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Debt Consolidation
Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. This commonly refers to a personal finance process of individuals addressing high consumer debt, but occasionally it can also refer to a country's fiscal approach to consolidate corporate debt or government debt. The process can secure a lower overall interest rate to the entire debt load and provide the convenience of servicing only one loan or debt. Overview Debt generally refers to money owed by one party, the debtor, to a second party, the creditor. It is generally subject to repayments of principal and interest. Interest is the fee charged by the creditor to the debtor, generally calculated as a percentage of the principal sum per year known as an interest rate and generally paid periodically at intervals, such as monthly. Debt can be secured with collateral or unsecured. Although there is variation from country to country and even in regions within country, consumer ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Refinancing
Refinancing is the replacement of an existing debt obligation with another debt obligation under a different term and interest rate. The terms and conditions of refinancing may vary widely by country, province, or state, based on several economic factors such as inherent risk, projected risk, political stability of a nation, currency stability, banking regulations, borrower's credit worthiness, and credit rating of a nation. In many industrialized nations, common forms of refinancing include primary residence mortgages and car loans. If the replacement of debt occurs under financial distress, refinancing might be referred to as debt restructuring. A loan (debt) might be refinanced for various reasons: #To take advantage of a better interest rate (a reduced monthly payment or a reduced term) #To consolidate other debt into one loan (a potentially longer/shorter term contingent on interest rate differential and fees) #To reduce the monthly repayment amount (often for a longer ter ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Car Finance
Car finance refers to the various financial products which allow someone to acquire a car, including car loans and leases. Car purchases The most common method of buying a car in the United States is borrowing the money and then paying it off in installments. Over 85% of new cars and half of used cars are financed (as opposed to being paid for in a lump sum with cash). Roughly 30% of new vehicles during the same time period were leased. There are two primary methods of borrowing money to buy a car: direct and indirect. A direct loan is one that the borrower arranges with a lender directly. Indirect financing is arranged by the car dealership where the car is purchased. Legally, an indirect “loan” is not technically a loan; when a car buyer obtains financing facilitated by a dealership, the buyer and dealer sign a Retail Installment Sales Contract rather than a loan agreement. The dealer then typically sells or assigns that contract to a bank, credit union, or other financi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Equity (finance)
In finance, equity is ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets. For example, if someone owns a car worth $24,000 and owes $10,000 on the loan used to buy the car, the difference of $14,000 is equity. Equity can apply to a single asset, such as a car or house, or to an entire business. A business that needs to start up or expand its operations can sell its equity in order to raise cash that does not have to be repaid on a set schedule. In government finance or other non-profit settings, equity is known as "net position" or "net assets". Origins The term "equity" describes this type of ownership in English because it was regulated through the system of equity law that developed in England during the Late Middle Ages to meet the growing demands of commercial activity. While the older common law courts dealt with questions of property title, equi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Home Equity Line Of Credit
A home equity line of credit, or HELOC ( /ˈhiːˌlɒk/ ''HEE-lok''), is a revolving type of secured loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower's property (akin to a second mortgage). Because a home often is a consumer's most valuable asset, many homeowners use their HELOC for major purchases or projects, such as home improvements, education, property investment or medical bills, and choose not to use them for day-to-day expenses. A reason for the popularity of HELOCs is their flexibility, both in terms of borrowing and repaying. Furthermore, their popularity may also stem from having a better image than a "second mortgage", a term which can more directly imply an undesirable level of debt. However, within the lending industry itself, HELOCs are categorized as a second mortgage. HELOCs are usually offered at attractive interest rates. This is because they are secured against a borrower’s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Second Mortgage
Second mortgages, commonly referred to as junior liens, are loans secured by a property in addition to the primary mortgage. Depending on the time at which the second mortgage is originated, the loan can be structured as either a standalone second mortgage or piggyback second mortgage. Whilst a standalone second mortgage is opened subsequent to the primary loan, those with a piggyback loan structure are originated simultaneously with the primary mortgage. With regard to the method in which funds are withdrawn, second mortgages can be arranged as home equity loans or home equity lines of credit. Home equity loans are granted for the full amount at the time of loan origination in contrast to home equity lines of credit which permit the homeowner access to a predetermined amount which is repaid during the repayment period. Depending on the type of loan, interest rates charged on the second mortgage may be fixed or varied throughout the loan term. In general, second mortgages are su ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Institution
Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial institutions: # Depository institutions – deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions, trust companies, and mortgage loan companies; # Contractual institutions – insurance companies and pension funds # Investment institutions – investment banks, underwriters, and other different types of financial entities managing investments. Financial institutions can be distinguished broadly into two categories according to ownership structure: * Commercial banks * Cooperative banks Some experts see a trend toward homogenisation of financial institutions, meaning a tendency to invest in similar areas and have similar business strategies. A consequence of this might ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debt Relief
Debt relief or debt cancellation is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations. From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves. In World War I the United States Treasury made large loans to the allies that were postponed, reduced and finally paid off in 1953. In the late 20th century, it came to refer primarily to Third World debt, which started exploding with the Latin American debt crisis (Mexico 1983, etc.). In the early 21st century, it is of increased applicability to individuals in developed countries, due to credit bubbles and housing bubbles. International debt relief First World War reparations War debt payments by World War I Allies to the U.S. had been suspended in 1931—only Finland paid in full—and American public opinion demanded repayments resume as a condition of U.S. postwar aid. Germany had ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debt Settlement
Debt settlement (also called debt reduction, debt negotiation or debt resolution) is a settlement negotiated with a debtor's unsecured creditor. Commonly, creditors agree to forgive a large part of the debt: perhaps around half, though results can vary widely. When settlements are finalized, the terms are put in writing. It is common that the debtor makes one lump-sum payment in exchange for the creditor agreeing that the debt is now cancelled and the matter closed. Some settlements are paid out over a number of months. In either case, as long as the debtor does what is agreed in the negotiation, no outstanding debt will appear on the former debtor's credit report. History As a concept, lenders have been practicing debt settlement for thousands of years. However, the business of debt settlement became prominent in the USA during the late 1980s and early 1990s, when bank deregulation, which loosened consumer lending practices, followed by an economic recession, placed consumers in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Personal Bankruptcy
Personal bankruptcy law allows, in certain jurisdictions, an individual to be declared bankrupt. Virtually every country with a modern legal system features some form of debt relief for individuals. Personal bankruptcy is distinguished from corporate bankruptcy. By country The DICE report 2006 of Munich's ifo Economic Research compared international personal bankruptcy in selected OECD-countries. United States In the United States, the same chapters of the Bankruptcy Code are applied in both personal and corporate bankruptcies. Most individuals who enter bankruptcy do so under Chapter 13 (a "reorganization" plan) or Chapter 7 (a "liquidation" of debtor's assets). More rarely, personal bankruptcy proceedings are carried out under Chapter 11. The ultimate goal of personal bankruptcy, from the viewpoint of the debtor, is receiving a discharge. Canada The concept behind bankruptcy in Canada is that an individual assigns (surrender) everything they own to a trustee in bankruptcy in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Credit Counseling
Credit counseling (known in the United Kingdom as Debt counseling) is commonly a process that is used to help individual debtors with debt settlement through education, budgeting and the use of a variety of tools with the goal to reduce and ultimately eliminate debt. Credit counseling is most often done by ''Credit counseling agencies'' that are empowered by contract to act on behalf of the debtor to negotiate with creditors to resolve debt that is beyond a debtor's ability to pay. Some of the agencies are non-profits that charge at no or non-fee rates, while others can be for-profit and include high fees. Regulations on credit counseling and Credit counseling agencies varies by country and sometimes within regions of the countries themselves. In the United States, individuals filing Chapter 13 bankruptcy are required to receive counseling. Overview In the United States, the National Foundation for Credit Counseling was established in 1951. The modern practice known as ‘‘credit ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Insolvency
In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet insolvency. Cash-flow insolvency is when a person or company has enough assets to pay what is owed, but does not have the appropriate form of payment. For example, a person may own a large house and a valuable car, but not have enough liquid assets to pay a debt when it falls due. Cash-flow insolvency can usually be resolved by negotiation. For example, the bill collector may wait until the car is sold and the debtor agrees to pay a penalty. Balance-sheet insolvency is when a person or company does not have enough assets to pay all of their debts. The person or company might enter bankruptcy, but not necessarily. Once a loss is accepted by all parties, negotiation is often able to resolve the situation without bankruptcy. A company t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. Bankrupt is not the only legal status that an insolvent person may have, and the term ''bankruptcy'' is therefore not a synonym for insolvency. Etymology The word ''bankruptcy'' is derived from Italian ''banca rotta'', literally meaning "broken bank". The term is often described as having originated in renaissance Italy, where there allegedly existed the tradition of smashing a banker's bench if he defaulted on payment so that the public could see that the banker, the owner of the bench, was no longer in a condition to continue his business, although some dismiss this as a false etymology. History In Ancient Greece, bankruptcy did not exist. If a man owed and he could not pay, he and his wife, children or servants were forced into " ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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