Financial Tips For Loans & Credit Cards
Credit cards Vs Loans
If you want to take out a personal loan you can borrow up to £25,000; the main point is you get structured repayments so you know how loang you're borrowing for and what it'll cost each month. If you were to borrow on the cheapest credit cards it substantially undercuts the cheapest loans on offer; so in many circumstances credit cards should be the first choice. Check out the latest loan deals at www.peekoo.co.uk.
Are you trying to make existing credit card debts cheaper.
In most cases a loan will not be the cheapest option for you. Most credit card providers offer 0% balance transfer deals and they are designed to allow you to transfer othe card debts to them at a special rate, usually these rates are much cheaper than the best loan rates.
By going for this option it does not mean that you need to keep transfering debts between short term 0% deals; some of the deals available last until all of the debt has been repaid. Do try to ensure that you make at least similar repayments to what the loan would normally cost you each month.
Are you borowing for less than a year or less than £1000?
Majourity of the loans available over a short period or low amounts are usually very expensive. Instead there are other options available to cut the cost. Some of the credit card providers allow new customers to spend on there cards at 0% for up to the first year. As long as you can make your purchase on a card and will definitely pay it off before the 0% deal ends, then this could be a lot better option than a loan with a high APR%.
Are you trying to cut the cost of an existing loan?
Most would think that by switching to a cheaper interest rate will save you money. Many loans, especially the older ones, have lock in penalties so even though you will end up paying less interest on the loan, when you add in the fine for switching, overall you end up paying more.
Secured Loans Vs Personal Loans
Most of the hisgh street loans available are un-secured. You would think that this option is a bad thing but it isn't. The other alternative is secured loans the kind you'll see all over the TV. For the following reasons i'd steer well clear unless you really have to...
Your home could be taken away if you fall behind on payments.
A secured loan means you are securing the debt on your home (or something else you may own), and if you can't repay, the lender can repossess your home. With unsecured loans this is a lot less likely to happen.
Most personal loan rates are fixed, and secured loans are usually on a variable rate.
Majority of the un-secured loans available are on a fixed rate; from the start you know exactly what you will pay, and this will not change if the UK's interest rates change or the lenders rates change. For the latest rates on secured loans visit www.peekoo.co.uk.
With secured loans the rates are variable, meaning the lender can change the rates when it likes, especially in a credit crunch when you really don't need added pressure on your finances. Many secured loans have seen rates doubling, hitting people's pockets hard which is resulting in the falling behind on payment and in some cases having the homes repossessed.
Secured loan payments are usually stretched over many rears.
Secured loan lenders often tell you that there is "one easy low monthly repayment", this may sound good but this illusion is made by stretching the debt over many years, so you will end up paying more and more interest, costing you a fortune.
This is very important information and something you should take seriously if considering a secured loan. Remember secured loans give your lender the security, not you. A much better option is to take a normal unsecured personal loan than one secured on your house.
Secured loans are rarely the best possible option and should be considered as the last resort of lending. If you have a reasonable credit score then you should consider a personal loan first. There are other options like cheap credit card deals or even extending your mortgage.
Choosing the right loan
Some of the lowest interest rate loans can turn out to be most costly due to hidden costs from the lender. Before you pick the type of loan you want to apply for decide the most important factors. How much, for how long?
The maths behind is very simple; borrow as little as possible and repay as quickly as possible. When looking for a loan always base borrowing on what you can comfortably afford to repay as over borrowing can cause debts to build up. Also before borrowing question everything; can you avoid any debt. The peekoo loan calculator will let you calculate how much you can borrow and at what cost.
The Cheapest Personal Loans
Have a look at the best buy tables in the peekoo loan section to find the best rates available. The cheapest loans with out insurance, all you need to do is find the loan with the lowest APR (Annual Percentage Rate) of interest for the amount you are borrowing.
Please be aware that all the top loans compared in our tables are 'typical rates', which means only 66% of those accepted actually need to be given these rates; depending on your own personal credit score you may end up paying a lot more.
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