The Forgotten Art of ‘Private Financing’ – Being on the Correct Side of Debt

Investing in Debt

I know you “Financial Guru’s” know what I mean when I use the term, Private Financing, but most of us haven’t had your education. And, sadly, our primary and secondary institutions of learning spend little time, if any, on preparing students for the world of credit and debt. Most young people learn about credit, and don’t understand what it means, until they graduate high school and get to college.

The bankers and credit card companies meet freshmen during college orientation and pass out their cards. The first time our students swipe those miraculous pieces of plastic and get what they want, their feeling of financial power is awesome. After all it will be 30 days before they’ll see the billing and interest due for their purchases.

This is, of course, the wrong side of the “debt equation” as I see it. One should want to be on the side of the banker and not be the debtor. But how does one accomplish that?

My, Late in Life, Education

You see, I had no formal education in financing and therefore I was always on the wrong side of the debt. My education in Real Estate Financing started much later in life than it should have. In fact I met Frank, my instructor, about a dozen years ago when I answered an ad about “Investing in Debt”.

Just the ad caption intrigued me enough to call the number and set up an appointment. At first I didn’t understand the idea but after our conversation, the process became more clear. I had never heard the term “Private Mortgage” before that day, at least not by that term.

Private Mortgage Notes

Simply stated, private mortgages are exactly the same as loans you get from the local bank which lends money to buy a real estate. The banker lends the money and the mortgagor (you) pay back the money plus interest over time. You own your house and the bank’s depositors are happy to make interest on their money. Everybody wins!

Private Mortgage “Holders” are little private banks. For instance, your next door neighbor might be a private financier who lends a buyer the money to buy a home. In fact, I found out that my parents bought their first home with a private mortgage, financed by our next door neighbor. They were, by no means financial experts, but they accepted his generosity and bought their first home. What did they know that I didn’t?

A Pleasantly Rude Awakening

My conversation with Frank opened up the extraordinary world of Private Financing and Creative Financing. But before your eyes glaze over and you stop reading, listen to Frank’s story about a farmer, who needed money to buy seed for his fields.

“Having no cash available, he surveyed a piece of his property and offered to sell it for $10,000. A neighbor agreed to buy the property on which to build a house. Between them they created a promissory note or promise to pay $10,000 plus interest over a certain period of time. The purchaser would build his new home on the property. The farmer had just invested in debt by becoming the bank and by receiving payments with interest.” Sound familiar? But there’s more….

Notes Are Negotiable Assets

With no money out of his pocket, the farmer had turned one type of asset, land, into another, a mortgage note, which would provide monthly income (principle and interest) for the life of the loan.

But that was not his plan; he wanted to seed his other fields. So he went to the nearest “Note Broker” and sold his promissory note for about $8,500 and then bought seed and planted a crop which he harvested the next Fall and sold for $20,000, a $10,000 profit over the market price of the land.

Using My New Knowledge

After more conversation with Frank, I caught on and asked a question. “I’m not a farmer, but I own a home which has equity, (market value minus debt) let’s say 50% equity. If I sell my home and create a note for the 50% equity, I can get paid with interest until the loan is paid off?” Let’s say when I want to retire.

All Frank did was smile at my answer. I then realized that I owned a “farmer’s field” right under my own roof. I could become the bank and lend my equity to a potential buyer of my home for principle plus interest or I could “sell the note” and get my cash now.

The Forgotten Art, Revisited

Since that time I have sold two houses using a lease purchase agreements and private mortgages to develop income. One of those was my mother’s home when she moved into a retirement residence. Her earnings over the past 4 years have been over $80,000 which she uses to fund her rent and living expenses, her personally funded retirement fund.

What If They Don’t Pay?

By this time you “Financial Guru’s” and some Attorneys, who are reading this article, are busting to tell my readers that there is a “risk” that the person who borrowed the money won’t pay off. However, government statistics show that about 4%, of the millions of outstanding mortgages, go bad. And that means that, in 96% of the millions of mortgages, the borrowers Do Pay!

