thebestmortgagerate.co.uk » 2007

Search

Latest News

Blogroll

Theme by Seobilgi Sponsored Lazerli Epilasyon www.lazerepilasyon.de and Abant Kapadokya pansiyon - Pamukkale pansiyon - şile ağva - ağva rehberi - ağva otel - lazer epilasyon - saç modelleri - antivirüs programı - paris hotels - gitar www.gitaral.com

Credit unions urged to make more loans to small firms

Small-business advocates want credit unions to do more lending to local businesses, but many credit unions say they’re not yet interested. Organizations like MicroBiz Buffalo and the U.S. Small Business Administration are actively encouraging the nonprofit credit unions to partner with them — or each other — in reaching out to local small businesses. The organizations say credit unions have a valuable role to play in supporting communities and revitalizing neighborhoods by helping businesses grow.The efforts by the various advocacy agencies and organizations, and the somewhat lackluster response to date by credit unions, represents one of the challenges facing small businesses and their supporters: How to get more capital into the hands of entrepreneurs. Small businesses are the engine of the U.S. economy, with 23.7 million small companies accounting for 99.7 percent of employers.

Small businesses provide seven of every 10 new jobs, and pay about 44 percent of the country’s private payroll, according to the SBA. Banks have become more active and aggressive in lending to small businesses. But it costs the same to generate a loan, no matter the size, so banks are more likely to go after larger loans to justify their effort. That’s where the advocates say credit unions can come in. Credit unions are nonprofit, community-oriented institutions that are owned by their members. Their mission is usually to serve underserved markets, and they are generally much smaller and more local than banks. So advocates see credit unions as a natural fit. “Small business people want to talk to people who can make decisions,” said Paul Hoffman, SBA lender relations specialist here. “Credit unions certainly have a unique opportunity to provide some of these services.” The SBA provides government guarantees for business loans to make lenders comfortable in extending credit. The agency used to use only banks, but is now trying to add credit unions. The problem is that credit unions historically have not been active in business lending. Federal regulations currently restrict them to having no more than 12.25 percent of their portfolio in business loans, unless they have a special exemption as a low-income or community development credit union. So most of them aren’t familiar with business lending, and don’t have the staff, expertise or systems in place to handle it.Currently, only one credit union in the Buffalo area — Olean Area Federal Credit Union — and one in Rochester participate with SBA, out of at least 140 in the two metropolitan areas. And Olean has just $10 million in business loans, out of $140 million in assets. Others, like Niagara’s Choice Federal Credit Union and Niagara County Federal Credit Union, do very little business lending, although they acknowledge they may not know how personal loans are being used. Some want to get into business lending, but aren’t sure how. That’s the case with Lancaster Depew Schools Federal Credit Union, which may apply to regulators for a community charter and wants to be ready to serve the needs of businesses. It has 3,100 members and $20 million in assets, more than double its size five years ago. That was the purpose of last week’s forum, at which speakers urged local credit unions to work with them, commercial loan brokers, or other business and community development groups to tap into the small business community. They also suggested partnering either with each other or with loan funds to gain experience, learn the process, and share the risks.

Posted in Uncategorized, loan, personal loan, loan calculator, loan rate | Comments(0) July 2007

