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Debt crisis: How postman’s head injury left him relying on benefits and soup kitchens | UK | News

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Chris Brasil

Chris Brasil (Image: Tim Clarke/DailyExpress)

After five years without work, he went along most days to see if there were any jobs for him. The 56-year-old former Royal Mail postman and lorry driver was unable to work after he was knocked off his bicycle in 2014. He suffered a head trauma with life-changing consequences and was deemed unfit to use his HGV licence by the DVLA so could not return to his old job.

The accident fractured Chris’s hips, ­landing him in hospital for seven weeks. He also developed long-term health problems including partial deafness, depression, ­memory loss, epilepsy and deteriorating eyesight. Chris, who lives alone, became ­reliant on benefits to make ends meet. 

But at least, he would tell himself, he wasn’t in debt – a position he desperately didn’t want to find himself in. 

That is until last year when he was approached at the job centre by a man who promised him paid casual work driving for his fledgling removals business. 

“I was desperate for work as I hadn’t worked for five years and wanted to do something,” says Chris. He had no idea his “employer” had just left prison. 

Chris knuckled down and completed the drives, racking up huge expenses for diesel. When he asked when he would be paid, he was told not until he had helped the boss pay off bills and keep the business afloat. 

“This man ran up £1,142 debt on my credit card when he realised he couldn’t get more work,” says Chris, who at the time kept one credit card for emergency use only. 

“My card was maxed out, then he fraudulently applied for a second card in my name at his address, which he also maxed out.” 

Chris also ended up paying his scammer’s mobile phone bill and a fee to a job web portal. His arrears rocketed to more than £3,000. Bailiffs began calling over a burgeoning debt from a £6 overdue Dartford tunnel fine. 

Meanwhile, his thieving employer ­disappeared leaving Chris, who has no family or next-of-kin, distraught. “I couldn’t sleep, I’m highly anxious and also depressed,” he says. Now he relies on food banks and soup kitchens to survive. 

The Daily Express is featuring his story to highlight today’s Time To Talk Day, which aims to help those whose mental health issues make them vulnerable to debt.

Chris may never have reached such a crisis point if he had been signed up to the Vulnerability Registration Service (VRS), a new free service set up to protect people like him. It operates on a flag-based system. Consumers classed as ­“vulnerable”, highlight their status by informing lenders they should not be offered credit. It can prevent scammers from stealing people’s details and setting up credit cards, loans and other financial products in their name through an alert to registered lenders.

The dreaded bills: More help is on way

The dreaded bills: More help is on way (Image: Getty Images)

The register can also help organisations develop a more sensitive approach towards vulnerable individuals. With Christmas credit card payments now due, it is estimated that one person will ring Citizens Advice for debt advice every 10 seconds. VRS is trying to ­prevent consumers from getting into debt in the first place – and stay debt free. 

The service is available to people in all ­situations from gamblers to older people being persistently targeted for charity donations, says VRS director Helen Lord, previously a senior figure at credit ­reference agency Experian Plc. 

She says: “Through many ­conversations with people, the big issue is typically that if you are a vulnerable person, you do not want to have 25 different organisations and tell them exactly the same story. We see VRS as a hub to get the message out that you may be in financial difficulties, shouldn’t be lent money or granted credit. You might have someone you are looking after who potentially could do things they shouldn’t.” 

Helen stresses there is no overall definition of vulnerability so the ­numbers of people who could benefit could be “huge”. 

Current estimates from the Money and Mental Health Policy Institute state 46 percent of all people in problem debt are also experiencing a mental health problem. People can register as a short-term ­precaution in case of divorce or bereavement and power of attorneys are also an option. 

Jolene Simpson, 44, of Stoke-on-Trent is one of VRS’s earliest sign-ups. She was working as a customer service adviser and had a loan of nearly £3,800 when her situation changed overnight. 

“The doctor told me that I needed to cut back my work hours due to my disability,” she explains. The mum has a below-the-knee amputation after contracting septicaemia in 2013, plus severe bipolar disorder. 

“I was devastated and was not sure how I was going to cope financially and mentally as I’ve worked my whole life.” 

Despite speaking to her creditors, she was hounded by debt collection callers. “They just kept coming and I had uation over and over every time.” 

