Bad- Credit-'s Loan Plan to Improve Your Cashflow

The following guidelines could help you to restore an ailing bank balance:

Action Stations!
Think big- look at your financial situation as a whole. All too often our financial plans remain disjointed, so while you strive to make savings in one part of your life, your overall financial position remains unchanged. Make a proper plan. Write down exactly how much you owe, as well as listing what you earn and spend each month.

Dig out every single financial record you possess, including: savings balances, bonds of every colour and shape, insurance plans, both general and life, pensions statements, receipts, income payments and anything else relevant to tax returns. Next, borrowings: mortgages, credit cards and storecards, personal loans, student loans, hire purchase agreements. The lot. Only then will you be able to see where you can make savings.

Now, work out how much spare cash you have, over and above money needed to take care of emergencies and bills. If you have debts, use it to repay them. Borrowing rates may be low, but savings rates are normally lower still.

Be realistic
Set your goals too high and you are bound to fail. Aim for a 12-month strategy for getting your finances on track, not a three-week spending deprivation exercise that is likely to leave you desperate for a splurge.

Beware the sales- however, sales shouldn't be ignored altogether. If you know you need to make an expensive purchase (such as new furniture or electrical equipment), it's obviously better to seek out discounts. Give yourself limits in advance, and don't be tempted by other "bargains" that you probably don't need and cannot afford.

Be a "Rate Tart"- you shop around for bargains like clothes and motors- so extend that thinking into your money as well!

Interest-free loans can be an excellent way of funding big purchases, so long as you ensure you have paid off the debt by the end of the interest-free period. While some retailers calculate monthly payments so the debt is repaid in time, others encourage you to underpay, and then force you to repay all the back interest because you have not conformed with the terms of the contract- always read the gobbledegook in the small print.

Some quick fixes to get you started:
Bills: Use direct debits wherever possible to save money. Check statements to ensure you are not building up credit balances. If you are, demand a cheque. It's your money, not theirs.

Current accounts: Check monthly statements exhaustively. They're computerised and staff no longer check for obvious errors. Retain lists of bank charges and keep them handy. Watch out for unnecessary credit insurance charges. They're expensive and rarely worthwhile. Don't be afraid to transfer to better-paying accounts. The process is getting simpler and faster.

Insurance premiums: Household and motor premiums have soared. Never renew without trawling the market for cheaper quotes. Brokers don't always mention direct providers, so check them. Don't trust promises by big broker brands to find the best deals.

Beef up your financial IQ: Read financial sections in newspapers such as the Financial Times or the Wall Street Journal. "quality" broadsheets at the weekends also carry a lot of information.

Cut credit card bills: Your credit cards can end up costing you an arm and a leg- and many now face a series of large bills. Switch balances to the cheapest credit cards, most of which offer special deals to those transferring existing debt.

But be careful. Those with low rates for balance transfers often have much higher rates for new purchases (often at 15 per cent plus) and these will not be cleared until your transferred balance is paid off. If you have a large debt to clear it could be months before you start to pay off any new purchases, which will have been clocking up interest charges at a much higher rate.

Of course the easiest way to save money on your credit card is to pay off the debt in full each month before interest starts accruing, but credit card borrowing is sioaring as more people struggle to do so every month.

Consolidate debts: If you have large debts on several credit cards, an overdraft spiralling out of control and several smaller loans, it may make life simpler - and more affordable - to consolidate them into a single loan.

By consolidating debts, it is possible to lower monthly payments. But remember, if cutting repayments increases the time you take to pay off the debt, you will pay much more in interest. One of the main advantages is that you have just one monthly payment, making it easier to organise your finances, and save money.

Again, shop around for the best rates! Try calculating your best online rates through

Remortgage: Mortgage rates are at their lowest for a generation. So, if you haven't already taken the opportunity to remortgage, do so now! Fixed rate deals are already getting more expensive in anticipation of higher interest rates.

By remortgaging, homebuyers can also release additional equity in their home, which can be an extremely cost-effective way of consolidating debt, paying for home improvements or other purchases, such as cars. Why pay 10 per cent-plus on a personal loan, when you can pay off your debts with a mortgage charging less than 5 per cent?

Mortgage rates have fallen significantly over the past year, and homeowners who are still paying standard variable rates can easily remortgage to a better deal. If you are worried that rates might rise again, you should opt for a fix. If you are confident that interest rates will remain low, then the cheapest deals around are the discount and tracker deals.

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