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Monthly Archives: September 2016

Being Dept Free?, Here Its Tips

# Work out the amount you owe

With home loans, Mastercards and credits all piece of ordinary cutting edge life, it can be difficult to monitor what you owe. Be that as it may, you can’t work out how handle your obligations until you know the sort of aggregate you have to pay off.

Take a seat and make a rundown of the considerable number of banks and different loan specialists you owe cash to (aside from your home loan moneylender). The aggregate figure may be somewhat of a stun, however this is the total that you have to manage on the off chance that you need to be without obligation and it’s the main place to begin.

# Consolidate your debts

Once you know how much unsecured debt – which includes credit cards, store cards, personal loans and overdrafts – you have, the next step is to work out how much interest you are paying on those debts.

For example, you might have a personal loan at an Annual Percentage Rate (APR) of 7%, an arranged overdraft at 18% and two credit cards, one at 15% and one at 18%.

However your debt burden is comprised, you will find it a lot easier to manage if you move the total to one place – and, if you choose this place wisely – a lot cheaper too.

# Slash your interest charges

The right new home for your debt will depend on how much you have and where it’s held. If you owe £5,000 on a credit card for example, then a 0% balance transfer credit card will mean you stop paying interest on that debt altogether. In other words, your repayments will be used solely to pay off your capital balance.

Borrowers with good credit scores can currently get up to 29 months interest-free withBarclaycard’s Platinum Extended Balance Transfer Credit Card (subject to a fee of 2.79% of the debt being transferred) or 15 months at 0% with the Halifax All in One Card, which charges a fee of just 0.8%.

If, on the other hand, you owe into double digits across a range of borrowing, one low-rate personal loan could be the best option. Not only do personal loans generally allow you to borrow larger amounts, they also come with a fixed repayment plan that will help less organised borrowers get back on track.

The good news is, the cost of personal loans is at rock bottom at the moment – especially on medium-sized borrowing of between £7,500 and £15,000.

# Talk to your lender(s)

If you are already at the stage where you have been forced to miss payments because your debt burden is too heavy, the best advice is to seize the day.

If, for example, you are worried about meeting your mortgage payment (which, alongside rent payments, should always be your first priority), a phone call to your mortgage lender could be the start to the solution.

For example, your lender may agree to extend the term of the loan which will reduce your monthly payments, temporarily move you onto an interest-only deal, or even give you a payment holiday while you get back on your feet. It will be much less sympathetic if you only get in touch after you have started missing payments.

# Seek free debt advice

Switching to cheaper deals or talking to lenders is all very well. But for people with real debt problems, it could be too little, too late.

Even if your debts are really getting on top of you, though, it’s never too late to take action.

Contact a free debt advice charity such as StepChange which will help you decide the best way out. This could be anything from a Debt Management Plan to an Individual Voluntary Arrangement (IVA) or even filing for bankruptcy.

But at least your road to financial recovery will have started.

Take a Credit Card or Loans?

On the off chance that you have Visa obligations, your money related need – whether it’s a New Year or not – ought to pay them off as fast and as inexpensively as could reasonably be expected.

What’s more, changing them to a 0% Mastercard or paying them off with an ease credit, are two keen approaches to get on the way to budgetary flexibility.

In any case, with individual advance rates at record-breaking lows, and a heap of splitting Visa bargains hitting available, which would it be a good idea for you to carry out the employment?

Both alternatives have upsides and downsides. That is the reason we’ve investigated the arrangements accessible so you can settle on the right decision and quit being a borrower (beside a home loan on the off chance that you have one), within the near future.

# Personal loans

Pros

If you are considering taking out a personal loan with which to pay off credit card debt, the good news is there’s never been a better time to bag a bargain interest rate.

Loan providers are locked in a price war that has driven rates down to the lowest ever level. We have a new exclusive deal with the AA for example, which charges just 4.6% (representative) on borrowing between £7,500 and £15,000 – whether you are a member with the AA or not.

On the off chance that you are thinking about taking out an individual advance with which to pay off Visa obligation, the uplifting news is there’s never been a superior time to pack a deal financing cost.

The deal, sits joint market leading with Sainsbury’s Bank which has recently cut rates to 4.6% on its Shopper Standard Loan for the same borrowing amounts. This representative APR applies to loans taken from three to five years, though. If you want to borrow for a shorter period, the APR goes up to 4.7%.

M&S Bank has also slashed rates on its one to five-year Cardholder Loans of between £7,500 and £15,000 to 4.7%. Although, as the name suggests, this is for M&S current account customers only. For new customers, the representative APR is a fixed 4.8%.  Clydesdale and Yorkshire banks however, have also pegged their personal loan rates down to 4.7% in deals which are available to all.

As long as your credit score qualifies for these deals, you can therefore borrow at well under 5% and enjoy the security of knowing that you will be debt-free at the end of the term of fixed monthly repayments for which you sign up.

Cons

But what if you don’t owe as much as £7,500? Rates on these so-called mid-range loans (from £7,500 to £15,000) are the cheapest on the market – and also tend to be the preferred battleground for lenders vying to top the best buy tables. Rates on loan amounts that fall either side of these upper and lower thresholds are more expensive.

The new M&S rates, for example, are set at 6.1% APR for loans of between £5,000 and £7,499 and at 6.7% APR on between £15,001 and £25,000.

And loans on small amounts, say £2,000, will pay much more at 18.5% APR.

In any of these cases, loans become much less appealing – especially when you can avoid interest altogether by taking out a 0% balance transfer credit card.

