All posts by Mark Scott

About Mark Scott

Is the Company Director of Swift Money Limited. He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

How to Stop the Constant Cold Calling Here In the UK

How to Stop the Constant Cold Calling Here In the UK

Cold calls, which are simply unwanted phone calls, top the list of UK’s most hated marketing tactics. Although marketers cold call people all over the world, the problem is worse in the UK. If you hate cold calls, look no further. Below are top 6 tips for you to consider.

1. Register with the TPS (Telephone Preference Service)

TPS-registered phone numbers are protected from cold calling. UK-based companies are barred from making unsolicited sales/marketing calls to TPS-registered phone numbers. You can register with TPS for free by visiting the website (www.tpsonline.org.uk/) or calling 0345 070 0707. It’s, however, worth noting that the TPS stops unsolicited sales/marketing calls only. You can still get market research calls as well as calls where you have opted in. Also, the TPS doesn’t stop calls from companies which are based abroad.

2. Keep your contact details off directories

Most companies especially local businesses use phone books to get phone numbers. To avoid cold calling, you need to request for your contact details to be removed from directories. Keeping your contacts off directories ensures marketing companies don’t find your number when looking for target customers. You should also be careful when giving out your contacts. If you have to give out your phone number, request whoever you are giving your number to; avoid calling you for sales/marketing offers or giving out your number to third parties.

3. Screen all your calls and use call blocking software

You should also avoid picking calls from unrecognised numbers. You can use software such as Truecaller to help you identify calls from numbers you haven’t saved in your phonebook. Screening calls is an effective way of avoiding cold calling since you get to know the identity of every person/organisation that calls your phone immediately. You can also block ”suspect” numbers.

4. Never bow down to cold-calling pressure

Some resilience can also go down a long way. Some marketing companies use underhand tactics to pressure their victims into accepting calls and offers. Never pick a cold call if you don’t want to. If you pick a cold call unknowingly, don’t disclose your personal information. Simply cut short the conversation and hang up. If you receive a cold call from a company you are interested in, insist on contacting them yourself. Most marketing companies will stop calling you if you don’t express any interest whatsoever or if they notice you won’t bow down to pressure.

5. Record cold-call numbers and report them

You should also record all unsolicited calls and report such numbers to organisations like Ofcom to take the necessary action. Get as much information about the company or person cold calling you and report them. Ofcom is UK’s communication industry regulator with a mandate for investigating and prosecuting individuals and companies which breach communication laws. You can also report cold calling offenders to TPS which will then forward the complaints to Ofcom or the ICO to take the necessary action against repeat offenders.

6. Use opt-out options

Sometimes you may be a victim of cold calling because you submitted your contact details somewhere without much thought. In such an instance, you should look for ways of stopping such calls. Legitimate companies have opt-out options that prevent calls or any other type of correspondence at the touch of a button. If you can’t find such options on a company’s website, call the company directly and ask the sales/marketing team to stop calling you. Legitimate companies abide by verbal requests so you shouldn’t have a problem stopping cold calls this way. You can consider writing a formal request just in case the cold calling doesn’t stop, and you have to take legal action.

Summary

Constant cold calling is a huge problem in the UK. Luckily for you, it is possible to stop this menace by taking any one or more of the above measures. Start by being cautious when giving out your contact information. You should also use the technology and institutions at your disposal. Being resilient and getting your contact information off directories will also go a long way.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
How to Deal With Debt of a Lost Loved One

How to Deal With Debt of a Lost Loved One

Losing a loved one is painful. The experience becomes more painful when you are left with new debt. Fortunately, there are some steps you can take to cope with the situation. In case you don’t know what you need to do to deal with the debt of a lost loved one, follow the simple guide below.

Step 1: Take stock of the debt

Your first debt should be determining the amount as well as the type of debt they have. This step is crucial because it makes the situation clearer. You can’t be able to predict the type and amount of debt a lost love one has with accuracy without conducting a thorough investigation.

