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What You Should Know about Personal Loans

If you find yourself in a position where you need to access a lump sum of money throughout a fixed period of time, then a personal loan could be the best way for you to get your hands on the finances that you need. Unsecured personal loans are typically the cheapest option available for those in search of a way to borrow money, and you can usually borrow more with personal loans than you would be able to achieve by dipping into your authorized overdraft in your current account.

However, before you consider taking out a personal loan of any kind, it’s important to make sure that you fully understand how these loans work, what you should be watching out for in order to keep yourself and your finances safe, and how they compare with secured lending options.

How Much Does a Personal Loan Cost?

A personal loan is often a good way to borrow if you need to access a larger amount of cash. In general, loans are typically cheaper the more you want to borrow, up to a maximum limit of around £25,000. Loan companies are required to show the rate or annual percentage rate that are charged on their loans during advertisements. This rate is known as the APR, and it examines any charges and fees that you may need to pay during your time taking out the loan, as well as the interest rate that you will be expected to manage. Ideally, when you are comparing loan options, this is the rate that you should pay attention to. The lower your APR, the cheaper your loan will be.

Bear in mind, however, that when you are examining APR solutions, the advertised APRs you will be able to see on commercials and banners will only be a representative rate. This means that not all successful applicants will necessarily be able to access that rate. However, at least 51% of all borrowers will need to receive the advertised typical loan rate by law.

The biggest problem with this pricing method is that you will need to actually apply for the loan in question before you can find out what sort of rate you will be given by the company you want to borrow from. To find out what kind of rate you can be offered, the provider will need to run a credit search that leaves a mark on your credit file. Unfortunately, if you end up with too many searches in a short period of time, you could have an adverse impact on your credit rating.

Fixed Term and Fixed Rate Loans

The majority of unsecured loan providers cam offer you a certain amount money for a set period of time. This will mean that you will know from the moment that you take out your loan exactly how much you will be expected to pay each month, as well as when the loan is due to be repaid and the amount of interest you will be charged.
Usually, you will be able to borrow anywhere up to £10,000 with a personal loan, although some providers will be willing to offer loans for as much as £25,000. Before you consider taking out a loan with any provider, you should carefully consider whether or not it’s likely that you might end up paying your loan off ahead of time. If you want to pay more than the minimum amount on your loan every month, or you feel that you might want to pay it off completely with a lump amount before your term has finished, you may be charged a penalty for the privilege. Indeed, it’s not unusual for lenders to charge a couple of months of interest to those who want to pay off their loan early.

However, there are some loan providers on the market today who will not charge any fees for early repayment. If you think that you might be able to pay off a loan early, then it makes sense to go for one of these loan options and potentially reduce the amount of interest that you have to pay.

Unsecured or Secured Personal Loans?

The final thing to consider when taking out a personal loan is whether you want it to be secured or unsecured. Secured loans are secured using your assets, which could mean that if you fail to make repayments that your property gets repossessed. Because of the risks associated with secured loans, it’s crucial to be very careful. However, secured loans are best for people who need to borrow a large amount.

Secured loans also come with variable rates, which could mean that your provider ends up raising the cost of borrowing at any time. However, because unsecured loans come at a fixed rate, you know exactly how much you’ll be paying each month.

What You Should Know about Cashback Credit Cards

In simple terms, a cashback credit card gives you the opportunity to earn money back every time you spend. Basically, you go to a store and spend some money, then a portion of whatever you spend is given back to you in the form of points or rewards. So, a good example of a cashback credit card would be a card that pays 1% every time you spend money in a certain shop. This particular card would mean that when you spent £100, you would get £1 back.

Although the percentage that you earn with cash-back credit cards might not seem like much, if you know how to use your credit cards properly, it can be a great way to save a little extra money here and there. Usually, cashback is paid on an annual basis, though some will give you what you earned on a monthly basis.

How Cashback Credit Cards Work

Cashback credit cards give you rewards when you shop. Reward points are typically available to be exchanged at any point so long as you have enough to qualify for a certain reward. Cashback credit cards can work in a variety of ways. For example, some cashback cards will pay a flat rate of cashback regardless of how much you’re spending, or where you’re spending your money.

Alternatively, other cards will pay tiered cashback rates depending on the amount you spend. For example, if the amount you spend is less than £5,000 annually, you might only get a 1% cashback. However, if you spend more than that, the amount you get in cashback could double. Additionally, some cards will also offer differing levels of rewards on where you end up spending money. For instance, you might get 1% on the money you spend in certain supermarkets, and 2% on fashion stores.

When Are Cashback Cards Useful

So, when might it be a good idea to get a cashback credit card? The answer is when you are able to pay your credit bill off in full every month. If you can make sure that you pay off your balance every month, then you’re basically getting free money. Simply put, you’re being rewarded for spending money that you would have spent anyway.

