Entries Tagged 'Personal Loans' ↓

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Early payment of your student loan as provided by the government may not be such idea. No, we are not defying everything we have said so far but re-iterating the fact that this might be one of the cheapest forms of loans available so go ahead and take your time to pay off this loan. However, if you have a student loan from a private institution, this recommendation does not apply.

Student loans are a point of discussion since they are not really charging interest….just the inflation rate. Inflation, as you might already know refers to the year on year price increase and is determined by the finance department of the government. It is unlikely that the rate of interest on student loans will go beyond the inflation rate and this works to your advantage. so what are the advantages of not paying student loan off at one go?

The answers are governed by the type of person you are. If you like to save, then it is likely that you will get a higher rate of interest than what you pay for your student loan. The saving ( though not very large) here is obvious. If you are planning to borrow again sometime in the near future then your low interest student loan is not likely to affect your credit rating too much as most agencies do not have this information anyways.

There are two types of student which exist: the mortgage-style loans which are equal monthly installments and the income-linked repayment plan. In the first option, you monthly/annual installments are fixed and in the second one, you pay a percentage of what ever you earn over a minimum basic. Both the plans are common and a student can choose the option which suits him best.

Though the 0% credit card debt sounds more interesting than student loan, do keep in mind that it is for a shorter term and has a direct impact on your credit rating. Also keep in mind that student loans exceeding a certain age are usually wiped off since the person is considered unfit to work and earn. However, dishonest means to get out of student loans result in serious disciplinary actions by the Student Loan Council and should be avoided at all costs. Moving to another country does not remove your liability to pay the debt and it is likely that you will have incur additional charges for currency conversion and related fees.

So you have decided to take a loan and there is no better time than the present as the rate of interests are at an all-time low. The next step is identifying the right kind of loan which will service your requirement in the best possible way. You can take your pick from:
1) Credit cards: refers to those cards which allow transfer of balances and have a reasonable rate of interest (around 4.9%) as well as short term borrowing at 0% interest for a period of 12 months.
2) Personal loans: Applicable for amounts up to £25,000
3) Secured loans: Usually related to a collateral such as the house as well as a good credit history
The first step in determining the type of loan which suits you is to create a budget and then choose from one of the three. How much you can repay comfortably is the first query which needs to be answered and the actual amount of the loan can be decided using this as a basis. Keep the loan term as short as possible so that you pay the least amount of interest.
The second step is to determine how you want it…a slow loan (which might take a few days to materialize) can save you up £45 in processing fee. Similarly car loans are a lot more expensive than an APR loan so you might like to avoid that and as a result save on interest. Switching loans to a cheaper percentage has its own pitfalls as you would be liable to pay penalties for exiting a fixed rate loan.

Internet loans for amounts ranging from £1000 to £5000 are a good option as you get rates ranging from 6.3% to 7.4%. Yourpersonalloan.com, Moneyback.com and Northernrock.com are all good options for such loans.
However, if you are currently earning more than £25,000 then you can also try Zopa.com which gives you a comparative credit rating and rates of interest change daily. Zopa.com loans are unsecured and are if this is not suitable then you can get a more flexible loan from NorthernRock.com where you can payback your loan in advance without a penalty. Egg.com has a higher interest rate but allows you even more flexibility when it comes to the payment terms.
If you are still unsure of which company you should take a loan from then you can refer to a Loan Comparison service which includes a personal credit rating estimate. MoneySupermarket.com and Equifax.com offer these services. Other than these services, you can also opt for services which offer a fixed rate which is dependant on your credit score.
Getting a loan which Payment Protection Insurance (PPI) can help the self-employed borrower by offering insurance for failure in meeting repayment deadlines. The insurance does not cost a lot but is worthwhile as it offer additional coverage. If a single loan including PPI is working out to be expensive, then you can opt for a loan and a separate insurance policy from Paymentcare.com, Securityfirst.com, Antinsurance.com or Burgesses.com.

There have been a number of developments this year within the financial services market which point to another surge in reclaim requests that industry sources are predicting could be even bigger consumer scandal than ‘unfair’ bank charges - payment protection insurance (PPI).  A good place to find out more information on PPI reclaim would be www.ppireclaimservice.co.uk but to summarise:

Payment protection insurance (PPI) sold with loans has been receiving increased attention over the past couple of years a problem first highlighted by the Consumer Advice Bureau in 2005 for their low claim to premium ratio and the fact that many of the policy holders would not even be eligible to claim.  They passed this information to the Office of Fair Trading, who investigated, with a statements made by the FSA to financial services firms, reminding them to comply with regulation.

