Markets – This week

May 23rd, 2013 India Infoline No Comments »

After rallying for five-weeks on the trot, the market decided to shed its gains on negative global cues. The nearly 14% returns and almost 750 points rally from its April lows looked under threat with Asian markets falling like nine pins.

Sentiment took a further hit after the Indian currency weakened to an eight-and-a-half month low against the dollar.

Stock market participants are showing an inclination to take some money off the table.

One more reason for the decline could be the huge action in the primary markets. Almost five initial public offerings have hit the markets, out of which the Scotts Garments’ IPO was called off due to lack of investor appetite.

Just Dial, the biggest IPO till date in 2013, hit the markets on May 20. Investors have subscribed to over 50mn shares against the 13.5mn shares on offer, according to the latest exchange data.

On the earnings front, SBI and L&T disappointed the street.

SBI Q4 FY13 profit declined 19% to Rs. 32.99bn from Rs. 40.50bn in the same period last fiscal. Total income rose Rs. 363.31bn as against Rs. 339.6bn in the period under review.

Engineering behemoth L&T reported a 6.9% year-on-year fall in its Q4 net profit at Rs. 17.88bn on the back of a 9.9% YoY rise in total income at Rs. 206.87bn.

Apart from the domestic dampeners, market participants turned vigilant after cues from the US Federal Reserve suggested it may begin tapering its bond-buying or stimulus program in the coming months. This sent US markets tumbling.

To compound matters, Bank of Japan announced a two trillion yen or $19bn fund-supply operation. This pushed markets further into the doldrums with yield on the 10-year Japanese government bond closing at 0.885% on Thursday after touching a high of 1%.

Going forward, the April core sector and fiscal deficit data and Q4 GDP numbers will be tracked closely. IIFL expect the selling pressure to continue until greenshoots on the macroeconomic front appear. With Finance Minister P Chidambaram promising to rollout additional reforms, one cannot rule out a dead cat bounce.

Akshaya Tritiya 2013 – Invest Wisely!

May 11th, 2013 HDFC Securities No Comments »

Akshaya Tritiya is a momentous occasion in the Hindu calendar. It is one of the most auspicious days for Hindus who believe that any meaningful venture started on this day would bring wealth and fortune. We all know that Akshaya Tritiya is also considered a very auspicious day to buy gold. Celebrated on May 13 this year, this day is likely to see a huge demand for gold especially because the prices have fallen. It is great time, therefore, to invest in gold in India.

Before putting forth the money, it is important to understand whether you are buying it as jewelry or for investment purpose. There are many options available for gold investments in the market.

You can consider investing in gold through Gold Mutual Funds, E-Gold and Gold ETF. Gold coins and bars are also ideal investment options.However, the fact remains that a majority of Indians do not consider gold jewelry as investment. But the market today sees a huge demand for gold ETF in India.Considering that Akshaya Trititya 2013 is the next big occasion, this demand is expected to rise further. Not just metros, but people from smaller towns are also considering exploring the options of gold ETF. Not to forget, a majority of Indian buyers still prefer physical gold over ETFs during such occasions due to popular beliefs.

What is Gold ETF?
Gold ETFs are exchange traded funds that are connected to the value ofactual gold. In this way, each unit of gold ETFallowsthe investor to possess 1g of gold without actually owning it.Investing in gold ETF also eliminates the downside of possessing actual gold, i.e., storage, theft, liquidity, and purity.Gold ETF in Indiahas been influential in widening the scale of gold buyers. And because it’s easier and growing popular day by day, it will further drive the demand for gold in future. Commonly referred as paper gold, gold ETFs are issued by asset management companies as mutual funds against physical gold deposits with 99.5 per cent purity.

Before going for any investment option, it is advisable to first analyzeyour needs. Gold ETF would be the ideal choice if you are seeking investment for long term with less cost involved and no tax obligations. And because it’s India, no matter what the price of gold would be, people here will always remain the largest consumers of gold for both emotional and investment purposes.

