Hints and Tips


 

Points to watch when considering a loan

• Make sure you can afford the monthly repayments
• Find out if there are premiums included for payment protection and compare with other quotations

Shop around for credit and ask what the APR is. Generally speaking the lower the APR the better the deal (annual percentage rate includes such items as interest, insurance, and loan origination fee)

• Make sure you have read and understand all documents
• Check whether the interest rate is fixed or variable. If it is variable then your repayments could increase in the future - make sure you could afford the increase
• Consider the terms for early settlement before you take out the loan.  In some cases you may have to pay more then the outstanding debt and some additional interest may be charged.

Lenders who finance small business loans are looking for:

·    Your potential cash flow that can be created by the sales of your product or service

·    Collateral to support the business loan in the form of business equipment, real estate or personal assets

·    If you already have an established business with cash flow then you may not be required to provide as much collateral as you would if your business is just beginning

·    A good management team

·    Thorough knowledge about your product or service, a clear understanding of the market demands for your product or service, and to know what competition there is

Generally there are two types of loan – secured and unsecured

A Secured loan means the creditor (or person) you owe money to has the legal right to repossess the goods or property that the loan is secured against. Examples of secured debts are mortgages, secured loans on property or Hire Purchase (HP) normally found on vehicles.

Unsecured loans are not secured to anything and therefore the creditor does not have the automatic right to repossess any goods even if you are struggling to repay the money that you owe. Examples of unsecured debts are credit cards, loans, storecards, catalogues, overdrafts, income tax bills etc. 

·         suitable if you are in a fairly stable financial position and want money for a specific reason. Personal loans are usually based on your credit profile and how your have dealt with debts in your past.

·         Before applying for unsecured personal loans you should have the information that is required by the lender. There are many online loan calculators that will show you any of the variables you are not sure of. Apply to a few different lenders to get a fair comparison of the rates and terms

·         The money you receive from unsecured loans is paid to you in one lump sum and can be used for whatever reason you wish improvements

Personal loans are still available for those who do not have a good credit rating. Depending on your particular situation, the lender will propose a personal loan rate. The worse your credit history is, the higher the interest rate they will charge

If you know someone with a good credit profile who will co-sign your personal loan, then this will allow you to qualify for a much lower interest rate. Remember that a co-signer will be responsible for any payments that you cannot make.  This may well affect their credit rating so be sure of your payment stability before putting this liability on them.

Bad credit loans do not have to be based on assets like a home, a vehicle or a boat. Although you could give some security with any of these assets, they are not a requirement. If you have secure employment then you should qualify.

If you have only been at your present job for a short time then it may be a good idea to have someone co-sign for your loan. If someone does co-sign then they will be responsible for making any payment that you cannot make *and their credit rating may be affected

What a lender would like to see is your ability to make payments on a regular basis for the full term of the loan. Many situations could have happened in your past that has absolutely no bearing on your present life.

Payday loans are quick, easy and confidential. The loan agreement is between you and the lender and no one else is notified. Once your information has been checked and verified the amount of money you requested would be electronically deposited into your checking or savings account for your use.

Debt consolidation loans will give you only one payment per month. Debt consolidation loans are structured to fit your budget and take the pressure off your bank account They give you the ability to lump together debts to pay them off and then you only have one repayment back on your loan. The money you owe hasn’t gone away – it is just in a different place. Quite often, the repayments on your consolidation loan can be cheaper than all your other payments added together but you need to check what the interest rates are, how long you will be paying back for and what the total debt will therefore be.

Car loans can be assessed with a car loan calculator. This allows you to estimate the unknown factors for you car loan agreement.

You will need to know:

·    The price of the car

·    The amount of your down payment, if any

·    The interest rate charged on the loan

·    The length of the term

A home equity loan

·         In the past people have wanted to pay off their  home mortgage as quickly as possible and stay away from home loans. With the very low interest rates recently available for borrowing, online home loans make a lot more sense.

Online home loans may be significantly better value and offer you lower interest rates than personal loans offers.

 

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