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David - Personal Finance

1 year ago

UK Chancellor Vows to Cap Exorbitant Payday Loan Rates

Decisive Action against Lenders in the Face of Public Pressure

 

George Osborne, UK Chancellor, has finally promised to rein in high-cost lenders like Wonga in a bid to contain exploitation of economically disadvantaged families. The high interest rates on payday loans has long since been a bone of contention. The UK public has often felt that the government needs to take strong measures to curb unscrupulous lending practices.

The chancellor has guaranteed that the new laws were already being discussed and they are expected to control interest rates as well as the high fees and charges hidden in payday loan contracts. George Osborne assured the people that the new regulations were expected to come into force by 2014 and would be implemented by the Financial Conduct Authority by 2015.

Consumer activists groups have been voicing their concern at the exorbitant interest rates charged by high-profile lenders (touching as high as 5000%). Most groups termed payday loan lenders as 'legal loan sharks'. There had been an earlier proposal in Parliament (proposed by the Labour Party) that had been shot down by Tory MP's. In a sudden (but welcome) about turn, the UK government has decided to introduce far-reaching banking reforms including placing legal caps on payday loans.

Stella Creasy, Shadow Consumer Affairs MP, supported the government's move to bring high-cost lenders to heel. She also commented that although she welcomed the move, the main challenge would lie in the small details.


UK Government to Follow capping Precedent Set by the Australian Government


The Australian government successfully passed a law to cap payday loan limits to 4% and the maximum borrowing limit to 20% of the borrower's gross salary. But UK finance experts feel that Australian borrowers are still not fully protected from high interest rates in the event of a rollover.

In response, Mr Osborne said that the solution was to amend the entire payday loan lending structure including penalties, rollovers, fees and the interest rates. He said it wouldn't help borrowers if the government only capped the interest rates and left the rest of it as before. Lenders like Cushtee Cash say that they have already been doping this procedure.

Gillian Guy, CEO of Citizens Advice, commented that the very fact that the UK government was forced to overhaul the payday loans industry indicated the seriousness of the problem. But while she supported the government's decision, she also suggested investigations into why people were driven to emergency loans in the first place. The answer, said Ms Guy, would reveal basic problems like shrinking income levels combined with rising food and living costs.

1 year ago

Should you really still visit the high street for personal loans?

Should you really still visit the high street for personal loans?

In days gone by people would be forced to trek around the high street to find a bank that was prepared to lend money at a time when it is needed.

The problem that this created meant that people with an unfavorable credit rating could not have a chance of getting a loan when it is most needed. The good news is that unsecured loans are now available online and no time at all. Small loans can provide credit in no time at all. It is always worth bearing in mind that personal loans can help allow you to access various services, but also be aware some forms of training take a little bit of practice before than can be mastered. This includes but is not exclusive to horse riding, go carting and shuttle running. It may be a whole lot easier to just join a gym and work out in a hot and sweaty environment with many other like minded people.

This could cost some serious dough and hit the bank account and wallet hard. There is a way to make things a bit easier in this department if you happen to be short of funds and low on cash. I found the website www.lotsalolly.co.uk and have to admit that getting hold of quick cash has never been so easy for many people now that theres a new way of obtaining cash online.

Getting from A to B

Cash is the means by which we all can get from 'A' to 'B'. Without is we're left high & dry,and without options. Sometimes the amounts required are small, sometimes large; it all depends on the specific circumstances. A lot of chatter has been noticed in various circles with regard to the best means of availing oneself of the money that is needed today. Certain people seem to consider the usual methods, such as the bank, credit card or pawnshop as the only methods out there. They would be wrong: it is now very common to apply for a cash loan today online. With money being short at this time, it is no wonder that people are requiring loans regularly, sometimes they are the only thing which can give a person the finances that are necessary quickly.