Author Box
HDFC Securities is a leading stock trading company which has been operating for over 10 years and serves a diverse customer base of retail and institutional investors. HDFC Securities provides a seamless online real-time platform to trade in stocks where one can buy or sell shares on both the NSE and BSE. With upcoming festival of Akshaya Tritaya seize the opportunities to invest in Gold with HDFC securities.

Know the Right Approach to Invest in Property

May 9th, 2013 Guest No Comments »

Real estate investment is a safe option in the present economic scenario. When it comes to investing in property, finding a suitable property in your preferred location is not sufficient. Arranging for the finances is of utmost importance. This article focuses on giving its readers an idea about the real estate investments and opportunities.

Creating wealth by investing in property is one of the most profitable long-term options. Depending on the type of property and investment strategy, the choice of home loan can be decided. The returns on your property investment can exceed your expectation if assets and home loan is managed properly.

Buying a house is a dream for many people globally including India. The rising real estate prices however make it a herculean task to buy a property of your choice. The expanding housing finance market in India includes a large number of Housing Finance Companies (HFCs) and banks that have come up with several lucrative home loan plans for buying a flat in different cities like Delhi, Mumbai, Bangalore and Pune.

How does a Home Loan Helps in Property Investment?
Investment in property has out-performed the other traditional investment options such as equity and bonds. In current scenario, real estate is the only tangible asset that offers high returns and stability. Home loans have become a necessity in today’s time. These loans offer a long-term saving option to the customer. It allows people not only to fulfill their dream of purchasing a house, but also save money.

With the skyrocketing property prices, it is one of the best options available to property buyers. If the loan amount is paid off, renting your property can generate income and serve as your pension plan. Moreover, it serves as a tax saving tool for salaried employees. Thus, even if you can afford to buy a house, availing housing loan is a lucrative investment option.

Types of Home Loans for Investing in Property:-
Every person has different needs to buy a house. Keeping in mind the investment requirements of different customers, housing finance companies and banks offer a range of home loans. Some of them are give below:

  • Home Purchase Loan: It is one of the most common types of loan demanded by people for buying a New Flat or house. Purchasing a house is considered the best investment option in today’s time.
  • Home Equity Loan: Buying a property is your biggest investment. This type of loan offers a line of credit up to a certain amount on your mortgage.
  • Land Purchase Loan: In order to purchase a land for investment or residential purpose, this type of loan can be availed from various banks.
  • Bridge Loan: This is a special type of short-term finance scheme that is offered for buying a new house after the sale of the existing home. It bridges the finance gap till a suitable purchaser is found for the old house.
  • Home Construction Loan: Loan is also available for constructing a new house instead of purchasing a ready to move property.

Financing Your Investment Plan through a Simplified Home Loan Process:-
A property investor needs to arrange in advance the funds required in buying a property. Availing loan to fund the property is an appropriate option. Getting a loan approved used to be a lengthy and cumbersome process. However, in the current scenario the presence of several HFCs, private and nationalized banks have significantly streamlined the home loan process.

A certain procedure needs to be mandatorily followed to avail the home loan in India. Let’s take a look at the entire process:

Step 1: Submit Application Form
Once you know your loan requirement and the type of finance scheme that suits you, you need to submit the loan application form to the bank or Housing Finance Company with all the required documents demanded by them. These documents may include information about investments, employment, age, income or residence. You also need to pay the upfront processing fee at the time of submitting the form.

Step 2: Information Verification
Once the borrower provides all the required information, the HFCs verify all the details. Some of them also conduct reference check and personal interview with the customer.

Step 3: Provide Sanction Letter
After the proper validation of information provided by the customer is done, the next step is issuing a sanction letter. This letter includes all important loan details like the interest rate, loan amount sanctioned, mode of repayment, terms and conditions, and the duration of the loan.

Step 4: Document Submission
The loan amount is sanctioned only after the original documents relating to property being purchased are verified. Once the sanction letter is passed, the next step is the submission of original documents, which remain in the custody of the lender till the full loan amount is recovered.

Step 5: Property Validation
The property is visited by the HFC before the loan is finally disbursed to the customer. The purpose of visiting the property location is to ensure that it is legally approved.