Soup kitchen

Chris relies on food banks and soup kitchens to survive (Image: Getty)

One creditor told her about how VRS could help. “After I registered with them all the calls stopped,” she says, and it allowed her the breathing space to tackle her finances. 

Helen says registration is real-time, meaning frequent calls and letters should stop very quickly. Payday companies are among the present sign-ups but large financial ­institutions and insurers are expected to be on board from March onwards. 

Helen admits VRS does not provide a one-size-fits-all solution in that it does not ­consolidate debt or provide personalised advice or emotional support but says ­organisations who can help in those areas are signposted on the website. 

“We’re creating a flag and we’re making organisations aware that an individual is ­vulnerable and to take into consideration their wishes,” she adds. “Registration is simple and we’re not holding large amounts of ­sensitive data about the person.” 

Only an individual’s name, address, date of birth and contact details are required. 

Chris believes the idea could have helped him manage his debt at an earlier stage, relieving him of a large part of his awful experiences. He sought help from the Salvation Army and debt charity Stepchange, which has written off both of his credit card debts and helped him to be identified as a victim of financial abuse. 

“I will hopefully be out of debt but only because of a debt relief order, which means I have a bad credit rating now and have to use the more costly pay‑as‑you-go meters for electricity bills,” he says. 

The hope is in the not-too-distant future vulnerable people like Chris will not be in this situation in the first place.

• To register or for more details, visit vulnerabilityregistrationservice.co.uk

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Cleaning up your credit safely

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TUCSON, Az. (KGUN) — Americans who are dealing with financial hardship because of job loss and aftermath caused by the pandemic could be struggling to make ends meat and in some cases they might be racking up credit card debt or they’re simply late on paying bills.

KGUN 9 caught up with Sean Herdrick with the Better Business Bureau of Southern Arizona who says there are ways to get your credit fixed but you have to be careful about who’s handling your situation because they can take your money and leave you with bad credit.

“To see how many 1-star ratings there are for credit companies is frightening. They promise you they will do all of this stuff for your credit, get things taken off. Negotiate with your creditors. They’ll ask for a fee up front, you send them the fee and they never come back to you,” Herdrick said.

According to the BBB you can check their website to find out details about how a company operates. And while there are three common ways to fix your credit. It’s also a good idea to get schooled on extra fees.

“We vet the companies we accredit and if you find an accredited credit business chances are they’re doing a good job and they’re going to help you out. Credit counseling and that’s probably the best way. There’s also debt relief or settlement companies where they offer to settle your debts for you or come up with a plan to do that and a debt consolidation company they will offer a loan at a lower interest rate to help pay off all of your debts at once,” Herdrick said.

The U.S Department of Commerce released data that says Americans are spending their stimulus checks on clothing and sporting goods while others are using it for bills to fend off financial ruin and get their credit back on track.

“Do your research make sure the company you hire can give you what you need,” Herdrick said.

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Taking A Joint Home Loan Can Benefit You. Here’s Why – Forbes Advisor INDIA

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In India, buying a home is mostly the single largest investment made by an individual during their lifetime. As our families expand, we plan for the future and plan to invest in bigger homes that can comfortably accommodate and protect a growing family. However, such dream houses come at a significant cost, warrant access to huge funds, and hence, require key financial planning.

In most cases, individuals need to opt for home loans to fulfil the cost obligation associated with buying a house. Considering the amount and type of loan taken, there are certain eligibility criteria that one needs to be aware of before initiating applications. 

At the time of taking a home loan, your lender or you may wish to add another applicant, also called co-applicant, to your home loans for various reasons and the structure of having a co-applicant is referred to as a joint home loan. 

Let’s understand when and why should you take a joint home loan. 

Role of a Co-applicant in a Joint Home Loan

A lender while considering applications simply wants to check if the borrower can repay the home loan along with their household expenses and existing loans. Therefore, while calculating your eligibility they generally keep aside a certain fixed portion of your income that covers your existing expenses. An individual’s eligibility is decided on the basis of the discretionary amount left post calculating their interest repayments and monthly instalments. 

In a joint home loan, you can add another co-applicant or applicants who becomes liable to pay the home loan along with the primary applicant. Liability of the loan is a collective responsibility on both or all the co-applicants as well. Generally, immediate family members, including father, mother, spouse, children, and brother, are most eligible to become co-applicants in joint home loans. 