Spreading Christmas Costs With A Personal Loan

As the days grow shorter and the nights get colder, our thoughts might start turning towards festive matters. Christmas is coming, and while this should be a cause for excitement and anticipation of good family times, for many of us there’s something less pleasurable on our minds at this time of year. The holiday season gets evermore expensive, and if money is already tight we might worry about how our finances will cope.It’s very common for people to use a credit card to cover the expenses of gifts, food, drinks and socialising, intending to pay off their indulgences in the New Year, but this kind of credit is fairly expensive - especially if your good intentions to repay early don’t quite succeed and you end up carrying the debt for many months.Another option is to make use of an overdraft facility at the bank, going ‘into the red’ over the holiday season. This is a convenient option, but it comes at a price - an overdraft is often expensive to maintain, with both a monthly fee and a percentage interest charge. This can make an overdraft almost expensive as a credit card.There’s also the danger that if you overdraw heavily on your account so that you’re close to your limit, you’re not leaving yourself much financial breathing space should an unexpected expense arrive in January. Besides that, once you’ve built up an overdraft it can be very hard to pull As the days grow shorter and the nights get colder, our thoughts might start turning towards festive matters. Christmas is coming, and while this should be a cause for excitement and anticipation of good family times, for many of us there’s something less pleasurable on our minds at this time of year. The holiday season gets evermore expensive, and if money is already tight we might worry about how our finances will cope.It’s very common for people to use a credit card to cover the expenses of gifts, food, drinks and socialising, intending to pay off their indulgences in the New Year, but this kind of credit is fairly expensive - especially if your good intentions to repay early don’t quite succeed and you end up carrying the debt for many months.Another option is to make use of an overdraft facility at the bank, going ‘into the red’ over the holiday season. This is a convenient option, but it comes at a price - an overdraft is often expensive to maintain, with both a monthly fee and a percentage interest charge. This can make an overdraft almost expensive as a credit card.There’s also the danger that if you overdraw heavily on your account so that you’re close to your limit, you’re not leaving yourself much financial breathing space should an unexpected expense arrive in January. Besides that, once you’ve built up an overdraft it can be very hard to pull yourself back into the black, particularly if your normal budget leaves you with little spare cash each month.So what’s the solution to this? Are we doomed to a festive season of bread and water, alone and miserable? Well, maybe a personal loan could be the answer. Taking out a loan, if done thoughtfully and with a definite purpose in mind, can provide you with the funds you need to see you through the holidays without plunging you into penury for the rest of the year.First of all, by shopping around you’ll be able to take advantage of the intense competition between loan providers, and you should be able to get yourself credit at a much, much cheaper rate than that of a credit card or an overdraft. This means your monthly repayments can be smaller, or alternatively you can clear the debt much more quickly.Secondly, a loan is usually arranged on a fixed rate basis, meaning that you’ll know exactly how much you need to repay every month. This contrasts to the variable rates of credit cards and overdrafts, which can change from month to month, leaving you unsure in your budgetting.Finally, a personal loan is most often repaid over a specified length of time, after which your debt has been cleared. With a credit card, it’s tempting to just make the minimum repayments, which barely cover the interest charges, leaving the best part of your debt uncleared. This is a guaranteed way to enrich the card company while keeping the millstone of debt around your neck.So is a personal loan the right solution for you?

Credit should never be taken out without careful consideration of how it will affect your financial future, and it is of course better to live within your means if possible. However, if you decide that credit is the best way forward then a personal loan is often the cheapest and most effective option. yourself back into the black, particularly if your normal budget leaves you with little spare cash each month.So what’s the solution to this? Are we doomed to a festive season of bread and water, alone and miserable? Well, maybe a personal loan could be the answer. Taking out a loan, if done thoughtfully and with a definite purpose in mind, can provide you with the funds you need to see you through the holidays without plunging you into penury for the rest of the year.First of all, by shopping around you’ll be able to take advantage of the intense competition between loan providers, and you should be able to get yourself credit at a much, much cheaper rate than that of a credit card or an overdraft. This means your monthly repayments can be smaller, or alternatively you can clear the debt much more quickly.Secondly, a loan is usually arranged on a fixed rate basis, meaning that you’ll know exactly how much you need to repay every month. This contrasts to the variable rates of credit cards and overdrafts, which can change from month to month, leaving you unsure in your budgetting.Finally, a personal loan is most often repaid over a specified length of time, after which your debt has been cleared. With a credit card, it’s tempting to just make the minimum repayments, which barely cover the interest charges, leaving the best part of your debt uncleared. This is a guaranteed way to enrich the card company while keeping the millstone of debt around your neck.So is a personal loan the right solution for you? Credit should never be taken out without careful consideration of how it will affect your financial future, and it is of course better to live within your means if possible. However, if you decide that credit is the best way forward then a personal loan is often the cheapest and most effective option.

Posted in loan, personal loan, loan calculator, loan rate, bank loan | Comments(0) July 2007