Step 6: Payment Procedure
After all the above stages of the loaning process are clear, the final stage is deciding the loan payment procedure. The payment of EMI starts once the borrower draws the complete sanctioned amount.

In today’s time, owing a house gives a feeling of achievement and stability in life. Apart from this, investment in property has become a safe and profitable option. The various housing schemes in India have contributed significantly in making real estate investment a successful option.

Author Bio: - Swati Srivastava, a professional writer has been writing for several real estate sites in India. Her articles provide useful information about real estate deals that help the readers to find Flat in Uttam Nagar, Delhi at best prices.

Policy meet: RBI could cut repo rate on May 3

May 2nd, 2013 India Infoline No Comments »

RBI may well cut repo rate by 25 basis points. In March, one would have expected the central bank to keep the rate unchanged in the annual monetary policy review on May 3.

The RBI had cut Repo rate by 25 basis points in March. An improvement in trade deficit, drop in core inflation, achievement of 5.2% fiscal deficit and slowing growth prompted RBI to act. These front ended cuts in 2013 (50 bps in Repo and 25bps in CRR) are a welcome step and will help bring down interest rates in the medium term. Having said that, immediate monetary transmission on account of the Repo cut is difficult due to liquidity tightness in the system and hence in the stock market.

Ironically, deposit rates were increased in the last few months despite a Repo cut in January. Private banks did not pass on the benefit of policy rate and CRR cut while SBI reduced its base rate by mere 5 basis points.

Should RBI cut rates further, one can expect deposit rates to go down gradually. When the monetary policy meet takes place, you will hear about some terms like CRR,  Reverse Repo Rate and Repo Rate.

The Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system.

Reverse Repo rate is the rate at which the RBI borrows money from commercial banks. An increase in reverse repo rate can prompt banks to park more funds with the RBI to earn higher returns on idle cash.

The rate at which the RBI lends money to commercial banks is called repo rate. It is an instrument of monetary policy. Whenever banks have any shortage of funds they can borrow from the RBI.

A reduction in the repo rate helps banks get money at a cheaper rate and vice versa.

 

Delhi Still Holds Potential for Investors

May 1st, 2013 Suraj Deshpande No Comments »

Delhi real estate market has witnessed a tremendous growth in the last few years. Due to rise in housing demand, it has seen a gradual increase in the property prices as well. Due to ample of opportunities, vibrant culture and excellent food, Delhi turns out to be one of the best cities to live in.

With the increasing population, work opportunities and developing infrastructure, Delhi and the surrounding areas like Noida and Gurgaon have become a prime location for both builders and investors.

Delhi being the capital of India, offers end number of facilities in terms of education, hospitality, healthcare and business. Presently, there is a growing demand for 1 & 2 BHK flats in Delhi as well. North Delhi is in great demand for 2BHK units, especially in areas like Pitampura and Rohini. The maximum demand for 1 & 2 BHK units is coming from the middle-income groups. Majority of these buyers are first-time home buyers.

However, the preferences in Gurgaon are still high for 3 BHK apartments, probably due to lower rates as compared to Delhi. While demand in Dwarka Expressway, Noida, Noida Extension, and Yamuna Expressway is equally good for 2 BHK as well as 3 BHK apartments.

One reason why there is an increasing demand for 1 BHK flats in Delhi is the splitting up of joint families into nuclear ones. Most of the people prefer settling down with their immediate family after establishing their careers in this city. However, the concept of living in joint families in Delhi is still pretty much alive when compared to metros like Mumbai.

Delhi has an impressive infrastructure to talk about. It has plenty of five star hotels, luxury residential and hi-tech commercial properties. And since a large number of multinational companies are setting up their offices in the capital, investing here seems a good option for property seekers. Other major locations close to Delhi like Noida, Noida Extension and Gurgaon are also immensely popular in terms of property investments.