You should start by going through their financial statements/papers and then make a conclusive list of their debts. While doing this, remember to determine the type of debt i.e. individual or joint, secured or unsecured. It’s also important to check if the debts have a guarantor. All debts with a guarantor should be settled by the guarantor. It’s important to establish the type of debt because there are different ways of dealing as well as paying off different types of debt.

While individual debt (debt registered under one person) can be paid off by a loved one, i.e. a spouse or sibling, joint debt (debt registered under two or more people) should be paid off by the other registered individual/s when one individual dies.

If someone dies after taking secured debt (debt taken against an asset), such debt is already covered by the asset which simply means no one is liable for the debt. Mortgages and car loans are great examples of secured debt. Unsecured debt such as student loans and home improvement loans should be paid for even after someone dies.

You also need to check if they had any undisclosed debts (debts you didn’t know about). The best ways of discovering if your loved one had undisclosed debts is to advertise locally. By doing this, you give creditors time to forward their claims. You also avoid legal problems and inconveniences in the future.

Step 2: Paying off outstanding debts of a lost loved one

Once you take stock, you will have an accurate picture of the type and amount of debt your lost loved one has. To deal with the debt accordingly start by;

a. Contacting creditors: You need to contact all creditors and inform them about the death of your loved one. It is better to initiate communication rather than wait for the creditors to start calling demanding payment. Ask the creditors for formal letters or statements showing outstanding debt. Contacting creditors will buy you time and get rid of unnecessary stress while you go through the legal process of handling a person’s estate.

b. Check if they had insurance: After contacting creditors, you should check if your loved one insured his debt/s. Life insurance can cover mortgage debt and many other types of debt in case of death. There are other insurance covers that can settle outstanding debt. So, check if your loved one had insurance and if the cover can take care of any or all of the debt. You can then proceed by contacting the insurance company, launching a claim and then using the money to pay off the debt.

c. No insurance? If there is no insurance, contact the creditors and discuss ways of settling the debt.

d. Joint debt? If the debt in question belongs to your lost loved one among other parties, check the terms and conditions of the debt. If the terms transfer all the debt to the other parties in case of death, you can initiate a debt transfer process i.e. requesting the other parties to remove the name of your loved one from future bills.

e. Paying the debt: If you have to settle the debt of a lost loved one, pay in order of priority. If the deceased granted you administration of his/her estate through a will, you need to pay off their debts first before distributing the estate to heirs (if there are any). You should pay the debt after exhausting insurance funds, if any. Secured debt like mortgages and car loans should be paid first followed by unsecured debt such as credit card bills, unpaid rent, utility bills, etc. You should also consider selling assets which may be available. If the debt surpasses the value of the estate, you will be required to get professional advice from a lawyer or probate specialist. You can find a good legal professional in the UK here: http://solicitors.lawsociety.org.uk/

Step 3: What if I am struggling to pay off the debt of a lost loved one?

In case you are having difficulties paying off the debt of a lost loved one, you need to talk to a debt adviser to help you find a way forward. Debt advisers can help you find new ways of dealing with the debt. A debt adviser can also help you find benefits and entitlements you didn’t know about.

Summary

Losing a loved one results in a lot of misery if you are left with new debt to service. It is, however, possible to manage the debt of a lost love one if you are equipped with the right information. The most important steps are; taking stock of the debt, taking steps to pay the debt as well as seeking professional help if you encounter problems.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
What You Need To Know About Consumerism

What You Need To Know About Consumerism

Consumerism can be defined as an economic and social ideology and order that encourages consumption or acquisition of goods/services in a never-ending cycle. Consumerism encourages purchasing and consumption of goods and services in excess of a person’s basic needs.

In economics, the term consumerism is used to refer to economic policies which encourage consumption. In a consumerist society, people are bombarded by adverts, discounts, product launches, product giveaways among many other promotions meant to encourage constant and significant spending on goods and services. Consumerism encourages pursuit for the ”good life”. This may come at the expense of things like saving and investing.