Home Loans and Loan Interest Rates

Obtaining home loans can be a difficult decision for any person. Couple that with the sometimes high and unavoidable interest rates it can be a downright nightmare. When shopping for home loans, you will need to consider the interest rates being charged. In some places the rates of interest will be ideal for your situation and others will seem too high. The best way to choose the right home loans is to have a solid understanding of what factors go into determining your interest rates.There are several factors that go into determining what interest rates a loan company or bank will charge for home loans; however, the most important factor is your credit report and FICO score. Essentially, the lower your score, the higher the interest rates charged on home loans or the higher the chances of being turned down. Your credit report contains information about every aspect of your life. When we say every aspect of your life, we mean that. When applying for home loans, the creditor will, with your permission, access your credit report. Your credit report contains information about any form of credit you have obtained, bankruptcies, criminal record, court history, history of bill payment, where you live, as well as where you work and how long at each. What is more, each time a creditor accesses your credit report, rather it is for home loans, personal loans, credit cards, or rental history, and it is documented as well. A FICO score is what is used to determine your credit worthiness of receiving home loans. What this means is that you are assigned a score that basically summarizes your ability to pay, your history of paying, and other such information into one score, which tells potential creditors everything they need to know. Just as there are many factors involving your credit report that will help potential lenders of home loans determine your credit worthiness, the number of times accessed by creditors also weighs heavy on the decision as well. If in a short time period, several lenders have accessed your credit report, this could cause lenders to deny your home loans application or offer you a high interest rate. All of the above factors are considered when a lender is determining the interest rates of home loans. It is important that you understand the information that is contained in your credit report and how creditors will view it when applying for home loans.

Posted in Uncategorized, home equity loan, home loan, loan, home equity loan rate, fixed rate home equity loan, home equity loan bankruptcy | Comments(0) July 2007

Bad loans on the rise, but banks are not worried

High are throwing up large number of bad loan banks. Big private and foreign banks have reported a jump in their gross Non Performing Assets or NPA’s. Analysts expect bad loans only to increase from here on.Banks for the past several years have been successful in erasing bad loans from their books. But in the first quarter of this year, several big private and public sector banks have seen bad loans resurfacing.ICICI Bank and Centurion Bank of Punjab saw a jump of nearly 30% in NPA’s over the last quarter, PSU biggies like Punjab National Bank Union Bank, and Canara, all reported higher gross non performing assets between 5 and 9% Experts say the defaults have cropped up largely in personal loans, credit cards and the category, where EMIs have become unaffordable for borrowers, as rates have risen consistently for the past 18 months.

Shailendra Bhandari, MD, Centurion BoP said, “The corporate SME is absolutely fine, are fine, personal loans are fine, commercial vehicles and trucks is fine, two-wheelers is going through a bit of turmoil in the industry itself, sales have been down for the last three months. But again what happens is that, as we get into the busy season, this picks up. So, we are playing this cycle out. Analysts expect these bad to rise even further. estimates that retail bad loans which are 3.5% of retail advances are likely to increase to 5% in the next two years. This is because banks are increasingly focusing on non-collateralised loansTarun Bhatia, Financial Sector Ratings, CRISIL said, “NPA’s may be under control, but they are definitely rising because banks are lending more to personal loans and credit cards where 40-50% of them are sub-prime yields.”However, analysts say they are not worried about increasing retail bad loans as banks have better risk management tools and are able to provide cash for these loans. Most banks also have the option to sell down their riskier assets through the securitisation mechanism, making it easier for banks to protect themselves from bad loans.

Posted in loan, loan calculator, loan rate, bank loan | Comments(0) July 2007

Cheap Secured Personal Loans: Security From Personal Crunch

When you need some bucks for your personal needs, why should you think of going to the kins? They are helpful, but they may also need the money back at any hour and you need a flexible repayment mode. Well, besides kins, there are other ways out too and these speak of cheap personal secured loans.are earmarked as cheap loans for a few noteworthy and genuine reasons. They require collateral attachment and collateral is one thing which lets the light to spark bright off the face of the lender. When he has got your collateral against your loans, the lender knows that his money will be paid back timely. Out of this gratification, he gives you the loans at cheap prices and easy terms. Cheap secured personal loans are there to get you off the hook for a term ranging from 5 years to 30 years and the amounts of the loans range from £3,000 to £250,000. So, it’s a whopping amount you can grab up to the 125% of your property value. However, in case you are having a bad credit stint, this percentage will face a slump and you will get around 90% of the property value as the loan amount. Well, cheap secured personal loans are there for the bad credit holders too. Cheap secured personal loans are there for any of your personal needs. You can grab some money to meet your personal debts, to update your business or set up a new business, to repair your home or needs like buying a car or to go for a holiday jaunt.. An exploration of the cheap secured personal loans opens up the online process. Online is the platform where people can avail these loans without any hassles of paper work or leg work. Also, you will have a large array of choices to grab the best of loans with cheap rates.