It is rare that the builders provide flats and apartments here at affordable prices; however this doesn’t pull down the demand for property in Delhi. NRI’s and Foreign investors too are considering the city of Delhi as a good investment option. Indeed, investing in Delhi and the NCR will turn out to be profitable considering the rate of growth and planned developments for the city. The face of real estate in Delhi is changing too fast; therefore it would be great idea to put in your hard earned money in buying a property in this city.

Author Box:-
Suraj Deshpande is a Real Estate columnist who has a vast experience in the real estate space. He regularly writes about various property listings in India and about the real estate market in general.

Using online tax calculators to have a fair idea about your savings and investments’ tax liability

April 30th, 2013 India Infoline No Comments »

Planning your investment portfolio is as important as having a clear idea about the tax liability of various instruments like bonds, shares, debentures etc. However, it may not be possible to rush to a tax consultant every time you need to have a fair idea about the tax elements, or want to compare them for different investment options before seeking a tax consultant’s opinion. This is where online calculators can come handy.

Various websites play host to different types of tax calculators, from which you can take your pick based on what you want to calculate. You should remember that you earn capital gains on your investments, which is why you become liable to pay capital gains tax. Irrespective of whether you put your money in bonds, stocks, or other financial instruments, you should have a clear idea about how your final return will get affected by the capital gains tax. In such a scenario, you can use a tax calculator for identifying your capital gains tax applicable on your investments in mutual funds and other financial instruments.

You may come across calculators that ask users to submit pertinent data, such as the date of investment, investment category (equity or debt etc), purchase value, date of redemption, and redemption value, among others, to offer users a reference point with respect to their tax liability.

Depending on what you are looking for, you can search online to find devices that assess your savings as well as tax liability. For example, if you want to have a fair idea about your returns on a specific financial instrument, you can use online calculators that compute the post tax returns produced by your chosen investment options. You may also come across need based redemption tools, which help you to identify the number of units of a particular share or other financial instrument that you have invested in, which should be sold in order to fulfil the present financial requirement. You may even use online tools like inflation calculators to analyse how inflation would affect your savings and the amount you will have in hand after meeting your tax liabilities.

Though such tools can help you to get a basic idea about your financial condition and investment returns/tax liability, they shouldn’t be used as an alternative for competent tax advice. There are many assumptions on which such tools work, which may or may not be applicable in your case. For example, you may come across mutual fund investment tools, which assume that no part redemptions were made for the particular investment, while assessing your tax liability or returns. Thus, only a professional tax consultant can help you with sound advice in case you have redeemed some units before the respective redemption date. Again, based on the budget and newly introduced finance bills, the actual figures may vary from what these tools show. This is why you should use them for indicative purposes, and not take major financial decisions based on what results/figures they show.

Gold’s two-day trauma

April 29th, 2013 Kotak Commodities No Comments »

Spot gold daily price chart

Source: MetaStock
Gold, once considered a safe haven asset and least volatile commodity, has witnessed a sharp $200 per troy ounce sell-off in just two trading sessions leaving most market players awestruck and struggling for an answer. Market players are now struggling to point a finger at an event or information which triggered the sell-off.

The amazement at gold movement is evident from following comments. Dennis Gartman, editor and publisher of The Gartman Letter was quoted stating that there are a lot of people throwing up their hands, throwing positions overboard. Panic is everywhere.

Hedge fund manager John Burbank said the recent sharp selloff in the precious metal came as a surprise to many investors

Some of the reasons stated for the fall are reports of gold sale by Cyprus, ETF outflows, uncertainty about US central banks asset purchase program and downbeat price forecast by major investment banks. China’s disappointing GDP data added fuel to the selling in the market.

While these factors make a bearish case for gold, the fall of such momentum cannot come unless we see massive selling in the market. Market reports suggest that a futures sell order worth $6 billion, equal to 4 million ounces or 124.4 tonnes of gold, by a large investment bank sent prices plummeting and spooked the markets contributing to the decline. The order was believed to have been placed through Merrill Lynch’s brokerage team.

Gold has been sitting on a variety of negative factors and the recent fall seems to a culmination of these factors in form of a massive sell-off by some big players.

