financial situation – 4 Walls And A View http://4wallsandaview.com/ Tue, 08 Mar 2022 16:39:48 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://4wallsandaview.com/wp-content/uploads/2021/06/icon-5.png financial situation – 4 Walls And A View http://4wallsandaview.com/ 32 32 Looking for credit card relief? Don’t Believe These Debt Consolidation Myths | national company https://4wallsandaview.com/looking-for-credit-card-relief-dont-believe-these-debt-consolidation-myths-national-company/ Tue, 08 Mar 2022 16:39:48 +0000 https://4wallsandaview.com/looking-for-credit-card-relief-dont-believe-these-debt-consolidation-myths-national-company/ PHOENIX–(BUSINESS WIRE)–March 8, 2022– As Americans’ credit card debt levels rise, 29% are facing trouble with their liabilities, according to New York Life. This means that millions of people may need solutions such as debt consolidation, but may find information about the process confusing or misleading. “Debt consolidation offers a way to combine multiple debts […]]]>

PHOENIX–(BUSINESS WIRE)–March 8, 2022–

As Americans’ credit card debt levels rise, 29% are facing trouble with their liabilities, according to New York Life. This means that millions of people may need solutions such as debt consolidation, but may find information about the process confusing or misleading.

Debt consolidation offers a way to combine multiple debts into one payment to provide a streamlined way to repay. It’s often a great solution for people overwhelmed by multiple bills looking to regain control of their money,” said Michael Sullivan, personal financial consultant at Take Charge America, a non-profit housing and credit counseling agency. “But like other forms of debt relief, it can be difficult to separate truth from fiction.”

Sullivan busts five common debt consolidation myths:

  • You cannot pursue the consolidation yourself. False. Despite what you may hear elsewhere, debt consolidation is a process that you can initiate yourself. Consolidation can take many forms, including a debt management plan, balance transfer credit cards, and personal loans. Research the different solutions to determine which works best for you. A non-profit credit counseling session can also offer an unbiased assessment of your unique situation.
  • Consolidation eliminates your debt. False. Although consolidation is a great way to control your debt by combining multiple debts into one payment, you still have to pay off the balance. Consolidation is not forgiveness.
  • You must have good credit to pursue debt consolidation. Mostly false. When applying for a consolidation loan, good credit can help you get better terms and a lower interest rate. If you explore a debt management planyour credit score is not a factor in qualifying for the plan or obtaining lower interest rates.
  • You always save on interest. False. You can save on interest, depending on the terms of your consolidation loan. But even with a lower interest rate, you might end up paying more interest over the life of the loan if you extend the repayment period.
  • Consolidation traps you in a cycle of debt. False. Like other debt relief options, consolidation is a tool to help you regain control of your financial situation. It doesn’t solve the underlying problem, which is often overspending and mismanagement of money. If you don’t solve these problems yourself, you can easily get into debt.

To learn more about debt consolidation or other debt relief options, visit take over america.

About Take Charge America, Inc.

Founded in 1987, Take Charge America, Inc. is a non-profit agency providing financial education and counseling services, including credit counseling, debt management, student loan counseling, housing advice and bankruptcy advice. He has helped over 2 million consumers nationwide manage their personal finances and debts. To learn more, visit takechargeamerica.org or call (888) 822-9193.

Show source version on businesswire.com:https://www.businesswire.com/news/home/20220308006031/en/

CONTACT: Tim Gallen

Aker ink

(480) 335-6619

tim.gallen@akerink.com

KEYWORD: ARIZONA UNITED STATES NORTH AMERICA

KEYWORD INDUSTRY: FUNDING OF PROFESSIONAL SERVICES

SOURCE: Take Charge America, Inc.

Copyright BusinessWire 2022.

PUBLISHED: 08/03/2022 11:39 / DISK: 08/03/2022 11:39

http://www.businesswire.com/news/home/20220308006031/en

Copyright BusinessWire 2022.

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What is a Signature loan and how does it work? https://4wallsandaview.com/what-is-a-signature-loan-and-how-does-it-work/ Thu, 03 Mar 2022 21:48:17 +0000 https://4wallsandaview.com/what-is-a-signature-loan-and-how-does-it-work/ If you’re looking for a loan that doesn’t require collateral, a signature loan might be a good option. A signature loan can be used for almost any purpose. Plus, you can receive funds quickly – some lenders issue funds the same business day. However, like all financial products, these loans have drawbacks. Some lenders charge […]]]>

If you’re looking for a loan that doesn’t require collateral, a signature loan might be a good option. A signature loan can be used for almost any purpose. Plus, you can receive funds quickly – some lenders issue funds the same business day.

However, like all financial products, these loans have drawbacks. Some lenders charge fees and you may receive a high interest rate. Before applying for a signature loan, review the details of these loans to make sure it’s the right choice for you.

What is a signature loan?

A signature loan is an unsecured personal loan. Unlike a secured loan, this type of loan doesn’t require you to post collateral — something of value, like a bank account or a house — that a lender can seize if you don’t repay the loan. Instead, the loan is secured by your signature, which represents a legal promise to repay the loan funds.

Since the loan is unsecured, lenders generally charge a higher interest rate than secured loans, such as mortgages and car loans. The average interest rate for signature loans is often lower than the average credit card interest rate.

Also, loan funds can be used for almost any purpose, such as medical emergencies, debt consolidation, and major life events.

How does a signature loan work?

