Finance Choices
General Loan Tips
Getting a loan doesn?t have to be a stressful procedure, providing you have done your homework, and know exactly what it is you want! I have compiled some tips and ideas about what to look for when searching for a loan! Many people when they look at a loan, they see it as a whole and it appears very scary and confusing?but if you look at it broken down into it?s sections, then you?ll see it?s pretty simple.
In it?s basics, a loan can vary according to the amount you need to borrow; the interest rate and whether or not it?s variable or fixed; the term time of the loan and if there are any deposits required. There also some hidden charges involved which can bump your loan cost up i.e. bank charges, broker fees, prepayment and insurance fees etc. Basically, your buying money for more than it actually costing the lender; so they are making a profit!
Never only consider the interest rate as a judgment of how much the loan is going to cost you; but with the introduction of the APR rate, all other fees are included. When shopping for a loan always compare the APR rates. Brokers make their money by adding in all these hidden fees so keep an eye out!
Always keep a copy of every cheque you make out for the loan you have obtained. If you ever have to call your lender regarding your loan, always take down a note of who you were speaking to in case of any future disagreements ? it can save a lot of hassle!
Always budget your cash-flow! Being sensible and realistic can help you in the long run. Keep all the receipts you receive so you can calculate what you are spending each month, and where you can cut down on your expenditures.
Most people, who plan a budget end up sticking to it for one month, then forget about it the next 9 months, and then wonder where all there money has gone! Stick to it! Make it a religion to review and update it monthly, making better additions and improvements. By cutting out all your waste expenditure, you can get the maximum amount for your loan.
Please avoid ?quicksand? loans. As you can tell by the name, they suck you into debt hell! Many features of these loan types include short term periods, high upfront fees, massive payments and high late fees! They can seriously damage your financial situation. . Beware of prepayment penalties. Many 'no fee' credit lines have a pre-payment penalty. There is no need to agree get a loan which contains any significant prepayment penalty, if you have good credit. One of the smartest things someone can do with a loan is to prepay it.
In it?s basics, a loan can vary according to the amount you need to borrow; the interest rate and whether or not it?s variable or fixed; the term time of the loan and if there are any deposits required. There also some hidden charges involved which can bump your loan cost up i.e. bank charges, broker fees, prepayment and insurance fees etc. Basically, your buying money for more than it actually costing the lender; so they are making a profit!
Never only consider the interest rate as a judgment of how much the loan is going to cost you; but with the introduction of the APR rate, all other fees are included. When shopping for a loan always compare the APR rates. Brokers make their money by adding in all these hidden fees so keep an eye out!
Always keep a copy of every cheque you make out for the loan you have obtained. If you ever have to call your lender regarding your loan, always take down a note of who you were speaking to in case of any future disagreements ? it can save a lot of hassle!
Always budget your cash-flow! Being sensible and realistic can help you in the long run. Keep all the receipts you receive so you can calculate what you are spending each month, and where you can cut down on your expenditures.
Most people, who plan a budget end up sticking to it for one month, then forget about it the next 9 months, and then wonder where all there money has gone! Stick to it! Make it a religion to review and update it monthly, making better additions and improvements. By cutting out all your waste expenditure, you can get the maximum amount for your loan.
Please avoid ?quicksand? loans. As you can tell by the name, they suck you into debt hell! Many features of these loan types include short term periods, high upfront fees, massive payments and high late fees! They can seriously damage your financial situation. . Beware of prepayment penalties. Many 'no fee' credit lines have a pre-payment penalty. There is no need to agree get a loan which contains any significant prepayment penalty, if you have good credit. One of the smartest things someone can do with a loan is to prepay it.
posted by Bruce Wayne at 8:27 AM
General Loan Tips
3 Comments:
My son needs a small loan to set up business, but he is unemployed just now. Is there any way he can get a loan without going through my bank?
He could try somewhere like the Princes Trust or another charitable body to help him set up a business.
Any commercial loan company or bank is unlikely to offer him a loan at a sensible rate though, given his current income is presumably benefits only?
If your son is able to get a loan it will be on the strength of his business and hopeful future earnings. It's therefore paramount that he prepares a good business plan to state his case and set out what he's going and how he plans to do it. Finance will obviously feature strongly in this - he needs to cost what he wants to spend the money on.
Depending upon his individual circumstances, where in the country he is based and the type of business he is hoping to start up, there MAY be a possibility of grant finance as well as loan finance available. Try www.businesslink.gov.uk for more information.
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