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Tue 23rd Oct, 2007
Posted in Bad Credit, Consumer Credit, UK Finance, Consumer debt, Student debt, Borrowing, Personal debt, Debt management, Budgeting at 11:30 am by admin
Almost every student starts their school year with enough money to last the year. This money is usually borrowed. However, once students start the school year they forget how to budget, and that they must carry this debt for years.
Any bar in a university district will tell about friends who buy expensive rounds of drinks for all their friends, or shops who see the same students day after day buying clothes or shoes.
New friends, and peer pressure can make the most level-headed student careless with their money. Many students feel the pinch because they need friends. They need to recreate the network that helped them survive school.
Others are stepping out for the first time. Faced with the responsibility of being an adult, and the excitement of being independent for the first time, may young adults go punch-drunk.
This lasts for a month or two, then the reality hits. They look at their budget and realize that they won’t survive until spring unless they tighten their belts.
Student loans can take decades to repay. They can make it difficult to apply for a mortgage, own a home, and in some cases, many young adults claim that their student loans are preventing them from starting a family.
The best debt management program is a strong budget. The next is avoiding peer pressure and staying away from social situations where you may be encouraged to spend money, or to treat a whole table of friends.
Remember, it is possible to end the school year without acquiring more debt, or needing to ask your parents to take out a mortgage.
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Posted in Consumer Credit, UK Finance, Credit Card, interest rates, Financial products, Balance transfer, Borrowing, Personal debt, Debt management, Zero percent cards at 11:29 am by admin
If you are considering switching from your current credit card provider to a new one because you are having trouble paying back your balance then it would be helpful if you were aware of a few pointers first.
Many credit card companies offer very low interest rates on balance transfers; sometime this can be as low as zero percent. But there is a time limit on this balance transfer. So for example if you need six months to pay off your debt and the zero percent interest on balance transfers apply for the first six months then this is an option worth considering. This could possible save you from having to pay back possibly hundreds in interest fees.
The danger is if you do take that option and you fail to pay back the balance within the given time period the zero percent will revert back to the normal rate of the loan and this includes the lender then charging for interest on the first six months of the loan as well. This could result in repayments outweighing the benefit of the zero interest on the first six months. Banks do have a responsibility to warn you if the introductory offer of zero percent is about to run out. However as a general rule its better not to trust banks if you can help it when it comes the things like this. Just make sure you yourself are always aware of the time limit on your offer or one morning you could wake up to a big surprise.
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Thu 11th Oct, 2007
Posted in Consumer Credit, Homeowner Loans, UK Finance, interest rates, mortgages, Remortgaging, Consumer debt, Homeowners, Property, Financial news, Borrowing, Personal debt, Secured loans, Debt management at 12:43 pm by admin
Director of Help the Aged in Wales, Ana Palazon, said that those elderly on fixed incomes who have not paid off their home loans will have been hard hit by this year’s rate increases.
“People with sufficient savings will always benefit from high interest rates, but the reality in Wales is that we don’t have older people with massive savings,” she said.
“Most are dependent on state pensions and therefore any increase in interest rates will not be of benefit. And while interest rates have increased we have not seen a proportionate increase in the state pension.”
Principality chief executive Peter Griffiths urged homeowners to seek professional advice and find ways to reduce their monthly commitments to loans.
“We are advising people not to panic but to look at how it will affect their finances. They can seek advice from a mortgage adviser who will help them to consider their options and possibly reduce their mortgage repayments.”
Roger Bootle, an economic adviser to finance experts Deloitte & Touche, said the Bank of England’s Monetary Policy Committee (MPC) was determined to keep inflation low at all costs.
“It might not be too long before the MPC follows up the interest rate rise to 5.75% with another increase.
“And even interest rates of 6% might not be enough to secure the continuation of the UK’s low inflation environment.”
Mr Williams, managing director of North Wales estate agents Williams & Goodwin, said, “It will help continue the stability of the market, which should help first-time buyers. In the scheme of things when you look at interest rates over the last 20 years they are still quite low now.”