Looking around for loans today it is noticeable that certain companies are providing a more varied range of loan deals than others that are on the market. The basic procedure is not complicated and shouldn't take you too long to complete. With a few details necessary, once done there should be a quick overview, so to be sure you have not left any part undone. With this done you will be able to get the personal loan that is required, speedily and without problems.

1 year ago

Credit Card Debt Consolidation Loan - A Way Out For Debtors

Credit Card Debt Consolidation Loan - A Way Out For Debtors

An average family at this present time needs a decent shelter, clothing, healthy meals to indulge three times a day, and more. Nowadays, the look of an average family also includes other necessities such as education, transportation, employment or a business, and many more that would enable them to survive through life.

The Way To Debt Troubles

To be able to suffice the monthly needs and necessities of a family or an individual, hard earned cash isn’t always enough for this. A lot of people get an average of 2 to 3 credit card offers in one week. The truth is that a big percentage of these people actually grab the opportunity to get several credit card loans to provide for their different needs. Why do they end up in several different loans? A simple and direct answer is that one credit card loan alone isn’t really going to be enough to cater the various needs of the whole family or even of the individual’s necessities.

So they ended up forcefully handling multiple loans than what could they carry. Sometimes, there are cases when a person gets a credit card loan to pay the debts in other credit card loans. This is not wisest idea ever. It will only worsen the situation of being cliff-hanged in debts. Credit cards offer higher interest rates leaving an ordinary individual with sky-scraping sum of credit card balances. What happens to one loan also happens to the other. Thus, soaking and drowning the debtor into more and more debts.

How To Deal With Multiple Debts

While getting out of the multiple debts that had stack up one after the other is close to being impossible, there will always be the debt consolidation loans to raise the debtor up and completely out of it.

One of these consolidation loans solves the problem of credit card loans. By getting into a credit card debt consolidation loan the debtor simply gets a single loan to cater all of his credit card loans from different lenders and roll them into one manageable payment obligation. This is called a debt consolidation because the person chose to consolidate his payables into a single loan only. This enables the payer to get a lower fixed interest rate than what he usually pays separately.

While this one does really sound good for a person who was plunged in serious credit card balances, getting a loan is not as easy at it sounds. A credit card debt consolidation loan requires like what most loans want: the debtor must have a good reputation as a payer. Why? This is because the consolidation loan repays his monthly financial obligations to the lenders. In return, it has to make sure that the individual who gets the loan can pay back monthly.

A Single Credit Card in Hand

In exchange of the multiple obligations to pay various credit card loans with different interest rates, having a single credit card in hand is like breathing more and more fresh air. The use of credit card debt consolidation loan saves the debtor from more financial stress and harassment from lenders. This debt consolidation usually transfers all of the debts into a single card. Some of it provides lower interest rates, longer period of expiration, and favorable transfer rates. The debtor has to be clever enough to choose the one that’s best for his interest and paying capacity.

Being another loan itself, credit card debt consolidation loan may or may not be a secured loan. Unsecured loan allows a person to get a loan without involving collateral obligations. While the debtor’s residence and valuable properties are safe with this one, it usually asked for a higher interest rate than the secured one. On the other hand, the secured loans’ only difference from the unsecured ones is that it requires collateralization to go against the debts of the person.

In conclusion, whichever way a person in deep debt goes there will always be the smartest way out of the knotted rope that he’s in. Getting another credit card loan would never ever lessen the burden. Nobody has gotten out of debts this way. But getting a debt consolidation loan to free oneself from his multiple loans might be a brighter thing to start with.

1 year ago

Student Loan Infographic

Student Loan Infographic
1 year ago

Get Help With College Student Loan Consolidation

Get Help With College Student Loan Consolidation

Student loans are one of the more popular ways of paying through to college. If everything else had been exhausted, students loan come into the picture and provide financial aid to a student anytime, anywhere. Loans are a big commitment especially to the student who still does not have a permanent job that can pay for the loans he obtained. Normal college loans and federal loans are great options in financing college because they offer significantly lower interest rates compared to standard ones. College loans also offer interest-only payments while the student is in school and more lenient payment collection to somehow ease the burden for the students.

