When you are in control of your money, you have more power and flexibility to craft the lifestyle you want. You have an excess of money coming in and a handle on the money going out, so you don’t feel stressed or pressured by your finances, even when a surprise emergency expenditure occurs. Being in control of your money is a critical element of being in control of your life — but for some reason, you just can’t manage to do it.

Believe it or not, it probably isn’t a mystery why you still aren’t in control of your finances. Consider the following list of reasons why many people fail to manage their money, and think about making some changes to the way you live to keep your earning, spending and saving in check.

You Are Neglecting Your Debt

You will never be in control of your money if you don’t first gain control of your debt. Debts can accrue slowly, over time through things like credit cards, and debt can appear suddenly and massively in the form of a car or home purchase or student loans. Equally easy to accrue is business debt, which will impact many more people than yourself if allowed to grow unchecked. If you are suffering from a serious amount of debt, either personally or in your business, ignoring it will only make your financial situation worse. A much better strategy is understanding what your debt is, where it is and how you can systematically gain control of it to benefit your finances overall.

There are all sorts of tips and tricks for dealing with debt in a constructive way. At the very least, you need to be making your minimum monthly payments, but you might consider the snowball method or the avalanche method to rid yourself of debt faster. Debt isn’t inherently a bad thing, but you need to have a handle on it if you want greater control over your money.

If you are suffering from a serious amount of debt, either personally or in your business, ignoring it will only make your financial situation worse.

You Are Spending Frivolously

One reason your debt might be out of control is that you can’t manage your spending properly. Even if you start with a great fortune, you can lose it rapidly with excessive spending on things that don’t add to your wealth or the betterment of your business. Typically, frivolous spending isn’t merely buying yourself a coffee every morning; it is buying a coffee, buying lunch out, buying dinner out, buying new clothes, buying home décor and buying other things you really don’t need. In short, improper spending is a habit that you need to work to break.

Again, there are several strategies for overcoming this bad habit. Perhaps the best is employing money management software, which helps you track your spending and apply it to a carefully created budget. It is much easier to control your money when can see exactly where it is going and when you can see that the changes to your spending are having a positive effect on your finances overall.

You Aren’t Increasing Your Income

There are two ways to build your wealth: stop sending money and increase your income. If you have your spending under control, but you are still struggling financially, it might be that you don’t have enough income to manage your current lifestyle. In general, having more money makes it easier to manage your money because you don’t need to worry as much about covering necessities like food, rent/mortgage and utilities. The absence of financial stress allows you more freedom to experiment with money management strategies, which can be fulfilling and fruitful.

[ymal]

At present, increasing your income might be a difficult prospect — but that doesn’t mean you shouldn’t try. If you are currently employed, you might ask your employer for a raise; a 10 or 20 percent raise every year or so will help your salary remain competitive in the market and meet the demands of inflation. You might also consider obtaining a side hustle, either a second job during your typical off hours or else a way to turn a hobby into a money-making endeavor. However, it’s important to remember that your life shouldn’t only consist of work; you need time for yourself to avoid burning out and losing all income.

Everyone wants to have impeccable personal finance skills, but the truth is that not everyone has the discipline to build them. It takes time to develop the knowledge and habits necessary for excellent money management, and if you are intent on gaining control of your finances, you should start paying attention to your debt, reducing your spending and increasing your income today.

According to Roberts Lasovskis at investment platform TWINO, the year ahead is an opportunity to get onboard with the changes happening all around us, embrace regulation, and create solutions that focus on the customers.

Lendy’s collapse in May and FundingSecure in October put a combined £240m of savers’ money at risk, while Funding Circle’s new withdrawal processes have raised investor concern among even the most well-established lenders. But there is light at the end of the tunnel, and the industry can be optimistic for 2020, providing last year’s lessons are learnt.

Firstly, there is one particular aspect of the two peer-to-peer collapses last year that has attracted much of the criticism from both media and investors. Both Lendy and FundingSecure came advertised as ‘approved by the FCA’, yet in collapse, both displayed structural faults and warning signs that should perhaps have been noticed earlier. Managing credit risk is an expensive learning process, but should be taken very seriously, and using as many data sources and as much testing as possible. Inevitably, these high-profile failures will cause a tightening of regulation across the industry. That is a good thing.

The sector should not just tolerate and survive regulation; it must embrace it. Higher levels of scrutiny from administrators lead to better industry structures and more robust business models that generate greater trust from consumers. This is an inevitable step for a maturing industry, and now is the time for peer-to-peer to ensure its regulations are fit for purpose, and that investor money is not put at unnecessary risk.

Higher levels of scrutiny from administrators lead to better industry structures and more robust business models that generate greater trust from consumers.

