Students with a financial need for managing their education would opt for a student loan and the best amongst all of them is the federal student loans. There are a lot of supporting factors for this particular loan which make it a huge success amongst students. More than 80% of the students in the country opt for a federal student loan for their education. Of this, more than 50% of the students seem to be undergraduate students. An overview of why to choose a federal student loan is explained in detail as follows.

There are different types of federal student loans offered, few of those include Perkins loans, Stafford loans, PLUS loans etc. Each and every student would be able to obtain the loan of their choice easily. Federal student loan is offered for both undergraduate and graduate students. Being eligible for a federal student loan is one of the easiest things to do since, most of the students would be eligible for the loan and there are no restrictions placed on them apart from the requirement that the borrower should be US citizen and should have no criminal record against their name.

Eligibility & Interest rate charges

Being eligible for a loan would make the job easy for the borrower since they need not worry about the complications that might occur during loan application. Application procedure is also simple and easily understandable. Coming to the most important aspect of any particular loan program, which is the interest rate charged on the loan. All the federal student loans carry lower interest rate charges. Considerably lower interest rate charges would mean that the borrower would be able to manage their repayment in a better manner.

Repayment terms

Due to lower interest rate, the amount of monthly payment that has to be made towards the loan repayment would be lower and manageable. Apart from the interest rate charged on the loan amount, federal student loans would not have any other costs associated with the loan. Subsidized Stafford loan offered to undergraduate students would help the borrower with the repayments since the interest rate charged at the time of schooling would be paid by the Federal government directly and the borrower need not pay them.

Repayment period would be initiated only after 6 months from graduation and so this would allow enough time for the borrower to secure a job and start earning money to pay for the repayments. In case of unemployment or any other financial stress situations, the borrower would be able to opt for a deferment period which would allow them to postpone their repayment period for a fixed period of time. This time period can be utilized by the borrower to recover from their bad times and gain some finances.

Suppose, in case the borrower files for a bankruptcy or forbearance, he or she would be forgiven for the amount of money they would have to make towards the loan repayment and this amount would be paid by the federal government themselves.

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When times are hard and money is short, borrowing from a bank or loan company can often seem like the only way out of a deep hole. While there are a number of different financial options available, one of the fastest growing in popularity is the logbook loan, an agreement that is secured against the value of the owner’s vehicle. Quick and simple, it is little wonder that so many people turn to their logbooks in search of extra money.

Valid purely for those who own a vehicle, a logbook loan is a tempting way out of debt, as a person’s financial history is seldom taken into account before a loan is approved, even those with a bad credit rating can be considered as eligible for credit. For those lucky enough to find a reputable lender, the benefits of a genuine logbook loan can be far-reaching; local lenders are particularly convenient, especially when it comes to taking a vehicle to the credit centre for assessment. Genuine lenders will also have their terms and conditions set out in black and white, making it easy for those seeking a loan to know exactly where they stand.

As with all loans, though, there is a certain element of risk involved when applying for any new logbook loan. The biggest risk is, of course, applying for a loan with the wrong company. For every genuine loan company out there, they may be twice as many that are simply looking to make money out of the misfortune of the vulnerable. These companies are more likely to offer a loan without first assessing the claimant’s outgoings, or the likelihood of them being able to make repayments; this leaves a person at an increased risk of losing their vehicle and spiralling even further into debt.

Top tips

While there are some genuine, reputable companies willing to help, there are also a similar number of companies who are simply keen to make money. The key to sourcing a reliable logbook loan is research, and plenty of it. Those considering a logbook loan should keep an eye out for the best rates, including the annual percentage rate and the minimum payment requirements, and be sure to familiarise themselves with the loan’s terms and conditions before signing on that dotted line. It’s important to understand exactly what needs to be adhered to – for example, what is at stake if the loan’s repayments are not met?

It is also essential that those in search of a loan research reputable companies. Family, friends, colleagues and acquaintances may be able to recommend those that they have used, while online financial forums are a great source of information and advice. For those who are unsure, it is important to seek financial advice before speaking to any loan companies. It is a good idea to be wary of any companies that are willing to offer a loan without asking any questions; while it may seem much simpler at the time, these are often the organizations who only have their own interests at heart.