History and rise of consumerism

Consumerism can be traced back to the onset of capitalism in the 16th century in Europe. Consumerism intensified in the eighteen century because of a growing middle class that embraced luxury consumption. The eighteen century also saw an increasing interest in fashion rather than necessity as a determinant for purchasing. The growth of consumerism can also be attributed to politics and economics. For countries to thrive politically and economically, capitalist competition for profits and markets had to be at the core of every country’s agenda. Colonialism has also been attributed as one of the major drivers of consumerism.

Colonialists had to look for markets for their goods by creating demand because there was supply. The industrial revolution also spurred consumerism as the number of consumer products increased in the market due to the increasing use of machines. Over many decades, buying goods/services became a way of life in Britain and many other parts of the world. The consumerist culture continues today. It encourages spending on consumer items like cars, clothes, shoes, and gadgets instead of saving and investing. Consumers buy goods and services to keep up with fashion/trends. The search for better goods is never-ending.

The rise of consumerism today is evident in both developing and developed countries. This can be seen in the mass production of luxury goods. The media is also saturated with advertisements. Personal debt levels are also rising globally which is an indication of more people buying goods excessively on impulse or without proper financial planning. Other evident signs of consumerism include product innovation.

Benefits of consumerism

1. Economic growth:

Consumerism drives economic growth. When people spend more on goods/services produced in a never-ending cycle, the economy grows. There is increased production and employment which leads to more consumption. The living standards of people are also bound to improve because of consumerism.

2. Boosts innovation and creativity:

Since consumers are actively looking for the next-best products/services to buy, producers/manufacturers are under constant pressure to innovate. As consumers access better goods/services, living standards improve.

Cons of consumerism

1. Environmental degradation:

Increasing demand for goods put extensive pressure on natural resources such as water and raw materials. Consumerism also results in the excessive use of energy. Consumerism also encourages the use of chemicals which are known to degrade the environment. In a nutshell, consumerism does more harm than good to the environment.

2. Moral degradation:

Increasing consumerism tends to shift away societies from important values such as integrity. Instead, there is a strong focus on materialism and competition. People tend to buy goods and services they don’t need so that they can be at par or at a higher level than everyone else.

3. Higher debt levels:

Consumerism also increases debt levels in a society. The number of people taking short term loans such as payday loans to buy luxury goods has increased drastically. Many short-term loans aren’t channeled into constructive use today.

4. Mental health problems:

Consumerism increases debt levels which in turn results in mental health problems like stress and depression. Trying to follow the latest trends when you have limited resources can be very exhausting to the mind and body. Consumerism forces people to work harder, borrow more and spend less time with loved ones. Consumerism gets in the way of fruitful relationships. It affects the overall well-being of people negatively in the long run since research has proven that people don’t get valuable and long-lasting fulfilment from materialism.

Summary

Consumerism has a good and bad side. Although consumerism drives economic growth and boosts innovation, it comes with a fair share of problems ranging from environmental and moral degradation to higher debt levels and mental health problems. Since we are already in a consumerist society, it is advisable to strike a healthy balance. A person’s love for the finer things in life should not come at the expense of his/her mental health and financial stability.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Consumer Spending Statistics in the UK: What Does the Average British Family Spend Their Money On?

Consumer Spending Statistics in the UK: What Does the Average British Family Spend Their Money On?

If you care to get accurate insights on what British families spend their money on, look no further. Below is a summary from the ONS (Office for National Statistics) in the UK. The information highlights family spending as of 2016.

Overview

According to the latest ONS statistics, the average weekly household spending remains at £528.90 for the year ending 2016. Most low-income households in the UK continue to spend a higher portion of their income on food and energy bills compared to high-income households.

Mobile communication costs have risen significantly. Over 50% of all the money spent by UK households on communication is spent on mobile phone related costs. Expenditure on tobacco, alcohol, and narcotics has fallen below £12 for the first time. Expenditure on restaurants and hotels has however risen by over £45 a week. This is the 1st time this has happened in 5 years. Below are important background spending statistics.

