A British Man's Take on Debt, Saving & Investing

Car Finance: The Easy Road Ahead

Posted on October 07, 2015 by Lee

It’s estimated that there are currently 35 million cars on the road in the UK, with over £1.2 billion spent on acquiring them every year. Yet as crowded as our roads may be, cars are ultimately a necessity for many of us – whether it’s a get-me-to-work car, a family motor or a little run-around vehicle.

The obstacle to this, of course, is getting your hands on the capital to make this necessary investment. The prices of insurance alone can be inhibiting, and, coupled with maintenance costs, can make the ‘package deal’ of buying a car seem like a distant dream.

It need not be this way though. In the increasingly agile world of consumer credit, there is one particular avenue which is fast emerging as a viable and good-value source of car finance. Quite simply, the personal loans market has been taken by storm by peer-to-peer (P2P) lending platforms, which, by virtue of matching consumers who have extra money to lend directly with those in need of a loan, are able to offer highly competitive APRs and repayment plans.

Indeed, the culling of intermediaries from the interaction (as you would associate with the likes of banks and building societies) results in a highly streamlined process. Furthermore, with both the lending and borrowing processes taking place entirely online, there are minimal overheads for these peer-to-peer lenders to contend with, thus allowing them to pass the benefit on to the consumer.

Unsurprisingly, P2P platforms have therefore become major players in the market for car loans. A borrower is typically able to take out a personal loan of between £1,000 to £25,000, thus meaning that cars of just about any variety are as accessible and attainable as they ever have been. The flexibility doesn’t end there though. Some platforms such as Lending Works offer you the opportunity to make overpayments and early repayments at no extra cost.

Perhaps the greatest pull of these platforms though is the element of convenience. An online personalised loan quote can be attained within a couple of minutes, and, if the quoted APR is to your liking, the subsequent application process is even quicker. A decision on whether the loan has been approved and the final APR is then returned to you via email within one working day, and, should you decide to accept the terms, the funds arrive in your bank account overnight.

Such an innovative concept has lifted the bar in the personal loans sector, and, more importantly, has made things simpler for the customer. No longer are unsecured loans something to be sceptical of, and instead they are increasingly being characterised by sensible repayment plans and convenience.

It all leaves you in a good position, whereby you can shop around and find the most suitable loan for you. Certainly, with the power in your hands, it is prudent to do one’s homework, and ensure that there isn’t any fine print or potential pitfalls with the provider you choose.

However, if after weighing things up you decide that a peer-to-peer loan is the route you wish to go, you can afford yourself a smile knowing that you could be driving away in your new set of wheels just 48 hours later, safe in the knowledge that you are living within your means. It’s car finance that benefits the consumer – just the way it should be.


What are debt consolidation loans?

Posted on July 13, 2015 by Lee

Juggling multiple debts can be tiring and stressful. Credit cards, household bills and overdraft and loan repayments all mount up, and it can be hard to keep on top of it all. If you are struggling to pay back a number of different forms of credit, it is relatively simple to consolidate debts with a debt consolidation loan. Although taking out yet another loan can seem counter-intuitive, if you use it sensibly, it will help you to get on top of your debt problem and to feel in control of your life and spending once again.


What Is a Debt Consolidation Loan?

A consolidation loan is a large loan that is used solely to pay back a number of smaller loans. As a result, you only have to pay back one large debt on a monthly basis rather than several smaller ones. The advantage of this is that it is much simpler to cope with and, significantly, it can often save you money. Credit cards, store cards and unauthorized overdrafts usually come with relatively high rates of interest. In contrast, lower interest rates are often available on larger loans and at fixed rates. By borrowing a larger amount at a lower interest rate to pay off all your smaller debts, you consolidate those smaller, more costly debts into one larger and, more often than not, cheaper debt – this is a debt consolidation loan.


What Are the Advantages?

If you are overwhelmed by debt and finding it difficult to remember who to pay back and when, the most obvious advantage of a consolidation loan is that life becomes much simpler. You are effectively putting all your debts in one basket, which means that you only have to make one regular fixed payment each month rather than several different payments, often at variable rates of interests.