Finally, a spreadsheet of monthly outgoings is a fantastic way of analysing spending, ensuring a loan can be repaid at the agreed rate. Following these handy hints, as well as applying common sense, can ensure that taking out a logbook loan isn’t a nasty experience.

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A study by the FSB has reported that many UK small business owners are struggling to manage their accounts properly. On average, 12 working days are lost each year to the accounting process and the total cost to small businesses for tax administration is around £500 million a year.

Around 50 per cent of all small businesses spend around two to eight hours each month understanding, calculating and completing tax forms. On top of this, 11 per cent of businesses spend between two and six days every month on financial administration.

For small businesses, good tax management can make or break the company. Having a thorough understanding of the savings that can be made on income tax is vital for businesses, but this can be very time consuming. In addition to a personal allowance, which should be fully utilised to reduce a tax bill, companies can also make further tax reductions through various tax allowable expenses.

Tax allowable expenses

Capital allowances refer to the tax relief on certain items that are vital for business. Such items include cars, computers and machinery. There is a limit to how much each person can claim in a year, which is called the capital allowance or annual investment allowance. The current annual investment allowance is £250,000. Businesses cannot claim tax relief on the whole cost, but instead annual allowances are written down by claiming a percentage of the total cost each year following the initial purchase.

Tax deductions can be made against the cost of running a car for business. It is important to keep an accurate record of business car use, as private car use is not tax deductible. The easiest way to manage this is to just claim on the fuel used in travelling on business and use a business card to purchase the fuel. Total mileage is used to calculate the allowance, so also keep a record of how many miles are travelled on business, and how many for private use.

Record keeping

Good record keeping is vital for all businesses. Without proof of every purchase and sale a company cannot provide proof of their tax liability. Although self-assessment means that most of the time a small home based business will not need to provide documentary evidence, sometimes HMRC do carry out inspections on small businesses.

Companies should keep expenditure receipts, at least all that are included in the tax calculation. If driving allowance is being claimed fuel receipts are the best evidence that the car is being used for business.

Where to get information

The best source of advice is the HMRC website. Tax rules and allowances change often and privately run websites sometimes display out-of-date information. If you prefer to have printed information, leaflets and advice can be found at your local Citizens Advice Bureau. Many larger libraries also have a business section and stock leaflets and other information to assist small business owners.

Employing a qualified accountant or a tax specialist

Hiring a tax specialist can have many benefits although the main objective is to reduce the size of the tax liability. HMRC adjust the tax rules every year and it is very difficult for entrepreneurs to keep up to date with these changes while also devoting sufficient time to running the business. A good accountant is a wise investment and the savings made in taxation and other financial dealings might well recoup the professional fees payable.

Self-assessment tax returns

Sole traders who are trading under their own name can submit an annual self-assessment. This can be submitted online or in paper form. Online is easier and has a later deadline, so is the preferred option. For those with a simple business structure this is a quick and easy process. However, for more complex businesses professional assistance may still be required.

Umbrella companies

Due to the growing complexity of financial administration and taxation many small businesses and sole traders are using the services of umbrella companies to manage their finances. An umbrella company acts as a parent company for a sole trader or small business. This means that the umbrella company manages all the paperwork and files tax returns for their client. The client is paid a monthly salary via a PAYE system.

The biggest advantage for sole traders is that they can focus on their core business rather than wasting hours every week with administration. Savings are also made through improved tax avoidance. Umbrella companies are managed by skilled accountants and tax specialists who make every tax deduction that is possible for their clients.

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“Having a lodger” or “taking lodgings” are phrases that bring to mind the Victorian era, when widowed ladies rented out rooms in their city homes to single men and women. Though private homes and apartments have since become the norm, the idea of renting a single room in a private home has been steadily increasing, due in part to the difficult economy. For homeowners, the idea of renting out a room has become more and more appealing, so much so that the number of private homeowners renting out a spare room in their home has more than tripled in the past year.