When you apply for a signature loan, a lender considers factors such as your credit history, income, and credit score to determine if you qualify for a loan. These factors also help a lender determine your interest rate and loan amount.

If you are approved for a signature loan, a lender will give you a cash lump sum. You then repay the loan amount, plus interest, over a set repayment period that typically ranges from 24 to 60 months or more.

What are the best uses for a signature loan?

The best use of a signature loan depends on your unique financial situation. Here are some scenarios where using one might make sense.

Debt Consolidation

If you have high-interest debt, such as credit card debt, using a signature loan to consolidate debt might be a good financial decision. Debt consolidation involves paying off your existing debts with a new loan. If you qualify for a signature loan with an interest rate lower than the average rate of your current debt, you can save a ton of money on interest.

Emergencies

Signature loans also work well for covering unexpected expenses, such as medical emergencies, auto repairs, and home repairs. If you don’t have emergency funds or the expense is too large to cover, you may be able to receive funds quickly.

Major life events

If you need to pay for an expensive event, like a wedding, moving to another state, or a birthday party, a signature loan could help. Remember to only borrow what you can afford to repay.

Where can you get a signature loan?

You can get a signature loan from several financial institutions, including banks, credit unions, and online lenders.

Banks

Traditional banks offer signature loans. If you already have a relationship with a bank, contact their customer service to see if they offer signed personal loans. You may qualify for an interest rate reduction for being an existing customer. Alternatively, you contact a bank by phone to see if they offer unsecured personal loans.

credit unions

Some credit unions offer signature loans, and the interest rate is often lower than those offered by banks. For example, the average rate for a three-year unsecured personal loan at a credit union was 8.95 percent on June 25, 2021, according to the National Credit Union Administration. In contrast, the three-year average rate on a personal loan at a bank was 10.09%.

To take out a personal loan from a credit union, you must be a member or apply for membership.

Online lenders

Several online lenders offer unsecured personal loans. To find them, you can visit an online marketplace or search for individual lenders. One of the benefits of applying with an online lender is that most allow you to prequalify to check your estimated rates and terms, without hurting your credit score.

Advantages and disadvantages of signature loans

Before taking out a signature loan, be sure to weigh the pros and cons.

Benefits

  • Quick funding. Do you need cash fast? Some lenders may issue your loan funds the same business day or a few business days after loan approval.
  • No collateral needed. Since all signature loans are unsecured loans, you don’t have to worry about a lender repossessing your car or foreclosing your home (unless a court grants judgment to the lender) .
  • Lower interest rates than credit cards. The average personal loan interest rate is generally lower than the average credit card interest rate. For example, since March 3, 2022, the average personal loan rate is 10.28%.

The inconvenients

  • Some lenders charge fees, such as application fees, late fees, and prepayment penalties. These fees can significantly increase your borrowing costs.
  • Potentially high interest rates. If you have bad credit, a lender may charge you a high interest rate. Some lenders have advertised maximum interest rates above 30%.
  • Late payments can hurt your credit score. If your payment is more than 30 days late, it can cause significant damage to your credit score, making it harder to qualify for future loans.

How to get a signature loan

If you think getting a signature loan is right for you, follow these steps to get one:

  1. Review your credit report. Inaccurate and incomplete information can lower your credit score. Before applying for a loan, review your credit reports to make sure they are accurate. You can view your Experian, Transunion and Equifax credit reports for free each week until April 20, 2022, by visiting com. If you find a credit report error, dispute it with every credit agency that lists it.
  2. Prequalify with multiple lenders. Compare your loan options by prequalify with as many lenders as possible. After you submit your application, a lender will perform a soft credit check to review your credit, which has no impact on your credit score. If you prequalify, you will receive an estimate of rates and terms.
  3. Submit a formal loan application. Once you have chosen a lender, complete a loan application. You will likely be asked to provide personal and financial information, such as your name, employer, social security number (SSN), income, and bank statements.
  4. Sign the loan agreement and receive the funds. If your application is approved, a lender will send you a loan agreement to sign. Read the conditions carefully and sign if you accept them. Then the lender must deposit the funds into your bank account within a few business days.
  5. Repay your loan. Be sure to repay your signature loan as promised. If you make late payments, you could pay late fees and it could hurt your credit, preventing you from taking out future loans. Sign up for autopay or use a spreadsheet to stay on top of your due date.
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These 4 metrics indicate that SpartanNash (NASDAQ:SPTN) is using debt a lot https://4wallsandaview.com/these-4-metrics-indicate-that-spartannash-nasdaqsptn-is-using-debt-a-lot/ Sun, 27 Feb 2022 14:55:20 +0000 https://4wallsandaview.com/these-4-metrics-indicate-that-spartannash-nasdaqsptn-is-using-debt-a-lot/ Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, […]]]>

Berkshire Hathaway’s Charlie Munger-backed outside fund manager Li Lu is quick to say, “The biggest risk in investing isn’t price volatility, but whether you’re going to suffer a permanent loss of capital “. So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, because too much debt can sink a business. We note that SpartanNash Company (NASDAQ:SPTN) has debt on its balance sheet. But the more important question is: what risk does this debt create?

Why is debt risky?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. If things go really bad, lenders can take over the business. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. That said, the most common situation is when a company manages its debt reasonably well – and to its own benefit. When we look at debt levels, we first consider cash and debt levels, together.

See our latest review for SpartanNash

How much debt does SpartanNash have?

