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Lending

How to Choose the Best Payday Lender

When you are looking to borrow money, whether taking out a loan, credit card, mortgage, overdraft or any other sort of lending, it is important to pick a good lender. They vary a lot and you need to be confident that you are choosing the best one.

It is easy to think that you will just need the cheapest lender. The one that will provide what you need at the best possible price. Of course, this is really important and you want to make sure that you are not overpaying or what you need. However, there is more to borrowing than just the cost of it.

If you are borrowing at a variable rate then you may find that the competitive price that you signed up with will change. This means that suddenly you will find that you are paying over the odds. The does not happen with all lenders though and so you will need to do some research and think about who you can trust. Ask other people about who they use for lending and read online reviews as well. People are not afraid to give their opinions about things like this these days and so it should be easy enough to find out more about different lenders and what people feel about them. Finding more out about the lenders is a wise thing to do anyway. You will be able to find out all sorts of information about them which will help you know whether they are right for you. You will need to be aware that some people may find fault with things that would not be a concern to you and that everyone makes mistakes so there will be negative comments for all lenders. However, some may have a lot more than others and some may deal with their mistakes more professionally than others as well. So take this into consideration as you will need to remain open minded.

Another thing to consider are the fees and costs. You are likely to just start by comparing the interest rates, but you need to consider how much they charge for other things as well. There may be administration charges, for example, fees for paying off early, fees for extra statements and definitely fees if you miss a repayment. It is worth finding out all about these fees and using them to compare lenders as well. You may think that you will always be able to pay on time, but it is always wise to know how much the charges are if you do not, just in case. You need to consider that they need to make money somewhere and if they have a competitive interest rate then they may have higher fees to make up for that. This is why it is important to read the terms and conditions first as you will be able to find out this information.

Customer service is really important as well. You want a lender that will be able to answer your questions and queries if you need to talk to them. You may like there to be a branch nearby so that you can talk to someone face to face or you may be happy with online banking or telephone banking. Think about which will suit you and your lifestyle the best and what sort of service you would expect to get. You can always enquire with questions about the loan before you take it out and you will then be able to test whether you think that they are up to scratch by your standards. It is worth trying different methods of contacting them as well, so that you can see if they are as good online and on the telephone as they are face to face, for example.

For some people branding is important. You may only want to borrow from a lender that you have heard of or that you know has a good reputation. There are many smaller lenders as well as the well-known ones available and you will need to decide which you prefer. You may feel that a well-known brand will give you a better service because they have a reputation but a smaller lender cannot afford to make too many mistakes as it is more vulnerable. It is worth having a think about whether this is something that is important to you.

So there is a lot to think about when choosing a lender. It is worth thinking beyond the cost so that you make sure that you really do choose the right lender. There is a lot to think about and It can be a big decision, particularly if you are borrowing a big sun of money and so you need to be sure that you are using the right company to help you.

Mortgages

Fixed vs Variable Rate Mortgages

If you are choosing a mortgage then you will find that there are a lot of options out there. There are many different lenders to choose between as well as many different mortgage types. It can be wise to employ a financial advisor to explain things to you and to help you to decide which is the best. However, to help with some of the basics here is an explanation of the main differences between fixed rate and variable rate mortgages.

With a fixed rate mortgage, the interest rate that is charged on the money that you owe will not change. This means that you will know exactly what your repayments will be as they will not change if the base rate changes. However, it will not be fixed for the full term of the mortgage but for a number of years, this is likely to be between one and five years. It can be useful for those not used to paying a mortgage to know exactly how much money they will be paying each month rather than worrying that the amount may change. It can also be useful in a time when interest rates may rise and this would increase a variable rate However, there are disadvantages as well. You may find that you are tied into to a fixed rate deal meaning that for the fixed rate term you cannot change mortgage companies.

This means that if the rate falls and you find that your fixed rate is far higher than you would be paying elsewhere, you will not be able to move your mortgage. If you have a five year deal and the rates fall within the first year, you will be paying over the odds for a long time. Of course, you will need to think about whether the rates are likely to rise or fall and consider what the rate is and whether it is that far away from the current rate to make it worthwhile.