Financial advantages of renting out a spare room

The extra income generated on a monthly basis is one of, if not the, main reasons that people choose to open their homes to a stranger. The amount of rent being charged for a room will vary depending not only on the size of the room and its amenities, but also on where the home is located. A bedroom with bathroom and kitchen privileges may run around $200 per month while a room with a private bathroom en-suite or possibly an efficiency layout with a small refrigerator and microwave could run as much as $500 per month. The type and amount of furnishings, as well as the utilities included will also affect pricing.

Renting out a spare room also allows the homeowner to receive a break on their income taxes by deducting part of their home ownership expenses. Real estate taxes and home mortgage interest are two areas where dividing the property into effectively two homes can save when it comes to tax time. Deductions may also be taken for general maintenance, expenses and repairs to the home, including utility bills and repairs to appliances, as long as these are available to the entire home. Installing utility services directly to the room being let may also be deducted, for example the installation of a cable or phone line.

Financial costs of renting out a spare room

Choosing to rent out a room in the home means the homeowner may have to invest before the profits roll in. The room needs to be properly and simply decorated with a sleeping area the primary focus and a seating area a close second. This may mean carefully selecting furnishings and investing in pieces such as a sleeper sofa or a built-in Murphy bed that are both functional and attractive. Room design and décor may need to be quite different in a rented room than it would be in the rest of the home, with furniture choices and layouts more like those in a studio or efficiency apartment than in a traditional bedroom. The homeowner can save on the furniture by watching for sales and taking advantage of free delivery if available. Neutral color palettes and wood furniture pieces are universally appreciated and allow the tenant some leeway to express themselves and their style by adding accessories and personal items.

Other financial considerations include legal expenses, such as credit checks on prospective tenants and extra home insurance reflecting the new rental status of the property.

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“Nothing is certain but death and taxes” – a quote, from Benjamin Franklin, that we will all have heard at one time. Neither is something we look forward to, but while we can’t do anything much about the former, there is plenty we can do about the latter.

Tax planning can be broadly defined as minimising one’s exposure to tax through ordering one’s financial affairs in such a way that only the right amount of tax due under the law, and no more than that, is paid. Tax planning is completely legal and is actually welcomed by the UK tax authority, HM Revenue & Customs (HMRC)

However, while HMRC wants everyone to pay the right amount of tax it hasn’t got the time or the resources to be able to provide all taxpayers with a comprehensive service to explore each individual’s financial / personal and business circumstances. So, unless your tax affairs are very simple – eg, an employee coming under the PAYE system – there is a very strong chance that you may not be paying exactly the right amount of tax to HMRC. That is not the fault of HMRC or indeed the result of anything you might have done, or not done. There are an awful lot of tax rules out there and the knowledge of what you are entitled to claim in the way of expenses, or what you can legally do to minimise tax, is not common knowledge amongst small business owners.

A quick look around the Internet can thoroughly confuse you about tax as this term is used to cover all sorts of charges and levies that are imposed by local councils as well as HMRC – eg, council tax and business rates.

The main areas of taxation that anyone studying tax planning needs to think about are those run by HMRC – income tax, capital gains tax, National Insurance contributions, VAT and corporation tax, and finally, when we get back to the subject of death, inheritance tax. That seems a reasonably small number to deal with, right? But beware, as within each one of these taxes there are vast numbers of complications, allowances, exemptions, concessions, thresholds, practices, etc. that you probably don’t know about. Do you know for example, if you are running a small business, whether you would be better off forming a company than working as a sole trader or partner?

If HMRC doesn’t have the resources, and the Internet information baffles you, where can you go in order to get good quality tax planning advice? The two areas of expertise to help you are accountants (indeed you may already have one) or if you want a more comprehensive review of all of your financial / taxation circumstances an Independent Financial Advisor, who is likely to be better informed about a whole range of taxation issues. Such a company will probably offer you a free consultation to assess your needs, and will provide a tailor-made service if required.

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