Car Loans

Where to find the Lowest Rate Car Loan

Getting a car loan is not much fun. Cars can be very convenient, help us to do a lot of things we would otherwise not be able to do and help a lot of people to get to work. However, they cost a lot of money and a lot of people will need to get out a loan in order to pay for one. Therefore if you are looking for a car loan then where can you find the best rates?

It is very convenient to organise your car loan through the car dealer. They may even give you a bit of money off the cost of the ca if you take the finance through them. However, it is likely that you will not get the best possible deal this way. Make sure that you compare their deals, including any reduction in price you get for the car, with other places that offer loans. You are likely to find that you can get a better deal elsewhere. This is because the dealer will often offer cars at a low price but make their profits from the finance deal. You could end up paying charges as well as high interest and so it is worth adding up the cost of this sort of finance and comparing it with others.

Often a secure loan from a financial institution could be cheaper. Take a look at your options and see what is available. With these you will also need to calculate the total cost, so not just how much you will pay out in total for interest but add in any other costs as well. There may be administration charges for setting up the loan and possibly other fees as well.

It might be tempting to use a credit card or unsecured loan to pay for a new car. This is unwise though because they are very expensive. The interest rate on these sorts of loans are very high and so unless you really need the car and can find no other ways to finance the purchase, then these should be avoided.

It is worth considering whether you can pay for the car with your savings or whether you have enough time to save up to pay for it without borrowing money. Most loans are expensive and this would be a way to avoid these costs. However, there are some interest free loans which could be worth considering. An interest free credit card, for example, could be a good choice. You will need to make sure that you pay back what is owed before the interest free period ends though, as once it goes to the standard variable rate you could start paying a very large amount of interest. However, if you pay back some each month, spreading the cost of what is owed over the zero interest period, then you should be able to take advantage of this deal. Sometimes car dealers offer 0% finance deals as well. These can seem attractive but it is worth being aware of a few things. The cost of the finance may partly be added into the cost of the car and so you may find a similar car cheaper elsewhere. If you miss a payment, you may find that the amount that you are charged is far higher than if you miss one with another lender. It is worth comparing the different charges to see. You may think this is not worth it because you do not think that you will miss a payment but it is worth being aware anyway, just in case.

Another thing to be aware of is any early redemption fee. These are charged if you want to pay the loan back early. You might think that you will want to do this in the future so that you can get rid of the debt early and save money on interest. However, some lenders will charge you. If you want to do this. You may just be charged a month’s interest, which could be reasonable if you still have a year to pay so are saving 12 months interest by doing so. However, you could be charged significantly more and it may not even be worth paying it off early. So if you think you will be likely to want to pay it off early, make sure that you check for this.

Home Loans

Is a Home Equity Loan Worth Considering?

A home equity loan allows you to release some equity in the home that you own. It is usually something which is considered once a mortgage is paid off and the homeowners want to release some of the equity tied up in their home. This could be to allow them to have a better quality of life, to give to family or to enjoy. Some people are very much against them but there are others that are really keen on them.

The main reason for people not liking home equity loans is because they think that they do not give good value. They do work in different ways depending on the lender so this could help to determine whether they are good or not. However, basically you will be able to money released form the value of your home and when you no longer need it, it will be sold and the loan repaid from the proceeds of the sale. In some deals the whole home is bought outright but the sellers can live in there and pay rent. In other deals a percentage of the value is given in a lump sum or sometimes several lump sums are given at different time.

Many financial advisors will advise against this sort of loan. They feel that they are not good value because you do not get back the same value of the house compared to what you would get if it was sold normally when no longer needed. This means that if you were hoping to pass it on to someone, it will not be worth so much. Therefore it means that your assets are very much reduced which is not a financially savvy thing to do.

