How To Find The Best Loan
Every one loves to lead a comfortable life, but
, nowadays the cost of comfort has risen to a level where it has gone out of reach for most of the people. Loans are an easy option to fulfill your wishes. One can take a loan for buying a new house, car or pursuing higher education or even going for a holiday. In other words, loans can be taken for almost everything.
A loan is a type of debt where the borrower takes an amount of money from the lender and returns it later along with interest. This interest on the debt is an added income for the lenders and the only reason that encourages them to provide loans to others.
Loans are usually classified into three categories:
* Secured Loans- Here, you need to pledge some asset, your property or car or anything you own, as collateral for the loan.
* Unsecured Loans- These are made available to you by financial institutions in various forms like personal loans, credit facilities, credit card debt, bank overdrafts and corporate bonds. The law governing this type of loan, in case of individuals comes under the Consumer Credit Act 1974 of United Kingdom.
* Demand Loans- This short term loan may be secured or unsecured. These do not have fixed repayment dates, have floating interest rate and moreover, the repayment can be called at any time by the lender.
If you are planning to take a loan for your new car or for buying property, there are some vital points that one should keep in mind before you apply for a loan:
* APR% (Annual Percentage Rate or the Interest rate on the loan)
* Time period over which one needs to repay the loan
* Repayment amount one needs to pay back per month
* The total amount one will repay
* Penalties in case of early repayment of loan
* Payment Protection Insurance (PPI)
You must always plan before you take a loan because if you fail to repay back, then you could get black-listed and may face difficulties in getting loans the next time. You can generally get a loan for 500 to 25,000 which you can repay through monthly installments over a time period of six months to 15 years. There are various loans available and the rates usually vary from 6% to 20%, therefore, the best way to save your Pounds is to search for the best deal with minimum interest. Its always advisable to negotiate with your lender.
The Director General of Safe Home Income Plans, said that there is some anecdotal evidence in the industry that the equity release is being used by the pensioners to pay off their debts, more than earlier. She also noted that Some have said that they have seen an increase in people taking equity release to pay off debts.
She said that this money seems to be getting used for repaying mortgages and not unsecured debt. She reasoned that many people wish to pay off the outstanding home loans when they retire so that there are no more repayments to be done.
by: Cat White
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