As well as building consumer trust and engagement in the sector, increased regulation encourages the development of better products. When regulation works well, companies are forced to innovate and adapt to meet the new challenges, eliminating the number of shortcuts or ‘easy options’ that are taken when developing a product for consumers. Ultimately, this creates safer and more sustainable returns for investors.

Beyond regulatory intervention, it is paramount that in 2020 the peer-to-peer industry prioritises transparency - with investors, borrowers and other industry partners. Transparency and clear communication are key to rebuilding trust in the sector, and even in specific products. Take Funding Circle as an example. It is undoubtedly one of the most successful businesses in the sector, and yet has been suffering a recent crisis in trust, which has been largely caused by customers not fully understanding what procedural changes are going to mean for their money.

The changes in question are not necessarily the full problem. The model is no less safe and the business is no less high-profile. Nor do investors automatically object to the idea of a delay before they can access their money (look at fixed-term savings accounts for example). As with all peer to peer lending platforms, it is simply a question of understanding risk - customers misinterpreted the changes as a sign that their money was under threat and understandably rushed to protect it.

[ymal]

As with all communication, and this goes for most industries, the customer must always come first. Fintech itself exploded as a sector in the wake of the 2008 financial crash, as a reaction to bad practices in the financial services industry. New businesses and solutions were developed to fix the shortcomings in finance and financial services, and to pivot them back to a consumer-focus. Many are predicting an economic downturn in the next year or couple of years, following a decade of growth. Fintech businesses emerged from the last downturn by creating solutions that focused on their customers, and should do so again.

Peer-to-peer is a prime example of how fintech puts customers first, directly connecting those investors who want to see their money grow faster with those seeking convenient loans. For all the perceived problems in the P2P sector, the fundamental market for the products have not changed. By remembering where it came from, and the problems it set out to solve, the sector can still thrive in 2020, even if the predicted economic downturn materialises. To avoid the pitfalls other providers have fallen into, peer-to-peer must embrace regulation, communicate with transparency and focus on leveraging their expertise to provide trustworthy customer-centric solutions.

Below Finance Monthly hears from Steve Moss, Founder and CEO at P2P lending specialists Sourced Capital, on the ins and outs of the FCA regulations, the overall plans behind the new rules and what investors can expect when applying for financing.

These stricter onboarding measures now require potential investors to answer a number of questions focused around investment, to ensure they possess the required knowledge to make educated decisions when investing, thus improving the sector for investors from a quality control standpoint and ensuring they receive a greater level of security and protection, a positive for P2P lending industry as a whole.

At our firm we place investor welfare at the heart of their business model and see these regulatory changes as the first step towards a more transparent, investor-friendly sector. We've recently invested in a new platform that provides a simpler and easier user experience for customers in anticipation of these industry changes, so that while standards progress, the ease at which someone can invest remains the same.

The platform means that customers can transfer their ISAs online and use it to invest in property instantly with e-wallet control on their integrated dashboard. Investors can also invest with their SIPP or SSAS pension, or regularly with cash.  The company also uses regtech processes such as an anti-money laundering check (AMC) and know your customer (KYC) identification checks. The AMC and KYC checks are in place to verify the identity of individuals carrying out financial transactions and screen them against global watchlists.

[ymal]

But while Sourced Capital has worked hard to keep the process as straight forward as possible, these latest changes have still left some investors a little deterred, so what should you expect when tackling these newly introduced questions?

The areas covered to ensure investor knowledge are quite robust and include but are not limited to topics such as: -

• The nature of the client’s contractual relationship with the borrower, and with the platform.
• The client’s exposure to the credit risk of the borrower.
• Their understanding that all capital is at risk.
• The understanding that investments in P2P lending are not covered by FSCS.
• That your returns may vary over time, that entering into P2P agreements or investing in a P2P portfolio is not comparable to depositing money in a savings account.
• That where a platform has not adopted any risk mitigation measures, the extent of any capital losses is likely to be greater than if risk mitigation measures were adopted by the platform, the role of the platform and the scope of its services, including what the platform does and does not do on behalf of lenders.
• The risks to the management and administration of a P2P agreement or P2P portfolio in the event of the platform becoming insolvent or otherwise failing.

While this may sound daunting, the process is designed to really boost the level of investor knowledge and this will be gauged through questions such as:

When Underwriting a Loan for a New Project Sourced Capital will:

❌ Do no Due Diligence at all as Lenders Will Do Their Own Research

✅ Sourced Capital Carries out Due Diligence Internally and Remotely. Though Lenders Are Advised to Carry Out Their Own Research on Every Investment They Make.

How should you manage the risk of your investments?

❌ Put all my money into Peer to Peer Lending

✅ Build a diversified investment portfolio covering many different investment classes after seeking independent financial advice

I Have Invested with Sourced Capital and Received Great Returns, This Means:

❌ I Will Continue to Always Receive Great Returns, My Capital is Not at Risk.