Yes,, 96% of mortgagors Do Pay. And you’re rights, to get paid on a “Private Mortgage”, are protected by the law in every State, just like the loans the banks give.

So, what if we actually taught our children about “The Forgotten Art of Private Financing”? And about being on the correct side of the “debt equation”. How much better off would their futures be?

Robert J. Sivori Business Therapy

By way of introduction, I work with start-up as well as established businesses to increase business profits, assist with business planning and expansions using my small business and Corporate America experiences , in other words, I provide “Business Therapy”.

I will help you perform business profit analyses and develop marketing programs and help you obtain business financing. I operate under the premises that as business owners you want to maximize your sales, your profits and achieve your short and long term business goals.

Why It’s Time to Bring Factoring Into Your Financing Equation

In your search for commercial financing in the midst of the ongoing credit crunch, here’s something to factor into your consideration: It may be time to look at factoring in a whole new light.

It’s unfortunate that, for whatever reason, factoring has gotten a bad rap. A lot of the myths about factoring simply aren’t true-for example, that factoring is too expensive to be considered a viable commercial financing option for the average small business. In truth, factoring can make the difference between success or failure for companies operating without adequate working capital-at a cost that’s probably a lot less than most business owners think.

How Factoring Works

With factoring, companies sell or borrow against their outstanding commercial accounts receivable. The cost is a fee called a discount-typically between 2-5% of the invoice or the amount borrowed. By factoring, companies immediately benefit from improved cash flow: Instead of waiting somewhere between 30 and 90 days or longer to receive payment, they will receive approximately 80 percent of the receivable in the form of an advance when the receivable is presented to the factor.

In addition, the factor performs credit checks on customers and analyzes credit reports to uncover risks and help manage appropriate credit limits. Most factors will also provide a follow-up service to assist with keeping the debtors paying more promptly.

One thing to note is that factors need to be more insightful about the inner workings of their client’s business than traditional lenders are. Since they are lending against their client’s outstanding receivables, it’s their job to know all about the client’s customers, terms, backup and the billing process itself. Factors need to possess an in-depth understanding of their clients’ industries and the business nuances between their clients and the clients’ customers.

A Factoring Success Story

An industrial service business in Philadelphia recently entered into a factoring arrangement with a well-established factor because it was in need of short-term working capital assistance and decided on a factoring arrangement instead of a traditional line of credit

Since the business’ customers are of high credit quality, factoring was a logical credit facility for them to turn to. The business has been factoring invoices for several months now and is extremely pleased with the arrangement.

The owner especially likes the fact that he can use the factoring company’s online system to determine how much money he can borrow through factoring at any time, 24/7. This is a big help when it comes to daily cash flow and working capital planning.

Factors for Success

Here are a few areas you should concentrate on in order to increase your chances for factoring success:

• Financial statements, management reports and forecasts: It is important to generate accurate and timely financial statements, as well as for the owner to know exactly where the business is financially at all times-and where it’s headed. By accurately tracking factoring fees, the business is better able to build in and earn back those fees. Value will be gained via an increase in gross sales, discounts for paying vendors early and overhead reduction. Factoring will look expensive unless it is properly measured against the value it brings.

• The factoring contract: Be sure that you understand all details in any contract you sign with a factor, as well as the fees you will be charged. Beware of factors who issue a term sheet without doing proper due diligence. What may appear to be a low factoring rate at the outset could end up being very expensive when things like lockbox, minimum usage, credit checking, and wire transfer fees are included.

• Monitoring of factoring facility and working capital: Make sure that a senior financial person on your staff has sufficient time to monitor usage of the factoring facility and working capital-oriented items. By borrowing only what you absolutely need, you will be able to minimize your factoring expense. It’s also important to monitor the aging reports and become involved if any trade or payment disputes arise.

• Maximum efficiency: Increasing efficiencies in your backroom operation can have significant positive implications on your bottom line. By understanding all the services that your factor performs, you will be able to better utilize your staff and your own time. Understanding the reports and implementing controls and procedures will minimize errors and increase efficiency.

