 |
Saving Money on Personal Loans
Author: Caroline Poynton  | Posted: 07-08-2007 | Comments: 0 | Views: 28 | Rating: (50)  (?) 
These summer months may be a time for holidays accessorised with jugs of Pimms, but a day or two of sunshine can also be enough to turn our thoughts to a life-changing venture. Maybe you've decided you're not going another summer without that conservatory or garden summer house. Maybe you've decided it's time to up sticks and move home altogether. Perhaps you've even decided to get the cosmetic surgery you've always wanted...
Whatever your motivation, such purchases/investments often require the support of a loan so that you can spread the cost over time. And there's nothing wrong with debt in itself - companies borrow, our government borrows - you just need to ensure you can afford to finance your debt. There's nothing worse than signing up for a loan that will typically have a one to five-year repayment period, only to discover you can barely afford the first repayment.
"Taking out a loan could be sensible for all sorts of reasons - from consolidating existing debts, to buying a car or making home improvements," said Nick Tsimbidaros, Marketing Director at BeatThatQuote.com. "But loans can also be expensive - you need to seek out the best rate and carefully assess your own budget to ensure you can afford the long-term cost."
BeatThatQuote.com compares numerous loan providers and by asking you just a few questions about your circumstances, can give you a market comparison of possible loans that might suit you. However, you should also have a think about your available budget and what kind of loan would give you the best security and peace of mind.
Interest and repayment periods
Most loans will be advertised alongside an annual percentage rate (APR). This is the interest that you will be charged over the lifetime of the loan. When you are looking for a loan, you should compare the available APRs and don't forget to look at a variety of providers - supermarkets and online companies often offer more favourable APRs, which can sometimes be cheaper than the traditional banks/building societies.
If you are worried about the cost of a loan, just by comparing APR rates, you might also be able to get your potential loan provider to tell you what the total cost of your loan would be over the whole repayment period. This will help you directly compare the amount with your budget and other loan providers. In addition, as interest rates on loans are generally fixed for the whole repayment period, you should be able to see what your monthly repayments would be for the whole length of the loan. If you realise that the monthly repayments will seriously stretch your budget, be very careful. If your circumstances change, you do not want to be faced with repayments you can no longer afford - this is how debts quickly spiral out of control.
Also don't forget that spreading the cost of your loan may seem ideal - paying back £5,000 over five years, for example, may ensure you have low monthly payments that are far more manageable. But, the longer you spend paying a loan back, the more interest you will be charged. Decide how much you need, do not borrow more than you need, and pay it back as quickly as you can. Remember, however, that the quicker you pay back a loan, the higher your monthly payments will be. Just ensure you can afford the higher payments before you try to save money this way.
Short-term loans
If you only need a loan for a very short period of time - for example, six months to a year - you may be better off looking at credit-card deals. Many credit card providers now offer highly favourable introductory rates or 0% interest-free periods that could prove cheaper than a loan, if you plan to pay the balance off quickly. Again, BeatThatQuote.com can help you compare both loans and credit card deals so you can see which offering might suit you best.
Insurance
When you apply for a loan, you will probably be offered 'loan protection insurance'. This will cover your repayments should your circumstances change - for example, if you are made redundant or fall ill. Such cover can be expensive, however, and there will be exclusions that may make it difficult for you to claim. New rules, however, mean that any insurance costs must now be included in the APR, making it easier for you to compare loans that include insurance to those that don't.
Unsecured or secured?
A secured loan quite simply means that the debt is placed against your home - if you fail to make repayments, your home might be at risk. If you are highly confident of your repayment ability, then you may be able to get a cheaper interest rate by applying for a secured loan. But if you have any concerns whatsoever, you might be better off going for an unsecured loan. Yes, it might have a higher interest rate, but your home will be safe if you struggle to make repayments.
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/loans-articles/saving-money-on-personal-loans-194948.html
About the Author:Caroline Poynton is a financial journalist and writes for Beat That Quote on all loans, mortgages and personal finance topics.
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Latest Loans Articles
Home Equity Loan - How to Release Your Equity Easy as Pie!
By: Robert | 21/08/2008
How can UK homeowners release their equity safely with being ripped off.
Borrow Vs. Saving: Do You Really Need Another Loan?
By: Andron Fisher | 21/08/2008
Taking out a loan is a great way to spread the cost of an expensive item over time. Without loans we would not be able to afford major purchases such as automobiles, homes and college educations.
