Tag: APR

Undoubtedly, new year is the best time to take some hard decisions, especially close to your heart. One of the most prominent life changing decisions can be opting for a personal loan. This type of loan has always been there to help the needy. Since it was always easily available, people relied on this type of loan much vociferously than any other loan.

However, rate of interest must be kept in mind if an individual wish to strike the best deal. As far as popularity of the loan is concerned, it is growing massively with every passing moment. That is what makes this loan type all the more significant and worthwhile. Since, personal loan’s availability is quicker than one can imagine, this is what makes it all time favorite of the people across the UK. Let us look at one of the surveys conducted by Nationwide in the recent past, which will give some idea about the current trends.

Nationwide Survey

It is worth noting that in the month of January, nearly 60% of the loan seekers went for debt consolidation purposes. As quick personal loan can also be used for debt consolidation purposes, people opted for the same in large numbers.

Interestingly, Nationwide also revealed that there are some companies that are offering market-beating interest rate of (typically) 7.6%. As most of the companies are providing the loan usually at more than 10%, the lowest rate of interest seems to become unimaginable for a moment.

However, there is something, which makes the low rate of interest factor altogether useless for the people in general. As the offer involving lowest rate of interest is only meant for certain customers, it becomes altogether useless for the people in general.

The role of creditworthiness

It is interesting to note that lenders only approve applicants with good at credit rating. So, it is possible that an individual may not qualify for the advertised typical APR. As far as law is concerned, the “typical” rate must be delivered to at least 66% of applicants. However, the actual APR is entirely dependent on ones personal circumstances. So the logic behind the APR rests on the following:
Better the credit rating is, lower the APR.

Avoid multiple applications

It is always better to avoid multiple applications as it might affect an individual’s creditworthiness. Every time one applies for a loan, the information is passed to the credit rating agencies for verification purposes. If an individual does not have good credit rating, there are chances that he or she will be negatively affected.

In order to be a mature borrower, one must check the credit rating on ones own. In doing so, an individual avoids the negative credit checking by the lenders in case he applies for the loan. As there is no dearth of quick personal loan providers, it is better to check the APR factor before finalizing things.

A personal loan is a sum that any adult individual borrows to
fulfill his financial requirements. There are many purposes for which
any individual can take a personal loan. Personal loans can be used to
provide funds to buy a car, pay for your dream cruise or that remote
island escapade, buy a boat, pay mortgage arrears, finance your home
improvement plans, payment of alimony or paying for credit card bills
etc. In fact personal loans can be taken for most of the financial
emergencies you can think of.

There are many banks and financial
institutions, which provide personal loans. All of them have their own
terms and conditions. To get the best deal on your personal loan you
must ensure that you contact and consult as many lending institutions as
possible. Tell them about your financial requirements and situation.
Get quotes from them and check whether you can repay the personal loan
with ease.

The banks will provide you with a lump sum amount when
you complete the formalities of getting the loan. The money can be used
to fund your requirements. The amount banks will recover from you will
include the debt, coupled with the interest charged on it over the
repayment period. The longer the repayment term the less will be the
interest to be paid on the personal loan.

Personal loans
[http://www.easyfinance4u.com/secured_personal_loan.html] are preferred
due to their flexibility. The two most common types of personal loans
are secured and unsecured personal loans. The option of secured and
unsecured personal loans are linked to the fact whether you can offer
any property or fixed asset as collateral for the loan. These loans are
discussed below in detail.

Secured personal loan

A loan
secured against some immovable or movable asset is called a secured
loan. These loans are easy to get since the lending institutions feel
comfortable while giving them. The reason for their comfort is the
collateral you provide. Secured personal loans have lower interests and
easy repayment options. Lending institutions don’t hesitate in giving a
large loan against high value collateral. Generally, secured personal
loans are given against house owned by a person, but if you have put
your house on mortgage you can still avail a secured personal loan
against the proportion of the home you own.