• Open communication: It’s important to have a clear channel of communication with your factor. You might be surprised at the flexibility your factor (and others) will provide when you are open and honest with them. It’s also important that you communicate directly with the factor if you are aware of any issues or problems with your invoicing or customers. A good factor can deal with most issues if aware of them-but like most lenders, factors don’t like to be surprised.

Since a factor will become an integral part of your business team, it’s important to select your partner carefully. Professional experience and adequate capitalization are especially crucial. Don’t be fooled by Internet claims of very low rates and a “24-hour application process.” Good factors are as choosy about their clients as you should be about your financial partner. When everyone performs their proper due diligence, you are more likely to build a foundation for a positive relationship for many years to come.

Lead You To The Authentic Zone Of Money Transfer

If you have an international business and you have to move to many countries for the purpose it is the urgent requirement to find a reliable and efficient money transfer service. Business with any other country will require a resourceful money transfer. This transfer should be fast efficient and safe. Your trade shouldn’t be forced by the variation in exchange rates either. For all these reasons, it is prudent to take the assistance of International money transfer Services available. It will be better to find the reputed and quality one on the internet. It is an internet era and you get different types of information on the internet.
Process Involved
This service helps you find a provider that you are comfortable with. After you decide on the money exchange provider you will need to complete some forms. Once you have established contact, you will be informed about the rules, terms and conditions involved with a deal. Finally, you will be asked to complete some forms to set up your account. You can fix a standard rate for your exchange as well. The whole process is hassle free and once you learn how to go about it, the upcoming transactions will be smooth, effortless and quick.
Exchange Rates
When you wish the inexpensive currency transfer to be done, you should be careful about the rate you choose. With large amount of money a little change can make a big variation for your commerce. When you transfer your money to a bank, they will transfer it at a great exchange rate that you are happy with on the day you have mentioned. Exchange rates promised may differ between agencies that are why you should be careful while choosing one.
Staying in the circle
Most good free currency transfer companies will make sure you are kept in the circle about where your money is. When the transaction is being made, you will be sent a verification message and sometimes even a message. You will be consulted before and after the deal, which assures that nothing can go wrong with the deal. This feature gives you more control over your money.
Expediency and safety
Foreign Exchange is a very expedient way of sending money across countries. When you choose a reliable company, along with good customer service, you will also safer transferring your money. This service is as useful for the common man as it is for businesses. Having an overseas exchange agent working for you is an immense way of saving money. In some websites, you get to check the exchanging rates promised before you sign in to transfer money. This makes it easy for you to select the best in the record.
Currency Exchange near me, this thought is quite wise and intelligent as there is lower risk for the safety of your cash. If you are in Adelaide, you can find a good currency exchange company that has a strong team for a powerful deal of money transaction. A reputed and trustworthy company always offers the better rates and a higher security.

Common Cents When Financing Your Small Business

“The Best Advice is always free”

Starting a small business requires bucket loads of wisdom. Financial wisdom offered through various media is not always inherently beneficial to the reader and their business.

The foundations for financial excellence are elementary and logical; here is a new perspective on financial insight to starting your small business. Making use of purely scenario planning this illustrated scenario would be a recommendation for all businesses that you intend financing.

The average cost of setting up a franchise and small business in U.S.A. is currently in the $300,000.00 to $ 474 000.00 marks, a sizeable sum taking into consideration the prevailing economic climate and business confidence levels.

Loans or Finance

In order to stimulate the economy, banks are eager to finance new business as this has a long-term stimulus on the economy and contributes to job and wealth creation.

Most individuals do not have the entire capital amount available to finance their new venture and financing becomes the preferred and logical route to market.
Taking into consideration the average price of a new franchise $474 000.00, the average cash portion of financing that particular business would be $ 153 000.00 which includes the initial, cash joining or franchise fee.

This would equate to a financing portion of $321 000.00 or 68% of the initial set-up cost of the business.

From a personal and statistical point of view, the gearing or debt ratio is too high and the minimum recommended debt ratio should never exceed 50%.

Why is gearing so important?

