Want To Take Care Of Your Finances?
We Can Do The Hard Work For You!
Articles
- Personal finance explained
- All about secured personal loans
- How can I finance a new car?
- Personal loan finance made easy
- What are home loans?
- Is debt consolidation worthwhile?
- How can I finance my home improvements?
Warnings
News
Personal Finance Explained
26th SEPTEMBER 2006
Many high street lenders and internet companies now offer loans to cover all sorts of situations but how do you go about personal finance planning?
Read More >
Latest News
Personal Loan Finance Made Easy
26th SEPTEMBER 2006
Clearing The Haze
The prospect of looking for personal loan finance in the UK can appear complicated but asking yourself a few questions will help you get started.
Matching Your Requirements
Firstly you need to be clear about the purpose of your loan. Loans come in many different forms but some will be more appropriate for your particular requirements. For example a short term unsecured loan could be used to buy a car, but refinancing to get a secured loan could be the answer for a new kitchen. A secured loan is likely to have a lower rate but it will be tied to your home.
Fixed or Variable Rate?
You will also need to consider fixed or variable interest rates on any loan. A fixed rate means payments stay the same throughout the loan period. This allows you to work out an accurate monthly budget which helps when managing your money. A variable rate will change according to the bank base rate so your payments will vary. You will benefit if rates fall as your payments will be lower, but if rates increase you will lose out. So the best value loans now on variable terms may not always stay that way.
A Fictional Example
Example figures for two entirely fictional cases are shown below. The first is for a secured loan of £10,000 at a rate of 6%. This could perhaps be used to finance a new kitchen or other home improvements.
| Loan period | Monthly payments |
|
5 years 10 years 15 years |
£197.83 £113.22 £85.80 |
However, if you want to buy a new car the following guide for an unsecured loan of £5,000 at an APR of 11.4% would be more appropriate.
| Loan period | Monthly payments |
|
3 years 5 years |
£163.33 £108.32 |