✅ Past Performance of Investments is Not an Indication of Future Performance. Each Investment I Make Should be Considered Individually

These stricter onboarding measures now require potential investors to answer a number of questions focused around investment, to ensure they possess the required knowledge to make educated decisions when investing, thus improving the sector for investors from a quality control standpoint and ensuring they receive a greater level of security and protection.

But are these measures enough?

They are at the very least, a step in the right direction.

The Peer 2 Peer sector has received some stick over the years and as you’ll find with all business areas, there are certain less scrupulous types that sometimes drive this, whilst some of us have been working hard to raise the bar. These latest regulatory changes by the FCA are a positive step in the right direction in terms of improving standards and investor welfare across the board, and the extensive knowledge now required will ensure that investors are far more educated than previously and not only does this help them in terms of the decisions they will make, but it helps improve the quality of the sector as a whole.

Of course, there is always more that can be done and until this is introduced at the top level, it’s the responsibility of us as sector professionals to drive positive change. For example, all our investors get a first charge against the property invested in, which gives a greater level of protection and lowers risk but is something that not all platforms do.

We always recommend that investors only opt for FCA approved companies which again reduces risk, while we also only loan at maximum loan to value of 70%. We also offer all investors the chance to view a project and to learn directly from us which again, is something that other platforms don’t offer, but for us, it provides greater transparency and trust while helping improve knowledge on a particular investment.

Prolonged repayment duration, higher loanable amount, and efficient application are a few among many reasons why people tend to opt for personal loans. Before going through to its other advantages, it is crucial to know the most common types of installment loans.

Types of Installment Loans

Auto Loans
Auto loans are a kind of installment loan that’s meant to be applied when planning to purchase a car. Typically, this type of loan is repaid within a range of 12 to 96 months. Take note, however, that not all lenders have the same duration of monthly payments. Usually, loans with a longer-term repayment come with a lower interest rate, while loans with a shorter repayment term have a higher interest rate.

Mortgages
If auto loans are for buying cars, mortgages are for purchasing a house. Most mortgages usually have a duration of 15 to 30 years of repayment, as well as a fixed interest rate and set monthly payments that often don’t change.

Personal Loans
Personal loans can be used for a variety of purposes. You can get this loan to consolidate your debt, pay off sudden bills, or finance a major purchase. Typically, personal loans should be repaid within 12 to 96 months. One downside of personal loans is that they come with a high-interest rate as lenders don’t usually require collaterals, unlike auto loans and mortgages.

Advantages of Installment Loans

As stated earlier, there are several reasons why a lot of people prefer installment loans than any other kind of loan, including repayment duration, higher borrowing limit, and efficient application as some of its benefits. Specifically, here’s a roundup of the reasons why an installment loan can be the best for you.

[ymal]

Higher Borrowing Limit

Because installment loans offer a more extended repayment schedule, banks and other lenders can give you a higher borrowing limit. This is an amazingly good advantage when you’re in need of a big amount of money, especially during emergencies. Plus, a larger borrowing limit removes the possibility of applying for multiple loans in the future.

Quick and Easy Application

The application for an installment loan can be either personal or online. Most people prefer applying online because of its fast and offers an immediate response not so long after the application. Take CreditNinja, for example. They offer a software application intended for borrowers, which can be awesome for people who don’t want to leave the comfort of their home.

Quick Cash

Many lenders offer a quick credit check that makes the process and approval quicker. Once you get approved, they will deposit the funds directly into your bank account as soon as possible. They also offer flexible repayment terms, depending on the type of loan and repayment plan you applied.

Options For Any Credit Rating

Even if you have a poor credit score or financial issues in the past, you could still be able to apply for an installment loan. Many lenders don’t regard a loan applicant’s credit score as their only deciding factor. An applicant can show other essential documents, like payslips, paychecks, or proof of billing, to serve as another determining point for his/her credit rating.

Apply Any Time of the Day

Banks and other traditional lenders follow certain standard business hours between 9:00 AM to 5:00 PM. Meaning, they can’t always be accessible 24/7. Fortunately, online lenders offer round the clock services. If an unexpected situation happens and you need some quick cash, you’ll just have to access the Internet to apply for a loan online.

If it’s a big sum of money and you need to do over-the-bank counter, you might need to wait for the next day. The good thing is you don’t have to spend more time at the bank as your application has already processed.

Flexible Repayment Terms

One of the most significant benefits of installment loans is that it offers affordable repayment terms to the borrowers. Instead of paying a large sum of money in one go, a borrower can repay the lender with lower payments with a fixed interest rate in a fixed schedule. Paying in reasonable amounts allows a borrower to start working out his/her financial management.