Gold’s modest gain last year disappointed some market players who preferred to shift to other asset classes for better returns. This is evident from the steady outflow from gold ETF’s. Gold holdings with SPDR Gold Trust, the biggest gold backed ETF, have fallen by 196 tonnes so far to 1154.344 tonnes

Optimism about US economy also put pressure on gold as equities were seen as a better bet. US political leaders reached a fiscal deal early in the year to avert a fiscal showdown. Meanwhile, economic data pointed to improvement in the economy. This pushed US equity markets higher further diverting people from assets like gold. There was little negative reaction in the market even when automatic spending cuts got triggered in March.

Improvement in US economy also raised doubts about sustainability of the monthly $85 billion asset purchase program announced by Federal Reserve last year. Fed officials have discussed the costs and benefits of the asset purchase program and some have even suggested tapering or ending the asset purchase program. However they lack consensus hence we have not seen any decision so far.

Another disappointment for market players was gold’s failure to rally despite some supportive factors. Euro-zone came back into focus with weaker economic data, political instability in Italy and bailout for Cyprus. However this failed to increases gold’s appeal as an alternative asset.

Gold failed to gain despite aggressive monetary easing measures announced by Bank of Japan to support the economy. The metal was also unfazed by increasing tensions in Korean Peninsula following North Korea’s nuclear test.

In last few days, a series of event added to downbeat sentiment for gold. In its April 10 report, Goldman Sachs slashed its short- and long-term gold forecast for gold and suggested to sell. Goldman sees gold ending the year at $1,450, a forecast that came down from $1,600 at the end of February and $1,810 prior to that. Goldman sees gold falling to $1270 by the end of 2014.

FOMC minutes released on April 10 noted that Fed officials discussed costs and benefits of the asset purchase program while acknowledging the improvement in US economy.

On the same day came reports of gold sale by Cyprus, the fifth euro nation to get a bailout. An assessment of Cypriot financing needs prepared by the European Commission showed that Cyprus has to sell excess gold reserves to raise around 400 million euros to help finance its part of its bailout. As per World Gold Council data, Cyprus has gold reserves of about 14 tonnes and with current price 400 mn euros would amount to a meager 10 tonnes sale.

However reports of Cyprus gold sale fuelled speculation that other European nations will follow suit. As per WGC data, euro area including the European Central bank holds around 10000 tonnes of gold.
While negative news kept pouring in, gold was standing at a key level near $1550/oz where price had taken support at previous occasions. Gold plunged after failing to hold through that level. The losses were extended further this week when Chinese GDP data came in below market sentiments. The downbeat sentiment snowballed in a sell-off as investors rushed out of the metal.

The recent fall in gold price shows the intensity of bearishness in gold market. However we believe that the recent fall is overstretched and some of the market fears are unfounded. The US economy is showing signs of improvement however growth is not strong enough to scale back the stimulus. We believe that the asset purchase program may stay in place for next few months. Also the fear of central bank sales seems over bloated. Central bank sales have been negligible in last few years despite slowdown in global economy and bailout of many states in euro-zone. Also the agreement between central banks, the CBGA agreement, restricts gold sale at 400 tonnes in a year. European central banks will not disrupt the gold market by selling the metal in an unorganized manner.

The sharp drop in gold price will further narrow down the profit margin for gold producers reducing the incentive to produce more gold. This could affect mine production and thereby supply in the market. Barrick Gold Corp., the world’s largest gold producer, projects all-in costs of $1,000 to $1,100 per ounce for 2013. However price has to stay low for a significant time to affect production in an adverse manner.

On the demand front, the severe correction in gold price will increase appeal for the metal for consumers especially in India. Lower gold price will also keep central government away from hiking import duty again. Wedding season and Akshay Tritiya on May 13 could the major buying events. However we may not see a sharp spike in demand. Investment demand will be affected by the drop in price.

The drop in gold stocks at COMEX warehouses is also supportive for gold price. Stocks have fallen 18% so far this year to 9113814 troy ounce or about 283 tonnes, the lowest level seen since Feb.2010.

