exemptions to vested classes of the society   subdue the pricks of ethics in the prospective tax payers.

 4.     The departmental officials do not see beyond return filers. Once you file a            return, the tax collector puts your name on tax rolls and your absence will   be noticed. But those who escape this tax roll, they remain unnoticed  (sometimes with the connivance of the tax officials) for years and years. Policies of the CBR reward non-filers and punish regular taxpayers. First  of all they seldom issue notices to people who are not on tax rolls. The much trumpeted survey conducted by spending millions of rupees failed to increase tax base. Rather it eroded whatever image CBR had in the eyes of people as an enforcement agency. Amnesty Schemes so often         offered in Pakistan give message to the tax evaders that they would get such chances in future too. So why pay taxes voluntarily now.

 5         Tax amnesties prove effective where laws are enforced with full vigour. It             gives tax evaders a window of opportunity to make their record clean.

 6.        CBR has not taken any action against persons who neither availed   amnesty nor paid taxes before or after this amnesty. In a culture of  immunities and impunities no one cares such amnesties.

 7.        Our tax law favours tax evaders and avoiders. Taxpayer and tax-evader     are two brothers. Taxpayer kept on paying income tax each year @ 35% of  his upper bracket income for 10 years. Tax-evader never filed return. After  10 years he was caught in “tax net”. Notice was issued. He files tax return showing below taxable income. When asked to explain from where he got money to purchase the plot he owned in defence, his explanation was that  he got a prize bond and he produces receipt of the same which is obtainable from the market by paying a little more than the prize money and tax deducted would be 10%. That is it. Instead of 35% he ends up with 10% or so and no hassle of filing return over the years. All money is white       now. Foreign remittance is perhaps the cheapest way to whiten your money earned in Pakistan but given flavour of foreign remittance.

 8.           You may purchase a plot for Rs. 15 million and CBR will ask you to explain only to the extent of DC rates of the property. So you plough back  your untaxed business profits into cash economy and at the end you will also enjoy legal cover as capital gains on immovable property is forbidden   tree for taxation.    


9.    It looks as if the government chooses to withhold/collect tax from such      sectors which it thinks would not file returns and not claim refund of taxes withheld as advance taxes. My this impression emerges from the     fact that tax on commercial electricity bills is collected without any lower   limit. Similar is the case with pre-paid cards. While capital gains on listed  shares is exempt, tax is withheld on transactions of such shares. 


Achieving tax revenue target should not be the only criteria to judge performance of the CBR. Ascertainment of actual potential of tax revenue, extent of realization of this potential, progressiveness of structure of taxation, its impact on the economy and extent of reducing income inequalities in the economic system are all relevant in evaluation of the performance. Promoting tax culture is as much need of the hour as controlling unwanted, useless, unproductive expenditure. There is a strong case for paradigm shift in attitude of CBR. The non-compliance gamble which at present swings heavily in favour of non-filers should be shifted against them. They should feel themselves at some disadvantage vis-à-vis  tax law compliant citizens of Pakistan. Only culture of fairness and equity can promote tax culture otherwise you may continue to achieve targets without achieving objectives of taxation.


( Published in the Business Recorder, May 26, 2006) 

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