Fast forward to 2007 and a number of firms have now been fined by the FSA for miselling PPI, with many analysts predicting up to 10 million people could be affected.  Following the FSA fines, consumer action groups prompted their members into putting their cases for miselling forward, with a number of them being able to claim back 100% of the premiums for PPI that they have paid.  If you’ve had PPI on a loan, looking into the possibility of reclaiming might be a good idea.

While you’re out for a midday stroll you come across this enchanting little boutique, and within its beautifully decorated walls you find an item – a beautiful formal gown, decorated in lace and silk – that you simply must buy.  Not wanting to put the purchase on one of your high interest credit cards, you go to pay with Interac until you realize something: you don’t actually have the money required to buy it.

You ask the store clerk to put it on hold for you and you rush home.  Once you are at home, you get on your computer and make an online application for a payday loan.  You return to the store the next day, cash in hand, and take home your dress.  The loan that you obtained is a short term loan- you’ll pay it off in a few days when you get your paycheck.

What Is A PayDay Loan?

A payday loan is when a lender provides you a short term loan, payable on the day that you receive your paycheck.  The terms and conditions of payday loans vary wildly, depending on your credit, income, and the lender that you’re obtaining the loan through.

Risks and Advantages of PayDay Loans

PayDay loans are a good way to be able to finance an item that you can’t afford because of your paycheck schedule.  So long as you pay back your payday loan on the agreed upon date (and avoid taking out another loan to pay it off).

Some advantages include:

• Quick access to the money that you need.
• Little or no security/collateral required.
• Short payment terms.
• Low overhead.
• Immediate access to the loan principle.

PayDay loans are notorious for placing unreasonably high interest rates or fees on the loan terms, so make sure that you are completely aware of the conditions of your loan.  Read the entire contract, including any pages of fine print, so that you know all of the terms, fees, and payments associated with the loan.

Disadvantages of payday loans include:

• Uncertain interest rates.  Unlike a home loan or personal loan, there is little regulation or standardization among payday loans.  Always be aware of your interest rate.
• Loan payment fees or hidden charges.  Not always, but sometimes.
• Major financial obligation to pay off the loan on your payday.

An unsecured personal loan is when a lender agrees to lend you money without any form of collateral, such as a home or car.  This lack of security on the lenders part is the reason why it is called an unsecured personal loan.  Your credit rating is the sole variable used to determine whether or not you will be approved or declined for an unsecured personal loan.

Please note that unsecured personal loans and personal loans are the same thing.  Since a personal loan is a loan based on your credit score, requiring no security or collateral, has the same literal meaning.  Different lenders may refer to them in different terms, however, so don’t be surprised if you come across different terminology.

How Can An Unsecured Personal Loan Help You?

If you are in debt, the last thing that you should do is acquire a larger debt load, right?  In most situations, that is completely correct.  However, acquiring an unsecured personal loan to act as a consolidation loan is a very wise move, and can even help you become debt free.

This is due to the properties of unsecured loans:

1. Fixed interest rates – Unless the lender specifies otherwise, most personal loans have a fixed interest rate.  While some loans have interest rates which vary based on market conditions, a fixed interest loan means that you will always have the same cost of borrowing attached to each payment.

2. Fixed monthly payments – This will help you plan your budget better.  At the end of the loan term you will also have paid off whatever debt was consolidated by the loan.  So long as you didn’t go out and obtain new forms of credit your personal financial obligations will have substantially decreased.

3. Lower monthly payments – Since most forms of credit have interest rates in the mid teens/ low twenties, consolidating those high interest payments onto a loan that has a 10.9% interest rate, such as the loans offered by Oceans Finance, will save you a bundle every month in interest.  As well, your monthly rate will be dependent on your consolidation loans payment terms and payment duration.

A consolidation loan is a great way to help free up your finances and set your financial track record in the right direction.  However, you will defeat the purpose entirely if you turn around and spend the money that you are saving on frivolous items, or choosing to obtain other forms of credit.  The moral of the story?  Don’t bite yourself in the butt with poor decision making.

The phone rings.  The sound echoes throughout your home, reverberating off of the walls and reaching your ears.  To most, it’s just a phone call, and the ringer is a welcome announcement.  For you, however, the sound is a reminder that the person on the other end – a collection agency – is once again calling to remind you that are way behind on your payments.  You ignore the call and unplug the phone.  You sigh in desperation as you realize that you won’t be able to run away forever.