Total spending

Average spending remains at £528.90. However, when adjusted for inflation, spending appears to have increased but is not yet at the levels experienced before the 2007 economic turndown.

When you compare expenditure against other economic indicators like the GDP (Gross Domestic Product), output has grown steadily. The employment rate has also increased. The average earnings and median disposable income has also increased (after being adjusted for inflation). However, disposable income grew at a slower pace for the richest 1/5th households. The median income for UK’s richest households has fallen since the 2007/2008 economic downturn.

Inflation

The prices of goods and services affect spending patterns. Inflation shows the rate at which the prices of goods/services rise or fall. During the financial year 2015/2016, inflation as per the consumer prices index was significantly lower compared to the previous financial year. In fact, the UK entered a deflation period which simply means the cost of goods/services remained the same or became cheaper in 2015/2016.

Consumer confidence

Consumer confidence increased during the last financial year. The UK has been on an upward trend in regards to consumer spending since the 2007/2008 economic downturn. Consumer confidence has increased significantly since 2013.

Household expenditure according to category

The average British household spends the most on transport, housing, fuel and power bills. The average amount of money spent per week on transport in the financial year 2015/2016 was £72.70. The highest expenditure was on fuel costs i.e. petrol and diesel costs. Compared to the previous financial year, the average expenditure on transport remains unchanged. The overall spending on motor fuels decreased this financial year due to the drop in crude oil prices globally. Also, more Britons bought new and second-hand cars this year compared to last year. There was an increase in uptake of loans for buying new vehicles.

Britons spent the least on education i.e. £7 per week (1% of the total expenditure). Transport costs were the highest at £72.70 per week followed by housing, fuel and power costs at £72.50 (both 14%). The third highest expenditure was on recreation and culture at £68 per week followed by food and nonalcoholic drinks (£56.8), restaurant and hotels (£45.1), miscellaneous goods/service (£39.7), household goods and services (£35.5), clothing and footwear (£23.5) and communication (£16). British households spend £11.4 on alcohol, tobacco and narcotics and £7.2 on health.

Household expenditure according to region

London households have the highest average expenditure at £652.40 per week. The North East region has the lowest household expenditure at £423.50 primarily because of lower housing costs. The highest expenditure category for most regions is transport, housing, fuel, and power. As a result, it doesn’t really matter when you live in Britain. Most Britons spend most of their money on transport, housing, fuel, and power. There are however a few exceptions. In the North East, North West as well as Yorkshire & the Humber for instance, families spend the most on recreation and culture.

Other important spending statistics/information

The latest spending statistics indicate that low-income households spend more on food and non-alcoholic drinks. Most of the money spent on food goes to milk, bread, and groceries. While low-income households spend most of their food budget on basic groceries, higher-income households spend most of their food money on vegetables. In general, households with less income have less money to spend on nonessentials.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Payday Loan Giant Wonga Suffers Major Customer Data Breach

Payday Loan Giant Wonga Suffers Major Customer Data Breach

Payday loan giant Wonga HACKED!

On 8th April 2017, Wonga sent its clients correspondence stating that it had fallen victim to hackers who stole confidential information belonging to its customers. The hackers made away with the names, addresses, bank account numbers, phone numbers and sort code numbers of over a quarter million Wonga customers. The hackers are also believed to have accessed the last 4-digits of bank cards belonging to 270,000 Wonga customers.

According to the correspondence released by Wonga, the lender doesn’t think Wonga account passwords were compromised but advised clients to change their passwords. Customers have also been advised to be on the lookout for suspicious activity on all bank accounts as well as online portals. Wonga has also contacted all financial institutions believed to have been affected directly or indirectly by the hacking.

Wonga began contacting customers after discovering the severity of the breach on 7th April 2017. The breach is believed to have taken place late March 2017. The firm has already established a help line (0800 3166 745) to assist borrowers who may want to contact the lender for more information or guidance.