However, if you can’t always pay all of your credit card bill, then getting a cash back card is not a good idea for you. While you’ll still earn the cashback you want on the amount you spend, you’ll find that the amount you earn is usually less than the interest that’s charged on your debt.

It’s important to remember that some card providers might attempt to convince you that you should take out a cashback card by coming up with a range of scenarios that will allow you to earn a fortune in rewards. However, if you always pay for your items in cash, and you don’t intend to make a change, then you won’t earn anything at all.

At the same time, one very important thing to remember when it comes to cashback credit cards, is that you shouldn’t let yourself get tempted into spending more money just so you can earn more cashback. Sometimes, people who struggle with their spending habits convince themselves to buy things that they don’t need, or even items that they can’t afford, because they feel like they’re getting a reward for doing so. This kind of behavior can be very dangerous and quickly lead to debt.

What to Remember about Cashback Credit Cards

One good thing to keep in mind when you’re thinking about applying for a cashback card, is that you may need to pay an amount every year for your card. These fees can range from a few pounds, way up to hundreds of pounds for certain premium membership cards. It’s important that you factor these fees into your decision to get a cashback credit card, and make sure that you can afford whatever you’re signing up for. If you only do a very small amount of spending on your card each month, and it’s unlikely that you will increase that spending, then you might find that the cashback you would earn from your card is over-ridden by the fees.

If you want to make sure that you earn the very most cashback possible from your rewards card, then it can make sense to transfer all of the spending that you typically do each month onto your credit card. However, you shouldn’t look at this option as an excuse to spend more than you would on a typical basis. Remember, earning more cashback won’t help if you can’t pay back the money you owe.

The golden rule with cashback credit cards is that you should always make sure that you pay back what you owe at the end of every month, before you can start to generate interest on your account that will wipe out your earnings.

Your Simple Guide to Store Credit Cards

Store cards are something that many people know about, but few people actually understand. These cards should often be handled with care and caution, because they can easily lead to debt and financial problems if they’re used incorrectly. Although store cards can be very useful in certain circumstances, particularly if you are sure that you’re disciplined enough to pay back the money that you owe, they can also be very dangerous and expensive.

The most important thing to remember about store cards is that it’s usually a good idea to look around at the other financial options that are available to you, and find out whether there are more effective credit options out there.

How do Store Cards Work?

A store card is basically a kind of credit card that you can only use in connection with certain high street groups or chains. A lot like a standard credit card, you can use these simple financial solutions to buy things using credit, rather than actual cash. This means that you can gradually pay the bill off, or wait to pay it off until the end of the month.

Although this can seem very useful, it’s worth remembering that a store card, just like a standard credit card, comes with interest that will be charged to your account if you don’t pay off the minimum amount on time. These interest rates are often much higher than they are on standard credit cards.

There are a wide range of different companies and high-street brands around the world today that will offer you a store credit card or store card when you shop with them. These cards often come with exciting introductory deals, such as a certain percentage off your purchase for so many months, or a great initial discount. Some even come with money-off vouchers and reductions when you buy online. To get a store credit card, you will need to be at least 18, and you’ll also have to have a credit check.

The Benefits of Store Credit Cards

The benefits of store credit cards are pretty obvious. They’re convenient and easy to use, and they’re a great way to save money on your purchases if you buy quite a lot from a particular store or brand. Many store cards come with freebies and discounts that include money-off vouchers, occasional discounts, and introductory benefits. However, it’s important to remember that if you don’t pay off the amount you owe on your card, the resulting interest could add up to a lot more than what the introductory benefits and discounts are actually worth.

Most of the time, the only reason you should consider taking out a store credit card is if you spend a lot of time with the store in question, and often spend a lot of money there. Even in these cases, it’s important to make sure that you’re completely in control of your spending and you have no problems with paying back what you borrow each month. You might consider setting an arrangement to pay your bill by direct debit to ensure that you never forget one of your payments.

The Problems with Store Cards

The problem with store credit cards is that they often come with very high interest rates that can put you in a very dangerous position if you’re unable to pay off the money you owe on time. You can also only use your store card to pay for things within a particular high-street chain.

These cards are typically sold by assistants within the store, rather than financial advisors. However, the truth is that you should always get plenty of information about how a credit card works before you sign up for something. Most sales assistants don’t have the right amount of training to give you the guidance you need, and this could mean that you end up getting into trouble.

Before you Get a Store Card

Even if you feel confident that you can pay your store card bills each month, you should think very carefully before you make the decision to take out a store card. For instance, you might want to think about comparing the benefits you would get with a store card with the discounts and benefits of cash-back credit cards, which generally give a lot more flexibility.

Store cards tend to charge much more interest than average credit cards. Before you sign up, make sure that you look at the APR, as this will help you to compare the various costs of your card with other ways that you can borrow. To avoid paying too much interest, your aim should be to pay off as much of your bill as you can each month. Your statement should be able to give you an insight into the minimum amount you need to pay, but if you stick to this amount your debt will take longer to pay off.