Posted in loan, personal loan, loan calculator, loan rate | Comments(0) July 2007

Give us more credit too, SMEs tell banks

Even as the government is pushing for higher credit availability for small and medium enterprises (SMEs), the classification of home loans up to Rs 20 lakh under priority lending may impact credit flow to the sector. There is no separate sub-category for SME lending under priority sector lending (PSL), which is 40% of the net bank credit. Lending to agriculture is 18% and the remaining 22% is spread between exports, SMEs, etc. Many banks meet priority lending targets by giving advances to exports, since they are unwilling to take on the risks involved in SME lending. “We have reasons to believe that with housing loans up to Rs 20 lakh classified as priority, SME lending may take a hit,” says Anil Bhardwaj of the Federation of Small and Medium Enterprises (FISME). The SME sector wants the same priority that consumer finance or housing loan enjoys in the banking system. The advances to small-scale industries was Rs 83,179 crore in 2004-05. Banks now have a wider definition for SMEs ranging from tiny units to mid-corporates. A wave of banks have specialised teams on SME lending, but are fighting shy of lending aggressively to this sector. The RBI definition of small enterprises is, up to Rs 5 crore investment in plant and machinery. For the purpose of convenience, banks, however, classify SMEs according to turnover. Nearly 90% of the total SME lending is on account of public sector banks. “Banks find it difficult to appraise these projects because, unlike agriculture, they are not aware of the growth patterns and cycles across various industry segments. There is considerable delay in processing of loans due to this reason,” says Mr Bhardwaj said. SME loans are lent at 200 basis points above the prime lending rate (PLR). The interest rates have gone up from 11% to 14%. “Banks are constrained by data on the sector, and are, therefore, not in a position to assess risks associated with the sector. They do not have indicators like the lifecycle concept, as in the consumer finance area,” a banker said. Globally, the size of SMEs is much larger and the exposure of banks to the sector is higher as well. “The success and failure of SMEs piggyback on the success and failure of the bigger corporates that they work for,” Robin Roy, principal consultant, banking and financial services, PwC says. “Basel-II guidelines on capital requirement attach the same risk weights to SMEs as retail, thus, it is expected that lending to the SME sector will improve. Under Basel guidelines, the risk weights for SMEs will be 75% against the current provisioning of 100%,” a banker said.

Posted in Uncategorized, home equity loan, home loan, loan, loan calculator, home equity loan rate, loan rate, fixed rate home equity loan, home equity loan comparison, home equity loan bankruptcy, bank loan | Comments(0) July 2007