As you can see below, SpartanNash had $405.7 million in debt as of January 2022, up from $442.8 million the previous year. However, he has $10.7 million in cash to offset this, resulting in a net debt of approximately $395.1 million.

NasdaqGS: SPTN Debt to Equity History February 27, 2022

A look at SpartanNash’s responsibilities

We can see from the most recent balance sheet that SpartanNash had liabilities of US$655.8 million due in one year, and liabilities of US$768.1 million due beyond. As compensation for these obligations, it had cash of US$10.7 million and receivables valued at US$361.7 million due within 12 months. Thus, its liabilities outweigh the sum of its cash and (current) receivables of US$1.05 billion.

Given that this deficit is actually greater than the company’s market capitalization of $1.02 billion, we think shareholders really should be watching SpartanNash’s debt levels, like a parent watching their child go shopping. bike for the first time. In the scenario where the company were to quickly clean up its balance sheet, it seems likely that shareholders would suffer significant dilution.

We use two main ratios to inform us about debt to earnings levels. The first is net debt divided by earnings before interest, taxes, depreciation and amortization (EBITDA), while the second is how often its earnings before interest and taxes (EBIT) covers its interest expense (or its interests, for short). In this way, we consider both the absolute amount of debt, as well as the interest rates paid on it.

SpartanNash has net debt worth 2.1x EBITDA, which isn’t too much, but its interest coverage looks a little low, with EBIT at just 6.8x interest expense. . While these numbers don’t alarm us, it’s worth noting that the cost of corporate debt has a real impact. Shareholders should know that SpartanNash’s EBIT fell 26% last year. If this decline continues, it will be more difficult to repay debts than to sell foie gras at a vegan convention. The balance sheet is clearly the area to focus on when analyzing debt. But it’s future earnings, more than anything, that will determine SpartanNash’s ability to maintain a healthy balance sheet in the future. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Finally, while the taxman may love accounting profits, lenders only accept cash. We must therefore clearly examine whether this EBIT generates a corresponding free cash flow. Fortunately for all shareholders, SpartanNash has actually produced more free cash flow than EBIT for the past three years. This kind of high cash conversion gets us as excited as the crowd when the beat drops at a Daft Punk concert.

Our point of view

Reflecting on SpartanNash’s attempt to (not) increase its EBIT, we are certainly not enthusiastic. But on the bright side, its conversion from EBIT to free cash flow is a good sign and makes us more optimistic. Looking at the balance sheet and taking all of these factors into account, we think debt makes SpartanNash stock a bit risky. Some people like that kind of risk, but we’re aware of the potential pitfalls, so we’d probably prefer it to take on less debt. The balance sheet is clearly the area to focus on when analyzing debt. But at the end of the day, every business can contain risks that exist outside of the balance sheet. For example, we found 2 warning signs for SpartanNash which you should be aware of before investing here.

In the end, it’s often best to focus on companies that aren’t in debt. You can access our special list of these companies (all with a track record of earnings growth). It’s free.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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32% of Americans are hiding a financial secret from their partner, according to a survey https://4wallsandaview.com/32-of-americans-are-hiding-a-financial-secret-from-their-partner-according-to-a-survey/ Thu, 10 Feb 2022 19:19:24 +0000 https://4wallsandaview.com/32-of-americans-are-hiding-a-financial-secret-from-their-partner-according-to-a-survey/ A new TD Bank survey claims nearly a third of couples experience financial infidelity, such as hiding a major purchase or having secret debts. (iStock) Just in time for Valentine’s Day, TD Bank revealed how couples in serious relationships spend – and hide – their money in its seventh annual report Love and Money Survey. […]]]>

A new TD Bank survey claims nearly a third of couples experience financial infidelity, such as hiding a major purchase or having secret debts. (iStock)

Just in time for Valentine’s Day, TD Bank revealed how couples in serious relationships spend – and hide – their money in its seventh annual report Love and Money Survey.

Nearly a third of Americans (32%) are hiding a financial secret from their romantic partner, an 11% increase from last year. The most common financial secrets are a big purchase (40%), large credit card debt (18%) and a hidden bank account (13%).

Most common financial secrets hidden from a partner

It should be noted that half (50%) of partners in an unhappy relationship experience financial infidelity, compared to a third (32%) of those in a happy relationship, according to the survey. TD Bank spokeswoman Alissa Van Volkom said “when debt, financial secrets or unemployment enter a relationship, both partners need to stand firm on what matters to them.”

“The pandemic has shown that you can’t put a price on a lot of things – financial health, stability and happiness included,” Van Volkom added.

Keep reading to learn more about managing money with your partner, including how to be more transparent with your financial behavior. You can visit Credible to compare rates on a variety of financial products, so you and your partner can achieve your financial goals together.

PAYING OFF $10,000 OF CREDIT CARD DEBT WITH A PERSONAL LOAN COULD SAVE YOU THOUSANDS

How couples can become more transparent about money management

Keeping secrets in a relationship can sow guilt and embarrassment – ​​and financial infidelity is no exception. Being more honest with your spouse about your shared finances can help build trust with clear financial goals.

“Couples should regularly discuss three things: how they’re managing their budget, unexpected or upcoming expenses, and rising debt,” Van Volkom says.

Read more in the sections below for tips on how to have open conversations with your partner about financial transparency.

Discuss your budget

Although creating a shared budget might not seem like the most romantic date idea, it can help you and your partner see how you manage your income and expenses. Tracking your spending can help you identify areas where you might be overspending and find opportunities to increase your savings.