Takeaway

Installment loans can be a solution when you’re in need of immediate cash, not to mention its flexible repayment terms. It’s good for borrowers who are only planning to loan upfront. Just be careful not to treat installment loans like payday loans. Just like any kind of loans, an installment loan doesn’t affect your credit score as long as you always pay on time. Don’t ever think of refinancing so you can extend a repayment date. Otherwise, your debt burden will grow.

We saw the digital transformation of eCommerce with what 10 years ago was a complex process to open an online store that can now be accomplished in minutes. Gone are the expensive payment provider integrations with the rise of Shopify opening an online store is a streamlined and automatic process.

With the automation through machine learning and artificial intelligence of once complex lending processes, the same can now be said for how eLending is completely changing the banking and financial worlds.

Unified Lending Management - What It Is & How It Automates Lending

Unified Lending Management (ULM) is the concept that describes the complete complex of measures business undertakes to digitalize their crediting processes.

A solution that can automate all steps in the lending process from the loan origination approval through to the collections and reporting process is the way that lending processes can be automated to be as easy as the opening of a Shopify store.

One company leading the Unified Lending Management (ULM) industry in terms of innovation and reliability is TurnKey Lender. TurnKey Lender designs and develops end-to-end intelligent software products that automate the entire lending process.

TurnKey Lender offers software solutions that automate every part of the lending process for different types of creditors: money lenders, SME financing companies, grant management institutions, leasing, trade finance, in-house financing, and bank-grade lenders. Currently, TurnKey Lender serves customers in over 50 countries as the trend is developing. The functional modules, that come either fully integrated or as separate tools, cover application processing, loan origination, risk evaluation, underwriting and credit decisioning, loan servicing, collection, and reporting.

How Artificial Intelligence Drives Lending Automation

Led by Dmitry Voronenko, who holds a Ph.D. in Artificial Intelligence and has been creating banking solutions for decades, TurnKey Lender heavily invests in the idea of applying machine learning, deep neural networks, and other AI approaches to make the lending process more streamlined, intelligent, and secure.

This is an example of how technology and science can often take complex matters and make them simple and automated. Below is an overview of the thinking process that TurnKey Lender’s credit decisioning engine does. Additionally, it conducts the complete risk evaluation and credit decisioning process within a 30-second time frame. It would work even faster if requests for risk profiles came back from credit bureaus faster.

To deliver the most accurate and secure system for credit decisioning possible, TurnKey Lender developed sophisticated models powered by both deep neural networks and proven statistical techniques. The solution combines numerous evaluation approaches in the assessment of each borrower.

In order to build the process to be more potent than traditional scoring, the contributing parameters can include financials scoring, firmographics, credit bureau evaluations, loan application scoring, and bank account statement scoring with rules, decision trees, cross-checks, and calculations.

In the new digital reality, AI-powered credit decisioning allows lenders to:

• Build up a fast and secure loan origination process
• Automate every step of borrower`s digital journey
• Find and filter out potentially ineligible borrowers based on sophisticated proprietary models powered by deep neural networks
• Reduce the operational costs of origination
• Be prepared for an increase in loan application volumes and expansion into new markets
• Enable unhindered scalability of the lending business

Conclusion

Dmitry Voronenko, CEO and co-founder of TurnKey Lender

AI-powered credit scoring system is a part of TurnKey Lender’s Unified Lending Management solution and it can be delivered in tandem with many other pre-integrated systems or as a stand-alone tool. The system provides a choice between a fully automated borrower`s digital journey and a semi-automated creditworthiness analysis. This helps lenders combine the power of predictive models with the knowledge of in-house experts.

For more info about the company’s lending automation solutions or for a free personalized demo, contact the TurnKey Lender team at sales@turnkey-lender.com.

And to wrap up, here is a quote from Dmitry Voronenko, CEO and co-founder of TurnKey Lender: “The importance of this kind of proprietary technology is hard to put into words. This scoring has the potential to make business crediting across borders and industries safer, faster, and more lucrative for everyone involved.”

QuickQuid, the UK's largest remaining payday lender has revealed that it will close down, with US-based owners, Enova, stating that regulatory uncertainty being the key reason for their decision. Whilst the UK payday lending market has taken advantage of the most vulnerable consumers for too long, a question mark looms over the lending industry in the UK.

FairMoney.com have unveiled that 10.5 million Britons are in the worst financial position ever, with 53% stating that they have a weekly disposable income of less than £0. With the continual failings of the peer-to-peer market, and the long overdue closing of payday lenders in the UK, Britons need access to fair finance. Businesses such as FairMoney.com provide valuable consumer services by providing comparisons for a variety of loan sizes, with the most accommodation interest rates.

Dr Roger Gewolb, Executive Chairman and Founder of FairMoney.com, has commented on the closure of QuickQuid and provides financial advice for those 10.5 million Britons experiencing their worst financial position: “Both the payday loan industry and the relatively new 10 year old peer-to-peer lending industry are vital for consumers, especially that segment of the population that cannot easily obtain credit.

