Loans

Our financial friend at Fool.co.uk has some handy tips for those who think they might need a loan.

First off, do you really need to borrow money at all or can it wait? If the answer is yes, carefully work out how much you need to borrow. Try and borrow the minimum amount for the minimum term to avoid paying hefty interest charges.

Try to avoid getting a secured loan, this is only putting your biggest asset and your home at risk.

Search around and explore the world of price comparison online, it will save you time and money.

Compare each loan by the TAR - Total Amount Repayable at the end of your loan term. This is much more accurate and obvious than comparing the APR (Annual Percentage Rate).

Avoid taking out Payment Protection Insurance and watch out for additional charges and early settlement fees. Essentially choose your loan wisely.

Read the full article here for the comprehensive run-down.

With personal debt on the rise, there is also a correlating increase in personal insolvencies along with it. Once you are in debt, it can soon get out of control so always think very carefully before borrowing money from financial lenders.

Handy Hints for sensible borrowing:

1. Decide whether you actually need to borrow money at all or if you can delay a purchase and save up for it. If you do need a loan, borrow the absolute minimum only.

2. Before choosing a lender, invest some time into comparing between all the financial lenders. Make sure you compare the Total Amount Repayable (TAR) rather than the Annual Percentage Rate (APR) for a more accurate comparison.

3. Keep the repayment term as short as you can manage, this will reduce the amount of interest you pay overall.

Read more at the First Rung site here

Over the past year the base rate has been gradually increased by the Bank of England to 5.75%, a leap of 1.25% since 2006, when it was just 4.50%. This knock-on effect has caused those companies offering financial services to increase their interest rates too, meaning higher rates for those taking out a mortgage or personal loans. Even overdrafts and credit card borrowings will now cost more to repay and it seems to be even more noticeable if you are trying for an unsecured personal loan.

From the article, The Fool says:

‘the biggest rate rises have come from Norwich Union and RAC Financial Services (up to 4% hike) and six small building societies whose loans are funded by the Co-operative Bank (up to 3% hike).

Even the most aggressive players in this market (such as Alliance & Leicester, Barclaycard, Masterloan and Northern Rock) have pushed up their rates by a fraction in order to balance their books. In most cases, these increases have hit larger loans, typically those over £5,000, which could push up the total amount repayable (TAR) on a hefty loan by £200 or more.’

Read the whole article and check out the ‘Best Buy’ tables for unsecured loans at Fool.co.uk

Money Supermarket is one of the top price comparison websites involved in offering impartial advice on all things money related. It will compare 1000’s of products in a matter of seconds. Their aim? To save you time and money and make your life a little easier.

With just one search you can find a straightforward low-down on the best deals on offer on 1000’s of money related products ranging from credit cards, insurance, mobile phones, loans and travel to name just a few. Updated on a regular basis, you can be sure you are getting up-to-the-minute information.

They compare deals on all money-related products including credit cards, personal loans and mortgages. Many insurance products ranging from home, travel and car insurance and even holidays, phones, broadband and household utility companies.

The website is easy on the eye and simple to use, so don’t make any rush decisions without checking out the deals being offered by all the major finance related industries. It could save you a bundle.

Visit the site at MoneySupermarket.com

Bad Credit, also know as Adverse Credit, indicates that someone has a poor credit rating usually from a history of defaults or arrears on previous loans, bankruptcy or CCJ’s (County Court Judgements).

This doesn’t rule them out from being able to get a personal loan, as there are plenty of companies offering to this particular it just means they may not be able to borrow as much and they will probably have to pay a much higher interest rate.

Most people borrow money nowadays to purchase a new car but whatever you need to borrow money for, whether it’s consolidation, to fund a wedding or make important home improvements there are still options out there. So if you have been turned down after applying for a loan, do not despair, there are companies out there who are more than willing to help you out.

Read more about bad credit lenders at The Thrifty Scot for some important information on what loan companies are currently offering prospective borrowers.