An easy way to streamline your budget is to download a finance app that automates the process. Budgeting apps can be linked to your bank accounts to give you a clear picture of your financial situation. More than half (57%) of Americans have financial apps on their smartphones, according to the TD Bank survey.

HOW TO CLEAR YOUR CREDIT CARD STATEMENTS QUICKLY

Plan for unexpected expenses

Among Americans who hide a financial secret from their partner, the most common is that they hide a large purchase (40%). For couples with shared finances, making a major purchase without your partner knowing about it can make budgeting and tracking expenses difficult.

One way to plan for unexpected expenses is to create an emergency fund that covers about three to six months of expenses. You can start your emergency fund by setting up a direct deposit of your paycheck into a high-yield savings account. You can compare savings account rates on Credible for free without affecting your credit score.

ARE BABY BOOMERS RESPONSIBLE FOR THE HOUSING SHORTAGE?

Make a plan to pay off your debts

Nearly a fifth (18%) of survey respondents with financial indiscretion are hiding secret credit card debt. This is problematic because revolving credit card debt that is carried over for a month comes with high interest rates, making it difficult to pay it off.

When discussing a debt management plan with your partner, consider the following strategies for paying off credit card balances:

  • Snowball method or debt avalanche. The debt snowball method is to pay off the credit cards with the lowest balances first, while the debt avalanche strategy is to pay off the debt with the lowest interest rates first. the highest.
  • Credit card balance transfers. Applicants with very good to excellent credit may qualify for a 0% APR introductory period, effectively allowing you to pay off credit card debt without interest. You can compare balance transfer card offers from several credit card companies at once on Credible.
  • Debt consolidation loans. It is a type of unsecured personal loan used to pay off high-interest debt in fixed monthly installments at a lower rate. Interest rates on two-year personal loans are currently at historic lows, according to the Federal Reserve.

You can visit Credible to learn more about debt management and compare personal loan interest rates. This way, you and your partner can make an informed decision on how to pay off credit card debt.

MILLENNIALS AND GENERATION ZERS PLAN TO REDUCE STUDENT LOAN PAYMENTS WITH REFINANCING

You have a financial question, but you don’t know who to contact? Email the Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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These 4 measures indicate that Trident (NSE: TRIDENT) uses debt safely https://4wallsandaview.com/these-4-measures-indicate-that-trident-nse-trident-uses-debt-safely/ Thu, 10 Feb 2022 04:14:37 +0000 https://4wallsandaview.com/these-4-measures-indicate-that-trident-nse-trident-uses-debt-safely/ Warren Buffett said: “Volatility is far from synonymous with risk. So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, because too much debt can sink a business. Above all, Trident Limited (NSE: TRIDENT) is in debt. But should shareholders worry about its […]]]>

Warren Buffett said: “Volatility is far from synonymous with risk. So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, because too much debt can sink a business. Above all, Trident Limited (NSE: TRIDENT) is in debt. But should shareholders worry about its use of debt?

When is debt a problem?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company cannot meet its legal debt repayment obligations, shareholders could walk away with nothing. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. By replacing dilution, however, debt can be a great tool for companies that need capital to invest in growth at high rates of return. The first step when considering a company’s debt levels is to consider its cash and debt together.

See our latest analysis for Trident

What is Trident’s debt?

The image below, which you can click on for more details, shows that as of September 2021, Trident had a debt of ₹13.3 billion, up from ₹8.95 billion in a year. However, since he has a cash reserve of ₹3.98 billion, his net debt is lower at around ₹9.29 billion.

NSEI: TRIDENT Debt to Equity February 10, 2022

How healthy is Trident’s balance sheet?

The latest balance sheet data shows that Trident had liabilities of ₹16.2 billion due within a year, and liabilities of ₹6.71 billion falling due thereafter. As compensation for these obligations, it had cash of ₹3.98 billion as well as receivables valued at ₹4.81 billion due within 12 months. Thus, its liabilities outweigh the sum of its cash and (short-term) receivables by ₹14.1 billion.

Considering that Trident has a market capitalization of ₹299.3 billion, it is hard to believe that these liabilities pose a big threat. However, we think it’s worth keeping an eye on the strength of its balance sheet, as it can change over time.

In order to assess a company’s debt relative to its earnings, we calculate its net debt divided by its earnings before interest, taxes, depreciation and amortization (EBITDA) and its earnings before interest and taxes (EBIT) divided by its expenses. interest (its interest coverage). The advantage of this approach is that we consider both the absolute amount of debt (with net debt to EBITDA) and the actual interest expense associated with that debt (with its interest coverage ratio ).

Trident’s net debt is only 0.67 times its EBITDA. And its EBIT easily covers its interest charges, which is 13.7 times the size. One could therefore say that he is no more threatened by his debt than an elephant is by a mouse. Even more impressive is that Trident increased its EBIT by 168% year-over-year. This boost will make it even easier to pay off debt in the future. The balance sheet is clearly the area to focus on when analyzing debt. But it is future earnings, more than anything, that will determine Trident’s ability to maintain a healthy balance sheet in the future. So if you are focused on the future, you can check out this free report showing analyst earnings forecast.

But our last consideration is also important, because a company cannot pay debt with paper profits; he needs cash. We must therefore clearly examine whether this EBIT generates a corresponding free cash flow. Over the past three years, Trident has recorded free cash flow of 70% of its EBIT, which is about normal, given that free cash flow excludes interest and taxes. This free cash flow puts the company in a good position to repay its debt, should it arise.

