Category Archives: Loans

Top 5 Reasons for Borrowing Money

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An infographic looking into the reasons why people borrow money – whether it be for a car or home improvements. Currently in the UK we borrow on average £3326 per household, over a term of approximately 5 years. We look to high street banks, peer to peer lenders and guarantor lenders for the majority of our borrowing.

Research You Need To Do When Applying For A Mortgage

One of the largest investments you will make in your life will be on your home, and it will likely be necessary to take out a mortgage to acquire it. The life of a mortgage is a long one that can last decades, so it is highly important that you are able to secure the best mortgage possible, and there is crucial research you need to do before you apply.

Know Your Credit Score

Those with low credit scores are not able to receive the best interest rates, and you should know where you stand before you apply. Performance Mortgage & Credit Services Ltd., an Edmonton mortgage broker, suggests reviewing your credit report with a skilled professional to make sure you understand the intricacies. They will assist you in filing paperwork if errors exist as well as provide tips to increase your score prior to applying.

Understand Your Finances

There are a number of things to consider when you are making the determination of how much you can spend. Along with homeowner’s insurance, you must understand that it is crucial to put money in savings. After all, you will no longer have a landlord to call when things go wrong, so carefully plan your budget including all bills you will have at your new home to determine how much you can spend per month on your mortgage.

Cease Credit Inquiries

Every time you apply for credit, the intended creditor will pull a credit report to determine the risk you may pose. This often causes the credit score to drop. Before applying for a mortgage, cease credit inquiries for at least 90 days. The credit reporting agencies recognize when multiple inquiries are made for the same purpose within a short time frame, so shopping around for the mortgage itself will have less negative impact.

Length of Loan

Know how long you wish to pay on the loan prior to applying. If you only plan on living there for just a few years, for example, a 30 year mortgage would not be your best option. Therefore, a shorter term would be ideal, and this will impact your monthly payment. This should be considered as you plan your finances.

Worth the Time

Buying a home is exciting, and it can be easy to get carried away and make mistakes. Before signing any paperwork, it is important that you take the time to do your research so you can ensure you apply for a mortgage that will work for you.

Ten criticisms of payday lenders answered from the point of view of the payday lender

We discuss the pros and cons of payday lending, which is in the spotlight once again now the UK government has announced plans to subject payday lending businesses to tougher regulation and supervision.

Payday loans are too easy to get

Payday loans are way too easy to get is what some people say about them. Survey after survey highlights how people can acquire payday loans quickly and easily, without too much checking of circumstances.

Payday loan lenders would answer this criticism by arguing that one the whole point of getting a payday loan relates to the ease of getting your hands on the cash. Consider a customer who opts for a payday loan to pay for his girlfriends’ birthday party using finance. If he applies for a credit card which can take two weeks to consider, then the birthday date might be passed before the cash is released. So, payday lenders argue that ease of access to payday loans is a good thing, and one of the central attractions of the product in the first place.

Charge more for a month than credit cards do for a year

A common criticism of the payday loan is the idea that it is very high interest. In fact compared to a credit card, you could end up repaying more interest in a month compared to a year on a credit card. Payday loans companies argue that the loans are not meant to be used in the same way as credit cards, so the comparison is unfair. Payday loans, unlike the credit card are designed to be repaid in a short space of time. Moreover, when shopping for credit you should shop around, especially if you have read recent reports that overdrafts can be more pricey than your average payday loan!

The disadvantage of regular payday loans

Regular payday loans are surefire ways to get yourself into debt is another common accusation fired at payday lenders. On the other hand payday loans companies respond by arguing that payday loans are not meant to be applied for on a regular basis, as they are only meant for emergencies.

Rollovers

Rollovers are where the lender can choose to extend the term of repayment on the initial loan sum. Some argue that while these may give customers some breathing space, they actually create a much worse outcome for the customer, who will often repay several times what was initially borrowed. Payday loans companies are no different from banks or any other financial lenders rollover loans regularly, for example in the case of loan consolidations.

