|
Secured loans used to be seen
as a last resort for borrowers
Article July 18, 2007
Any loan should be approached with care. However, there are
circumstances when secured loans can make a lot of sense for
helping out with finances for home owners.
If you need a loan, there are many ways to borrow. One of
the best ways can be simply to increase your mortgage.
The conventional route to borrowing for shorter-life items,
such as cars or holidays, is an unsecured loan as there is
no risk to your home if something goes wrong and you cannot
repay the debt.However, if neither of these methods of borrowing
is suitable or available for you, it can pay to consider secured
loans.
Many people have opted to lock themselves into fixed-rate
mortgages - a sensible move, as interest rates have been rising.
However, these loans may not allow further borrowing without
additional fees and charges.
In some cases, people locked into these loans who need to
borrow more have found they must redeem the whole loan and
remortgage, thereby incurring early repayment penalties as
well.Research has shown that more than 450,000 applicants
have been turned down by mortgage lenders in the past six
months, as interest rate rises have been introduced.
Fortunately at the same time, rising house prices have meant
that many people may now have equity in their home, and if
they do not need to move home, a secured loan could be an
ideal way to release cash, particularly as secured loans can
be cheaper than unsecured loans and other forms of borrowing.
One of the main advantages of a secured loan is that payments
can be scheduled for as long as 25 years to make monthly payments
smaller.
Secured loans can also be helpful for those who have County
Court Judgments against them.
This is because Lenders are usually more willing to grant
secured loans to those with a poor credit history, as the
loan is backed by the property.
A secured loan may also be useful for consolidating debts
Secured loan guidlines...
-
If you don't repay the debt, your house could be at risk.
-
Rates are generally variable meaning the payments will
increase if bank rates go up.
-
Look around for the best rates.
-
If you have financial problems, talk to a credit counselling
service as soon as possible.
Recent research has suggested
many Britons will develop debt problems later in life due
to excessive spending on luxury goods and commodities.
Article July 17, 2007
Research carried out by Fidelity International shows that
adults who currently have no savings will be unable to put
away money for their retirement.
However, the research also shows the average family spends
over £1,000 on clothes and nearly £2,000 on restaurants and
hotels each year.
Debts on personal loans and credit cards accounted for £3,500
spent each year.
The research reported customers were ‘living for today at
the expense of tomorrow’.
Many people are choosing to emulate the lifestyles of celebrities,
but, they will not have the funds later in life to be able
to retire like them.
Rising life expectancy is also putting a strain on peoples’
finances.
Britons are putting away worryingly small amounts into savings
accounts for use in later life.
This means that although they are currently living a celebrity
lifestyle they will be left financially disappointed later
in life.
Repairing your credit and improving
your credit score
Article July 16, 2007
Your credit score is one of the main factors which will dictate
whether a company is willing to lend you money or not. Your
credit score is used by lenders to assess the risk of offering
you credit.
Your credit score is compiled from your credit report and
from answers you provide in documents such as a credit card
application form.
Annual income, past addresses and details of current outstanding
balances on credit cards and loans are just some of the things
included in your credit report.
If you currently have a poor credit several steps can be
taken to repair your credit and improve your chances of been
accepted for credit in the future.
- Make sure you are on the electoral register as lenders
use it to confirm your name and address.
-
Don’t omit previous addresses as this could be seen as
an attempt to hide previous unpaid credit.Keep up to date
with any current credit.
-
Making payments on time shows you are a reliable customer
and provide less risk to the lender.
-
Previous missed payments indicate you may find it difficult
to make payments in the future.
-
If you have been declined for credit, don’t apply to
several more companies in quick succession as this will
affect your credit score.
-
Wait a month or two before applying to another company.
-
Don’t try and hide any previous poor credit as this is
easily traceable.
-
Be honest and upfront about your credit history.
-
Sort out any bad debt.
-
Missed payments and CCJs stay on your file for 6 years.
However, if you settlethese payments this will be marked
down on your credit file and taken into consideration
by lenders.
-
Get a copy of your credit report and check it thoroughly.
You are allowed to appeal against any discrepancies and
add notes to the file to explain any exceptional circumstances.
Credit repair is the best way of improving your chances of
been accepted for credit in the future. Following these simple
steps should ensure your credit score gets back on track and
where you want it to be.