In the near term, we expect gold in dollar terms to form a base near $1265 per troy ounce level and rebound to $1500/oz level. In domestic terms, we may see price form a base near Rs.24600/10 gram level and recover from thereon. Price could recover till Rs.27500/10 gram level in coming days.

From a longer term perspective, the sharp correction in price has dented sentiment for gold and we may not see the rally resuming unless there is a fresh trigger. However we do not expect a sustained decline and it could be more of a rangebound movement with downward bias. We could see price ranging from $1200-1650/oz. Indian prices will also be affected by movement in Indian rupee. On domestic terms, gold may remain in a range of Rs.23000-29000/10 gram level.

TECHNICAL OUTLOOK

Source Telequote
MCX Gold was trading positively and holding above the long term support line S for past 4 years. Further in last two years price was trading within the symmetrical triangle (R-S) with lower tops, higher bottom formation. However, after breaching the triangular support at (S) & (23.6% Fibonacci level) at $ 1630 price gave a sharp fall and supported at previous low and major support $ 1522.

Recently the price after breaking the major support of $ 1522 gave a sharp decline and breached major support of $ 1449 (38.2% Fibonacci level) and currently holding near $1303 (50% Fibonacci level ). A breakdown of which occurred near $1449 level, which might now act as a resistance area for the price.

Further if price continues to hold below the resistance zone at $ 1449 levels on a weekly closing basis, it has the potential to test the 50% Fibonacci support at $ 1302 level in a time span of 1-2 months. RSI has broken strong horizontal support near the 40 mark and is currently pointing lower holding well below the same, which indicates medium-term bearish momentum. Until price breaches the resistance area of $ 1522 bullishness can be effectively ruled out.

Author Box:
Kotak Commodity is a leading commodity broking firm offering commodity trading service’s along with a research division specializing in fundamental and technical research. Refer our research report disclaimer here.

Online trading: One of the best ways to invest

April 28th, 2013 India Infoline No Comments »

The internet age has changed the way we communicate, do business and also the speed and knowledge with which we trade. Any customer wanting to trade on the NSE, BSE or MCX SX, now has a choice of brokerages to choose from.

The ability of brokerages to attract new clients will depend on how they deliver Superior customer service, Low brokerage rates, Quality research, a Suite of products and seamless trading platform.

Once the customer chooses a broking company he gets a platform to invest online or through offline medium.

With online trading medium there are many benefits:
Instant Online access: You have access to your account all the time, and can view your portfolio real-time

Trade online from anywhere. You can choose to enter trades online from anywhere and anytime which is very convenient when one is travelling

Choose your brokerage: Many brokerages offer customised brokerage rates based on the trading pattern. In case if the customer is high trader then he can avail very low brokerage rates.

Ease & Speed of trade: Speed of execution of trades is the key in online broking, brokerages have invested in developing cutting edge technology to ensure they offer world class trading platform which are simple and easy to execute.

Choice of products to invest in: With the technology evolving so rapidly the customer has now options to invest in other investment products like Mutual funds, IPOS, Currency, and Commodities on a single platform thus reducing his touch points for investments to a single point. The availability of multiple products under a single umbrella has seen ever growing number of users to the online platform and companies are transforming their operations and strategies to cater to increasing needs of the clients

Truncated week again; momentum to continue

April 27th, 2013 India Infoline No Comments »

After five weeks of sell-off the Indian equity markets have bounced back smartly recovering almost two weeks of losses. The BSE Sensex and the NSE Nifty index surged nearly by 4% each during the week led by the Banking stocks. Heavy weights like ICICI Bank, SBI and HDFC Bank surged 10%, 7& and 4.5% respectively.

In terms of corporate numbers, Reliance Industries Q4 FY13 results were in line with expectations at the PAT level. Turning around of retail business and rising contribution of shale gas business in profits were the key positives from the consolidated. HCL Tech results were in-line with 3.2% qoq dollar revenue growth and stable margin. Additionally the deal wins of US$1bn provide decent revenue visibility.