Climbing out of a situation like this can be a long and arduous process, though there is no greater feeling of relief or elation when you finally accomplish it.  Emerging from a debt induced hole is akin to climbing to the peak of Mount Everest- it requires the same amount of determination and effort, and this accomplishment is more more permanent.

Risks Associated With High Risk or Bad Credit Personal Loans

Like any solution, a high risk loan is not a perfect one.  It offers many advantages, but it also comes with its own set of disadvantages and challenges.  And, like all forms of debt, it is an amount that you will have to repay at some point.

Many people forget that a consolidation loan is still an increase in their overall debt load, and beginning to lapse the payments on a high risk loan is essentially financial suicide.  However, that consolidation loan is also a vehicle that you can use to repay your current debts in a timely manner.

• High risk personal loans are still forms of debt, so pay them down!
• The interest rate is a reflection of your credit score.  Once you’ve paid down all of your debts and recovered from your financial slump you will probably receive lower interest rates on future loans.
• Late or missed payments are not handled very well by the lender, so avoid this at all costs.

Advantages of High Risk or Bad Credit Personal Loans

Imagine the feeling of being able to have an extra $300-$500 (or more) available to you every month?  Consolidating your high interest loans with a personal loan is a way to do that while meeting your financial obligations.

• l High risk personal loans have no collateral attached to them.  If you default on the loan, your credit rating will suffer dramatically, but you won’t lose any personal assets or your home.
• l Lower monthly payments give you more financial breathing room.  Just make sure that you don’t waste the money that you are saving on frivolous things.

With a good amount of perseverance, determination, and a bit of luck, you will climb from your debt induced slump, emerging financially stronger and more capable than ever.

In the past, you have had some indiscretions or failings when it came to your financial obligations.  Perhaps you didn’t make the best decisions early on in your life, or maybe you’ve maxed out all of your available credit options.  Regardless of the reasons behind your low credit score, the fact remains that it affects you every day.  You feel the effects when you try to obtain a new cellular phone plan, purchase a new vehicle, or perhaps even when you are trying to rent an apartment.

It seems kind of counterproductive to obtain even more credit to solve your financial problems, but in certain situations it can offer opportunities that you may not have had without it.  A high risk personal loan sounds like an unlikely solution to a nasty financial problem, but if done right, it can offer freedom and a reprieve from many pressing financial concerns.

What is a High Risk Personal Loan?

A high risk personal loan is a loan that is obtained through a lender, even when your credit score is poor and you have no collateral or significant down payment to place on the loan.  A lender will always asses the individual situation at hand when determining whether or not to approve a high risk loan application.

Generally, high risk personal loans are offered under stricter conditions and higher interest rates.  This is not to penalize the individual requesting the loan, but rather as a security measure to ensure that the loan is addressed and paid off.  If you are planning on consolidating your current debts, or perhaps even paying down high risk credit lines and card, your lender will more than likely empathize with your intentions.

How To Obtain a High Risk Personal Loan

Obtaining a personal loan if you are a high risk applicant is a bit more complicated than if you were not.  It can become frustrating, but you need to keep in mind that the lender needs to address their concerns as well.  After all, if they are planning on loaning you a significant amount of money, they want to know that they are doing so with the least amount of risk on their part.

1. Make your application – This should be done in person, but it can also be done online if the lender that you are applying with specializes in high risk loans.  The reason why applying in person is preferable is because you will have the opportunity to present yourself in a more personal way to the person who will be handling your application.  This is a good thing.

2. Offer as much leverage as possible – You can make the application process much easier by having some kind of savings or assets.  You don’t need to actually offer your assets as a collateral, but having them shows the lender that you are capable of saving and growing your financial assets.

Those two points are crucial to making your personal loan work.  Remember, at the time of your application, offering as much relevant information as possible is key.

A few months ago I was in dire need of £10,000 to finance an excursion to Canada for a funeral.  A good friend of mine – a mate that I’ve had for most of my life – passed away in a car accident in Toronto, and I needed to attend his funeral.  Due to the situation I had very little notice, and my airline ticket was very pricey.  Rather than stand around with my knickers around my ankles, I decided to take out a loan to pay for everything.

I used MoneyBack Bank for a few reasons, though the biggest one was that I was able to complete the entire process online, from application to acceptance.  If I were a bum, I’d have been in heaven.

MoneyBack Bank is very competitive as well: 6.2% interest, and the ability to receive cash back on the amount borrowed (cool!).  Considering some of my other options, including a 14% interest credit card, MoneyBack Bank seemed like a no-brainer.  I submitted my application online in a matter of minutes, and I found out the next day that I had been accepted.