Our point of view

Fortunately, Trident’s impressive interest coverage means it has the upper hand on its debt. And this is only the beginning of good news since its EBIT growth rate is also very encouraging. Overall, we don’t think Trident is taking bad risks, as its leverage looks modest. The balance sheet therefore seems rather healthy to us. There is no doubt that we learn the most about debt from the balance sheet. But at the end of the day, every business can contain risks that exist outside of the balance sheet. We have identified 3 warning signs with Trident, and understanding them should be part of your investment process.

Of course, if you’re the type of investor who prefers to buy stocks without the burden of debt, then feel free to check out our exclusive list of cash-efficient growth stocks today.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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The man was living on white bread to qualify for a home loan, then his pre-approval was withdrawn anyway https://4wallsandaview.com/the-man-was-living-on-white-bread-to-qualify-for-a-home-loan-then-his-pre-approval-was-withdrawn-anyway/ Wed, 02 Feb 2022 16:00:00 +0000 https://4wallsandaview.com/the-man-was-living-on-white-bread-to-qualify-for-a-home-loan-then-his-pre-approval-was-withdrawn-anyway/ Deep Singh lived off white bread for months to qualify for a home loan under the government’s tough new lending rules. The Wellington man says he ate once a day – losing 8 kilograms in the process – and worked seven days a week at two jobs. He shut down his social life, only going […]]]>

Deep Singh lived off white bread for months to qualify for a home loan under the government’s tough new lending rules.

The Wellington man says he ate once a day – losing 8 kilograms in the process – and worked seven days a week at two jobs. He shut down his social life, only going out to attend house tours.

The bank, he knew, would look into his statement and payslips once he made an offer on a house, under controversial new requirements under the Credit Agreements and Finance Act (CCCFA), which has seen banks take an ultra-cautious approach to lending, reject home loans for expenses like Uber eats Where therapy.

“I had to limit my spending and a loaf of white bread costs $1,” the first-time home buyer explained.

But hours before Singh was considering bidding on his dream home, ANZ canceled his pre-approval for a different reason.

Deep Singh was hours away from making an offer on this home - in the Upper Hutt suburb of Elderslea - when ANZ canceled pre-approval on his home loan.

Jericho Rock-Archer / Stuff

Deep Singh was hours away from making an offer on this home – in the Upper Hutt suburb of Elderslea – when ANZ canceled pre-approval on his home loan.

READ MORE:
* First home buyer says he ‘lived like a hermit’ to get approval under new mortgage rules
* Dreams shattered as home loan approvals plunge after changes to lending law
* Kiwibank withdraws low deposit home loan pre-approvals

The bank told him in an email that it had to comply with “tightened Reserve Bank (RBNZ) rules” for low-deposit loans.

“I begged them to extend it, even by just one day – they said they couldn’t,” Singh said.

The RBNZ requirements came into effect on November 1, reducing the availability of low-deposit mortgages and requiring banks to lend no more than 10% of new loans to people with less than 20% deposit.

Singh’s pre-approval was based on a 10% deposit – and was granted at the end of October, days before the new rules came into effect.

Briar McCormack, ANZ’s senior director of external communications, said the bank wanted to honor the deal but was having a hard time.

Demand for low-deposit loans soared after RBNZ rules came into effect, with pre-approvals being converted to settlement “at around 125% of historic rates” in December and January, she said. declared.

This meant that, to comply with the new regulations, ANZ had to “suspend a small number of existing pre-approvals” for low-deposit loans. “For a very small group of customers whose pre-approvals expired before February 1, we unfortunately withdrew those pre-approvals in mid-January,” McCormack said.

ANZ withdrew pre-approvals

David White / Stuff

ANZ withdrew pre-approvals “for a very small group of customers” due to increased demand following tighter Reserve Bank rules.

For Singh, the timing was tight. Its pre-approval was not due to expire before the end of the month, and ANZ had given no indication that it would cancel sooner.

He was aggrieved to barely miss a rare opportunity: a two-bedroom house within budget and within walking distance of his family in Upper Hutt. “It was a perfect opportunity – I literally could have dropped by and visited my niece and nephew.”

And the starvation months were “wasted efforts”, Singh said.

McCormack was surprised that Singh “felt the need to drastically cut expenses”.

JOHN BISSET/STUFF

Timaru man Samuel Pearce discovered that getting a mortgage and buying a house is no small feat.

“Unless the client’s financial situation changes significantly before they withdraw their loan, we generally wouldn’t need to reassess affordability after giving pre-approval,” she said.

Financial Advice New Zealand’s managing director, Katrina Shanks, was not surprised. The membership organization received 300 responses in two days from mortgage advisers who had seen a change in the availability of credit for their clients. And that anecdotal evidence was now backed up by hard data.

Credit reporting agency Centrix analyzed the figures and found that the proportion of successful home loan applications had fallen from 36% to just 30% since the lending rules came into force. And earlier this week, RBNZ reported that lending across the board fell by $1 billion.

“It indicates that the CCCFA is making it much more difficult for the average Kiwi to get a mortgage,” Shanks said.

Originally, the CCCFA was presented as a way to protect low-income borrowers from unscrupulous loan sharks. The RBNZ changes, meanwhile, were aimed at curbing house price inflation.

Economist Shamubeel Eaqub said the two policies were designed to “reduce risky lending”.