Federal Home Loan Bank of San Francisco Reports Second Quarter Operating Results

The Federal Home Loan Bank of San Francisco today announced that its second quarter 2007 net income rose $16 million, or 13%, to $144 million from $128 million in the second quarter of 2006. For the first six months of 2007, the Bank’s net income rose $39 million, or 16%, to $286 million from $247 million for the first six months of 2006. These increases primarily reflected growth in net interest income, as well as differences in fair value adjustments for the respective periods. Net interest income for the second quarter of 2007 rose $11 million, or 5%, to $212 million from $201 million for the second quarter of 2006. Net interest income for the first six months of 2007 rose $23 million, or 6%, to $417 million from $394 million for the first six months of 2006. The increases in net interest income were primarily driven by the effect of higher interest rates on higher average capital balances, partially offset by lower net interest income on the Bank’s mortgage portfolio (mortgage loans and mortgage-backed securities). Net income also reflects fair value adjustments on trading securities, derivatives, and hedged items, after assessments, which resulted in net fair value gains of $6 million in the second quarter of 2007, compared to net fair value gains of $2 million in the second quarter of 2006. Most of these net fair value gains consisted of unrealized fair value adjustments. Fair value adjustments on trading securities, derivatives, and hedged items, after assessments, resulted in net fair value gains of $16 million in the first six months of 2007 compared to net fair value losses of $1 million in the first six months of 2006. Most of the $16 million net fair value gains in the first six months of 2007 consisted of unrealized fair value adjustments. The $1 million net fair value losses in the first six months of 2006 consisted of $2 million of net unrealized fair value losses, partially offset by $1 million of net fair value gains on the termination of hedges related to consolidated obligations. Nearly all of the Bank’s derivatives and hedged instruments are held to the maturity, call, or put date. For these derivatives and hedged items, net unrealized fair value gains or losses are primarily a matter of timing and will generally reverse over the remaining contractual terms to maturity or by the exercised call or put dates. As of June 30, 2007, the cumulative effect of SFAS 133 on the Bank’s derivatives and hedged instruments was a net unrealized gain of $32 million. During the first six months of 2007, total assets fell $10.3 billion, or 4%, to $234.6 billion from $244.9 billion at December 31, 2006, primarily because advances decreased by $12.7 billion, or 7%, to $171.0 billion from $183.7 billion. In total, 109 institutions increased their advances during the first six months of 2007, while 102 institutions decreased their advances. In addition to the decrease in advances, interest-bearing deposits in banks decreased by $1.0 billion, or 11%, to $8.3 billion from $9.3 billion. The decrease in advances and interest-bearing deposits was partially offset by an increase in Federal funds sold, which grew $3.7 billion, or 23%, to $19.1 billion from $15.4 billion. The dividend rate for the second quarter of 2007 is 5.14% (annualized), compared to 5.22% for the second quarter of 2006. In the second quarter of 2007, the Bank retained $14 million, or 10% of its earnings excluding the effects of SFAS 133, to continue building retained earnings to its target amount of $296 million, in accordance with the Bank’s Retained Earnings and Dividend Policy, and is making available for dividends an amount equal to the remaining 90% of earnings excluding the effects of SFAS 133. In the second quarter of 2006, the Bank retained $7 million for the buildup of retained earnings, which was equal to 5% of its earnings excluding the effects of SFAS 133, and made available for dividends an amount equal to the remaining 95% of earnings excluding the effects of SFAS 133. The annualized dividend rate for the first six months of 2007 is 5.01%, compared to 5.13% for the first six months of 2006. In the first six months of 2007, the Bank retained $28 million, or 10% of its earnings excluding the effects of SFAS 133, for the buildup of retained earnings and is making available for dividends an amount equal to the remaining 90% of earnings excluding the effects of SFAS 133. In the first six months of 2006, the Bank retained $15 million for the buildup of retained earnings, which was equal to 6% of its earnings excluding the effects of SFAS 133, and made available for dividends an amount equal to the remaining 94% of earnings excluding the effects of SFAS 133. In addition to the impact of the change in the amount of earnings retained to build the Bank’s retained earnings, the difference between the dividend rates for the second quarter and the first six months of 2007 compared to the same periods in 2006 reflects a lower net interest spread on the Bank’s mortgage portfolio, partially offset by a higher yield on invested capital during the second quarter and the first six months of 2007 compared to the same periods in 2006.

Base rate at 5.75% - Protect your mortgage, personal loan and savings

What can you do to protect yourself from higher interest rates? Anyone with an average mortgage (£94,00 according to the Council for Mortgage Lenders) will now, on an interest-only basis, be paying almost £100 a month more for the mortgage than they were before rates started going up last August.As Moneyextra reported previously, millions of homeowners will have had that shock deferred because they’re on fixed rates. But many of these fixed rate deals are coming to an end over the summer.How big an interest rate shock are you likely to face? Forewarn yourself by checking just what higher interest rates could do to your monthly mortgage payment with Moneyextra’s new calculator - The Bank of England raised its base interest rate to 5.75% on 5 July, the fifth increase since last August and a new 6-year high for borrowing costs. The rise had been widely expected after s

Posted in Uncategorized, loan, personal loan, mortgage loan, loan calculator, loan rate | Comments(0) July 2007

Financial planning for graduates

Graduates are finishing their courses with debts now averaging £13,000 to £15,000 on student loans, overdrafts, credit cards and loans from parents, a figure that has been going up by around 12% a year and is likely to rise even faster following the near tripling of tuition fees to £3,000 a year in September 2006. Advanced studies on financial management would appear to be called for!Figures released by the Student Loans Company show total lending to British students in the year to April was £3.4 billion, up from £2.9 billion the previous year. The figures are the first since universities were allowed to charge tuition fees of £3,000 - up from the £1,250 charged to those entering before last September. The National Union of Students (NUS) now estimates that it costs as much as £15,000 a year to study in London and £13,000 elsewhere although the figures are disputed.Gemma Tumelty, NUS president, said “Debt does not only affect students’ choices before they enter university, it affects the courses they choose, the career they take on, the likelihood of them pursuing further study and their chances to save and invest as graduates.”

Hello world, I’ve got a BA (or BSc or MA, etc., etc…)

So, you’re leaving Uni with your degree certificate in one hand and bank statement in the deepest shade of red in the other. What do you do?To get your finances on the right track the first thing you need is write a budget. List everything you owe and all your living costs. If you are working, you need to deduct all outgoings for each month from your total income so you can work out exactly how much spare cash you have left for repaying debts.