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Wed 10th Oct, 2007
Posted in Consumer Credit, Homeowner Loans, UK Finance, interest rates, mortgages, Remortgaging, Homeowners, House buying, Financial products, First time buyers, Property, Housing news, Borrowing, Secured loans, Debt management at 1:24 pm by admin
So you’re thinking about getting a mortgage but not exactly sure which one to get. There are so many types out there and with house prices constantly rising and high interest rates making home loan mortgages more expensive, getting on the property ladder seems almost impossible.
Well, one way of making it easier to understand it all is by familiarising yourself with some of the terminology. Let’s have a look at fixed rate mortgages.
A fixed rate mortgage is a loan where the interest rate remains the same, or in other words, fixed through the term of a loan or for an agreed amount of time. The question we really want the answer to is whether this is the right answer for me? Well, that depends; if you really hate risk it may be right for you but then again interest rates could fall and you would end up losing out. So what is the experts saying at the moment? Is now a good time or bad time for fixed rate mortgages?
Well, the financial news reports say that the prices of fixed rate mortgages are starting to fall following months of soaring rates. This is good news for anyone who wants the security of fixed monthly payments, but don’t be too complacent. Experts are warning that interest rates could rise again later this year.
The best advice for anyone thinking of taking out a mortgage is, “do your homework”. Make sure you shop around and find the best rate out there.
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Thu 4th Oct, 2007
Posted in Consumer Credit, Personal loans, Homeowner Loans, UK Finance, interest rates, Savings, Consumer debt, Financial products, Property, Unsecured loans, Borrowing, Equity release, Personal debt, Secured loans, Debt management, Tenant loans at 11:10 am by admin
No matter what you want to buy, it seems that everything is expensive today. A handbag can cost £5000, a sofa can cost £10,000, but when it comes to borrowing, consumers need to consider the fact that the retail price is not the total price paid for the product.
A £50,000 wedding does not cost £50,000. Instead, it costs the original capital and the accumulated interest. While £50,000 will not buy a dream wedding any more, it does take a major chunk out of a person’s savings or home equity.
The important consideration when making a big purchase is value. Many people buy a £5,000 sofa instead of a £10,000 sofa. The first couch is worthless long before the loan is repaid. The second piece of furniture may not only retain its value, but it may even increase in value depending on the market and the demand.
The next thing to consider is the interest. Many people borrow on unsecured personal loans instead of secured loans. Releasing equity from your home can be a good idea if it saves you money.
Many people believe that finance companies cannot force the sale of a home to repay a debt if the borrower defaults. This is no longer true. In fact, a company can ask a judge to force the sale of a home for a relatively small loan. So, paying the extra interest for an unsecured loan, or a personal loan, is no longer ‘wise borrowing’.
The cost of borrowing has made it impossible to grab the first financial product offered.
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Posted in Consumer Credit, Debt Consolidation, UK Finance, Credit Card, interest rates, Consumer debt, Financial products, Spending, Borrowing, Personal debt, Debt management at 10:54 am by admin
According to a survey by Nationwide Building Society only 29% of credit card customers are aware of the fact that many credit card providers always pay off debts charged at the lowest interest rate before paying off the debts with the higher rate of interest, making themselves an additional £500 million each year from this credit card interest rip-off. Most credit card companies use this method to reduce the balance owed on your account to suit them, not you - a sneaky way of maximising the interest that you end up paying.
Most people are too optimistic in the sense that many credit card customers trust in their credit card company too much and assume that the company has their best interest at heart, when if fact it only has interest in the amount of money they will be able to make off of their customers’ debt.