Avail Personal Loans to Fulfil Your Wishes
By: Gracy Bonsu | 21/08/2008
Personal loans are the most genuine and most transparent kind of loans that exist in every loan market around the world. Even for people suffering from the bad credit score, there is bad credit personal loans.
Need of an Extensive Research to Find Low Rates Loans
By: Gracy Bonsu | 21/08/2008
Looking for a cheaper personal loan can be quite confusing and time-consuming. For this purpose, there are numerous lending authorities in the UK offering efficient and inexpensive personal loans. Inexpensive personal loans can be looked online by every borrower in the UK.
Get Secured Loans and Enjoy the Life Fully
By: Gracy Bonsu | 21/08/2008
Secured loans are the best option for a person, when he comes across any kind of financial shortcoming. But despite facing the problem of credit crunch, there are still many lenders across the whole United Kingdom who are willing to offer cheap secured loans at a very reasonable rate of interest.
Online Finance Company!
By: Sadhana Dhanyal | 21/08/2008
It is not easy to get a loan approved in a short period of time. Generally, lenders take a considerable amount of time to approve a loan. They take into consideration the credit score of the borrower, his repaying capacity, financial situation among other things while approving a loan.
Instant Loans Company!
By: Sadhana Dhanyal | 21/08/2008
Are you finding it difficult to secure a loan urgently? Don’t know where to look for help? Don’t worry. Find a simple solution in the form of instant loans no faxing. These loans are meant for the short term needs. They are very easy to avail. The process of loan application is very simple.
Payday Loans: Easy and Fast Approved Loans for Immediate Needs
By: Scarlette Riley | 21/08/2008
Payday loans are fast and easy loans. The loan amount is £100-£1500 for the loan term of 2-4 weeks. The interest rate is high and these loans are given to the borrowers who are employed with stable salary and are the legal citizens. Both online and traditional lenders offer these loans.
More from Caroline Poynton
Driving Abroad: are you Covered?
By: Caroline Poynton | 08/08/2007 | Travel Tips
While many of us take pains to choose the right insurance for our homes and vehicles in the UK, there is far more confusion as to what happens when we travel abroad.
Ten Top Travel Tips
By: Caroline Poynton | 07/08/2007 | Travel Tips
Many a modern traveller now explores further afield, with Australasia, South America, Asia and Africa proving very popular for those with an adventurous spirit (who don't mind long plane journeys). But for any such trips, there are known - and unknown - dangers that you may want to research before you leave.
Isas: How Will the 2008/9 Changes Affect You?
By: Caroline Poynton | 07/08/2007 | Investing
In 1999, the government introduced Individual Savings Accounts (ISAs) for an initial period of ten years. So successful have these tax-efficient saving schemes proven that the government has now confirmed that ISAs will be made available indefinitely.
To 5.75% and Beyond: Managing a Year of Interest-rate Uncertainty
By: Caroline Poynton | 20/07/2007 | Mortgage
The Bank of England has already made four quarter-point interest-rate rises since August 2006, leaving many homeowners hoping that fears of further rises this year would prove unfounded. With interest rates now rising to an eye-watering 5.75%, how are you coping?
Getting the Most Out of your Holiday Budget
By: Caroline Poynton | 20/07/2007 | Travel
With the recent terrible weather across the UK, your thoughts may well have turned to a summer escape to sunnier climes. Before you jet off, you will no doubt carefully consider your possible holiday destinations, your budget, your holiday accommodation and activities while there, and even your wardrobe. But how much time will you take thinking about the money you will spend while actually abroad?
Home Insurance Claims Likely to Rise With Smoking Ban
By: Caroline Poynton | 20/07/2007 | Insurance
Insurance companies are bracing themselves for a possible rise in home insurance claims, following the July 1st smoking ban. With people banned from smoking in public places, insurance companies are predicting an increase in the numbers of people smoking in the home, thereby increasing the risk of home fires and insurance claims.
Making the Most of your Move
By: Caroline Poynton | 20/07/2007 | Home and Family
Moving home has typically been rated second only to divorce in terms of stress. To ensure that you can put your feet up in your new home as quickly as possible, it's worth thinking about your utilities - including gas, electricity, water, telephone and internet connection - sooner rather than later.
Tripping the Credit Card Fantastic
By: Caroline Poynton | 20/07/2007 | Travel
If your holiday is just around the corner, you may just now be checking your travel insurance and purchasing a policy that will cover you for every eventuality. However, if you bought your holiday with your credit card you may already have some holiday perks that you just didn't know about.
|
|
Finance 