To minimize further the problems with regards to finances while a student is still in college; debt consolidation is a good way to go. Especially for a cash-strapped student, managing debts may be a tedious matter while still having to think about mathematics, philosophy and the arts. College student loan consolidation is a growing trend nowadays especially with the economic global recession still ongoing. It is a good way of managing student debts and it enables the student to control every account that they have all at the same time.

Benefits Of College Student Loan Consolidation

College student loan consolidation benefits a student in a variety of ways. First, a consolidated loan will mean lighter burden for the student. The burden of paying debts will still be there but it will be significantly lighter than individually paying different student loans. Fewer bills mean fewer problems for the thriving student.
Another benefit to be had in consolidated loans is the fixed rates across all the loans obtained. This will significantly lower the payments that students dish out to settle these accounts. The variable nature of interest rates of the different loans like that for tuition and dormitory payments makes it harder for students to keep up with the payments to settle these.

Auto-repayments are also an option together with these consolidation programs. Significant buyer leverage can be obtained together with this feature. With the automatic repayment option, students will not be able to miss anymore dues with regards to their monthly payments. Many consolidation companies also offer discounts and rate cuts together with the automatic repayment option.

What Does Loan Consolidation Involve?

Whether it is a college loan or a government loan that the students looks to consolidate, this process typically involves extending the term of the loan while still being able to save substantial amounts of money in rate cuts and discounted charges. Obtaining a college student loan consolidation makes it easier for the student to calculate the over-all interest he had paid annually while he obtained the loans. In this way, students are still in control and are able to keep track of how their payables are being reduced.

College student loan consolidation is a great option for students who work hard to finish their education. With the economy still in shambles, it is good to know that there are still a variety of ways to make ends meet and continue pursuing for that precious college degree.

1 year ago

Switching personal loans could save borrowers thousands

Switching personal loans could save borrowers thousands

Solid news from https://home.bt.com/lifestyle/money/cards-loans/switching-personal-loans-could-save-borrowers-thousands-11363988876838

As loan rates continue to tumble, people with existing loans could benefit too. 

Personal loan rates have fallen dramatically over the last few years, and that could be good news even if you already have a loan as you could switch to a cheaper deal.

How rates have fallen

As an example, the average rate paid by borrowers applying in branch at Nationwide for a medium-sized loan during May 2013 was 8.5%.

Now the building society offers a joint market-leading rate of 3.6% to its current account customers (or 3.9% to non-current account holders) on borrowing between £7,500 and £14,999.

M&S Bank, First Direct, Sainsbury's Bank and HSBC also offer a leading rate of 3.6% on medium sized-loans right now.

So for people with existing debt there's never been a better time to reduce the amount of interest they are paying and lower their monthly repayments on their loan by switching onto a cheaper deal.

Switching deals

To switch onto a cheaper deal, you’ll need to refinance or consolidate your debt.

This means taking out a new loan at a much better rate and using the money to pay back what you owe on your existing debt straight away.

By refinancing a loan or consolidating debts into a single loan with a cheaper rate, borrowers can make big savings.

For example a borrower who took out £15,000 over five years at 8.5% in June 2013 with Nationwide would today have a balance remaining of £9,721.85 – made up of £8,446.37 principal and £1,275.48 interest.

But if they transferred the outstanding principal balance (plus a typical early repayment charge of 58 days' interest) to a new rate of 3.6% over 36 months, Nationwide estimates they would save £728.49 in interest over the remaining three years.

In addition monthly repayments would fall from £307 a month to around £251 a month under the new deal.

Can I switch without penalty?

Loan providers have to allow you to pay off your loan in full before the end of the term. However, this is usually subject to an early repayment charge which is typically one or two months’ interest.