Figures from the survey reveal that 18% of people assume that the longest outstanding debt is paid off first, with another 12% believing that the items with the highest interest rate is paid off first. What seems to be the most disturbing is that a large percentage admits to not having a clue as to how their debt is paid off; roughly 26% admit to not knowing how their debt is paid off. However, this could all change as the Department of Trade and Industry has ruled that starting in October 2008 all credit card providers must draw attention to the order in which payments are made. This is part of general trend towards governing bodies keeping an eye on financial services, such as personal loans, insurance, banking and other forms of consumer credit agreements.
Consumers finding themselves paying vast amounts each month from their credit card bills and yet paying little more than the minimum amount would be wisest to consider a debt consolidation loan. Customers usually find that they can continue paying the same each month in loan repayments and yet most of the sum repaid will be capital, not interest, leaving them to clear the debt in record time.
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Mon 1st Oct, 2007
Posted in Consumer Credit, Personal loans, Homeowner Loans, UK Finance, Remortgaging, Homeowners, Spending, Property, Financial news, Housing news, Borrowing, Equity release, Secured loans, Home Improvements at 1:29 pm by admin
As governments work to improve emissions and environmental waste, municipalities are forcing new home builders to build environmentally-friendly homes. Many municipalities in the UK will soon implement regulations demanding that homeowners must replace old, fuel-wasting, polluting appliances and heating systems with new environmentally friendly systems.
This is a global concern. The Ford auto company recently discontinued their heavy luxury car because they could not feasibly convert it to run on low emission fuels.
The first step to an eco-friendly and healthier home is to replace the duct work and heating system with energy efficient and low emission equipment. This could include replacing electric with solar water heaters, or water heaters that heat water as its needed, and updating the furnace to a new energy-efficient model.
Energy-efficient models should be used in tandem with timers that turn them on when needed, and turn them off to eliminate energy waste.
As homeowners pay more attention to lighting and ventilation in old homes, venting and windows are moved to create balance, instead of being placed at geometrically balanced segments of the wall.
Windows maximize natural light, and incorporate solar heating. Good venting removes contaminants from a room, and reduces the need for air conditioners.
The initial investment is substantial, but the long term benefits are expansive. Many analysts suggest that now is the time to ‘go green’ before the demand spikes and the prices increase. Others say that prices are likely to drop as products become more mainstream.
Even now, a consumer can expect to borrow a £20,000 to £50,000 mortgage or secured loan to completely upgrade their existing home. An underground heating system, which takes heat from the earth could see a homeowner needing a £15,000 home improvement loan to implement. The cost may not be cheap, but big savings can be made on heating and electricity bills.
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Posted in Bad Credit, Consumer Credit, Personal loans, UK Finance, Credit Card, mortgages, Consumer debt, Card fraud, Identity theft, Credit record, Borrowing, Fraud, Zero percent cards at 1:28 pm by admin
Identity fraud is a growing concern in the UK with many Britons falling victim and costing the economy an estimated £1.7 billion a year. One way that people can fall victim is by leaving unused credit card accounts open. According to Apacs, at the end of 2006 31.5 million people in the UK held an average of 2 personal credit and charge cards. However, according to the research there are around one in three cards that are no longer active, which can cause concern for some. One reason why someone may no longer use a credit card account is because they originally opened the account to take advantage of the 0% interest on balance transfers and once the balance was paid off they never used the card because of the high interest rate, or because they transferred the balance over to another 0% credit card once the offer has expired. This means that there are many people who are moving their balances from one account to another account and often forgetting to close the account once it is no longer in use.
If you fail to cancel your cards once you stop using them you may end up forgetting that you ever had them. Often if your account has no activity you will most likely end up not receiving a statement to remind you of the account. So if someone gets a hold of your information and changes the billing address, you will easily miss that and fall victim to identity fraud. Once someone has your details they can easily go further and take out expensive personal loans or even mortgages in your name. Typically these fraudsters will very quickly default on payments, leaving the black marks on your credit record. Often the first you will know of the matter is when you yourself are turned down for loans or mortgages.
One way of protecting yourself is by checking your credit report, and if you find in-active accounts listed on your report, then you should close them the ensure you do not end up a victim of fraud.
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