Vehicle finance loans

Lions And Loans: Why Finance Should Always Be Personal
By Rachel Lane

Different types of loans are available for almost every aspect
of your life: personal loans, car loans, secured and unsecured
loans, home loans, homeowner loans, student loans, graduate
loans and career development loans (CDL). If you’ve suffered
from credit problems in the past and now hold sub-prime
characteristics, then you will be eligible for adverse credit
and adverse loans.

You can always borrow money these days, but it is crucial to
read the small print as the difference between interest rates
is enormous and stories of people forced to pay off amounts
which are five times the amount of their original loan are not
uncommon.

There are also numerous stories on unemployed couples being
sold loans, such as the case of Julie and Kevin Davies,
reported by the BBC. The couple were already experiencing
difficulty in paying off their existing debts of £4,000, when
they were sold another £20,000 loan by Lloyds TSB.

Loans of £1,000 to £25,000 can be taken out and repaid over a
period typically varying between six months and 10 years
depending on your credit history and available finances. Loans
are usually secured or unsecured. Secured loans are tied to
your house, so you can be forced to sell the house if you are
unable to make the repayments. Unsecured loans do not impose
the same restriction, though a default on repayments may result
in being “credit blacklisted”. Once blacklisted, you may get
future credit card, mortgages and hire purchase applications
rejected, as well as face a potential higher rate of interest
for all existing debts.

It is absolutely crucial that you shop around for a loan and
not just through the high-street banks. The internet offers a
wealth of information available and there are many sites which
compare the prices of products, and to really ensure you get a
good deal – compare the different comparison sites. In the UK
moneyfacts, moneyextra and moneynet ( http://www.moneynet.co.uk
) offer price comparison services for a wide range of loans,
amongst other financial products. These sites also offer
consumer information guides, which you can either print
directly off the website or download on to your computer.

Do read all the terms and conditions carefully and ask friends,
family and your financial adviser / bank adviser if you don’t
understand a particular statement. The annual percentage rate
(APR) is particularly important and can make a difference of
thousands of pounds over the term of the loan.

Unsecured loans can be purchased from building societies and
banks, as well as certain high street shops. Unsecured loans
may be taken out for something specific or simply to make life
more ‘comfortable’. The process usually involves:

* Requesting a typical amount for the loan
* Discussion of interest rate (APR) and possible loan payment
protection insurance
* A credit check, you may wish to get one of these first, so
you know what to expect
* Reading the terms and conditions and then signing the
agreement
* Money can then be transferred into your account

In the discussion of secured versus unsecured loans, moneynet
explains that although secured loans can offer lower interest
rates and repayments, many people do not wish to jeopardise the
potential loss of their home in the default of a repayment of a
secured loan. In unsecured loans, pay attention to the
difference in APR, term of the loan and any additional charges
such as an early settlement charge or redemption penalty.

About the Author: Rachel writes for the personal finance blog
Cashzilla: http://www.cashzilla.co.uk Rachel is a
disillusioned, disaffected and broke graduate, exploiting new
media for financial therapy.

Source: http://www.isnare.com