You will need to check the agreement you signed to see what your lender will charge you if you decide to leave early. It’s also a good idea to check what the set up costs of the new loan will be, if any.

Once you have all this information you’ll be better placed to understand whether it’s a sensible and worthwhile move to refinance or consolidate debt with a cheaper loan.

The cheapest personal loans

When looking for a personal loan you can generally choose between a small loan of £5,000-£7,499, a medium loan of £7,500-£15,000, or a large loan of more than £15,000. But the most competitive rates are normally found in the medium range.

Here's a round-up of the cheapest personal loans for those borrowing £10,000 over three years.

1 year ago

Quote

“Success is fueled by being persistent and consistent.”
― Franklin Gillette, How to Make Extra Money at Home Right Now

1 year ago

Consumer Debt Consolidation - A Way To Cope With Debt

Consumer Debt Consolidation - A Way To Cope With Debt

Different consumers also differ in terms of dealing with their financial situations. There are various ways on how one could resolve his economic crisis and the kind of step to take always depends on the crisis that he is presently trying to overcome. As an individual, upon entering into a consumer debt consolidation program, the consumer would not be offered yet another loan to take. A debt consolidation has a large difference from a debt consolidation loan, which requires the debtor to take another loan to pay off his several other loans.

In a debt consolidation service, the consumer would experience negotiating with a debt consolidation counselor regarding his present financial situation and would then come up with a plan to be able to resolve the debts wherein both the debtor and the lender would agree. Through the debt consolidation service, the consolidation company would take care of all of the payment obligations of the consumer to each of the companies that he owes. These combined debts in one financial obligation naturally leave him with a lightened burden.

Consumer debt consolidation offers different ways to resolve a financial crisis and each one of them depends on the situation of the consumer. Below is a chance to go with the different faces of the solutions one by one.

Is Unsecured Debt Consolidation Loan The Best Option?

The debt consolidation service is now talking about loans, which is not very easy to get especially with a debtor that carries a bad reputation in terms of proper payment. But if one doesn’t have a home of his own or other valuable properties for that matter, this is one of the wisest ways to consider to be able to pay his debts. It doesn’t require any collateral obligations to put against the payables. But as it was stated, it isn’t easy to qualify for this kind of solution for it requires a clean record and a steady income from the debtor. Another disadvantage is that it usually gives the same or even a higher interest rate. The only good thing about it is the chance to get every debt all rolled into one combined and collected loan allowing only a single payment per month on the part of the debtor.

Things To Know About Credit Card Debt Consolidation

This kind of debt consolidation allows the person to transfer all of his debts into a single credit card. Three things should be considered to make sure that the debts are lessen and not remained as it is or even worse. The credit card debt consolidation should offer lower interest or none at all, that is 0%. It should remain valid and usable for a longer period of time before it meets the expiration date. To last for 15 months is a quite favorable length of time for this kind. Lastly, it should have lower transfer fees.

Home Equity Loan

This would let the debtor to get a cash-out of money putting the value of his own home at risk. With lower interest rate, this is a better choice than to continue crawling his way out of several other debts that usually go with high interest rates. The money from the equity must be used to pay the debts and nothing more. If the consumer borrows more than the value of his property, he could lose his own residence.

Home Equity Line of Credit (HELOC)

This is another debt consolidation method that put the debtor’s property at risk. The money can be obtained through a credit card or a checkbook. The consumer can withdraw as much or as little as he wanted provided that he would not get more than the set credit limit. Also, HELOC’s one advantage is its adjustable interest rates depending on the amount withdrawn by the consumer but with this kind of varying rates, it usually makes it hard to budget.

Every month of paying various different kinds of debts from different lenders with varying and often higher interest rates could be somewhat troublesome. The key to lessen these kinds of personal economic crisis is to get a consumer debt consolidation wherein it makes it easier to pay a single lump of financial obligation with a fix amount of interest rate.

1 year ago

Welcome

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