“The excesses and exploitation of the payday loans industry were finally curbed by legislation in Jan 2015, in part due to FairMoney.com and the Campaign for Fair Finance’s efforts, and the rates now charged and lenders’ terms are now fairer, even though this has caused some 70% of the industry to go out of business.

“In the same way, we want the P2P lending industry to survive and prosper, and have no more of these dreadful, drastic, dramatic failures, for the people who cannot readily get money from the banks and also for investor/depositors with extra cash who can get a higher interest rate than what is available from the banks, all as originally intended. I would not be surprised if a major P2P platform collapsed before Christmas, highlighting the risks that investors and consumers could be undertaking. Proper regulation and supervision by the Bank of England will ensure no more failures and that the industry can be properly realigned, hopefully without a huge chunk of it disappearing as with payday.”

Here Sarah Jackson, Director at Equiniti Credit Services, reveals some surprising stats about millennials’ attitudes to credit and explores with Finance Monthly what it all means for lenders targeting this demographic.

According to Equiniti Credit Service’s latest UK research report ‘A three part harmony: how regulation, data and CX are evolving consumer attitudes to credit’, despite millennial borrowing increasing annually by a healthy 8%, three fifths of this age group will still only consider borrowing from a traditional, well-established lender, or one that they had dealt with before.

That’s weird

Right. Particularly when it’s clear that alternative lending is gaining traction across other age groups and showing strong overall growth of 15% in 2018. The same report revealed that some 62% of all UK consumers would consider alternative sources of credit (I.e. a non-bank, such as a retailer or car finance provider) the next time they apply for a loan. While consideration does not equal action, the figures about take-up also support the trend: over a quarter of consumers who borrowed over £1000 in the last year did, in fact, use an alternative lender over a traditional high street bank.

If both millennial borrowing and alternative lending are on the up, why is there a disconnect between the two?

So, while non-traditional lenders are not yet competing with banks in loan volumes, they have certainly established themselves within the market. Which begs a question: if both millennial borrowing and alternative lending are on the up, why is there a disconnect between the two?

Customer inexperience

The story, as usual, lies in the data. Although 70% of UK consumers are comfortable completing loan application processes digitally, this figure drops to 57% for millennials specifically. Considering this age group’s well documented digital literacy, this can only be chalked up to financial inexperience. Older generations have not only had more time to become comfortable with the credit processes involved with a loan application, but most have also had more opportunity. External factors play a big part here too. House prices are such that for many millennials, unlike previous generations, the prospect of buying a house and applying for a mortgage at a relatively young age doesn’t even feature on the radar. As such, this group has less exposure to credit processes.

Financial inexperience creates a need for more careful guidance and reassurance. This likely explains why over half (58%) of millennials would only consider borrowing from well-known or previously used lenders.

A helping hand

For lenders, this is both a problem and a huge opportunity. With many millennials now in their mid-thirties, their collective buying power is set to increase substantially over the next decade, making this an increasingly lucrative target market.

That this knowledge gap exists is a chance for the smartest non-traditional credit providers to differentiate themselves as genuine and credible sources of information and guidance for these nervy borrowers.

A great user experience (UX) will undoubtedly help, but will need to be far more than a facility for fast and convenient access to credit.

A great user experience (UX) will undoubtedly help, but will need to be far more than a facility for fast and convenient access to credit. This notion is given further weight by the same report which indicates that one in seven applicants cite clarity of the product’s documentation as the most important factor when deciding between lenders. Persuasive and confidence inspiring UX goes far beyond origination – it must resonate throughout the entire loan lifecycle.

To successfully target millennials, this means balancing investment in a slick digital user interface and the development of clear and simple documentation. Since this group values one-to-one guidance, the contact centre will be a key battleground for business. Here, engaging a specialist outsourcing partner may well be the way to go. These providers are trained and skilled in supporting the kind of dialogue that younger generations need to confidently apply for credit.

They deem it to be a “high risk” product and have recommended limiting P2P lending to 'sophisticated investors’ only. Below, Finance Monthly hears from Frazer Fearnhead, CEO at The House Crowd, on why we shouldn’t’ be restricting P2P lending.

This is likely off the back of the recent collapse of mini bonds provider London Capital & Finance, which persuaded customers to invest in bonds (with a ‘fixed’ 8% interest rate) that weren’t ISA eligible. Sadly, some 14,000 people have lost most of the £214 million they had collectively invested. This has, understandably, increased regulatory scrutiny of similar products marketed to retail investors.

Nonetheless, the FCA is lumping all P2P lending companies in with London Capital & Finance, which is patently unfair. The company marketed a product as an ISA, but wasn’t one at all – it was a mini bonds investment – so we’re not even talking about comparable products here. Plus, it obviously wasn’t acting in a regulated fashion and, as a result, it’s a knee-jerk reaction to lump the whole P2P industry together with it.