Continuous payment authority

Payday lenders have endured criticism on account of their use of the Continuous Payment Authority which is where multiple applications for a payment can be made to the customer’s bank. This can leave the customer with a hefty bill for overdrawn overdrafts and bounced payments. On the other hand, payday lenders would argue that if a customer is responsible and repays their loan on time and as agreed then these charges won’t apply. moreover these charges are applied by the bank and not the payday lender.

4 Practical Ideas for Going to a Fancy School Without Drowning in Loans

If there is one thing about college that everyone can agree on it is that it has become expensive. This is true for lower cost colleges, but when you look at the tuition costs for the fancy colleges, it seems hopeless that anyone can afford to go to college for a couple of semesters, let alone earn a bachelor’s degree. If you borrow the money, it will take too long to pay back the loan. There are a few ideas that may help you keep the costs down and avoid borrowing too much money.

Find out if you qualify for a Pell grant

These are grants not loans. What it means is that you are given a certain amount of money and do not have to pay it back. It is based upon income and is designed to help lower income families afford to send a child to college. The money can be used for a high cost college or a lower cost college. Many people qualify for a grant and do not realize it. It is possible to receive a small grant that pays for a portion of tuition but not all of it, but every little bit helps when trying to pay for a college education.

Attend part or all of your college online

Today, a person can get a four year degree in a variety of subjects and do so while taking their courses completely online. Generally, online classes are not as expensive as regular tuition. Many universities with great reputations are offering outstanding online programs, not just general classes or electives. However, you can get an entire degree, even your masters, through online classes. Students who have pursued an OU Electrical Engineering Masters Online were able to save money on what is usually an extremely expensive degree. This can be the perfect fix if you are trying to get your masters while also paying off your student loans from your undergraduate degree. Once again, all you need to do is explore your options and you may find that online classes are the way to go.

Go to a fancy college for the last two years

There is no requirement to attend the same university for all four years. One way to save money is to take your first two years of school at a local community college. Just make sure the classes can be transferred to the college of your choice, and you will save a lot of money on tuition. If it is your dream to graduate from a certain school, you can still make it happen—but you don’t need to build up four years of debt and loans just to say that you graduated from that school. Remember, transferring is always an option.

Apply for scholarships

Although it may seem obvious, too often people think of scholarships as being those that pay in full for books and tuition, but the truth is that there are many scholarships available that will pay small amounts. Maybe the amount will only be enough to pay for textbooks for one semester, but this helps. It is possible to receive several of these smaller type scholarships,which could help you make it through a few years of schooling. These days, you can get scholarships for all sorts of things, but you’ll never know about them if you don’t do your research. You could have money waiting for you that you never even knew about.

 

If you think you can’t afford to go to a good college, don’t despair, there are several possibilities to help bring down the cost, so you will not be paying off student loans for the rest of your life. The key to going to the college of your choice is to research your options—make a plan! There may be scholarships, programs, or options available that you don’t even know about. You can make an appointment with a counselor or financial aid counselor at the school to have them help you explore all your options before you give up on your dream of going to a school you love.

Best Tips on Saving Interest on Your Home Loan

Saving money on your home loan is very easy if you strategize properly. Many people concentrate so much on the interest rates when shopping for loan. They forget that even the other features are very important. Below are tips on how to save interest on home loans:

Paying in lump sum.
If you decide to pay off in lump sum you are definitely going to reduce the time it will take you to pay the loan. This in turn reduces your overall interest costs. For instance if you decide to pay $10,000 off a loan of $250,000, you are likely to shorten the loan term by around 5 years. This will enable you save a total of $108,000. This is a very large amount of money that you can use in other areas in future.

Increasing the pace of your repayment.
If it is possible, start to pay off your loan more regularly. You can decide to repay your loan weekly or fortnightly instead of monthly. By increasing your payment pace you are likely to save a lot of money. This is because if you decide to pay monthly, you will be making only 12 payments per year. If you decide to pay fortnightly or weekly you will be able to complete your loan repayment within a short time.