Loan Terms and Conditions

The conditions of my personal loan were as followed: 24 month payback period, 6.2% interest, and the possibility to pay out the loan early with no penalties.  As a consumer, I feel that the terms are very fair, as there is no condition or clause that would severely inhibit my ability pay the loan back in a reasonable period of time.

The money was wire transferred in my back account the day that I was approved and had agreed to the loan, and there was no hold on it either.  Surprisingly, MoneyBack Bank never asked me what I was using the money for.  The only question that was related was the obligatory “are you planning to use the funds to acquire illegal or controlled materials?”  Of course, I said no.

Overall Impression and an Update

Thanks to the timely service of MoneyBack Bank I was able to attend the funeral in Canada, spend a few days visiting friends and family, and not have to worry about money while I was across the pond.  Canada is a very beautiful country, and I made sure to see the parliament buildings in Ottawa, the CN Tower (the worlds largest freestanding tower), and Niagara falls.

At the end of it all, however, I was glad to be on my way back home.  Driving on the right side of the road was starting to make me dizzy, and the sheer number of yank tanks is nothing short of amazing.  MoneyBack Bank gets my recommendation, as does Canada.

Have you had your eye on a new BMW or Renault?  There is no time like the present to get behind the wheel (with the price of petrol constantly rising), and borrowing rates are as low as they’ve ever been.

Most car dealerships would have you finance your new purchase through one of their in-house financing options.  More often than not, the terms that are offered by the in-house financial institutions are unfair, placing crippling conditions and riders on your financing agreement.  This practice has existed within automobiles for years, and it doesn’t look as if it’s about to change.

Rather than obtain financing through a dealership, here are three other options that are fair and much more beneficial to you:

1. Personal Loans – Many people don’t realize the many advantages that a personal loan offers you versus an automotive loan.  Unlike an automotive loan, a personal loan can be applied to whatever purchases or financial commitments you want.  If the price of the vehicle that you want to buy is £10,000, you could take out a £12,000 personal loan to cover the cost of the vehicle as well as any repairs or modifications that it may require.

There are many lenders that offer you personal loans, though we recommend Northern Rock as the entire application process can be done online, and their interest rates and payment terms are quite competitive: around 6.5% APR, and up to £25,000 available to be borrowed.  As well, the loans offered by Northern Rock are fixed interest, making it much easier for you to pay down the loan over time.

2. Line of Credit – Obtaining a line of credit for the value of the vehicle offers you several advantages: you can pay off the loan as quickly as you want, as a line of credit operates in a similar manner as a credit card; you can put other expenses, such as a tune up or new tires, on your line of credit; a line of credit is always revolving, meaning that you can always reuse the credit that you have paid off if necessary.

Talk to your bank about your options when it comes to lines of credit.

3. Bank Loan – Automotive loans are quite common, and your bank will have many options available to you if you choose to use one.  Not all automotive loans are created equal, so make sure that you are informed about your interest rate, interest type, payment options, any balloon payments (if applicable), and early payment penalties.

Generally, the faster that you can pay off the loan, the better.  Ask if you are able to pay the balance of the loan early without penalty.

If your credit is less than ideal, you probably are already aware of how much of a pain in the butt obtaining a loan can be.  Mistakes or financial problems of the past have a way of haunting someone’s future, and it can become an incredibly frustrating experience.  Trying to buy a car, or even just trying rent an apartment, can become an arduous task.

In the UK, there are two lenders which specialize in bad credit loans: Halifax and Ocean Finance.

Halifax Personal Loans

If you are looking at borrowing £13,000 or less, Halifax Personal Loans may be a good option for you to explore.  Low interest rates (as low as 6.4%) and quick delivery (within 24 hours of contract acceptance) make Halifax affordable and convenient- a combination that seems to be missing from todays lending market.

Compared to a credit card or bank loan, the interest rates offered by Halifax are surprisingly affordable.  With interest rates as low as 6.4%, repaying your loans will take less time and cost you less overall.  If your focus is on the bottom line, Halifax has a lot to offer.

Click here to apply online.

Ocean Finance Personal Loan

Ocean Finance offers personal loans up to £100,000, making them a great option for debt consolidation or major purchases.  Ocean Finance offers interest rates as low as 10.9% for the duration of your term, giving you plenty of options and potential applications for the money that you borrow.

Many people use Ocean Finance to fund home renovations, car purchases, or family vacations.  A relatively low interest rate of 10.9% allows you to pay off the loan without having to worry about getting caught in a never ending cycle of debt payments.  If you are looking for more than £13,000 and have poor credit, make an application to Ocean Finance.

Click here to apply online.