Democratising investment options

Peer to peer lending, including products such as IFISAs, allow everyday people to access the sorts of returns that only high-net-worth and experienced investors historically had access to. Restricting this offering (or warning people away from it unnecessarily) would deal a big blow to the P2P lending industry and defeat its key objectives – for borrowers, to democratise access to finance and for investors, support the ability to lend in return for a better rate of interest.

Why should investments with higher interest rates be reserved only for experienced investors or those who already have significant capital? It’s precisely the savers who are working to build up a nest egg for their futures who should have such opportunities, especially since lending is much easier to understand than more complex investments. If they’re only left with options like cash ISAs (which won’t necessary beat rising inflation), they won’t be able to do it.

Why should investments with higher interest rates be reserved only for experienced investors or those who already have significant capital?

The FCA said that “anyone considering investing in an IFISA should carefully consider where their money is being invested before purchasing an IFISA.” Of course, this is still true – all investments should be carefully considered before they’re undertaken. But that doesn’t mean that we should completely rule out one of the most accessible investments available on the market today.

P2P is a diverse landscape

Another issue is that, at the moment, it seems the FCA can’t (or won’t) distinguish between different types of P2P loans with different levels of security. It’s true that many providers offer unsecured loans, but there are others that do offer more security. Lending can be secured against an asset which helps to mitigate the risk of the borrower defaulting, as a legal charge over the asset can force its sale and regain investor capital. Other lenders also operate a ‘provision fund’ as an additional security measure.

The FCA has previously warned of introducing ‘appropriateness tests’ in order to restrict who P2P lenders can market their products to, but the problem with this lies in conflating products that are in fact very different from each other. Not all P2P lending products are the same – levels of security do vary by provider, but if the right due diligence is conducted and processes are put in place to mitigate risk, they can offer consistency and reliability. Similarly, we should not look to compare, for example, a stocks and shares ISA with an IFISA. They are fundamentally different – and, arguably, the IFISA can be a safer option.

Ultimately, there are risks involved in all investments, but the answer isn’t in scaremongering. Appropriate education and transparency is what we need to get people investing their money wisely in a variety of options, and we would like to see the FCA do more to support this.

Investment loans, for example, would turn into profits in the near future while bad loans would result in recurring debts, bad credit score and higher interest rates. Car title loans are some of the popular personal loans sourced from private lenders as opposed to traditional sources such as banks and cooperatives.

More often, lenders financing, car title loans would need the applicants to undergo some credit check. While this is a crucial stage in any lending business, the procedure sometimes spoils the only chance an applicant had in order to acquire the so-much-needed money. In the tight economy, car owners who opt for the car title loan usually have a poor credit score with the other lenders and the only way to obtain a loan is to use their car title as security.

Over the years, car owners wishing to obtain a car loan, often don’t want to go through the credit check process since it can worsen their credit score. This has resulted in a friendlier way of obtaining loans without risking their credit reputation. Certain lenders give title loans with no credit check where car owners have to submit a few documents for consideration. Some of the most important aspects used by such lenders to evaluate the applicant’s ability to repay the loan are the presence of a steady income stream and the vehicle’s value.

Listed below are some tips that can help you decide, if you want to get a title loan or not.

Is it a good or bad idea?

This is a simple question with a straightforward answer. It depends on your urgency and of course the condition you’re in. Everyone at some point in time undergoes some financial emergencies such as paying hospital bills, overdue debts, etc. Taking a reasonable instant loan you can get is probably a good idea and a solution to such financial constraints.

A car title loan with no credit check will come in handy if you’re in need of some quick cash without ruining the already-damaged credit reputation. Since banks and cooperatives won’t buy your idea of borrowing a loan with poor credit, the only good idea is the no credit check car title loans. Again, going for a loan to fund some luxuries is a bad idea. Car title loans may come with slightly higher interest rates and you don’t want to pay such interest after funding some mediocre causes.

Requirements for the no credit check car title loans

When you’ve found a car title lender giving no credit check car title loans; you’ll be required to have certain documents with you. These are:

• Car title
• Government Issued Identification document
• Proof of residency
• Proof of income
• Proof of current vehicle insurance
• Personal and professional references

When no lending company would listen to your stories, the only way out of financial shortages is to use the resources you already have with you. Your vehicle is an important asset during such times and you can use it to your own advantage. Regardless of the existing credit score, the no credit check car title loans give you a chance to redeem your hopes without having to beg for what you deserve.

Matt Robinson, Commercial Director at Ping Finance, believes that now is the right time for SMEs to borrow, and here takes Finance Monthly through the reason why.