Consider a revolving credit account
If you have a revolving credit facility, your loan balance reduces every time you pay your salary into your home loan account. This simply means that you will end up paying less interest. If you decide to use Westpac credit card in making your daily purchases, you can get up to 55 days interest free. After this if you decide to pay off the balance in full, you will end up saving more interest. This is because you will be able to keep you total loan balance lower for a longer duration.

Health check
With the current competition among home loan lenders, it is advisable that you get home loan health check. This helps you have the most appropriate and affordable home loan for your needs. Try to find out whether the interest rate of your lender is competitive. Also check the features that you are repaying for that you don’t need. Try and figure out the benefits you are likely to get if you switch lenders or loans. The reason why you need to loan health check is that most of the time your circumstances change without a review on your loan. Make it your culture every three years to consult your loan broker and find out whether your loan is still appropriate. This helps you find out whether there are any chances of lowering the interest rate of your loan.

Checking your statements
The fact is that every human being makes mistakes. Banks are not an exception since they are run by human beings. Sometimes banks can allocate extra charges or fees incorrectly. It is thus advisable that you go through each of your monthly statement and see whether there is anything unusual.

If you follow the above tips, you will find yourself paying lesser interest. High interest on home loans will no longer be an issue to you.

Author Bio: Written by Mercy Karen. She is an avid blogger. She writes article for finance, home décor and business .Presently she is focusing on issues related to land registry. For any queries on land registry contact on land registry number.

 

Yakezie Carnival at Money Q
Aspiring Blogger Fin. Carnival at Aspiring Blogger
Carn of MoneyPros at MoneyPros

Time to Refinance or Not

1193074_83871887Since the 2008 financial crisis, the home market has seen a lot of churning, with the result that home sales are close to an all time low in at least two decades. Home mortgage rates have also nosedived over the last four years, making them very attractive for anyone who wants to refinance their mortgage. In the United Kingdom, home mortgage rates too have hit new lows.

Mortgage Rates in UK

It has recently been reported that fixed home mortgage rates in the United Kingdom are at their lowest levels since 1989, when fixed-rate home loans were first introduced. This mostly impacts new buyers, because lower rates are a marketing technique to get buyers. Even taking that into account, the lower rate of interest is making refinance an attractive option.

The low mortgage rates are a result of the Funding for Lending scheme launched by the British government in concert with the Bank of England in August 2012. Ever since the launch of that scheme, home loan rates have been falling steeply. The scheme aims to push about £80 billion into the hands of borrowers, and is therefore making it easy for borrowers to access money at low rates. The government in the United Kingdom is making a lot of efforts to encourage the sales of houses in UK, which will help the average buyer in the long run because it will indirectly increase the value of every home.

Other reasons to Refinance Your Home

The other main reason to refinance your home at lower rates is purely financial. Once you have zeroed in on a bank offering a lower rate, you should make an calculation about how much can you save, and from there you can make a decision on whether you want to refinance or not.

For example, if you have a £100,000 mortgage that is at a fixed rate of 5.5%, for a duration of 30 years, you will incur a monthly payment of £568 for it. However, if you refinance it with a rate of 3.5%, your monthly payment will fall drastically to £408. Refinancing at a lower rate makes mathematical sense at every point; however, you do have to take care that there are no hidden costs or fees in the refinance deal.

In conclusion, we can say that this is the best time to refinance your home in the UK. With fixed-rate interest rates at their 20-year lows, you can easily get a deal that would have been unthinkable when you got your mortgage.

Why Are Quick Cash Loan Fees So Expensive?

1412644_75137726Whoever has needed money to pay for an unexpected expense before their payday knows that quick cash loans are often the only way to cope with such an emergency. Certainly, payday loans are offered indiscriminately to anyone who can repay this debt with a paycheck, and the easiness to get an application approved with no questions, make people borrow money even if they only need it to buy whatever thing that cannot wait until the payday. Wrong decision! Quick cash loan fees are so expensive that is very easy to fall into a debt trap from where it is very hard and costly, to get out.

