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“It’s not that I forgot….”
Seasonal research from Abbey has revealed that the economic downturn has led many Britons to cut back on Valentine’s Day spending.
But figures from the Halifax Credit Cards revealed that Britons not only spend money on eating out and gifts each February, but also on their own appearance.
The average card holder spent £43 on cosmetics and £38 on shoes in order to impress a date.
But there are still some big spenders around romantically shelling out sums that might require personal loans. Regional data from Halifax found that customers in the south spent £504 on holidays to woo their loved ones, while consumers in the north spent £186 on jewellery.
June 14, 2009 at 10:40 am | personal loan | No comment
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Are you over-indebted?
In a scary move leading banks have signed up to a system developed by Callcredit which allocates scores to consumers based on what is termed their ‘over-indebtedness’.
The Department for Trade and Industry, which is now the Department for Business, Enterprise and Regulatory Reform, defined an individual as over-indebted if 25 per cent of their net monthly income was used to pay debt commitments.
Under the new system, which has been adopted by Halifax and Lloyds TSB, owned by Lloyds Banking Group, HSBC, and the Royal Bank of Scotland even prime borrowers with no history of defaulting could be rejected for a personal loan if their credit commitments take up too much of their income.
Funny it doesn’t seem too long ago that some of these organisations wanted you to have as much debt as possible regardless of your ability to repay – or did I misunderstand?
June 11, 2009 at 12:01 pm | Bad Credit Loans, Unsecured Bad Credit Loans, Unsecured Loans | No comment
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Borrowing for home improvement rockets
Sainsbury’s report a massive 53% increase in unsecured loans during 2008 (over 2007) and around 1.1 million of these loans were taken to partly or wholly fund home improvements.
Steven Baillie, head of loans at Sainsbury’s, said: “It is well-documented that the housing market struggled last year and our figures might suggest that people have decided to stay put and make the most of their existing homes.
“It may also suggest however that they’re trying to add value to their current homes in order to get a better price for them when the property market recovers.”
In all, Sainsbury’s extended £11.3 billion in personal loans for home improvement purposes last year.
February 15, 2009 at 10:40 am | Home Equity Loan, Unsecured Loans | No comment
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Don’t hold your breath for loan rate cuts
The Bank of England has cut the base interest rate from 1.5% to 1% and a further rate cut in March is likely, possibly to 0.5%. A rate of 0% at some point in 2009 remains a realistic possibility. This is the lowest ever interest rate and it takes us into unchartered territory. But if you are a borrower, what does it mean to you?
A cut to 1% should increase pressure on personal loan and credit card providers alike to follow suit and offer better deals to new and existing customers. But don’t hold your breath.
Variable rate loans work in much the same way as tracker mortgages but don’t tend to follow the base rate as strictly. Not all variable rate loan providers though will be obliged to pass on the rate cut so it’s important to check how your own loan will be affected.
A more important issue is that the rates applied by loan providers are more directly influenced by the rates at which banks lend to each other, the LIBOR. This, in contrast to the base rate, has remained fairly constant in recent months, and this, coupled with nerves from credit card providers has meant rates on cards have stayed high, or even gone up!
February 12, 2009 at 11:01 am | Loans General Info | No comment
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Bye, bye PPI
SOME of the country’s biggest high-street banks have withdrawn from the market for single premium payment protection insurance (PPI), in advance of an expected curb on its sale by the Competition Commission.
Although the loss of profits from sales of these policies could result in more expensive personal loans, the Commission is expected to outlaw the sale of single premium policies when it announces its final proposals to clean up PPI sales in the next couple of weeks.
PPI policies cover debt repayments if a borrower cannot work because of accident, sickness or unemployment, but it is alleged they have been widely mis-sold. The cost of the PPI is usually added to the loan and interest charged on this amount, significantly increasing the cost.
February 8, 2009 at 7:49 pm | Loans General Info, personal loan | No comment
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Objectors Trumped
When it’s built the fees at Donald Trump’s new Scottish golf resort may have many of us applying for a personal loan if we wish to enjoy the facilities at this north-east coastal pleasure park - but the delay he has suffered at the hands of planning objectors has done him no harm whatsoever.