Banks and financial
institutions often overlook negative credit ratings, CCJ, defaults or
pending debts since they get collateral for their loan. Secured personal
loans are available to individuals within 30 days of giving an
application.

Unsecured Personal Loan

In an unsecured personal
loan the amount given by the bank or financial institution is not
secured by collateral. The lending institution gives the loan solely on
the creditworthiness of the person concerned. This type of loan has a
greater element of risk for the lenders, so it carries a greater rate of
interest and is often followed by a through background check on the
financial soundness of the individual. The loan amount can start from as
little as �500 and go up to �25,000. Since the loan is unsecured,
lenders are wary of giving large amounts as loans. Unsecured personal
loan is good for tenants, people who don't own their homes and those who
cannot offer anything as collateral.

In case the borrower
defaults on payments then the lender will use the credit agreement and
take legal help in recovering the outstanding amount.

Before
jumping to a decision, the interest rate charged should be given a
serious look while taking a personal loan. The amount of interest you
will be charged, will decide what you finally pay to the bank. Lenders
have a legal obligation to tell you the interest they will charge on
your loan. The APR (Annual Percentage Rate) shows the real interest rate
the banks will charge from you. The lower the APR, the better it will
be for the borrower. The borrower is also advised to investigate whether
the interest charged by banks is fixed, or a floating one. Ask the bank
about prepayment penalties and other cost incurred in getting a loan.

Every
financial institution has its own way of enquiring about the borrowers.
Some might want to ask personal questions, get a feel of what you will
do with the loan amount and how you wish to build your future before
lending you anything. Be prepared to answer such queries.

Every
loan that is taken has to be repaid. The banks and financial
institutions derive part of their profits by the interest you pay. It is
fine if everything goes as planned, and you repay the entire loan in
due course with no hiccups. However life is known for its glorious
uncertainties. Plans fail, calamities come and something disastrous
often thwarts our plans. This might lead to repayment problems. This
happens and one should not get panicky in such situations. If you get
into one such situation, the first thing that you should do is to talk
to your lender. They are interested in recovering their money, a
mutually agreeable solution can be reached, which is less tense for you
to manage and appears promising to lenders also.

The phrase �tailor-made� ought to be made for personal loans.
Personal loans have become relatively easy to acquire in UK. More and
more loan providers have come forward to provide personal loans in UK
and that too with innovative modifications to include anyone in its
circumference.

Let us start with the definition of personal loans.
Personal loans are loans that are offered by financial institutions for
any personal financial reason. The financial institutions offering
personal loans in UK include banks, building societies, loan lending
companies etc.

Like every other loan, a personal loan needs to be
paid back. The time decided for the repayment of the loan is called loan
term. The amount taken for a personal loan is decisive about many
things in the context of personal loans like repayment terms, interest
rates along with repayment term.

Personal

loans [http://www.chanceforloans.co.uk/secured_personal_loan.html]
have been broadly categorized into two types � namely secured personal
loans and unsecured personal loans. Secured personal loans are those
loans which are given against a security which is usually your home or
any personal property like your car. The collateral placed is the
security against which the personal loan is supplied in UK. This
collateral acts as the security which guarantees for the repayment of
loan. In case of non repayment the personal loan, the loan lender can
seize your property.

Contrary to secured personal loans is
unsecured personal loans. Unsecured personal loans in UK are furnished
without any collateral being placed. Therefore unsecured personal loans
are an ideal choice for tenants in UK. Nevertheless, even homeowners can
apply for unsecured personal loans in UK.

If unsecured personal
loans are open to everyone then why would one get a secured personal
loan? Interestingly there is a hitch? Unsecured personal loans come
with their very own drawback. The interest rate on unsecured personal
loans is higher than secured personal loans. You place no guarantee and
consequently the rate of interest is higher. Thus unsecured personal
loans are more expensive that secured personal loans. Coming to interest
rate you would like to know about APR. It is a much publicized word but
little comprehended. APR is the annual percentage rate. It is interest
rate charged on your loan. APR is the interest rate of a mortgage
including other costs such as the interest, insurance, and certain
closing costs.