Shop around for the best

Just as you shopped around when looking at (you did, didn’t you?), now you have a degree you can switch to get the best deal on graduate accounts. The banks are always keen to attract graduates because they expect them to be good earners in the future.The banks will consider you for a graduate account up to three years after you have graduated. Don’t necessarily take the first one that comes along. You need to compare the products available in the marketplace. Don’t even think about incentives such as discounts at shops and restaurants you’ll probably never use - you’re in the business world now and it’s the figures that count.Graduate accounts offer preferential interest rates on personal loans and 0% rates on overdrafts but interest rates vary greatly as do the terms. This is where you need to be shrewd. Look at terms on free overdrafts; interest rates on extended overdrafts and personal loans; and fees for going over the overdraft limit.

For example, Barclays offers interest free loans up to £3,000 in year one, £2,000 in year two, £1,000 in the third year and £500 in the four year but there is a £5 a month fee. HSBC has no monthly fees but offers interest free loans of £1,500 in year one and £1,000 in year two.Check out the interest rates on extending your overdraft. Once again the interest rates do differ. For example, Abbey will charge you 9.9% and Barclays 15.6%. If you expect to need a personal loan as well, you need to study interest rates here as wellBeware of unauthorised overdrafts - the interest rates may appear outrageous. NatWest charges 17.81%, whereas Lloyds TSB will make you pay 29.8% plus a fee of £30 a day (up to £90 a month) and Barclays 27.5%.

Pay off expensive debt first

The top rules for paying back debt are to work out a timescale to pay off the most expensive at the fastest rate and switch expensive debt to something cheaper, for example switch to a or a cheaper loan. If you’re struggling to pay back debt on credit cards, which can be twice as expensive as a personal loan, you’re probably better off with a If you owe money to the government-backed Student Loans Company, don’t rush to repay it because the interest rate is linked to the retail price index and it’s currently 2.4%. Plus you don’t have to start repaying it until you start earning more than £15,000 a year.

Graduate checklist for financial recovery

Draw up a budget work out how much you need to live on and how much you owe.
Switch to a graduate account and compare free overdrafts, interest rates on personal loans and extended overdrafts and fees and interest rates for unauthorised overdrafts.
Set goals for repaying debt, perhaps two years or five years.
Pay off the most expensive debt first.
Don’t rush to repay cheaper student loans.
Pay back loans and credit cards using direct debits - that way you know they’ll be paid and you won’t be tempted to spend the money.
Review your finances every year to check youre on target and always shop around to see if you can get a better deal on loans or credit cards.
Don’t take on new loans you can’t afford.
Deal with bills when they arrive - don’t let them mount up.
Don’t bury your head in the sand if your debts are getting out of control - talk to your bank or seek debt advice. Use the free debt advice services from National Debtline (www.nationaldebtline.co.uk) and the Consumer Credit Counselling Service (www.cccs.co.uk).

Posted in student loan, loan, personal loan, student loan consolidation, loan calculator, college loan, college loan consolidation, college student loan, loan rate, student loan debt consolidation, college finance | Comments(0) July 2007

Rate rises begin to bite

As rising interest rates begin to bite, you may find that keeping up with numerous monthly payments for loans and credit cards at assorted interest rates, becomes increasingly confusing. Added to that, every so often less frequent bills, such as household insurance and car premium renewal, rear their heads, and suddenly the amount going out each month is no longer covered by your monthly income.This is when debt consolidation can help. By combining all your loans and other debt, such as credit cards, into one, you have a single payment to make on just one day of the month and you know exactly where you stand.But there are some important things to look out for. And you need to do the maths, to make sure you would be better off by consolidating your debt, because there are a number of pitfalls.

The difference between unsecured and secured loans

First of all, you need to know the difference between unsecured and secured debt. If you already have a loan it is probably unsecured. The lender trusts you to pay it off in full and on time. And he will make checks that you can do this by looking at your credit record.The other type of loan is a secured loan, which, as the name implies, is secured against something of value that you own - in this case usually your home. The total cost Don’t just look at the headline interest rate or the monthly payments on the new loan you are considering. Look at the period the loan is arranged over. The longer the period of the loan, the more you’ll pay in interest in total. Ask for calculations of the total amount repayable over the period of the loan and compare it with your current arrangements.

Early repayment penalties on your old loans

When you are consolidating debt, remember to count in your calculations redemption penalties on existing loans. There is little point trying to save money with a new loan if you end up paying more by way of penalty charges on the old one.

Posted in Uncategorized, loan, unsecured loan, secured loan | Comments(0) July 2007

« Previous Entries