Wonga is currently in the process of investigating the hacking which it terms as illegal and unauthorised access to personal information of some of its clients. The hacking is believed to have affected Wonga customers in the UK and Poland. Approximately 245,000 UK customers and 25,000 Poland customers have been affected.

The lender has already apologised for any inconvenience caused and is in the process of informing all affected customers. Wonga is also working closely with the police to bring the culprits behind the attack to book.

Although Wonga is already in a mess trying to contain the effects of the data breach, the lender is expected to face the office of the ICO (Information Commissioner’s Office). If the ICO finds Wonga’s data security measures inadequate, the Lender could face a hefty fine.
Wonga could suffer the same fate as UK telecom provider TalkTalk which paid £400,000 for being unable to prevent a systems breach which compromised personal information of approximately 157,000 customers back in October 2015. Given Wonga’s breach affects almost twice the number of people and it spans across borders, Wonga may face a stiffer penalty if found guilty by the ICO.

This is on top of the fact that Wonga is set to spend millions of pounds securing its systems among other costs incurred responding to the incident. Wonga’s revenues are also expected to drop as some customers choose other lenders with better data security measures.

Considering the lender doesn’t appear to be sure about how the breach occurred, some customers are expected to jump ship reducing the projected earnings significantly. This attack doesn’t help considering Wonga has been in the news again for the wrong reasons.
Back in 2012-2013, Wonga was the subject of a massive identity crime case involving A Nurse, Sherene Bascoe that saw customers scammed £3 million. Wonga’s faulty site algorithms allowed scammers to submit 19,000+ payday loan applications using a single password, ”Bengali90”. The identity theft gang responsible requested for payday loans using stolen identities leaving innocent Wonga customers with payday loans they hadn’t signed up for.

The £3 million scam was successful because of Wonga’s faulty site algorithms. Although the masterminds of the scam paid the price, Wonga is yet to learn how to safeguard its client’s personal information. Considering there is an investigation underway and Wonga has had a troubling data security history, 2017 doesn’t look good for UK’s biggest payday loan lender.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Seven Signs of Financial Instability

Seven Signs of Financial Instability

Are you keen on knowing if you are financially stable? People worry about their finances all the time for obvious reasons. You can’t be able to live a comfortable life if you don’t have money. It also takes money to elevate your lifestyle. It’s important to understand the difference between lacking access to money and being broke. You should also appreciate the fact that money is scarce. However, how do you tell when things are seriously going wrong?

1. Your expenses are more than your income:

If you spend more than you earn, you are already in serious trouble. Your income should be more than your expenses otherwise you are living beyond your means. You need to cut down on your expenses immediately to avoid serious financial trouble in the future. You should consider downgrading your lifestyle immediately. For instance, move to a cheaper house, take a bus/train to work, shop for discounts, etc. Your expenses should never exceed your income.

2. You borrow to fund recurrent expenses:

If you take out payday loans among any other types of loans to fund recurrent expenses such as; food, rent and transport expenses every month, you are already financially unstable. Loans such as payday loans are meant for funding emergency expenses. Using them to fund your lifestyle is a scary sign of financial instability.

3. You don’t have savings/an emergency fund:

You can never be financial stable if you don’t have savings. An emergency fund is highly recommended for taking care of unexpected expenses. You can lose your job or get into an accident that affects your ability to work. Without an emergency fund, you can’t be able to survive without taking up loans from friends/family members. If you don’t save/have an emergency fund, start setting up one today.

4. Your debts are greater than your assets:

You can take loans as long as you are in a position to repay them. Loans become a problem when you can’t afford them when the worst happens. If you lose your job for instance, can you be able to pay for all your loans with your assets and still have some money for subsistence? If not, you are not financially stable. This highlights the importance of investing the money you get from loans wisely. If you use loans to buy assets, instead of liabilities, your assets will always be greater than your debt.