Low Interest Rates

In the UK, interest rates are still incredibly low. Despite a 0.25% increase back in August 2018, bringing the interest rate up to 0.75%, the UK interest rate is still way below the average that it has been in the past, and this is only a good thing for those borrowing.

At one time, during the Thatcher leadership, interest rates rose to a staggering 17% to combat inflation. Interest rates continued to rise into the late 1980s due to the pressure of increasing house prices. The election of Tony Blair in 1997 gave the control of setting the base interest rate to an independent Bank of England. Interest rates then began to steadily decline, hitting 3.75% in 2003, before increasing again up to 5.5% in 2007. Since then, interest rates have dropped drastically due to the impact of the global financial crisis, falling all the way to 0.5% in March 2009, and then a further drop to 0.25% in 2016.

After the recent rise to 0.75% in August, Mark Carney, governor of the Bank of England, said there would be ‘gradual and limited’ interest rate rises in the future. With Brexit uncertainty on the horizon, predictions for the next couple of years are speculative at best. Therefore, there has never been a better time for the likes of SMEs to borrow. Even with the slight increase, we are currently experiencing one of the lowest interest rates in the UK’s history, and with the likelihood of increases on the way in the next couple of years, borrowing right now is a smart move.

There Have Never Been More Options

Nowadays, SMEs have the luxury of being able to be as picky as ever when it comes to their financing options. The alternative finance market has exploded since banks began to withdraw following the recession; traditional loans are no longer the only option for small businesses looking to borrow.

Crowdfunding, for example, can be an effective way to raise capital by allowing people to make small investments in a project or business. Online lenders can be contacted via online applications, and funds can be transferred into accounts in as little at 24 hours.

Peer-to-peer lending creates a form of borrowing and lending between individuals without a traditional financial institution being involved and can turn out to be a cheaper alternative to borrowing from a bank or building society.

Financial technology, asset-based lending, invoice finance and challenger banks are some other alternatives to traditional high street bank lending. These alternative lenders use algorithms and data manipulation to streamline the loan approval process from weeks down to days at most. With so many viable financial services available, there has never been a better time for SMEs to take advantage of all these different options.

Competition Between Lenders

In a similar vain to there being so many different financial options, there is also heavy competition between lenders. With so many lenders vying for your business, they are doing everything possible to make their services seem more appealing to potential clients. Lower interest rates in conjunction with reduced fees or no fees are just some of what’s being offered by many lenders in a bid to secure your business.

From the perspective of an SME, you have the power to shop around and discover the best deal for you. With so many lenders competing to provide the most enticing offers, SMEs can take advantage of this and get a better deal than they would if they had to go with the first offer they were quoted.

More Business Support

It has never been easier to start a business than right now. There is a lot more guidance and knowledge out there to help people bring their ideas and ambitions to life, and most of it can be accessed for free online.

One of the biggest barriers to starting a business has always been start-up cash, and whilst that is still the case, it’s not as much of a problem as it used to be. Online platforms not only create a global marketplace for SMEs, but it’s easier than ever to contact investors and lenders and start generating cash flow to get your business off the ground.

Obtaining funding is not the only barrier to starting a business; general business support is crucial for SMEs to become successful and be able to pay back their loans. Networking, paid mentorship, free courses, government led schemes, books and the wealth of information on the internet can all be utilised by SMEs to help grow a successful business.

Post-Crash Borrowing

Since the market crash in 2008, there has been a shift in attitudes when it comes to lending. There is a greater focus on lenders to look after borrowers, stamping out shady practices and creating a better environment for those who want to borrow. As 2008 becomes a distant memory, lenders’ appetites for risk has increased, and SMEs can take advantage of this current culture of encouraged lending.

You came to the right place. In this article, we will see how to apply and secure a personal loan.

What to Do Before Applying for a Personal Loan

1. Check Your Credit Score

A higher credit score will make it easy for you to get a loan. If your credit score isn’t good enough, then take steps to increase it before applying for a loan.

You can get a loan with a low credit score but at a higher interest rate.

2. Consider Different Lender Options Online

People usually go to banks to take a loan. Since the banks would be aware of your financial credibility, they would be flexible in offering you a loan.

However, you can also consider other lenders and any Non-Banking Financial Company (NBFC). Verify their credibility before approaching them. Check for loan costs, interest rates, terms and tenure.

3. Compare the Interest Rates

Shop around to check what interest rates different lenders are offering. Compare the loan amounts and the required monthly payments too. Some financial institutions may offer you an unsecured personal loan while a local bank may offer better interest rates.

Apart from comparing personal loan interest rates, check what other charges you may have to bear. These may include processing fees, payment penalties, and foreclosure charges.

4. Check your Eligibility

Banks or other lenders require you to be salaried or self-employed to be eligible for a loan. You should be in a particular age bracket as well.

