Once you get into the habit of using a pawn shop, it can be a hard job to kick the habit. Many people can see this, but have no other alternatives to help make ends meet – pawnshops are an easy way of accessing quick cash and, like most things, have both positive and negative aspects associated with them.

So how exactly do they work? It’s actually a pretty straightforward process. A pawnbroker lends a customer a small amount of money in return for some collateral (jewellery, electrical items, mobile phones etc). This collateral normally has a slightly higher resale value than the loan given and acts as a guarantee for the loan. The beauty of using objects as collateral is that no credit checks need to be done.

With the credit crunch starting to bite, some families are finding it harder and harder to pay the bills. If you are struggling to make ends meet, what can you do? Here at MoneyTowers.com, we have put together a short guide of what to do if you find you can’t pay some of your bills.

Mortgageoffice furniture in Bulgaria
Your mortgage is probably one of the bills that should take priority over other bills. If you are starting to find it a struggle to pay your mortgage, it is never too early to contact your mortgage provider. If your local office is unhelpful, try giving head office a call. Your mortgage provider may be able to help you, perhaps through a payment holiday.

Banks and credit card providers love customers who have a relaxed attitude towards credit cards as these are the customers who lenders tend to make the most money from. Relaxed customers tend not to take a lot of interest in the ins and outs of their credit cards and aren’t too fussed how much they use the credit card each month, or how much they pay off each month. These are the customers who tend to subsidize the customers who take advantage of the 0% deals that the banks offer.

With rising interest rates and bad debts, many homeowners are turning to the ’sell-and-rent-back’ schemes to help their overstretched finances. Despite having to sell their property at a knock-down rate and rent back at market rate, increasing numbers of people are looking to these schemes as a quick and easy way of reducing their debts and giving their finances a helping hand.

In this guide, we look give an overview of sell-and-rent-back schemes and list their advantages and disadvantages.

What is sale and rent back?

You would think that if you earnt a good wage and had been in a steady job for years, you would be a mortgage lender’s dream. However, many people are finding they are being turned down for the better home loans and are being forced to take out mortgages and loans with higher rates of interest. Why? Small mistakes that are simply oversights.

Sub-prime borrowers are commonly thought of as people who do not earn a lot of money and probably have a lot of other debts. However according to BM Solutions, a sub-prime lender, the average salary of a borrower taking out a mortgage with them is £30,000.

Mortgage lenders have now been accused of levying unfair and dispropotional exit fees on their customers. On the back of bank charges claims, mortgage lenders are now also being forced to pay back these unlawful charges.

Mortgage exit fees largely remained static for many years, up until 2004 when huge increases started to appear. Lenders claimed that they were allowed to do this because it was in their contracts. However, the increases seen were not in line with inflation, and were pushed up by up to £300 a time.

Pin money is a throwback to a time a long time ago and emulates the saying “look after the pennies and the pounds will look after themselves.” The idea is to save your loose change, and it will all eventually add up so you can buy yourself some luxuries. Pin money was usually used by families who didn’t have any savings. The pin money could then be used for small luxuries, or as an emergency fund if the main breadwinner was made redundant or lost some earnings.