Payday Loans – The Good the Bad and the Ugly
November 13, 2013
There is so much news and media Coverage at the moment about Payday Loans and it’s a scary thought to think how much some of those lenders are charging in Interest. I’m one of those who has suffered from debt in the past and I can see the benefits why people use them and also the downfalls too.
For those people that are in desperate need of the cash quickly, these short term cash loans can really help without having to either go into your overdraft and sometimes pay more fees as the interest can be higher believe it or not than those from a Payday loan company. They can also be beneficial to those that don’t want to tie themselves into a larger loan for a term where they could end up paying back more. The other advantage is that they provide you the cash the same day more often than not. Some lenders will even accept people with bad credit history and this can be a good way to rebuild your credit score.
Lets not beat around the bush. The rates are massively high, some even go as high as over 4,000% APR. Well at the lower end of the scale they can be nearer to 1700%. Don’t let this scare you though as although it sounds like a load of interest, its APR which is over the year, however you are not taking the loan over the year, but over 20-30 days usually until you next get paid.
Watch out for those scam companies and those charging the highest interest rates. Some lenders who aim to help students but advertise old grannies spring to mind. Although they might not be scam they are not helping in the way that other lenders are.
Look for companies who will simply put your application to a tree of lenders which are all legally verified and reputable lenders. This improves your chances 20 fold because your application will get put in front of over 20 lenders all from filling in 1 simple application form.
August 11, 2013
What are offset mortgages?
The principal behind offset mortgages is that they make it easier to pay off your mortgage earlier and in doing so potentially save you thousands of pounds in interest payments. Basically you do this by setting your savings and current account against your mortgage. By forgoing any interest you might earn on them you reduce your mortgage interest payments so that your monthly payment to your lender is paying off a bit more of your outstanding capital than it otherwise would. So if, for example, you have $10,000 in savings you wouldn’t earn any interest on it but at the same time you would reduce the amount of mortgage debt you are paying interest on by $10,000.
Put simply, each $1 you have saved is $1 of mortgage debt you don’t pay interest on. Even your monthly salary being paid into an offset current account helps because, as interest is calculated on a daily month, will be able to offset your salary while it is still sitting in the account before you have spent it.
What are the pros and cons of offset mortgages?
Pros of offset mortgages:
Offsetting your current account against your mortgage account is extremely beneficial particularly to high earners who often have a large amount of income in their current accounts at various times which is earning little or no interest anyway. It always makes sense to get your money working for you as best you can and in these days of historically low interest rates you will be saving a lot more in mortgage interest payments than you will be losing in forgoing interest on savings or income.
Some lenders will also allow you to lump personal loans or even credit card debt in with your mortgage so that you are paying the same rate on them as you are on your mortgage. This obviously makes sense because a mortgage is usually the cheapest way to borrow money.
Intelligent Finance once estimated that a borrower with a $175,000 mortgage, an Individual Savings Account (ISA) and A current account with the same lender and who was overpaying $50 per month into a 25-year mortgage could save $80,000 in interest, and reduce their payment term by almost five years!
Offset mortgages are extremely flexible. You can make unlimited overpayments but you can borrow back money or take payment holidays if you have overpaid enough. Any overpayments you have made are always available in your account and easily accessible in case of an emergency. Some lenders will also allow you to make underpayments.
Cons of offset mortgages:
Initially they can be quite difficult to understand. If you are thinking off lumping credit card debt in with your mortgage you need to consider whether this is a good option. Yes the interest rate will probably be a lot lower but the you could have the debt for longer as the average mortgage term is 25 years, and the consolidated debt will also be secured on your home.
August 3, 2013
Are you planning to apply for a loan? Have you already computed or estimated how much you will be paying on a monthly basis for the settlement of your loan? Are your monthly earnings enough to cover your loan payments and other expenses? To answer all the questions effectively, it would require you to have knowledge of basic computation to know what are the pros and cons after you take the loan. For this matter, loan calculator helps.
A loan calculator is a vital monetary computer that aids individuals getting a reliable result that could help in determining possible effects in their finances. It is a very effective tool in calculating monthly installments for any loans taken and when you are paying back. If you have the capacity to pay extra bucks, you can also count on it in verifying possible rebates or deductions on interest that you are paying. Financial advisors are generally using this tool when they prepare fiscal plans for their clients.
In general, calculation of loan is being done manually. An ordinary person might not be able to effectively calculate his loan without basic knowledge of computing interest, percentage rate and other matters concerning mathematical solving. Experts in financial planning would be helpful if you need their services for precise calculations and proper handling of your finances. These days, due to technological advancements, there are also available loan calculators online. If you are a tech geek and you think you can follow simple to complex instructions that would include data entry and inputting of needed information, doing online calculation by yourself is recommnended.
There are calculators that are designed for different loans. The most popular type is the one for car loan. If you are dreaming of driving home a brand new car, this stuff would be useful. There are financing entities that would be offering car loans especially so if they are aware that you have the capabilities to pay monthly amortizations. Beware as they might take advantage by adding some extra fees and charges and you will ended up paying more than what is needed. With the aid of this computing device you will surely be in good hands, sheltered and protected while you enjoy driving the automobile that you have been fantasizing of.
Next is the home loan calculator. Purchasing a home where you and your family will be staying is not an easy thing to do especially so if you have a limited budget which would force you to apply for a home loan. It is therefore important that every detail will be scrutinized. To help you in having a clearer picture of what you are going to pay, the said machine will surely be useful. Normally, mortgage calculator is being used for this type to get more specific details for either flexible or flat mortgage loan.
The last one is the calculator for personal loans. This covers calculations of all applied and taken loans for personal purposes. This would include cellular phones, laptops, jewelries, LED television, and many other gadgets or device that is for your own use. This type of calculator could also be used in computing personal cash loans. Normally, people are incurring personal loans when they use their credit cards to purchase different products such as those mentioned earlier. Furniture and appliances may also be included.
There’s nothing wrong in applying for different loans, especially if you have a reasonable purpose. However, in doing so, you have to be practical all the time to get the best value of the money that you have worked hard for. Meticulous computation is a must to properly assess your capacity to repay or settle any loan. To make things fast and easy for you, using a loan calculator is an important thing to do.