5. Your credit score is dropping:

Your credit score tracks all your credit activity. If your credit score is increasing, it simply means you are using your debt wisely. If your credit score is dropping, this is a sure sign that you are engaging in dangerous credit activity such as; misusing your credit cards, defaulting on debt, etc. The ratio of the amount of money you owe over your available credit (i.e. credit utilisation ratio) should not exceed 30% otherwise you will start hurting your credit score even if you make all payments on time. Overusing credit is a scary sign of financial instability even if the credit is available to you.

6. You lose sleep over your finances:

Financial problems are bound to cause stress. However, you should be overly concerned if you lose sleep thinking about your finances. It is advisable to seek financial help if you find yourself worrying too much about money. A financial expert can help you identify your financial problems as well as craft ways of dealing with them effectively. If you are already losing sleep over your finances, seek help immediately to avoid worsening your finances as well as physical health.

7. You have considered debt management/bankruptcy:

Debt management and bankruptcy are measures taken as a last resort when debt spirals out of control. If you have thought about debt management or filing for bankruptcy, you are already financially unstable. People usually contemplate these measures before taking them, so it’s a sure sign of financial instability. You can avoid these measures by seeking financial help immediately.

Summary

People don’t find themselves in financial problems overnight. There are common signs to look out for if you want to know the status of your finances. Discovering the scariest signs of financial instability is important because you have the opportunity to take the necessary measures and change your fortune.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Top 5 Strategies For Reducing Investment Risks

Top 5 Strategies For Reducing Investment Risks

Most investments fail because people take in too much risk. So, what should you do to reduce risk when investing? Below are proven strategies regular investors can use to manage risk.

Strategy 1: Invest in financial education

Most people make investment mistakes because they don’t take time to invest in financial education. You can’t be a successful investor if you don’t know anything about investing. You can hire an investment professional to invest for you. However, you’ll need to a lot of money for such an approach to work. Financial education is very important. You need to know why investing is important in the first place. You should also know the different types of investments available to you among other basics. Financial education helps you make informed investment decisions. You may not become an investment expert yourself by studying basics, however, you will be able to avoid common investment mistakes made by most people if you are financially literate.

Strategy 2: Choose investments you are familiar with/passionate about

Another great way of reducing investment risks is to invest in opportunities you are already familiar with or passionate about. Sometimes it may take a lot of time, effort and money to get adequate financial education. If so, invest in an opportunity you are familiar with or passionate about. It could be anything really. It’s easier to set up a business revolving around your passion or something you know a lot about rather than attempting to learn something new from scratch. Remember, risks emerge mostly from the unknown so, choose investments that you know much about or have an unmatched interest in.

Strategy 3: Take the relevant insurance

One of the best ways of managing/avoiding risk is taking insurance. The insurance industry in the UK as well as globally has countless insurance covers that take care of all types of risks imaginable. If you are investing in rental housing, for instance, you can take loss of income insurance to cover you when you don’t have tenants. Such a cover eliminates risks associated with having empty rental units especially when you are servicing a loan. Before you start investing, shop for relevant insurance products that can help you reduce risk.

Strategy 4: Start small

You can also reduce investment risks by starting small. This strategy is perfect when you don’t know much about the investment opportunity you want to pursue. When you start small, your risks are also small. Your financial stability stays intact regardless of the outcome. You can then grow your investment when you can handle more risk.

Strategy 5: Focus on organic growth

This strategy is perfect when the investment in question is a business. Most people make the mistake of growing ahead of the actual business. According to most investment experts, you should allow your business to grow organically if you are keen on avoiding risks such as lack of customers. For instance, you should take a loan to expand your business when you have already started your business and noticed the demand for whatever you are selling is increasing. Taking a loan to expand a business when there is no demand for your products/services exposes you to a lot of risks.

Strategy 6: Reinvest profits

It’s less risky to reinvest profits instead of borrowing a loan to invest. When you take out any loan, there is always the possibility of being unable to repay the loan for reasons that may be beyond your control. To avoid such risks when investing, consider reinvesting investment profits first before you think of investing using a loan.