With such arrangements the question that mostly arises is whether the co-applicant is also the co-owner of the home being considered. Co-applicant or co-applicants may or may not be the co-owner of the property, however they have a liability to pay back the loan. The co-owner of the property is a joint owner along with other owners. 

As a safeguard and prudent underwriting practice, lenders ask all co-owners to also become co-applicants in home loans, however, the reverse need not be true. This is a decision the pros and cons of which should be carefully considered by the primary applicant while choosing joint home loans.

Why Choose a Joint Home Loan Over Any Other Loan 

There are a number of additional advantages in considering taking a joint home loan as compared to an individual home loan. These include higher loan amount eligibility, lower interest rates and other income tax benefits. 

Higher Loan Amount Eligibility: When you add an income-earning co-applicant to a loan, the lender considers the income level of all the applicants and calculates an eligibility amount higher than that of only one individual applying for a home loan. This allows applicants or families to take a larger home loan amount or purchase a more aspirational home since the room for increasing an applicant budget is possible. 

Lower Interest Rates: In order to avail lower interest rates individuals can add their spouses or mother as co-applicants for a joint home loan and as a joint property owner. This is useful as most lenders in India offer a lower rate of interest to women borrowers. It is up to 10 to 25 basis points lower than the interest rate for male borrowers. 

Tax Benefits: Tax benefits can be enjoyed by all the co-applicants separately. For this to happen, co-applicants should be property owners as well and should contribute to the payment of monthly instalments towards the repayment of the home loan. 

Income Tax benefits that are available to the all co-applicants include: 

  • Benefit under Section 80 C of the Income-Tax Act for the loan’s principal payment up to a maximum limit of INR 1.50 lakh per year. 
  • Benefits under Section 24 of the Income-Tax Act for interest paid on a home loan up to INR 2 lakh per year. 
  • In a joint home loan, both the applicants can claim the above amounts individually and use this as an effective tax planning tool

Co-applicants and first-time loan applicants can utilise the joint home loan as a great tool to improve their credit score, thereby easing the process for future loan applications as and when required for various other purposes. 

Necessary Documents Needed for a Joint Home Loan

Documentation is the most cumbersome and tiring part of taking any loan. However, it is a critical part of any lender’s operations as they would want to make sure that their borrower meets income eligibility and supporting documents are provided. 

There are a number of regulatory guidelines for the know your customer (KYC) and property-related documents, where it is imperative that all accurate documentation is shared to avoid unnecessary rejections and thereby delaying the availability of funds. 

For any home loan, typically an applicant needs to provide the following: –

  • KYC documents which include:
    • Identity Proof
    • Address Proof 
  • Income proof documents including but not limited to:
    • Salary slips, Form 16 issued by your employer or
    • Income tax returns (especially for self-employed) of the last three years
  • Property related documents such as: 
    • Agreement to sell, a sale deed or a registry 
    • Previous sale deed for the property (typically all transactions done on that property in the last 13 years) 
    • Few property or location-specific documents like a no-objection certificate (NOC) from relevant authorities or from your bank if the project is funded by any financer in case you are buying new property from a builder.

All applicants need to provide their KYC documents regardless of whether they earn an income or not or whether they even co-own the property. 

If you are applying for a joint home loan mainly for higher eligibility wherein the income of other applicants also needs to be considered, then income documents of all the applicants will be required to be shared with the lender in addition to KYC documents.  

If your purpose is to save on stamp duty charges by adding a female member of the house as a co-owner of the property, then you must make sure that the draft agreements and final sale deed or the registry documents have relevant members stated clearly as co-owners. 

If you are a nonresident Indian (NRI), you can issue a registered power of attorney (POA) in favour of a trusted family member for them to execute the necessary documentation on your behalf. However, you must ensure that the exact purpose of the required transactions are mentioned in the POA, thereby easing the process for compliance and reducing chances of rejection.

Factors to Consider Before Applying for a Loan

Before even applying for a joint loan, it is important to fully understand the lenders’ conditions, which differ depending on the provider you’re considering to approach. 