By design, this meant that low-to-moderate income people “would have a much harder time borrowing money.” Lending restrictions could, however, “break an addiction to cheap credit,” Eaqub said. “Unfortunately, this will hurt young people and first-time buyers.”

The solutions for these groups were longer: more houses, greater density, better infrastructure, affordable housing. There were no satisfactory short-term solutions. “It’s extremely unfair and illustrates how broken our housing system is,” he said.

Deep Singh skips meals - and eats white bread when he eats - in order to qualify for a home loan.  He doesn't know how much longer he can last.

Jericho Rock-Archer / Stuff

Deep Singh skips meals – and eats white bread when he eats – in order to qualify for a home loan. He doesn’t know how much longer he can last.

Trade and Consumer Affairs Minister David Clark said anecdotal evidence suggested the CCCFA had posed “a greater challenge for some parties”.

He ordered an investigation into the impact of tougher new lending laws.

Meanwhile, Singh continues to skip meals as he seeks pre-approval for a new loan. He earns $150,000 a year, yet BNZ, Kiwibank and TSB said no. Even second-tier lenders – with higher interest rates – are reluctant to lend.

ANZ says it will again provide pre-approvals for low deposit loans as soon as “as soon as we can”.

Singh thinks saving a 20% down payment could take years. He doesn’t know if he can last that long.

“Even last night, I didn’t have a meal. I didn’t have breakfast this morning,” he said. “Whenever I feel like I’m ready, the goal posts move away.”

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Here’s why Telekom Austria (VIE:TKA) can manage its debt responsibly https://4wallsandaview.com/heres-why-telekom-austria-vietka-can-manage-its-debt-responsibly/ Mon, 24 Jan 2022 04:47:24 +0000 https://4wallsandaview.com/heres-why-telekom-austria-vietka-can-manage-its-debt-responsibly/ Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. Like many other companies […]]]>

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. Like many other companies Telekom Austria AG (LIFE:TKA) uses debt. But should shareholders worry about its use of debt?

When is debt a problem?

Debt helps a business until the business struggles to pay it back, either with new capital or with free cash flow. In the worst case, a company can go bankrupt if it cannot pay its creditors. However, a more common (but still painful) scenario is that it has to raise new equity at a low price, thereby permanently diluting shareholders. By replacing dilution, however, debt can be a great tool for companies that need capital to invest in growth at high rates of return. The first thing to do when considering how much debt a business has is to look at its cash and debt together.

See our latest analysis for Telekom Austria

What is Telekom Austria’s net debt?

The graph below, which you can click on for more details, shows that Telekom Austria had a debt of 2.55 billion euros in September 2021; about the same as the previous year. However, because it has a cash reserve of €675.3m, its net debt is lower, at around €1.87bn.

WBAG: TKA Debt to Equity January 24, 2022

How strong is Telekom Austria’s balance sheet?

According to the latest published balance sheet, Telekom Austria had liabilities of €2.91 billion due within 12 months and liabilities of €2.51 billion due beyond 12 months. On the other hand, it has cash of €675.3 million and €920.5 million in receivables at less than one year. Thus, its liabilities total 3.82 billion euros more than the combination of its cash and short-term receivables.

That’s a mountain of leverage compared to its market capitalization of 5.11 billion euros. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet quickly.

In order to assess a company’s debt relative to its earnings, we calculate its net debt divided by its earnings before interest, taxes, depreciation and amortization (EBITDA) and its earnings before interest and taxes (EBIT) divided by its expenses. interest (its interest coverage). The advantage of this approach is that we consider both the absolute amount of debt (with net debt to EBITDA) and the actual interest expense associated with that debt (with its interest coverage ratio ).

Telekom Austria has a net debt of just 1.3 times EBITDA, indicating that it is certainly not an imprudent borrower. And it has interest coverage of 8.8 times, which is more than enough. And we also warmly note that Telekom Austria increased its EBIT by 20% last year, which makes it easier to manage its debt. There is no doubt that we learn the most about debt from the balance sheet. But ultimately, the company’s future profitability will decide whether Telekom Austria can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Finally, a business needs free cash flow to pay off its debts; book profits are not enough. It is therefore worth checking how much of this EBIT is supported by free cash flow. Over the past three years, Telekom Austria has generated free cash flow amounting to 95% of its EBIT, a very solid result, above what we expected. This positions him well to pay off debt if desired.

Our point of view

Fortunately, Telekom Austria’s impressive EBIT to free cash flow conversion means it has the upper hand on its debt. But, on a darker note, we’re a bit concerned about his total passive level. Looking at all the above factors together, it seems to us that Telekom Austria can manage its debt quite comfortably. Of course, while this leverage can improve return on equity, it comes with more risk, so it’s worth keeping an eye out for. The balance sheet is clearly the area to focus on when analyzing debt. But at the end of the day, every business can contain risks that exist outside of the balance sheet. For example, we found 2 warning signs for Telekom Austria which you should be aware of before investing here.