Strategy 7: Diversify

Diversifying is one of the best ways of reducing investment risks although it might reduce your ROI. Concentrating on one investment opportunity is bound to increase your profits. However, it comes with immense risk. Considering anything can happen, your financial future should not be at the mercy of one investment avenue. You should invest in many markets to reduce risk in case one market crashes.

Summary

Incorporate the above strategies when investing and watch your exposure to risk decrease drastically. Many people expose themselves to investments risks by being financially illiterate. Many people also land into investment problems because they fail to start small, take insurance, focus on organic growth and diversify. It’s also advisable to consider reinvesting profits before you take out an investment loan.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Here Are The Top Debt Myths Debunked

Here Are The Top Debt Myths Debunked

There are many debt myths today that stop people from getting the best out of loans. It’s important to discover what is true about debt to avoid being part of the problem. The 1st step to getting the best out of debt is debunking the most common myths. Below are the top 5 debt myths debunked.

1. Debt is bad

There is this general notion globally that debt is bad so, it must be avoided. This is far from the truth. Many people have been led to think debt is bad because of the consequences faced by people who are unable to service debt. Debt isn’t bad if you can meet your repayment obligations. If you can take and repay a payday loan in time, there is nothing wrong with that. In fact, debt is a good thing in such an instance because you get access to money for taking care of emergency expenses. Debt is also useful when you have a solid plan. You shouldn’t take a loan just because it is available to you. Have a good reason first as well as a solid plan for repaying the loan. You should also understand the type of debt you are taking. Many people don’t pay attention to the terms and conditions of loans, so they end up branding loans negatively. Debt is good as long as you have good reasons for taking up debt and a solid repayment plan.

2. Debt is for the poor

People also associate debt with the poor although many rich people have made a fortune because of taking up debt. Loans are for everyone regardless of your social class. The only difference is the type of loans the rich take. Most rich people take up long term loans for investment purposes. The poor tend to take short term loans for subsistence purposes. You can take a payday loan or any other type of short-term loan to cater for unexpected expenses. So, applying for a loan doesn’t mean you are poor. In fact, your chances of succeeding using your own savings are very slim. Everyone, including the rich, take up loans. The difference is in the type of loans they take as well as what they do with the money.

3. Your credit history/score is better off when you avoid debt

Many people also believe that they can keep their credit score and overall history intact by avoiding debt. This is far from the truth. In fact, you hurt your credit history by avoiding debt since there is nothing to report about. As the name suggests, credit reports record your credit history. If you don’t take up loans, such as credit card debt, payday loans etc., your credit report won’t have any entries. A person’s credit score improves when they show they are capable of meeting their debt obligations. This simply means you have to take up debt. Otherwise, your credit score won’t change for the better.

4. Debt terms and conditions are set in stone

Most people are also of the notion that debt terms and conditions can’t change. This is far from the truth. Lending institutions are usually flexible. However, you have to put in work to get better terms. For instance, you need to be a regular customer to be able to negotiate for better terms. You also require a good credit score and solid assets. Being knowledgeable also helps. Your chances of getting the best possible debt terms and conditions are slim if you have basic borrower information. You need to invest in financial education to be able to negotiate on the next level. Most people believe loan terms and conditions don’t change because they don’t push their lenders hard enough. Lenders also tend to be less flexible on short term loans. Considering most people take short term loans, it’s easy to understand why people believe this myth.

5. Debt settlement is unethical

Lenders love portraying debt settlement as an unethical practice that portrays lack of character. This isn’t the case. Of course, there are people who take up loans and use them irresponsibly. However, most of the people who turn to debt resettlement do so because of circumstances beyond their control such as unemployment, emergency bills, family problems, etc. For this reason, there is no problem with seeking this alternative when you don’t have any other option.

Summary

There’s a lot of misinformation surrounding debt today. To get the best out of loans, you need to understand the myths surrounding debt. Although there are countless myths about debt, the above myths offer valuable basic information.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.