A variable rate can change at any time. This normally means that the lender can change it whenever they like. Therefore if interest rates go up, they will be able to increase the variable rate right away but if they go down they can choose not to lower them. They can, in fact, change the rates at any time and so they may decide to put them up even if the base rate does not increase. This can lead to uncertainty as you will not know how much you will need to pay each month. However, it is worth remembering that most of what you pay each month is likely to be the repayment of the mortgage rather than the interest and so a change in the interest amount will probably be small compared to the total repayment that you are making. You can also opt for a tracker mortgage where the mortgage interest rate tracks the base rate and only changes when that changes. This could be considered to be fairer and you will find that as rates move up and down your payments change accordingly. The lender will charged a fixed interest rate on top of the base rate so you will need to check this out and see whether you think that it is worth taking out.

So when deciding between a fixed and variable rate you need to consider a few things. You need to think about whether you think interest rates are likely to change in the near future. This can be a hard prediction to make as no one knows what will happen in the future but if you follow economics then you should have some idea of how things have happened in the past, how they are going now and what experts are predicting. If the rate is likely to rise, then you may want to protect yourself by fixing your mortgage rate. If it is likely to fall, you may want a variable rate, but you have to note that even if they do fall, your rate may not automatically fall unless you have a tracker mortgage. You also need to make sure that you can afford a rate increase before you select a variable rate mortgage. As well as the cost you need to consider which you feel will suit you better. You may rather have the peace of mind of knowing exactly how much money is going in and out of your account each month by fixing the rate. You may not want to keep wondering whether the rate may change from month to month and hoping that you will be able to afford it or wondering where you might be able to cut down so you can pay it.

It is worth remembering that your decision is not final though as you can remortgage and change the type of mortgage you have. You may be tied in for a period but you will be free to move after that and you can change the mortgage type if you feel it is the right thing to do.

Credit Cards

Pros and Cons of a Cashback Credit Card

A cashback credit card is one that offers you rewards for spending money. This could mean that you get a percentage cashback at the end of every month which is credited to your credit card account ready to spend the next month.

Similar cards may give you points, vouchers or even air miles, it depends which you choose. There are a lot of options out there depending on which company you decide to go for. The reward will be small though. While interest rates remain really low it is difficult for companies to be able to pay out much in the way of rewards as they are not getting much income in by the way of interest payments, but it is still a way of getting a bit of extra money. If you do a lot of shopping by credit card then you will be able to really benefit by getting something back.

There is a major problem with a cash back credit card compared to other credit cards though. They tend to have a higher interest rate. This means that if you do not pay off all of the money that you owe at the end of the month, you will be paying more interest on it than you would do if you were with an alternative credit card that does not offer cash back. You may also find that you are tempted to spend more money on the credit card because you get a reward for doing so. Although this is fine if you are spending the same amount of money, but using the card when otherwise you may have used cash or a debit card, it gets to be a problem when you are spending extra money just because you get rewarded. The cashback will not be very high compared with the amount that you are spending and so you need to try to avoid doing this. Spending more money may also mean that you struggle to pay it off and you may end up leaving a balance unpaid and you will end up paying those high interest rates.

It is therefore worth thinking about what sort of person you are and whether you think a card like this is a good idea. It is perfect for anyone who always pays their balance off in full each month and who is in control of their spending. If you know that you will not over use the card and will be able to pay it off in full then you will benefit from it and you will just need to decide which card is the right one for you. Look at the various rewards on offer and think about which one would benefit you the most. Cash is easy and flexible but you may get more back if you choose a points card or airmiles card, as long as it is something that you know you will use then it will be worth it. Do check though, to make sure that there are no charges associated with the card, anything like a yearly fee or similar. They will obviously be a charge for not paying it back on time, but there may be other fees as well. If you want to draw out cash, use the card abroad or any other specialist services then there will be charges and it is worth comparing those if you think that it is something that you will use in the future.

There are some people that should not have a credit card at all. People that will spend a lot of money on them and then only pay off the minimum. It is not a fault with that person, just that is what they like to do. However, it can mean that anything that they buy on a credit card is very expensive as the interest payments really add up.

Therefore, despite any cash backs offer that tempt them, they should avoid a credit card so that they do not get into financial difficulty. A cashback credit card is also more expensive than non-cashback cards and therefore is even less suitable for this type of personality. Try not to be tempted by the offers and just concentrate on paying back any cards you already have and not spending more than you can afford. It is not easy but is the best thing to do in the long run.