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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SOME of the country’s biggest high-street banks have withdrawn from the market for single premium payment protection insurance (PPI), in advance of an expected curb on its sale by the Competition Commission.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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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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Just normal madness
As you struggle to pay the gas bill, the electric bill, the mortgage, the personal loan repayments whilst hanging on to your job it may help to see the funny side of it all with this quote from American journalist Ellen Goodman:
Normal is getting dressed in clothes that you buy for work and driving through traffic in a car that you are still paying for – in order to get to the job you need to pay for the clothes and the car, and the house you leave vacant all day so you can afford to live in it.
January 30, 2009 at 8:03 pm | Loans General Info | No comment
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We’ll just have to sell him then
If you can believe it the average cost of raising a child is said to have reached £194,000. This equates to £9,227 a year from birth to the age of 21 according to research from insurer Liverpool Victoria published yesterday. That is equivalent to £769 a month, or £25 a day.
Worrying enough but what if you have three? Well, if you’re a mechanic your average salary is about £25K and your kids will cost you nearly £28K!
This ‘news’ is just another scare story as the economy dives, bills mount up and jobs look increasingly iffy. Truth is, if we ain’t got £9,227 a year to spend on a child then we won’t spend it. We’ll spend what we have to in order to balance our finances across the mortgage payments, utility bills, personal loans and daily living costs. It’s what people do!
January 27, 2009 at 9:50 pm | Loans General Info, personal loan | No comment
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Been a piggy? Time to get your house in order
Did you enjoy your Christmas – plenty to eat and drink, nice warm house, great sale bargains? Well, it’s all over. We’re at the end of January and it’s time to reckon up. Credit card statements, utility bills, mortgage payments, loan repayments are all waiting for your attention – just when you’ll be hearing that your savings and investments are not doing that well.
Be positive, use the start of the new year as a time to get your financial house in order. And don’t forget that a very useful way of managing your debt is to investigate how much a consolidation loan would free up some valuable cash. Visit personalloansmadeeasy and get help finding the best rates.
January 26, 2009 at 7:56 pm | Loans General Info | No comment
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It’s official – we are receding
Although we already knew because they’ve been telling us 24/7 for months, the media announced the ‘shocking’ news this week that we are ‘officially’ in a recession.
Somewhat superfluous advice soon followed with a list of ‘tips to beat the recession’ from thisismoney.co.uk which helpfully advised that we should:-
Cut our spending
Reduce our debts
Slash our bills
Save for a rainy day (it’s not raining now?)
So, there we have it. Tips to beat the recession. To be fair the advice also suggested not changing jobs just now as you could be first out of your new company if it fails. It also stresses the importance of not failing to meet mortgage payments even if you have to extend the term or move to interest-only. Maintaining your home and your creditworthiness are very essential. Debts need to be managed very carefully whether they are mortgages, personal loans or credit cards.
January 24, 2009 at 6:27 pm | Loans General Info | No comment
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