All the time Trump’s plans were being delayed by strong and furious local opposition, the dollar was growing in strength against sterling and now the expected cost of £1billion has fallen by $600 million. This more than makes up for the cost of delay. Well done you objectors.
February 7, 2009 at 8:59 pm | Loans General Info | No comment
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Unexpected house price rise
The Halifax has reported a 1.9% rise in house prices during January, ending 10 consecutive months of price falls. Figures from the Bank of England showed that the number of mortgages approved for house purchase rose by 15% in December, although they are still running at less than half of the level they were at a year earlier.
Economists were quick to warn people not to read too much into a single month’s data, as monthly house price changes tend to be volatile. And lots of other authoritative sources rush forward to warn us not to see this as any kind of continuing improvement. Of course, they’d know. They saw all this coming so clearly. If only we’d listened to them…
February 5, 2009 at 8:23 pm | Loans General Info | No comment
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New car purchase – which is the best way?
Although the best way to purchase a new car is usually with cash, most people need to borrow at least part of the purchase price. There are three main ways to finance your car purchase. Each has positives and negatives, so it’s worth giving them each careful consideration before proceeding.
Hire purchase finance is effectively a loan which is secured on your vehicle, and which is paid back in monthly instalments over a set number of years. However you need to examine showroom deals very carefully as car dealers are often keen to sign customers up to hire-purchase agreements as they often receive hefty commission payments for every finance customer.
Personal Contract Purchase (PCP) plans, on offer from most car dealers, are worth considering. You put down a deposit, make monthly payments and at the end of the plan you can pay the final balance to keep the car, or hand it back and switch to a new plan on another new vehicle. This means you can change car every three years or so, but check the small print carefully. Some agreements limit mileage, stipulate service frequency and tie you to a particular insurance package.
Personal loans tend to provide the cheapest method of financing the purchase of a new car. Increased competition in recent years has seen interest rates fall and the advantage of using a personal loan to buy a car is that it is unsecured, so you don’t have to pay off your loan if you decide to sell your car early.
February 4, 2009 at 8:29 pm | Car Loans, personal loan | No comment
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The taxman unfair? Surely not.
Here’s a funny story. H.M. Revenue and Customs has decided to stop paying any interest on money it owes to taxpayers (yes, there really are people who overpay the taxman). The justification is that interest rates are at an all-time low and also that people should not use the Revenue as a savings bank by overpaying in the first place.
Those of you who think this is fair enough might change your mind when you find you have miscalculated your self assessment and not paid the Revenue enough. Because, in that case, the Revenue will charge you interest at 3%. I suppose you could argue that it’s a competitive personal loan rate but then, as the Revenue would probably tell you, they’re not to be used as a lending organisation.
Remember tax evasion is wrong, but so is this kind of unfair treatment. Did I say this was a funny story? Bloody hilarious eh?
February 2, 2009 at 12:04 pm | Loans General Info | No comment
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Is a secured or unsecured loan right for you?
Most people would recognise a personal loan as an unsecured loan which does not require you to set any particular asset against the amount you borrow. A secured loan, on the other hand, has to be set against the value of something you own; nearly always your property. However there are benefits to opting for a secured loan.
Because the loan is secured against your home, the interest rate is normally cheaper than an unsecured loan and you are normally able to borrow more. Typically you can borrow anything from £3,000 to £50,000 although some lenders provide finance up to £100,000. Also you can borrow the money over a longer repayment term which means you can reduce your monthly payments to an affordable amount by stretching the loan over a longer period. A secured loan is a good way to borrow money for expensive items such a home improvements. Secured borrowing can provide a solution for homeowners who have been declined an unsecured loan because of their credit rating.
However you need to bear in mind that a secured loan gives the lender a claim on your home and if you don’t keep up the repayments you could lose your home. Also, not all secured borrowing is cheap with some lenders charging higher rates than unsecured borrowing. It’s important to shop around and get the right type of loan for your particular circumstances.
January 31, 2009 at 7:04 pm | Loans General Info | No comment
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