5. Check the Documentation Required

Check all the documents you require to apply for the loan. These may include your recent payslips, letter of employment, current address, photographs, etc.

6. Choose the Appropriate Lender

Choose a lender who gives you a flexible tenure and different EMI options to pay off the loan. Use an EMI and personal loan interest calculator online to estimate your monthly cash outflow.

7. Read the T&C Document Carefully

Make sure you understand all the terms and conditions before you apply and secure the loan. If you have any queries, ask the lender immediately.
Once you complete the above-mentioned steps, you can apply for the loan – either online or through the financial institution’s app.

How to Apply for a Personal loan

8. Online Application

• Fill up the Form

Fill up the online form and upload all the required documents. In this step, you need to mention:

1. Desired loan amount
2. Contact details
3. Email ID

• Get Instant E-approval

This is the stage when all the documents will be verified. The financial institute will check whether you are eligible for the loan or not. Once all the documents are verified, you will get an instant e-approval.

• Loan Disbursal

After the verification, the loan disbursal process will be initiated. You will have to e-sign the loan agreement document. By doing this, you agree to abide by the terms and conditions of the lender.

Once you e-sign the document, disbursal process will be started. Provide your bank account details where the loan amount will be disbursed.

9. Requests through E-mail or Phone Banking

Leave a request for a personal loan with the bank either through the customer service centre or an e-mail. The financial institute will review your eligibility and contact you to take the process ahead.

10. Offline Request at the Bank

If you don’t want to go the online route, go to the nearest bank of your choice. Talk to a relationship manager and request a loan.

Getting a personal loan has become a very simple process. You can use instant personal loan apps and have the loan amount in your bank account in no time.

However, every owner of stocks, bonds and ETFs has the right to lend these - meaning that in this unrealised market there are around $40tn of assets collecting dust. Below, Boaz Yaari, CEO and Founder of Sharegain, explains everything you need to know about securities lending.

In short, securities lending is due a revamp so that it can be fit for purpose in a post economic crash, 21st-century financial world. This would result in a more efficient and regulation compliant process for large banks and assets managers; huge cash potential for private investors and wealth managers; and greater liquidity and long-term trust in capital markets.

Securities lending is a long-established practice in capital markets that has until now been largely confined to big financial institutions, even though every owner of stocks, bonds and ETFs has the right to lend them. As a consequence, most asset owners know little about this lucrative practice, which has become a global industry with a massive $2tn of assets on loan on a daily basis. Here are some of the intricacies that make this such an exciting space:

Securities lending is a long-established practice in capital markets that has until now been largely confined to big financial institutions, even though every owner of stocks, bonds and ETFs has the right to lend them.

1. Securities lending has been going on for over 40 years. The first formal equity lending transactions took place in the City of London in the early 1960s but it really took off as an industry in the early 1980s. The practice has evolved from a back office operation to a common investment practice that enhances returns for big financial institutions.
2. Securities lending plays an important economic function in capital markets. It brings greater liquidity and efficiency to the market, ensures the settlement of certain trades, promotes price discovery and facilitates market making. It also plays a critical role in derivatives trading, certain hedging activities and other trading strategies that involve short selling.
3. Securities lending is a great source of alpha, and a way to earn from the hidden value of your portfolio. Earnings from lending are dependent on the level of availability of your stocks. The more widely available stocks, known as ‘general collateral’, generally produce lower returns, of up to 0.5% (50 bps). Hot stocks, known as ‘specials’, can command much higher returns varying from 1.0% (100 bps) to over 100% (10,000 bps) annually in more extreme cases.
4. Sometimes short-sellers are right! For example, they spotted that there was trouble with construction company Carillion long before anyone else. A year prior to its collapse, Carillion was the FTSE 250 most shorted stock, which should have sounded alarm bells. However, at other times they are wrong. They can misunderstand the present or future business of a company, as we saw with online supermarket Ocado and a share surge in early 2018 which wiped out $382m for short sellers. At the end of the day it’s not the short sellers who dictate the long-term direction of the stock but the performance of the business itself.
5. Did you know that fund managers, active or passive, engage in securities lending to help boost a fund's performance or offset its costs? This has helped keep index fund charges down, which is hugely important in an age where the hunt for alpha has taken more importance - and where fees are under the microscope.
6. In general, securities lending has negative beta to market conditions, with all things being equal. When stocks rise in a bull market, demand to borrow securities wains and lending rates are lower, but you do enjoy the appreciation of your assets. On the other hand, in a bear market (when stocks depreciate), demand to borrow stocks increases and so do lending rates. This way you benefit from a new stream of income to mitigate the volatile times.
7. Demand for borrowing ETFs is growing exponentially, with the huge swing towards passive investing over the past decade or so, and currently there are over a 100 ETFs returning more than 2.0% (200 bps) to lenders.