The Cost of Loans

Thinking about taking out a loan to pay off all those Xmas excesses?

Don't Let Your Personal Loan Become a Personal Moan: Good background reading before you take out a loan
Determining How Much Money You Need to Borrow: How much to borrow is always a key decision. This article gives some good general advice
Bad Credit Loans. Much Needed Money in the Most Testing Times: 1 in 3 people in the UK have a bad credit history. This article discusses the problem and the solutions.
Loan cover. watch out for Payment Protection Sharks: Around 50% of borrowers get Payment Protection Insurance for their loan. It would appear that many are being ripped off. This article investigates the pitfalls and the solutions.
Car Loans Drive down the cost: Usually the cheapest way to finance the purchase of your car is usually with a personal loan. But there are other methods. This article explains.
Payment Protection Insurance, what's all the fuss about?: Payment Protection Insurance has been getting a hammering in the press lately. Why and is PPI a good idea? This article investigates.

Then check out the cost of the loan you're offered.

Only recently the Department of Trade and Industry changed the rules forcing lenders to provide clear upfront information to enable borrowers to compare the costs of personal loans and shop around.

The new rules mean that before you sign a loan agreement, lenders ( life insurance policies ) have to clearly set out the main elements of the loan: -

· The total amount to be borrowed · The total amount to be repaid
· The frequency of payments and the instalment value
· The APR ( Annual Percentage Rate of interest )
· The costs if you pay late or default
· The cost of any early settlement or redemption penalties

It's worth searching the Best Buy tables to find the lowest APR but remember, if it says APR Typical, it doesn't necessarily mean that that's the interest rate you'll be offered - the rate you're offered will depend on your personal credit rating . APR Typical simply ( cheap mortgages ) means that at least two thirds of the lenders new customers can expect to get that rate or cheaper. Your personal credit rating could put you in the one third who are quoted for a more expensive loan!

Although there are more than 30 loans available at the moment with interest rates below 7%, only borrowers with an excellent credit history can expect to qualify for those rates. And as lenders are finding bad debts an increasing problem, it's becoming even more difficult to qualify for these super low rates. Everybody else will end up paying more.

And if you're tempted to shop around for the best rates by applying ( mortgages ) to lots of lenders, take our advice - DON'T.

Most people don't realise that each time they apply for a loan, a record of each application is added into their credit record which is held by the big credit rating agencies ( best mortgages ) such as Experian. In the lending industry, these loan applications are known as footprints and each successive footprint will reduce your credit rating. This makes it more difficult for you to obtain a cheap loan and in some circumstances, it might mean you are refused altogether.

The other aspect to watch out for is Payment Protection Insurance (PPI).( car insurance cover ) Most lenders will try to persuade you to take out PPI with them but many will fail to point out the full cost of that insurance.

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Your home may be repossessed if you do not keep up your repayments on a mortgage or any debt secured on it.
Loans may be secured on your home or other property. Think carefully before securing other debts against your home.