# Credit Card

Pros

If loan rates are looking good at the moment, they are certainly not outshining the deals available on balance transfer cards, which now offer up to an incredible 30 months at 0%.

That’s the interest-free period currently being offered by the Barclaycard Platinum Credit Card with Extended Balance Transfer.

The length of the 0% offer means you get almost two and a half years to pay off your debts without paying a penny in interest. You will, however, have to pay a fee – in this case 2.89% of the balance being transferred.

If you can clear your debts in a shorter time frame, it makes sense to look at other cards with lower balance transfer fees.

These include the Lloyds Bank Platinum 24 Month Balance Transfer Card and the Bank of Scotland Platinum Credit Card, both of which allow you 24 months at 0% to clear your debts for a fee of 1.5% (both of which are refunded from 3%).

You can pay even less if you can manage with just 12 months to clear your debt balance transfer. The Fluid Low Fee Balance Transfer deal offers 0% for this long for a 0.75% fee.

And Barclaycard offers the same time for a 0.79% fee (refunded from 1.2%) on its Platinum Balance Transfer Card with Low Fee.

Cons

Balance transfer fees charged by the card companies behind all the longest 0% deals are not the only disadvantage to using a credit card to pay off your debts.

You also need to bear in mind that you will end up paying the representative APR on the card if you fail to clear your debts in time.

The APR on the Barclaycard Platinum Credit Card is painfully high at 18.9%, while the APRs on the Lloyds and Bank of Scotland cards are not much lower at 17.9%. Bear in mind these APRs are also representative so could even be higher. But running over by just a month or two could cost you a serious amount of money.

And that could happen if you are undisciplined, or really struggling to make ends meet, which is why the fixed repayments required over a fixed time on personal loans are a better way for some people to clear debts.

Balance transfer card providers also limit their top deals to new customers. So anyone with debts on a Barclaycard, for example, will not be able to benefit from the longest 0% deal on the market, regardless of their credit score.

# Still unsure?

The summaries below should help you to make a decision if you are still undecided as to whether a credit card or a loan is best for you.

# Opt for personal loan if you :

  • Owe more than £7,500
  • Need more than 2.5 years to pay off your debt
  • Can struggle to live within your means
  • Like the security of fixed repayments

# Take out a 0% credit card if you :

  • Owe less than £5,000
  • Are disciplined enough to stick to your own repayment plan
  • Can definitely pay your debt off in 24-30 months
  • Want to avoid paying interest altogether

De-Stress Financial Life, Here Its Tips

de-stress-financial-life# Deal with your debts

Being pursued by moneylenders for cash you don’t have is a standout amongst the most distressing things that can transpire. What’s more, stressing over whether you’ll have the capacity to meet your next home loan or advance installment is positively enough to keep you up around evening time.

In any case, putting your head in the sand and attempting to disregard the issue is most likely the most noticeably awful thing you could do.

In case you’re agonized over paying your home loan, a snappy call to your bank could be the arrangement. Numerous banks or building social orders offer transient installment occasions to those in budgetary boiling hot water – yet they will be a great deal less thoughtful in the event that you just reach after you have begun missing installments.

In case you’re an occupant, your lease ought to be your money related need similarly as home loan installments – you would prefer not to out the rooftop over your head at hazard.

Other ways to reduce the debt-related stress include consolidating several balances on to one credit card with a long 0% interest balance transfer period (you will need to pay a transfer fee) or using a loan with a competitive rate of interest to clear other high interest debts.

# Catch the savings bug

It can seem hard to put a little aside each month, particularly when cash is tight. But the peace of mind of knowing you’re building a nest egg is priceless, and there are savings accounts to suit every circumstance.

# Get a better deal

It’s a horrible feeling thinking that you are somehow missing out on a better deal.

But that’s probably exactly what is happening if you have not compared financial products such as your mortgage, current account and credit card with the best offers around for a while.

Several of the best two-year fixed-rate mortgage deals on the market at the moment have headline rates of around 1.50%, way below the 4%-plus standard variable rates.

And current accounts often pay higher rates of interest than savings accounts when you agree to pay in a certain amount each month and pay a monthly fee.

# Protect yourself

Taking out insurance is certainly not one of the most exciting things in life, but it is one of the best ways to know that you and your family are protected should anything go wrong.

After all, not having an insurer to cover fire damage to your home, for example, could mean total financial devastation, as could you dying and not leaving a life insurance payout to help your loved ones.

And when it comes to car insurance, you could face a fine of £1,000 or more for failing to have the right cover in place.

To keep your stress levels in check, it makes sense to ensure that all your policies are up to date and offer the cover that you need. Just remember to shop around each year to ensure you don’t pay over the odds.

# Fix your energy prices

The cost of home energy keeps going up, putting an increasing strain on family budgets – and therefore upping their stress levels. However, you can protect yourself from future price hikes by switching to a fixed rate energy deal.

With these deals, the rate you pay for each unit of energy is fixed for a certain period – the longest fixes last until 2017. So if you fix, you bills will remain the same if you use the same amount of energy.

The best deal for you will depend on where you live and how much energy you use (and when). All the information you need to switch to a competitive fixed tariff is on your current bill – and we guide you through the process on our energy channel, so you can find out whether you can save in no more than 10 minutes.

# Bundle your TV, phone and broadband

Grappling with lots of different bills can be confusing and stressful. But the good news is that bundling your TV, phone and broadband together so that you have just one bill for all three could save you money as well as time.

TalkTalk, Virgin and Sky all offer deals of this kind, so why not check out how much you could save – and slash the stress of dealing with all those bills.