The Truth about Quick Cash Loan Fees

You probably have heard that payday loans are short-term loans with the highest interest rates when it comes to borrowing money. Nonetheless, being almost the only option to borrow money when someone has poor credit, bad credit or no credit history at all, people tend to justify those expensive fees as an abuse from lenders to take advantage of their credit situation when it is not that way. Payday loan lenders stick to state laws that determine what the maximum amount for financial fees can be, interest rate, and other charges that people pay, which the amount can vary from state to state.

How Quick Cash Loan Fees are obtained

The problem with quick cash loans is that the interest rate to be paid is often calculated on a two-week basis, being short-term loans. Based on this fact, the quick cash loan fee is generally the equivalent of an APR (Annual Percentage Rate) of 460%, which is the highest interest rate applied if compared to any other type of loan. As a contrasting example, you could pay for a car loan only four and up to seven percent APR.

Quick Cash Loans Are Unsecured Loans

Another factor that makes quick cash loan fees so expensive is that we are talking about unsecured loans, and therefore lenders need to protect themselves from the risk that involves having an individual with bad credit applying for them. Since credit history is not a determining factor to get a quick cash loan, nobody guarantees that the borrower may not lose the job while having an outstanding payday loan to repay.

Quick Cash Loans from a Lender’s Side

On the other hand, many people are aware of the costly financing fees associated to quick cash loans and repay the debt timely. Indeed, you could manage to pay back your quick cash loan in full the next payday and avoid paying more interest rates added when the debt goes beyond it. Repaying your debt as fast as possible is not a good deal for payday lenders, thus offering low finance fees would not give them enough money to pay their own operational costs.

Avoiding Quick Cash Loans Fees Trap

The only way to stay away from the high costs of quick cash loans fees is avoiding them as much as you can, and only apply for them when you really need the money they provide and do your best to repay your debt faster than is expected.

 

Yakezie Carnival at My University Money
Carnival of MoneyPros at The Happy Homeowner
Carnival of Retirement at Freeat33
Finance Carn. for Young Adults at Brick By Brick Investing

Use Low Interest Loans

Piggy Bank          If you are one of the unfortunate ones where at the end of the month you have bills that are owing and you do not have enough in the bank to cover them you will be faced with the situation of paying partially what you owe. No one ever desires this but people are often faced with it due to a number of unforeseen conditions. This could be from surprise car or house repairs, a job layoff or a number of other reasons. However if this happens to you the first thing you will want to consider is how to pay off the bills you owe on while paying as little interest as possible.

In order to pay as little interest as possible you must first go to your bank and tell them what you are facing. Most times a bank will be able to offer you a loan with lower interest rates than any credit card or what any other bill will charge for late payments. If you own your house or a car or can put up any considerable bank accepted collateral this is not difficult receiving a line of credit. Lets say for example they offer you £5000 loan, you then use this amount to pay off your bills and then only worry about paying back the loan amount. Now check this amount against what a credit card company would charge, or a hydro bill etc, It is almost for sure cheaper. Other than borrowing off a friend or family member who you know well enough that they don’t mind, a bank should be the first place to go when faced with this situation.

However if you are in a position where you don’t even have enough personal worth to consider a bank loan, you will want to explore other options in order to pay off your debt. Consider selling anything you may have via an online venue or with a local news paper etc. If this is not a viable option, you may have to go with a higher rate of interest but do compare your options as there can be considerable differences even among credit cards or other venues.

After you have solved the issue of paying back what you borrowed for, I recommend an all out assault on saving money in order to put a little bit away for a rainy day. Do whatever it takes as it may save you far more in the long run. Eat cheaper food (not unhealthy, just cheaper) turn your heat/ac down, walk more instead of using an auto, do whatever it takes and save a little bundle for the future to avoid a further situation like this.