If you are interested in investing in companies that can generate profits without the burden of debt, then check out this free list of growing companies that have net cash on the balance sheet.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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5 Smart Ways Fintech Companies Can Help You Debt Free https://4wallsandaview.com/5-smart-ways-fintech-companies-can-help-you-debt-free/ Sun, 23 Jan 2022 19:02:38 +0000 https://4wallsandaview.com/5-smart-ways-fintech-companies-can-help-you-debt-free/ Whether it’s high-interest credit cards, medical bills, or student loans, many people find themselves in dire financial straits with more debt than they can handle. This leads them to scour the internet for a solution. Luckily, there are plenty of fintech companies that can help them navigate these tricky financial waters, pay off debt, and […]]]>

Whether it’s high-interest credit cards, medical bills, or student loans, many people find themselves in dire financial straits with more debt than they can handle. This leads them to scour the internet for a solution. Luckily, there are plenty of fintech companies that can help them navigate these tricky financial waters, pay off debt, and get their finances back on track. Here are five ways fintech companies can help someone get out of debt.

1) Organize your bills

We live in a time where we have different bills from all directions, whether it’s cable, utilities, subscription services, credit cards, or student loans; the list goes on endlessly. There are many services and apps that allow you to manage your bills and track your payments. If you can see all your bills in one place, instead of having to dig through endless paper statements or emails, it will make your life easier. Becoming debt-free starts with physically organizing your spending, and there are plenty of fintech services that can help you do that.

2) Find the best interest rate

Comparison shopping is no longer just for retail. Now consumers can go online and find financial products that match their income and goals. When it comes to paying off debt, most people turn to debt consolidation loans to lower their monthly payments and/or lower their interest rates. This speeds up their debt repayment and, more importantly, gives them a concrete finish line as to when they can expect to be debt free. Many fintechs have technology that can connect consumers with the right lender in seconds and make the loan application process as easy as possible. Users can compare lenders side by side and make an informed decision on their best option. The market of potential borrowers being this competitive, the real winner is the consumer, who can now easily find the best offer(s).

3) Boost your credit score

Credit score and debt often go hand in hand. Those who have debts they would like to pay off are usually also concerned about their credit score. While most credit card providers offer a free service that lets you monitor your credit score, some other apps and companies take your credit score deeper, usually as a subscription-based service. Consumers can now view their entire credit history in real time, find out what’s currently affecting their score, and find ways to improve it. Although credit score is not an end in itself when it comes to your financial situation, it is essential to be aware of it if you are looking to get your finances back on track.

4) Education

Unfortunately, many people are unfamiliar with debt and financial education. Some of the essential principles, be it budgeting, investing, or debt repayment, are not taught in our schools. For this reason, many people turn to fintech companies that offer free financial education resources. Not only can people learn basic personal finance concepts, but they can then apply them to their own personal lives. Fintech companies can tell us about credit scores, savings, budgeting, and investing. When it comes to debt repayment, consumers can also learn about the different debt consolidation options, the pros and cons of each, and when each makes sense. There is no single answer to any personal finance question, as each person’s situation is unique. Luckily, with the amount of free content available online from fintechs, you’ll be able to find the answer you’re looking for.

5) Budget, savings, investment

Learning to budget and save not only helps you pay off debt faster, but it’s also a life skill that will help you build wealth for you and your family. Once your debt is paid off, most people will look to invest the extra money they currently have. The fintech industry is currently booming with companies and services that can help newbies invest their money. Depending on your level of risk aversion, you’ll want to choose the right service and investments that fit your unique profile. Many platforms can help you achieve your investment goals, and most have little or no fees.

Getting out of debt can seem like a daunting task. Yet, with the technological advances that have taken place across the fintech industry, consumers now have plenty of resources to simplify the process. Fintech companies help educate consumers on financial best practices, allow them to compare different products, and make it easier for them to invest their money once they are debt-free.

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About the Author: James Lambridis is the founder and CEO of Debt®

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Small loan applicant asked to explain eyebrow waxing and parking fees to bank staff https://4wallsandaview.com/small-loan-applicant-asked-to-explain-eyebrow-waxing-and-parking-fees-to-bank-staff/ Sat, 15 Jan 2022 00:51:08 +0000 https://4wallsandaview.com/small-loan-applicant-asked-to-explain-eyebrow-waxing-and-parking-fees-to-bank-staff/ BusinessUpdate Jan 15, 2022 12:31 AM3 minute read “Sometimes I get my eyebrows waxed, I had to explain to [a bank employee] in depth how often this happens.” File photo / Amanda Dalbjorn, Unsplash Other stories emerged detailing the effects of tough new loan changes, including a woman who was asked about her social life, […]]]>
Business

“Sometimes I get my eyebrows waxed, I had to explain to [a bank employee] in depth how often this happens.” File photo / Amanda Dalbjorn, Unsplash

Other stories emerged detailing the effects of tough new loan changes, including a woman who was asked about her social life, work and spending down to the dollar.

Changes to the law on credit agreements and consumer credit came into force in early December, requiring banks to analyze the spending habits of applicants before approving loans.

The changes were intended to protect vulnerable borrowers from loan sharks, but many found the new processes obstructive and unnecessary.

One woman, who did not want to be identified, said the process of getting a loan was invasive.

She was looking for a loan under $10,000 to help pay for her emergency medical bills.

She went to ANZ because it had the best rate for her, but was referred to a manager, who decided the loan was not affordable for her, she said.

Nothing but a cursory explanation was given for the refusal.

In the past, she had received a similar loan without problems, despite her worse financial situation.

Following the refusal, she approached the Co-operative Bank for the loan.

She had to specifically analyze her spending habits, with the bank demanding explanations for discrepancies as low as $5.

The bank inquired about her social life, her hobbies and how much she spent on parking.

“Sometimes I get my eyebrows waxed, I had to explain to him in detail how often it happens.

“Every transaction has been analyzed and questioned.”

