Tax Carnival Ecstasy – November 29, 2012

We need to get this to the Fiscal Cliff! What ...

Welcome to the November 29, 2012 edition of Tax Carnival Ecstasy. In this edition we start with two articles from Bill Smith, a look at Eco Products That Are Tax Deductible and an article all about the Buffett Rule. Then there’s a post on the Fiscal Cliff and whether large corporations are immune by John Schmoll. Finally David de Souza examines Where Your Taxes Go. Hope you enjoy the material, bookmark, share, like on Facebook, tweet and follow the next edition of the carnival.

Shelby Martin presents 5 Reasons to Give Your Nanny a Year-End Review posted at GoNannies.com Blog, saying, “Annual nanny reviews do more than give nanny employers an opportunity to give their nanny a raise; they provide a much needed opportunity to evaluate the health of the working relationship.”

credits

Morris presents How It Is Possible To Obtain A Mortgage Loan With Bad Credit posted at Fast Bad Credit Loan Blog, saying, “A bad credit mortgage loan is acquirable for those people who may have less income and have adverse scores and allows them to get loans sooner and more quickly. It is however important for the applier to know that there is a price to pay in order to get a bad credit home loan.”

Morris presents Things You Need To Apply For A Bad Credit Business Loan posted at Fast Bad Credit Loan Blog, saying, “When masses begin to think about bad credit business loans, chances are that they have had a difficulty repaying their former loans or debts within the right time. This is a ordinary thing majorly with start ups. Having negative history for debts does not imply irresponsibility.”

deductions

Bill Smith presents Eco Products That Are Tax Deductible posted at 2010Taxes, saying, “There are plenty of things that can help you save money if you go green. In 2011 you could write off home energy efficiency improvements.”

tax law

Bill Smith presents Learn About The Buffett Rule posted at 2011 Taxes, saying, “Dr. Cornwall wants everyone to know that there will never be a tax increase on the extremely wealthy population (The Buffett Rule) that will put the tiniest dent in the tax shortfall of the United States.”

taxes

John Schmoll presents Are Large Companies Immune to the Fiscal Cliff? posted at Frugal Rules, saying, “Unless you’re living under a rock you’ve heard of the Fiscal Cliff. We all know how it could possibly affect individuals, but how would it affect companies? Many companies will have to make decisions about what they’re going to do with their cash after the Fiscal Cliff meets its outcome.”

David de Souza presents Where Does Your Tax Go? posted at TaxFix Feed Update, saying, “If you have ever wondered where you tax goes this post highlights how your taxable income is spent by the government.”

James Powell presents What The Child Benefit Changes Mean To You posted at Tax Credits, saying, “Child Benefit is changing. This blog posts highlights what the Child Benefit Changes Mean To You.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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The Hidden Extras of a Loan

On the surface, getting a loan should be a straightforward process, but there are so many factors that can affect the final price paid. Hence, looking for the cheapest loans takes time and effort.

The best deals available will be offered to those customers with a good credit profile, but even they can get lower rates of interest (and hence monthly payments) by taking out a secured loan rather than an unsecured loan.

Secured loans are available for larger amounts borrowed over longer periods and, although the rate of interest will be lower (due to the additional security for the lender), the costs of setting up the loan will be charged to the borrower.

Loans under £10,000 will probably be unsecured for most borrowers, meaning that there will be a few extra add on costs other than an administration fee. Secured borrowers may have to pay for independent property valuation and registration fees, although these may be added to the loan and repaid over time.

Lenders look for a particular profile of customer, so comparing terms offered can be important in getting an application approved. Good credit profiles will have the widest choice, whilst those with a poor credit history can expect to pay a premium to borrow and have a shorter repayment period.

This means that for a similar £5,000 loan, a poor credit profile customer may pay an additional £2,000 in interest and fees over the life of a five year loan. Therefore prospective borrowers should do everything possible to improve a credit profile before applying for a loan as this can save many pounds.

Checking credit information costs just £2 or may even be free through one of the credit reference agencies. Several offer a free one month trial, which allows an easy to see view of the credit information held so that any incorrect information can be challenged.

Another additional cost to consider is the addition of payment protection insurance (PPI). There has been a large amount of bad press relating to the sale of PPI by banks but it can be a worthwhile addition provided it is properly explained at the time of sale and the customer qualifies for cover.

Self employed people and those with pre-existing medical conditions or previous knowledge of impending redundancy will not be eligible. There is also at least a six month qualifying period before a claim can be made.

On the plus side, PPI policies will make monthly loan payments if the worst happens. Extreme care needs to be exercised before taking on the additional cost of a PPI policy.

One measure of the cost of a loan is the stated APR (Annual Percentage Rate). This adds in all fees and charges and makes a standardised calculation as to the true cost of credit.

This is a fair comparison for loans over a year in duration, but can give some high values where short term loans are taken out.

Since the APR calculation looks at the cost per annum, a short pay day loan of 20 days, for example, could have a rate approaching 2,200%.

Some loan companies also have a policy of charging fees for missed payments or when loans are in arrears. Make sure to check what could be charged as an administration fee or late payment fee should a payment be missed. These can soon amount to a considerable sum and will not be included in the APR stated.

The final true test is the monthly repayment plus any fees paid. Rather than relying on APRs alone, always check the amount of the payment and the number of payments to be made, plus any additional fees.

Check what happens in the event of a default and it should be possible to flush out all the potential hidden costs.

 

Sam is a finance writer based in the UK, currently working for Moneysupermarket.com