While TCS result was in line with expectations the Sustained sector leading performance and bullish commentary were the hallmark of TCS results. Net profit of TCS rose 17.84% to Rs30.14bn in the quarter ended March 2013 as against Rs25.58bn during the previous quarter ended March 2012. Sales rose 24.37% to Rs126.49bn in the quarter ended March 2013 as against Rs101.71bn during the previous quarter ended March 2012.

Sentient further got a boost after the country’s trade deficit numbers were better than expectations. The country’s trade deficit in FY12-13 stood at US$190.91bn against US$183.4bn in FY11-12. Exports stood at US$307bn in FY12-13.

It’s a truncated week again with the stock market closed on Wednesday on account of Mahavir Jayanti. In the coming week, we expect the current momentum to continue. Rate sensitive stocks will be in action as cooling inflation has renewed hopes of a rate cut by the Reserve Bank of India in first week of May. Traders will also focus on the eight key infrastructure data to be release in the coming week and will also closely pay attention to corporate earnings. In US the Richmond Fed Manufacturing index data and the durable goods orders data would be closely tracked.

Six Ways To Cover A Financial Set – Back When You Don’t Have An Emergency Fund

April 24th, 2013 Guest No Comments »

The best way to prepare for future financial set-backs is to save up an emergency fund, but what happens if a financial problem hits you before you’ve saved any money? Luckily, you’re not on your own when it comes to paying for emergencies and there are a number of alternative options out there. While these should never be used to replace a good emergency fund, they can be used in the event that you have no other options.

Arrange Expenses for Efficiency:
How you deal with a financial set-back will vary depending on how much money you need and why it is needed. If the amount is moderate, you may be able to prioritize your expenses in such a way that you can afford to get out of your dilemma. What expenses can you put off for a week or a month? Which expenses can you live without this month? A budget can help you determine what expenses are unnecessary and which can be cut back. For example, you might have to avoid costly entertainment for a month and find ways to reduce your grocery and gas bills. It’s difficult, but it’s less expensive than taking out a loan.

Talk with Your Lender:
Many financial problems stem from credit cards or loans. If this is your case, talk with your lender about negotiating the debt you owe. Lenders know that some people will default on their loan. They would rather get some money than nothing which is why they are often willing to negotiate. You may be able to lower your payments if you can agree to settle on a smaller debt. Talk to them about adjusting your debt repayment schedule or lowering your interest rate.

Get a Payday Loan:
You can get a payday advance in just about any part of the country. A payday loan is a short term loan that is designed to be repaid in 1 to 2 weeks when you get your paycheck. The loans typically cost more than credit cards or other loans, but a payday loan can help you get out of immediate financial trouble. Power Finance can help you get a payday advance Arlington TX. Repayment can be easier than most people think, so it’s a reliable option when you’re in a crunch.

Borrow the Money:
This is the least desirable. Borrowing money from friends and family can put a strain on the relationship, but if it’s the only option left and you know you can and will repay them, give it a try. If you have a good relationship with your parents or another friend or family member, talk it over with them. Don’t take it lightly. If they agree to lend it to you, set up a repayment schedule and stick to it.

Dip into Your Credit Card:
Your credit card is there for a reason. Many people only use credit cards for emergency situations and that’s exactly why it’s there. If you haven’t saved for an emergency fund and your credit card still has available funds, you can dip into those funds for the time being. Always remember that credit cards can have very high interest rates and can damage your credit score severely if you use them improperly or fail to pay them off.

Rely On Home Equity:
If you own a home, you may have the option to take out a loan against your home. The best way to do this is to take out a home equity line of credit, also known as a HELOC. A Heloc is a line of credit, similar to a credit card that limits the amount you can borrow and allows you to use your home as equity to repay the loan. You’ll be given a draw period of around five to twenty five years, during which you can repay the loan. You can also take out a second mortgage against your home, but this is a more risky proposition. The benefits of being a homeowner are great in times of financial trouble, but as always, be careful to repay your loans responsibly or you could risk losing your house.

Author Bio:
Angela Prickette is a recent college graduate. She works for herself as a freelance writer and photographer. Her favorite activities include, skiing, rock climbing, and personal fitness.

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