Although she is an employee, she had to show the bank her employment contract to prove her employment.

She also had to write a detailed summary of her work to accompany it, she said.

The workers were “extremely sorry” about this, but she didn’t think many of the questions were relevant.

As part of the process, the bank asked her if she was interested in life insurance, which she agreed to pay for.

During this process, she was asked for in-depth details about her medical history, such as the exact circumstances that led her to develop post-traumatic stress disorder.

Once this process was complete, she was told that the weekly $2 fee for insurance could mean her loan was no longer accepted.

The loan was eventually approved, but the experience put her off considering a loan in the future and made her think twice about buying a house, she said.

“The whole process was overwhelming.”

Others shared their experience on Facebook, saying they were asked about spending on doctor’s visits, prescriptions, charitable donations and simple luxuries.

One user said he was told by a financial adviser to drop all extra expenses, such as his Netflix subscription.

Another called the new process demeaning and destructive.

Many users pointed out the importance of using cash, as it was untraceable and could help bypass the system.

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These 4 metrics indicate that Vertoz Advertising (NSE: VERTOZ) is using debt reasonably well https://4wallsandaview.com/these-4-metrics-indicate-that-vertoz-advertising-nse-vertoz-is-using-debt-reasonably-well/ Mon, 10 Jan 2022 02:57:25 +0000 https://4wallsandaview.com/these-4-metrics-indicate-that-vertoz-advertising-nse-vertoz-is-using-debt-reasonably-well/ Legendary fund manager Li Lu (whom Charlie Munger supported) once said, “The biggest risk in investing is not price volatility, but the possibility that you will suffer a permanent loss of capital.” When we think about how risky a business is, we always like to look at its use of debt because debt overload can […]]]>


Legendary fund manager Li Lu (whom Charlie Munger supported) once said, “The biggest risk in investing is not price volatility, but the possibility that you will suffer a permanent loss of capital.” When we think about how risky a business is, we always like to look at its use of debt because debt overload can lead to bankruptcy. We can see that Vertoz Advertising Limited (NSE: VERTOZ) uses debt in its business. But does this debt worry shareholders?

What risk does debt entail?

Debt helps a business until the business struggles to repay it, either with new capital or with free cash flow. If things really go wrong, lenders can take over the business. However, a more common (but still painful) scenario is that he has to raise new equity at low cost, thereby constantly diluting shareholders. That said, the most common situation is where a business manages its debt reasonably well – and to its own advantage. The first step in examining a business’s debt levels is to consider its cash flow and debt together.

See our latest review for Vertoz Advertising

What is Vertoz Advertising’s debt?

The image below, which you can click for more details, shows that in September 2021, Vertoz Advertising was owed 123.1m in debt, up from ₹ 116.1m in a year. However, given that it has a cash reserve of 31.5 million euros, its net debt is less, at around 91.5 million euros.

History of debt on equity of NSEI: VERTOZ January 10, 2022

Is Vertoz Advertising’s balance sheet healthy?

According to the latest published balance sheet, Vertoz Advertising had liabilities of 232.9m at 12 months and liabilities of 28.0m ₹ due beyond 12 months. In return, he had 31.5 million in cash and 279.5 million in receivables due within 12 months. So he actually ₹ 50.1m Following liquid assets as total liabilities.

This surplus suggests that Vertoz Advertising has a conservative balance sheet, and could probably eliminate its debt without too much difficulty.

We measure a company’s indebtedness relative to its earning power by looking at its net debt divided by its earnings before interest, taxes, depreciation, and amortization (EBITDA) and calculating the ease with which its earnings before interest and taxes (EBIT ) covers its interests. costs (interest coverage). The advantage of this approach is that we take into account both the absolute amount of debt (with net debt versus EBITDA) and the actual interest charges associated with this debt (with its coverage rate). interests).

Vertoz Advertising has net debt of just 0.84 times EBITDA, indicating that he is certainly not a reckless borrower. And this view is underpinned by the strong interest coverage, with EBIT standing at 8.5 times last year’s interest expense. Even more impressively, Vertoz Advertising increased its EBIT by 1270% year over year. This boost will make it even easier to pay off debt in the future. When analyzing debt levels, the balance sheet is the obvious place to start. But it is the results of Vertoz Advertising that will influence the performance of the balance sheet in the future. So, when considering debt, it is really worth looking at the profit trend. Click here for an interactive snapshot.

Finally, a business can only repay its debts with hard cash, not with accounting profits. The logical step is therefore to examine the proportion of this EBIT that corresponds to the actual free cash flow. Over the past three years, Vertoz Advertising has spent a lot of money. While this may be the result of spending for growth, it makes debt much riskier.

Our point of view

The good news is that Vertoz Advertising’s demonstrated ability to increase EBIT thrills us like a fluffy puppy does a toddler. But we have to admit that its conversion from EBIT to free cash flow has the opposite effect. Looking at all of the above factors together, it seems to us that Vertoz Advertising can manage its debt quite comfortably. Of course, while this leverage can improve returns on equity, it comes with more risk, so it’s worth keeping an eye out for. There is no doubt that we learn the most about debt from the balance sheet. But at the end of the day, every business can contain risks that exist off the balance sheet. For example, we discovered 2 warning signs for Vertoz Advertising which you need to know before investing here.

At the end of the day, it’s often best to focus on businesses that don’t have net debt. You can access our special list of these companies (all with a history of profit growth). It’s free.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.


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