Lending Conditions

  • If the property has co-owners, in such a case, the lender, in all likelihood, insists all co-owners to become co-applicants as well. 
  • The lender may also insist any or one of your family members become co-applicants in the case of an NRI loan. 
  • If you have given the power of attorney to any of your family members, the lender is likely to insist one of the family members is available in the country as co-applicant for follow-ups and communication purposes to minimize repayment risks.

Credit Score Reports

It is always better to check your and the other co-applicant’s credit score and bureau report prior to applying. This will help to ensure that you are aware of all your past and current loans along with their performance over time. 

In some cases, if it is observed that you may have an old credit card with some minor payment overdue or incorrect reporting by any financial institution, it may lead to the possibility of hampering your overall credit score, reducing the chances of approval.

In India, there are primarily four credit bureaus via which you can check your credit report. Any bureau after paying relevant fees, which is about INR 500, will process your credit report. These credit bureaus include CIBIL, Equifax, CRIF Highmark and Experian.  

When to Avoid Taking a Joint Home Loan?

When a co-applicant already has significant loan obligations and is not left with sufficient income to be eligible for a higher home loan amount, it is generally advisable to reconsider taking a joint home loan and instead consider an individual home loan.

Healthy credit history is very important for lenders while considering applications and a co-applicant who has a bad credit history or poor track of repaying past loans is a major factor while assessing the eligibility of a new loan. 

If your income is sufficient to cover costs with no additional benefits available in terms of tax write-offs, it is suitable for you to avoid a joint home loan and keep the responsibility of your liability limited.

Joint home loans are also best avoided if there is a plan for taking on a larger liability or loan in the near future as the joint loan may impact the eligibility criteria of future loans due to existing liabilities.

Bottom Line

A joint home loan is a beneficial financial tool with the potential of helping the borrower secure higher loan amounts. 

It can aid individuals significantly improve their spending power and investing threshold while buying a larger and more comfortable home and at the same time keeping the primary applicant’s liabilities manageable by sharing the repayment burden with other co-applicants. 

If utilized correctly, it can help you enjoy higher tax benefits, while simultaneously reducing overall tax outgo on a yearly-basis. 

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Fixed-rate student loan refinancing rates inch up, but still hover near record low

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Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

The latest trends in interest rates for student loan refinancing from the Credible marketplace, updated weekly.  (iStock)

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans into 10-year fixed-rate loans hit another low during the week of April 12, 2021.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender, during the week of April 12:

  • Rates on 10-year fixed-rate loans averaged 3.78%, up from 3.73% the week before and down from 4.81% a year ago. The record low for 10-year fixed rate loans was 3.71%, during the week of Feb. 15, 2021.
  • Rates on 5-year variable-rate loans averaged 3.26%, up slightly from 3.13% the week before and down from 3.28% a year ago. Variable-rate loans recorded a record low of 2.63% during the week of June 29, 2020.

Student loan refinancing weekly rate trends

If you’re curious about what kind of student loan refinance rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates won’t affect your credit score.

Current student loan refinancing rates by FICO score

To provide relief from the economic impacts of the COVID-19 pandemic, interest and payments on federal student loans have been suspended through at least Sept. 30, 2021. As long as that relief is in place, there’s little incentive to refinance federal student loans. But many borrowers with private student loans are taking advantage of the low interest rate environment to refinance their education debt at lower rates.

If you qualify to refinance your student loans, the interest rate you may be offered can depend on factors like your FICO score, the type of loan you’re seeking (fixed or variable rate), and the loan repayment term. 

The chart above shows that good credit can help you get a lower rate, and that rates tend to be higher on loans with fixed interest rates and longer repayment terms. Because each lender has its own method of evaluating borrowers, it’s a good idea to request rates from multiple lenders so you can compare your options. A student loan refinancing calculator can help you estimate how much you might save. 

If you want to refinance with bad credit, you may need to apply with a cosigner. Or, you can work on improving your credit before applying. Many lenders will allow children to refinance parent PLUS loans in their own name after graduation.

You can use Credible to compare rates from multiple private lenders at once without affecting your credit score.

How rates for student loan refinancing are determined

The rates private lenders charge to refinance student loans depend in part on the economy and interest rate environment, but also the loan term, the type of loan (fixed- or variable-rate), the borrower’s credit worthiness, and the lender’s operating costs and profit margin. 

About Credible

Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 4,300 positive Trustpilot reviews and a TrustScore of 4.7/5.

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