Lenders

How to Find a Trusted Lender


There are many lenders available all offering all sorts of different loans. If you know what loan type you need, then you could still be overwhelmed by the amount of lenders that you have to choose from. Once you start looking, you could find that you discover even more. Some people will just use a financial advisor to match them up but this can be expensive and you may prefer to do the research for yourself. It can be useful to think about what you want from a lender and then you can match a lender to your needs.

Costs

Many of us will look at the costs first. We will want to know how much a lender is going to charge us. It is understandable tat we will not want to pay more than we have to, although it is important to look for value for money. The reason that rates vary so much and that there are so many lenders is because we all have different ideas on what makes a good lender. Some people will just go for the cheapest but others will want to make sure that they like the lender as well.

When comparing costs it is important to make sure that you are comparing like for like. The interest rate is something which many lenders will promote. However, it is the APR that you should be looking for because this includes any fees such as admin fees as well as the interest and so is a better way to compare. It is also worth thinking about the charges that they have as well. Lenders will charge you if you are late with repayments and also may charge you if you want to repay the loan early. Take a careful look at these as well, even if you think that you will not be paying these. If you are finding it hard to choose between loans then this could be an area where they significantly differ.

Repayments

It is really important to find out how much you will be repaying each month and for how long. This is because you need to calculate whether you will be able to afford this. It will differ between lenders and you do not want to struggle to repay but you also do not want to be repaying over such a long period that you loan ends up being really costly. Therefore check this out and work out whether it suits you.

Reputation

Many people will want to go with a lender that has a good reputation. Although this is a really good idea, you do need to be careful when researching this. You will find that people have diverse opinions about lenders based on their experiences, other peoples experiences and things they have heard in the press. They may even have untrue opinions. Therefore, try hard to do a lot of research and form your opinion based on factual information if you can. Try not to be tempted too, to think that because you have heard of a lender it means that they are good. You may only know them through adverts or because you read bad things about them but have forgotten that part. Try to judge them all evenly and look at them without using your past experiences and opinions unless you are sure that they are correct and applicable.

Customer Service

For some people it is really important that a lender has good customer service. They want to easily be able to contact them, perhaps in a local branch, by telephone or email. Think about whether this is something that is important to you. Most people will also want to make sure that if they need to get in touch that they will b able to do this quickly and get their problems resolved easily and efficiently. To find out whether this is likely to happen then you may need to talk to people that already use that lender and read things online. However, the best way to test it is to use it yourself. Contact the lender using the method that you are likely to want to use if you are their customer and ask them some questions. You will be able to see for yourself whether they respond quickly and what the quality of their response is like.

It is really important not to choose a lender too quickly. Make sure that you do a lot of research so that you can be sure that you have picked the best one for you. It is important to think about what you are looking or in a good lender so that you can find one that matches your requirements. As you start researching, you may find that your requirements change, but that will not matter, it will mean that you should end up with one that is perfectly suited to you.

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Interest Rates

How to Protect Yourself Against Interest Rate Increases


It can be a scary thought to some people that interest rates could be on the rise. We might see news reports predicting that rates will go up soon or even hear statements form the Bank of England stating that they predict they will be putting the rates up soon. This can be tricky for anyone that is borrowing money.

Why are rate rises a problem?

If you are borrowing money then you will be paying interest on that loan. This interest is calculated by the lender and can be fixed or variable. If the interest is fixed it is always the same but if it is variable, they can change it. If the Bank of England increases the base rate then it is likely that lenders will pass that increase onto borrowers with variable rates and so they may go up as well. Although they do not have to do this, most of them will. They may even put your rate up by more than the base rate increase.

This means that an increase in interest rate could potentially mean that you will be paying more out in interest each month. If you have a lot of loans then this could mean that they will all be more expensive. So, you could see your mortgage, personal loan, credit card and overdraft all get more expensive. So, although a small rate increase may not seem that much, if it is increased on each of your loans then it could make a big difference. It will also make a bigger difference if you are borrowing a lot of money compared with those that are borrowing less.

What to do about it

It is therefore really wise to be as well prepared as possible for a rate increase. Thankfully there are a number of things that you can do.

Firstly, you could start to overpay on your loans. This means that you pay back more than you have to each month. This will reduce your debt amount and mean that if rates go up, you will be paying interest on less money and therefore it will not have such an impact. Try to repay the dearest loans first so that you can save as much money as possible.

Not all loans will allow overpayment or they charge an early redemption fee which is so expensive it is better not to over pay the loan. If this is the case then it is good to try to put some money in a savings account. Then if the rates go up, you will be able to fall back on this money if you do not have enough to cover the repayments.

It can also be good to see if you can cut down your spending elsewhere. Things like utility bills and insurance could potentially be switched to cheaper companies and save you enough money to cover the increase in interest. If you cannot or do not want to do this then you could spend less elsewhere. Think about whether you could cut down on anything you are buying or shop at cheaper retailers in order to save money. You may not want to change what you are doing right away, but at least identify changes that you can make and this will allow you to know what to do when the rate changes come in.

You could also think of ideas on how to make more money, which again you could either start right away or leave until the rate changes come in. It might be that you could sell things to bring in a lump sum that could help you out for a while. You might be able to work a few more hours or try to get a pay rise. You might be able to take on a second job or change to a better paid job. You could rent out a room in your home or the garage and earn some income that way. There are lots of options but you will need to find one that suits you.

Having a plan should help to put your mind at rest. You will know that if interest rates do go up, you will be able to cope with any increases in costs that you will have to pay out. We cannot influence whether the rates will go up or down, but by planning we can make sure that we will be able to cope if they go up. Others would rather take action right away so that they know they are prepared as soon as rates go up. We are all different in how we might want to act as well as how many changes we will need to make in order to make sure that we can cope. However, the solutions could be similar for some of us and planning in advance is something that we will all benefit from.

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