It is nerve-wracking and soul-destroying to build a business for you only to allocate the major share of your income and profits to servicing a loan and the commensurate interest payments. The strain on the cash flow and reserve funds is too great, and the business rapidly becomes a financial risk to the entrepreneur and the banks concerned.

“The Free Advice”

Total Cost

When using the above figures as our reference and benchmark, if the inclusive cost of the business is $474 000.00.
It would be prudent to assume that if shares were offered at $1.00 per share then the business would have 474 000 shares on offer.

Share Distribution

Taking my advice of a 50% gearing or financing ratio, the business when financed by the entrepreneur would allocate to the entrepreneur, 50%(237 000 shares) of the shares currently on offer (The portion he/she has paid cash for)
The remaining 50% of shares on offer would be the right and technical ownership of the banks or financing institution.

The Thinking Motivating This Strategy

As the entrepreneur pays off the loan, their ownership or share-holding increases exponentially.
Goals are easy to set, time and financing permitting the entrepreneur sees his/her goal of 100% ownership as achievable and desirable.
When the bank is essentially a partner in your business the relationship changes, the entrepreneur can take the banks perspective into consideration as they are a valuable share-holder, the logic of having a “you” and “me” approach becomes a “we” approach to the business.
Any extra funds available will inherently go toward servicing the loan on the business.

The Ultimate Lesson

That our thinking and approach has changed, it is a recommendation that one ignore financing by financial institutions and approach friends, acquaintances, and family to finance your business using this share-holding approach. The entrepreneur develops a fiscal policy that is easy to equate and calculate, profit distribution is just as equitable, and the entrepreneur has a clearer indication of the status of the business free of financing and interest costs and charges.

Judge Some Facts Before Exchanging The Money

When you will go traveling, then you have to take the things, which you will need in that place. It is necessary because you will not get the facilities of your home there and you have to be prepared for every situation. But when the matter comes to the visiting of a foreign country, then apart from our excitement we have to think about the thing first is the money. As all of us know that there is variety in the currency of different place. So, we must take the proper currency of that place as we cannot do anything without it. There are some methods, by which you can exchange the money, like the banks, the ATMs or from some brokers.
The banks are the most reliable medium for exchanging the money. You can be assured by the fact that you will get the service authentically. They will systematically exchange the currency and you don’t have to think about it. You can also convert it from the banks of that place also. You will get the same reliable service. But as you are going to a public sector, then it will take some time and you have to wait for it. So, if you don’t have the time to wait there, then you will face difficulty by exchanging through the banks. The banks also charge high rates for converting the money, then it can be expensive for you.
You can take the money from the ATMs also. It is the most convenient medium for getting your cash, as you yourself will draw the money and you don’t have to depend on someone for this. So, you can take the money whenever you needed and it is the fastest service. But there I also the problem, as the ATMs charge a very high price for drawing the money. It will become more expensive for you as you have to pay more than the normal transaction. If you think that you will get the money at a time, then also it will not be safe for you to carry so much money to an unknown place. But with every transaction, you have to pay the charge.
When you will try to go some brokers for Cash Exchange, then it becomes easy for you as you can get the money by sitting at your home. You can do it by online and the agent will come to your home and will take the money from you and will also return it within the given time. It can be a suitable option for you as you don’t have to do anything for the exchanging the cash. But there also can be a problem as the matter is about your money, then you have to be a little careful and have to know about the broker and the agent, who will be the medium of transaction. If they are not reliable enough, then your money will not be safe enough. There is also the matter of the false currency as it has happened in the services like Australian Currency Exchange. So, be careful about every facet of exchanging your money so that you don’t have to waste your money in the wrong place.

Top 5 Benefits Annuities Can Bring Except The Lifetime Income

Earning a consistent income in their retirement life is a major concern for the seniors approaching their retirement and many of them invest in different annuity insurance plans. These annuities help the insured to receive a guaranteed income for life protects from the fear of outliving their savings. Also, if a senior couple hasn’t saved enough or doesn’t have someone to support after their retirement, these policies help greatly to take care of their daily expenses and maintain a better lifestyle. However, the majority of seniors isn’t aware of all the benefits an annuity can bring. Most of them buy an annuity solely to receive a guaranteed income in their retirement life but the annuities have a lot to offer. Here, we are going to explain five more benefits of a retirement annuity plan that you might not be knowing.