Budgeting becomes much easier because you know exactly how much you have to pay back each month and, therefore, exactly how much money you have left over to spend on other essentials. Perhaps the biggest advantage of all is that you may find that you are paying back less than you were before you took out the consolidation loan. Your single payment may be less than the sum total of all your previous smaller debts because you are paying a lower interest rate. A final advantage is that a consolidation loan can help you to improve your credit rating. If you have fallen behind with loan repayments, your credit rating will have suffered. A consolidation loan can help you to prove to creditors and potential lenders that you are a reliable and trustworthy borrower. The way to do this is to make sure you make each monthly payment on time and do not take out any other forms of credit until you have paid the loan back in full.


What Are the Disadvantages?

Always look very carefully at the terms of the consolidation loan you are considering. How long are you borrowing the money for? What is the rate of interest? Although you may find that you are paying a lower interest rate than previously, this is not always the case. If the interest rate is higher than for many of your smaller loans, a consolidation loan will be a more expensive option for you. Consider too the number of years it will take you to pay back the loan. It could be that you will end up paying back much more with one consolidation loan than with a number of smaller debts if you agree to borrow the money over a longer period of time.


Never be tempted to borrow more money than you need. The idea is to wipe out your debts as quickly and cheaply as you can, not to accumulate fresh ones.


Should It Be Secured or Unsecured?

Debt consolidation loans can be secured against your home, but this is not a good idea if you think you might struggle to meet the payments. Secured loans usually offer lower rates of interest but should only be taken on if you are absolutely sure you will be able to pay back the loan. If you cannot, you may lose your home.



What can affect your credit score?

Posted on April 12, 2015 by Lee

When you apply for credit, lenders will take time to find out about you and your spending habits before approving or turning down your application. They do this in a number of ways, including looking at your credit rating. It is a good idea to have an awareness of the different things that can have an effect on your credit rating before making an application. This guide outlines how credit reporting works and the most important things to think about.


Credit Scores

Lenders will look at a number of different things to assign you with a credit score. Factors include:

  • Age
  • Salary
  • Credit history
  • The number of children you have
  • Previous mobile phone contracts


Understanding your credit score is the first step to improving it. Following the tips below may help you to achieve a healthier credit score.


Registering to Vote

Becoming registered to vote provides lenders with a reliable proof of your address. This information is shared automatically with credit reference agencies and can have a big impact on your overall credit rating.

Limit Credit Applications

Applying for credit can have a negative effect on your credit rating, especially if you are unsuccessful. This is because it indicates to lenders that you may be struggling to get credit elsewhere. Always check the criteria before any application to ensure you are eligible to minimise the chances of being turned down.

If you have other credit accounts, it is a good idea to close these. Lenders are unlikely to offer credit when you already have access to large amounts, as they need to know you are capable of repaying all debts owed.


Never Miss a Payment

Even payments which are late can remain on your credit record for a minimum of three years. Creditors often consider forgotten payments as a sign of an unreliable customer, and they may be reluctant to risk lending to you. If you are struggling to maintain repayments, always speak to your lenders. Sometimes debts can feel overwhelming, and it may be necessary to consolidate debts or use a balance transfer to take advantage of an interest-free period.


Avoid Moving Around Too Often

Lenders are less trusting of those who frequently move house. As part of your credit application, you will be asked to supply details of addresses you have lived at in the last three to five years, and any previous homes will also be linked to your credit report.


Check Your Report

Occasionally, credit reports may contain errors or inconsistencies which are potentially damaging to your credit score. For this reason, it is a good idea to check it regularly.


Close Joint Accounts

If you hold a joint account with someone who has a bad credit score, it can drag your score down too. Lenders typically assume that a partner with a poor credit rating has the potential to impact your income and ability to repay credit too. Once done, you can send the Credit Reference Agencies a ‘Notice of Disassociation‘ to ensure the link is removed promptly.


Keep Your Income as Regular as Possible

If you do not have fixed contracted hours, it can be hard to prove to lenders that you can afford repayments, even if your average income is well above the minimum criteria.


Phone Contracts

Check your credit report before applying for a new mobile phone contract. Phone companies will want assurance that you will be reliable about paying monthly bills. The same may also be the case for home fuel accounts, so think carefully before switching your gas and/or electricity accounts to ensure you will not be asked to use a pay-as-you-go meter, which can prove much more expensive.

Before making any applications, whether it be for a mortgage, a mobile phone, a new bank account or credit card, it is important to be aware of what’s in your credit report. A rejected application can potentially damage your credit score. Keeping a close eye on your credit report will also allow you to see quickly if you have become the victim of identity fraud.


Blog Widget by LinkWithin
Page 1 of 4812...Last »
savings accounts

  • Meta

↑ Top