The interest rate on personal loans in UK can be taken
under the head of variable interest rate and fixed interest rate
depending on your convenience. Fixed interest rate on personal loans
will remain the same irrespective of the changes in the interest rate in
the loan market. You will keep on paying the same interest rate even if
the interest rate in the open market drop.

While a variable
interest rate keeps on fluctuating. Variable rate personal loans are
also called adjustable rate personal loans. Adjustable rate personal
loans are beneficial only if you the rate of interest drop. But if they
rate of interest rises then your monthly payments will increase way over
the payments you would have made. It is a very unpredictable situation.

Personal
loans are an ideal option if the money is borrowed for less than ten
years or for any purchases or repayment of existing debts. Personal
loans are very dependent on your personal situation and temperament. If
you are open about your circumstances to your loan lender you are likely
get a personal loan in UK in accordance to your needs. Loan in simplest
terms is loan borrowing. You take money and repay it on the decided
time. There is no simpler way to describe on personal loans.

Credit problems can erupt at any time without any prompting. If
you are searching for personal loans with bad credit, you will think
that perhaps it might be difficult. To get through personal loans
process easily with bad credit can be overwhelming for some people. For
them no credit check personal loans are offered.

No credit check
personal loans are a novel way to overcome credit problems. However,
finding personal loans with no credit checks can be slightly difficult.
With no credit check personal loans, borrowers must weigh their options.
Personal loans with no credit checks are a way to get a loan even if
you have bad credit. You won’t be turned down due to bad credit. No
credit check personal loans do not have high interest rates as are
associated with bad credit.

Personal loans are the most searched
keyword on the net. Consequently, there are hoards of alternatives and
options to choose from. No credit check personal loans
can be availed by banks or credit institutions. Once you start
researching, you will come across many no credit check personal loans.
Don’t be in a hurry to sign no credit check personal loans. Take your
time and look around carefully. Ask for free quotes. Compare the quotes
and then decide which personal loan offer maximum benefits without
credit checks. Don’t forget to find out there policies and repayment
terms before you make the decision.

No credit check personal loans
are usually high interest rate than secured loans. This is because it
is not dependent on your credit score and usually you do not place any
collateral for the loan. While searching for no credit check personal
loans, you should be taking a good look on the APR.

APR is the
annual percentage rate. The total cost or finance charge for a loan per
year, expressed as a percentage of the loan amount. It is the sum of
the interest and any other fees, such as discount points, compared to
the amount of the loan. While comparing no credit check personal loans,
you would be required to concentrate on APR. It is a complex thing and
you do not need to go to its details. All you need to know is that the
no credit check personal loans with lower APR will cost lesser.

If you intend to borrow larger amounts on no credit
check personal loans, then you would require to place a collateral.
Usually personal loans with no credit check are accessible for any
reason. Home improvement, debt consolidation, car purchase etc. The
decision to take no credit check personal loans does not have any
influence getting the loan approved. However, it has an influence on the
loan term. Like a no credit check personal loan for home improvement or
car purchase will have a loan term between 3-5 years. For other
purposes loan term can extend to ten years or more. Do not take no
credit check personal loans for a longer loan term. A longer loan term
will cost you more in the long run.

In case you find difficulties
in making repayments for no credit check personal loans, you must
immediately contact your lender. If you are honest about your
difficulties, it is possible that they will help. In fact they might
even agree to take reduced payments till your condition improves.

No
credit checks personal loans seem easy and hassle free. However, do not
confuse easy. For no credit check personal loans are as liable towards
deception. Read the fine print. There are many hidden costs with no
credit check personal loans. No credit check personal loans usually
necessitate a cosigner and exorbitant late fee. Ask questions, do not
hesitate to clear any confusion. Take care before choosing your no
credit check personal loan lender. Otherwise your no credit check
personal loans will become a personal liability. Nevertheless, there
will be a no credit check personal loan that satisfies all your
financial specifications.