Benefit to your loved ones

At times, seniors pay a long series of premiums to earn them back during their retirement but die at an early age without receiving the complete benefits. Many seniors die soon after their retirement and insurance providers keep their share of investment with themselves. But, the new additional feature allows transferring the benefits to the beneficiaries, if the insured dies early. Along with the immediate annuity plan, you can choose a guaranteed period of 10-20 years that are calculated since the time you start receiving the payments. If you opt for a 20-year guaranteed period with the annuities, your insurer will provide a series of payments for exact 20 years. You can name your spouse or kids as the beneficiary and they will receive the benefits for rest of the period, in case you die early.

Tax deferral on earnings

Most of the investments are applicable for state and federal taxes, but the investments such as interests, annuities, dividends and capital gains earn a tax-deferred status. These investments are tax-free until you withdraw the accumulated amount. The tax-deferral is similar to 401(k)s and IRAs, but there isn’t any limit on the amount and you can put any amount into the annuities that you assume enough to spend your retirement comfortably. Moreover, the minimum withdrawal criteria have more flexibility than that of to 401(k)s and IRAs.

Tax-free investment transfers

Market performs differently at a different time and an investment performing strong today may perform poorly after a certain period. Hence, investors keep transferring their investment amount form one to another fund and there are financial advisors to help with the same. Usually, these investment transfers or rebalancing are applicable for taxes but the annuity retirement plan has no such tax consequences. That means, you can rebalance your investments as per your financial advisor’s suggestion and you won’t have to pay any taxes on that.

Protection from lenders

People take different types of loans to match a better lifestyle and pay the due amount in installments. At times, people reach a stage where they only have the money enough to take care of their fundamental requirements and aren’t able to pay the loan installments. In such cases, if the lender files a lawsuit, they may lose the return on the investments made. Annuities insurance policies also help protect your investment return even if you can’t make the installments. Usually, the premiums you have made to your insurance provider, belongs to them and there are laws that restrict that money to be accessed by the lenders.

Variety of investment options

Insurers help the investors with a range of annuity options at retirement including the fixed and variable one. The first one credits a certain rate of interest on the amount you deposit while with the later, your money is invested in the stock or bonds like mutual funds and provide a return based on the market performance. Also, various insurance providers have introduced different types of floors that set a limit by which your investment value may not fall further. That means, if you have invested in a variable annuity, you return won’t fall below a certain value, despite the fluctuations in the market.

Tax Considerations When Re-Financing

For many homeowners the overall goals of re-financing are often paying less in interest overall and reducing monthly payments. When a homeowner is able to obtain a lower interest rate, there is usually the opportunity to re-finance the mortgage to capitalize on the lower interest rate. However, a lower interest rate does not automatically translate to a savings. The homeowner must carefully consider the amount of money they will be savings over the course of the loan in relation to the amount of money they will be spending to re-finance the mortgage. When the closing costs associated with re-financing are larger than the savings, re-financing may not be warranted. Re-financing can also have financial ramifications associated with tax options.

Paying Less Interest Equals Less of a Deduction

In most locations, homeowners are permitted to deduct the amount of taxes they pay on their mortgage when filing their tax forms. This is usually quite a substantial deduction for homeowners who owned the home for the entire tax year. Those who re-finance their mortgage will typically be paying less money each year in taxes on the mortgage. While this is great in the long run, it can adversely affect the homeowners tax return.

Consider a situation where a homeowner is located just below a major tax bracket which would be quite costly for the homeowner. As all ready discussed, re-financing may result in the homeowner paying less money in taxes each year. This means the taxpayer will be able to make a smaller deduction this year now fall above the tax bracket they previously fell below. When this happens the homeowner may find themselves paying significantly more in taxes.

