Lions and Loans: Why Finance Should Always be Personal -

Home
>
Loan
>
Lions and Loans: Why Finance Should Always be Personal

Lions and Loans: Why Finance Should Always be Personal

Different types of loans are available for almost every aspect of your life: personal loans, car loans, secured and unsecured loans, home loans, homeowner loans, student loans, graduate loans and career development loans (CDL). If you've suffered from credit problems in the past and now hold sub-prime characteristics, then you will be eligible for adverse credit and adverse loans.

You can always borrow money these days, but it is crucial to read the small print as the difference between interest rates is enormous and stories of people forced to pay off amounts which are five times the amount of their original loan are not uncommon.

There are also numerous stories on unemployed couples being sold loans, such as the case of Julie and Kevin Davies, reported by the BBC. The couple were already experiencing difficulty in paying off their existing debts of £4,000, when they were sold another £20,000 loan by Lloyds TSB.

Loans of £1,000 to £25,000 can be taken out and repaid over a period typically varying between six months and 10 years depending on your credit history and available finances. Loans are usually secured or unsecured. Secured loans are tied to your house, so you can be forced to sell the house if you are unable to make the repayments. Unsecured loans do not impose the same restriction, though a default on repayments may result in being "credit blacklisted". Once blacklisted, you may get future credit card, mortgages and hire purchase applications rejected, as well as face a potential higher rate of interest for all existing debts.

It is absolutely crucial that you shop around for a loan and not just through the high-street banks. The internet offers a wealth of information available and there are many sites which compare the prices of products, and to really ensure you get a good deal ? compare the different comparison sites. In the UK moneyfacts, moneyextra and ( moneynet ) offer price comparison services for a wide range of loans, amongst other financial products. These sites also offer consumer information guides, which you can either print directly off the website or download on to your computer.

Do read all the terms and conditions carefully and ask friends, family and your financial adviser / bank adviser if you don't understand a particular statement. The annual percentage rate (APR) is particularly important and can make a difference of thousands of pounds over the term of the loan.

Unsecured loans can be purchased from building societies and banks, as well as certain high street shops. Unsecured loans may be taken out for something specific or simply to make life more 'comfortable'. The process usually involves:

* Requesting a typical amount for the loan

* Discussion of interest rate (APR) and possible loan payment protection insurance

* A credit check, you may wish to get one of these first, so you know what to expect

* Reading the terms and conditions and then signing the agreement

* Money can then be transferred into your account

In the discussion of secured versus unsecured loans, moneynet explains that although secured loans can offer lower interest rates and repayments, many people do not wish to jeopardise the potential loss of their home in the default of a repayment of a secured loan. In unsecured loans, pay attention to the difference in APR, term of the loan and any additional charges such as an early settlement charge or redemption penalty.

Resources:
Mortgage and loan comparisons - Moneynet
Personal finance blog Cashzilla

About Rachel Lane:
Rachel writes for the personal finance blog Cashzilla:
Rachel is a disillusioned, disaffected and broke graduate, exploiting new media for financial therapy.

E-mail: rachel@positiveinterest.com or online@moneynet.co.uk

Phone: 0131 561 2251

In The News:

Times Online
Silver State joins the banking casualties in the US
Times Online, UK - 5 hours ago
A spokesman for the Federal Deposit Insurance Corporation, the regulator, blamed â€œpoor-quality loans primarily related to real estate developmentâ€ for ...
Regulators close down Nevada's Silver State Bank MarketWatch
Silver State Bank in Nevada is shut The Associated Press
Silver State Bank in Nevada is shut Washington Post
Wall Street Journal - Financial Timesall 351 news articles

CNBC
New low for US market Loan crisis shifts to home owners with risky ...
Sydney Morning Herald, Australia - Sep 6, 2008
TROUBLE in the United States mortgage market has shifted from subprime loans made to borrowers with bad credit to home owners who had solid credit but took ...
Home loan troubles break records again The Associated Press
Report says 3.1 percent of Conn. mortgages overdue Newsday
Troubles spread to prime Md. mortgages Baltimore Sun
Wall Street Journal - Salt Lake Tribuneall 684 news articles

Citizen
Auto industry to press Congress for $50B in loans
WTOL, OH - 12 hours ago
AP - September 7, 2008 10:54 AM ET WASHINGTON (AP) - Auto industry allies hope to secure up to $50 billion in federal t loans this month to modernize plants ...
Detroit's sputtering Big Three turn to Washington for help AFP
Auto industry to press Congress for $50B in loans CBS 42
all 188 news articles

US financial crisis spreads toward your wallet
Christian Science Monitor, MA - 12 hours ago
She watched as investment banks constructed and sold these paper investments that were supposedly backed by loans on houses, cars, businesses, ...
Banks have had plenty to deal with in rocky times Milwaukee Journal Sentinel
Crumbling financials have further to fall Financial Post
Credit Crunch: The Sequel U.S. News & World Report
San Jose Mercury News - Reutersall 82 news articles

Business Wire (press release)
Shying Away From NY Loans
New York Times, United States - Sep 6, 2008
David A. Paterson introduced a host of new regulations for subprime loans that are meant to protect borrowers and the financial stability of the mortgage ...
Feds intervene, take control of Fannie Mae, Freddie Mac San Francisco Chronicle
Risky mortgages threaten to keep housing market down Detroit Free Press
Mortgage industry takes a healthy step back in its practices Chicago Daily Herald
Asbury Park Press - Business Wire (press release)all 13 news articles

China commercial banks offering more loans in H2 - regulator
Forbes, NY - 2 hours ago
BEIJING (XFN-ASIA) - Commercial banks are offering more loans in the second half in line with economic growth and market demand, the China Banking ...
China urges banks to lend more Sydney Morning Herald
Chinese regulators urge banks to lend for economic growth Xinhua
all 15 news articles

Washington Post
hard time to get new credit
San Francisco Chronicle, USA - 1 hour ago
The result is that all kinds of loans, from mortgages to student loans to credit card debt, have become scarcer and more expensive. ...
Video: Feds Take Over Mortgage Giants AssociatedPress
Your Money The Rescueâ€™s Effect on Consumers New York Times
Fannie, Freddie: Feds Step In BusinessWeek
CNNMoney.com - The Sunall 5,667 news articles

Some States Set Caps to Control Payday Loans
New York Times, United States - Sep 6, 2008
The quick and easy answer was a $400 loan from a payday lender. When payment was due two weeks later, she needed another loan to keep afloat. ...
Mortgage 101: Avoiding pitfalls News & Observer
all 3 news articles

State Secures More For Student Loans
WEEK-TV, IL - 3 hours ago
They add it will fill a void in the loan industry caused by an exodus of investment banks. Governor Rod Blagojevich says state-administered college tuition ...
Peoria credit union participatng in new state college aid program Peoria Journal Star
Ill. Credit Unions Help With College Aid CBS2 Chicago
all 5 news articles

Employers may get bill for loans to boost UI fund
Crain's Detroit Business, MI - 2 hours ago
Now, outstanding federal loans are likely to trigger higher unemployment taxes on some employers, starting in January. A state solvency tax, ...

loans - Google News