Before
taking the plunge and taking out a loan you need to answer
one simple question -
Article July 12, 2007
Do I really need to borrow all this money? Borrowing money
is almost always an expensive business, you should aim to
borrow as little as possible so you don't overstretch yourself
and end up with a bad credit record.
For example, you don't have to replace your vehicle every
two years just to keep up with the neighbours.
In the UK, sales of used cars exceed new-car sales by about
three to one - and a quality second-hand car might be more
up your street.
Depreciation plus the cost of borrowing makes buying a new
vehicle hugely expensive when compared to the costs of running
a good second hand vehicle.
Look to purchase the newest and most reliable vehicle you
can whilst avoiding the main dealers and make sure you research
the vehicle thoroughly before setting out to buy.
An alternative is to make your purchases using an interest-free
credit card, switching the debt to a new 0% credit card when
the introductory period expires.
Although most interest-free credit cards now charge a fee
for balance transfers, paying zero interest on the amount
you've borrowed may still be a cheaper option than taking
out a personal loan Finally, for a short-term loan, where
you are sure to repay the debt in full, it makes sense if
you have a generous friend or relative who is happy to lend
you the money but make sure you repay the debt and appreciate
the favour.
Sub-Prime
Lending Market Set To Soar - Article July 10, 2007
Picks up new entries from the Prime Market Following on from
the relentless interest rate rises from the Bank of England,
home owners are now starting to feel the impact.
Many home owners were locked into fixed rate mortgages deals
which are now coming to an end.
The consequences of this have been that the monthly mortgage
payments for those affected have increased by around 100 per
month on average.
Rising numbers of home owners are now hitting financial difficulties
with the sub-prime market set to see be the biggest influx
of enquiries for some years.
A combination of increased borrowing on credit cards and
rising interest rates has seen some households caught short.
The interest rate rises combined with the property market
rises have pushed many first and second time buyers into what
is called the sub-prime market with people having to borrow
100% or more of the value of their property.
The situation continues to remain bleak for those not yet
on the housing ladder with many now on the verge of giving
up hope of ever being able to afford their own home.
What Are
We Spending Our Loans On? - Article July 07, 2007
Spend-Thrift Continues A recent survey has shown that the
most common reason for taking out a loan is for debt consolidation
(34%), the second being a used car (25%) and thirdly was home
improvements (20%).Regional analysis of those polled provided
some interesting results showing that the Scots were most
likely to spend their loan on home improvements and those
in the South East and London were most likely to be consolidating
their debts.
Those in the North West were most likely to be buying a used
car.
Secured
Loans and Alternatives - Article July 04, 2007
Secured loans used to be seen as a last resort for borrowers
- any loan should be approached with care.
However, there are circumstances when secured loans can make
a lot of sense for helping out with finances for home owners.
If you need a loan, there are many ways to borrow. One of
the best ways can be simply to increase your mortgage.
The conventional route to borrowing for shorter-life items,
such as cars or holidays, is an unsecured loan as there is
no risk to your home if something goes wrong and you cannot
repay the debt.
However, if neither of these methods of borrowing is suitable
or available for you, it can pay to consider secured loans.
Many people have opted to lock themselves into fixed-rate
mortgages - a sensible move, as interest rates have been rising.
However, these loans may not allow further borrowing without
additional fees and charges.
In some cases, people locked into these loans who need to
borrow more have found they must redeem the whole loan and
remortgage, thereby incurring early repayment penalties as
well.Research has shown that more than 450,000 applicants
have been turned down by mortgage lenders in the past six
months, as interest rate rises have been introduced.
Fortunately at the same time, rising house prices have meant
that many people may now have equity in their home, and if
they do not need to move home, a secured loan could be an
ideal way to release cash, particularly as secured loans can
be cheaper than unsecured loans and other forms of borrowing.
One of the main advantages of a secured loan is that payments
can be scheduled for as long as 25 years to make monthly payments
smaller.
Secured loans can also be helpful for those who have County
Court Judgments against them. This is because Lenders are
usually more willing to grant secured loans to those with
a poor credit history, as the loan is backed by the property.
A secured loan may also be useful for consolidating debts
Secured loan guidlines...
-
If you don't repay the debt, your house could be at risk.
-
Rates are generally variable meaning the payments will
increase if bank rates go up.
-
Look around for the best rates.
-
If you have financial problems, talk to a credit counselling
service as soon as possible.
|