Consult a Tax Preparation Specialist

Determining the exact ramifications of paying less interest on a home mortgage on a tax return can be a rather tricky process. There are a number of difficult equations involved which can make the apt to make mistakes while trying to determine the consequences of paying less in taxes on the mortgage. For this reason, the homeowner should consult a tax preparation specialist when determining whether or not re-financing is worthwhile because the tax specialist can provide information regarding the impact of paying less in interest.

In selecting a tax preparation specialist, the homeowner should seek out opinions from friends and family members if the homeowner does not employ a specialist to prepare their own taxes. This can be helpful because trusted friends and family members are only likely to recommend professionals they feel were knowledgeable, trustworthy and caring. A tax preparation specialists should have all of these qualities but should also be well versed in the area of tax preparation. This will enable the tax preparation specialist to make all of the right decisions when considering the needs of the homeowner.

Online Calculators

For homeowners who do not know a tax preparation specialist or for homeowners who are unable to afford the consulting services of these individuals, there are online calculators which homeowners might find very useful. These calculators are readily available throughout the Internet and can be used to determine the tax ramifications to re-financing. These calculators ask the user to input specific criteria then returns results regarding the amount the homeowner will pay in taxes during the year if he refinances. Additionally the homeowner can run these equations several times to consider a number of different scenarios.

The Benefits Of Trading The Commodity Market

Like trading in the Stock market, trading in the commodity market is also very interesting. While one trades on the basis of Stock Cash Tips in the stock market, the trader can trade on the basis of commodity tips in the commodity market. ProfitAim Research is one such advisory firm, which provide both the best Stock Cash tips as well as commodity tips to the traders.
Commodity market seems to be a lucrative avenue to a lot of traders and Investors. In the Commodity market various commodities are traded and one can take benefit of the price fluctuations to trade effectively in the commodity market. Various commodities are listed on the Commodity exchange and the relative prices of various commodities are traded on the exchange. There are various benefits of the Commodity trading like a trader can make huge profits by trying to forecast the Commodity signals. The most important part of the Commodity trading is to anticipate the Commodity trading signals.
Scalping: Intraday Trading Strategy For Commodity Market
One of the important benefits of the Commodity market is that the trader can form a strategy and trade on the basis of it. The Intraday strategies like First hour strategy or scalping techniques can be followed to earn good profits from the trades. Scalping is a technique to look at the price range during the first hour of trade and then look for a breakout from this range. Thus, if the prices break from the high it’s a buy call and a rise in the prices is anticipated. On the other hand, if a breakout from the lower limit of range is observed a down trend is anticipated. Thus, scalping is an important strategy in achieving good profits from the Commodity markets.
Also, there are other strategies available like trading for small profits. In this case small changes in the Commodity signals are generally traded for the profits. Also, a large number of trades are executed to add up to large profits, this will be applicable in Stock cash tips as well. The Commodity trading signals are unassuming but still with a proper plan and a proper strategy good profits can be made through Commodity markets. The trader can also base their trade based on the advice from the advisory firms who provide free Commodity signals initially and then charge a nominal amount for their services. Thus, the Commodity trading is beneficial if done with proper planning and strategy.
Trading based on the Charts
Trading in the stock or commodity market is an art difficult to master. People use various methods and strategies to trade in the stock markets. Trading based on the charts is one of the ways out of them. Various types of charts exist like Candle Stick charts and line charts. These charts can be plotted with varying time scale. The price movement depicted by chart can be an important way of forecasting future prices.
Thus, one can trade on the basis of charts and by applying suitable indicators of the technical analysis, one can anticipate the price movement. Trading on the basis of intraday Stock Cash Tips is the other way of trading.

Does Social Media Help In Getting An Auto Loan?

We live in a world dominated by technology and social media. Whether they are your shared posts, status or your connections, social media platforms play a key role in carving your virtual personality. A well-known fact is that technology is an inevitable yet an integral part of our lives. When it comes to financing your car, social media is building its way and becoming a relevant medium of profiling. For instance, John walked into a dealership to purchase and obtain financing for a car. The quickest and easiest way to search for a tentative background of John would be to get a grasp of his personality on the basis of his behavior on Facebook and Twitter account, respectively. Currently, a small percentage of lenders use social media for judging an individual’s creditworthiness. However, the developing presence of social media is gaining mind share of the lenders.

Can Social Media help in ascertaining the Creditworthiness of an individual?

1) Facebook can build your Credit Circle

The very essence of Facebook lies in networking. A creditworthy profile does not require millions of posts or many friends. However, if you have a genuine profile and do not pose any abnormal social behavior, your profile is likely to get approved for an auto loan. Additionally, the presence of certain contacts in your friend list with a clean history and a strong credit score further add to your creditworthiness. Lenders can look for mutual contacts that have been previous customers. The payment history of the mutual contact can then be used as a basis to judge your creditworthiness. In order to get the most out of your circle, seek a person with a good credit score and make him a cosigner and your auto loan process will become smooth.

2) With LinkedIn, lenders can check your Employment Stability

A stable employment speaks volumes about your personality and trustworthiness. LinkedIn can serve as the best source of obtaining information regarding your job history, duration, professional position and interests. The documentation of an auto loan requires you to display evidence of a source of income through pay stubs. However, there is less proof one can gather regarding the stability of employment. Social media can become a tool to ascertain not only if there is job-hopping, but also the financial strength of the individual. A person with a 500+ connections, long duration of employment history and a considerable profile activity can become a favorable applicant in the eyes of the lender.

Buying a Car: Making the Most of your Social Media Profile

Social media has made its way into the minds of auto buyers as well as lenders. As primary sources of guides, nothing comes above your credit score, current income status and payment history. However, virtual platforms such as Facebook and LinkedIn are starting to occupy mind share in terms of creditworthiness. Once the primary sources of information seem insufficient, lenders may turn to social media to get an idea of your personality. A few helpful ways to make sure your social media positively adds to your credit score is to be careful with your online posts, invite only genuine friends into your virtual circle and to always keep your professional profiles updated.

How To Save Money On Your Two Wheeler Insurance

Tips to save money on two wheeler insurance

Many people in India own two wheelers. It is compulsory for you to buy a two-wheeler insurance policy if you own a bike or a scooter. But can you reduce the insurance expenses? Sure you can! Just follow these tips and you will see a difference.

Avoid making smaller claims: Before you make a claim, see how much the bill amount is. If it is a small amount, pay it yourself. Making numerous small claims will unnecessarily bring down your NCB to zero which will overall lead to a loss.

Attach anti-theft devices: A car insurance plan offers protection against theft and other dangers to the car. So if the car is found to be safe and less susceptible to thefts and break-ins, the insurer will offer a discount on the premium. Therefore look to install some anti-theft devices to the car to not only keep it safe but also to reduce your insurance costs.

Be a good driver and earn No-claim bonus: Driving carefully will reduce the chances of your car getting into mishaps. This will reduce the need to make claims and you will earn NCB. The NCB will in-turn pull down your insurance premium costs.

Renew two-wheeler insurance before expiry: Do not wait for the two wheeler insurance policy to expire before you renew it. If you have a lapsed policy, you may need to pay some fees and fines to get a new plan. So always try to renew the policy on time to save money.

Buy online: It is known fact that insurance bought online is cheaper. So buy a two wheeler insurance plan online and save a considerable amount of money.

Choose the right kind of cover: If you have a two wheeler that you use occasionally or is almost on its way out, opt for a third party cover. If however your bike is used daily and is a valuable vehicle, go for a comprehensive plan. Knowing which cover you need will help you save money.

Deductibles: Every two wheeler insurance plan has a deductible component. This means that as the policyholder, you will have to pay certain amount at the time of a claim and the insurance provider will pay the rest. A high deductible will lower your premium costs and vice versa. If you are confident of your driving skills and feel you won’t need too many claims, opt for a higher deductible. This will help you save money on your two wheeler insurance plan.

Compare: Last but not the least, you most definitely need to compare the available car insurance plans to get the best deal at the best rate. This is one of the easiest and quickest ways to save money on your bike insurance plan. Compare when you buy a new plan or renew an existing one.