However, decisions like this are not always about the money, but often about the specific situation you are in. It might be that you have no one to leave your home too and so feel like you may as well spend the money contained within it and have a enjoyable time with it. You may desperately need the money and so feel that by releasing some capital in the home you can get it. You may wish to pass the money on early so that you can watch your family enjoying it.

There are alternatives though which might be more financially savvy. You could downsize, meaning selling your home, moving to a cheaper one and releasing the money that way. This assumes that you will be happy in a different home and that you are prepared to move. You could rent out some of the rooms of your home, if you have empty ones, to generate some income. You could borrow money using a cheaper type of loan and the home as collateral, but this may not be easy to do as lenders tend to like borrowers to have an income and often this is not the case for those wanting to release some equity in their homes. They can often have very few options to get some money if they want it.

It is therefore difficult to decide whether equity release is a good thing or not. It very much depends on the individual situation, what they want the money for and how much they have available. It is worth noting too, that it is possible that the house will need to be sold to pay for care in old age anyway and so perhaps releasing some equity in it and spending it before this happens could mean that the money would actually be enjoyed by those that earned it rather than being paid out for care. However, it might be that having money available to pay for a carer or care home would be preferable so that more of choice would be available rather than just relying on what the local council had to offer.

There are lots of factors to consider. It is wise to spend a lot of time making this decision and thinking about the pros and cons. It is also good to compare the different equity release deals available so that you are aware of what there is to choose from and how much they might cost so if you do decide to go ahead, you will be able to find the best possible deal to suit you and your taste.


Why Getting a Business Loan is so Hard

If you have ever tried to get a business loan you will know how difficult it can be. It can almost seem that it is not worth trying to borrow sometimes. Some small business owners will even take out a personal loan to finance their business activities but this can cause lots of problems and pressure on household finances.

To lend to a business a lender will need to feel that they have complete faith that they will be able to repay the money that they have borrowed. They will want to see a business plan and see where the money will be invested and how it is predicted that the money will benefit the business and increase the profits. They will need to see that the profits will be increased enough to cover the cost of the loan repayments.

Banks do seem to be lending a lot of money lately, but they do not always extend this generosity to businesses. A lot of loans they do approve are secure loans so they have some comeback should the repayments not be met. They are able to repossess items and sell them to get their money back. With a business this is not something that can be done.

Sadly a lot of small businesses do not succeed. It can be much more difficult than anyone may think to start a business. There can also be a lot of high expenses when setting up and then there can be a period where very little income comes in. This can be very difficult and the new business owner is not able to pay themselves any money and could even get into personal finance difficulties as well. As lenders are aware of this it will mean that they are very reluctant to lend money.
A lot of people also start a business with very little knowledge of what they are doing. It can all seem like a great opportunity and great fun but there is so much to learn and very little time to find your feet before you need to get going. Therefore it is really important to show a lender that you are ready for the challenges ahead.

Already having secured some funding in the business can be a positive step forward. If you can show a lender that there is someone else that is prepared to lend your business finance then they are more likely to agree to doing it themselves.

Even established businesses may have trouble getting loans for similar reasons. They will still have to show that they are very capable of making the necessary repayments. As business loans are usually long term ones it is hard to know what might happen in the future. The lender ill want to be sure that they can be paid back and they will want reassurance that there will be the capital available in the future to be able to do this.

This problem of not being able to get business loans means that some businesses now look for alternative ways to get finance. Crowdfunding is a popular way for them to try to do this and peer to peer lending is also an alternative loan which is sometimes used. These can be more successful for some businesses particularly if traditional lenders are being reluctant to lend to anyone, which they can be at times.

It is really important to be able to prove to a potential lender that you have a realistic long term plan of how to make enough money to pay the loan back. You need to show them how that investment in your business will lead to increased profits and therefore mean that you will have the money available to make the repayments. It is necessary to show all the figures for this and to provide evidence for your conclusions. If you can perhaps show how other businesses have grown as a result of a similar investment this would be really useful. You also need to be confident and chat to them, explaining your reasoning so that it all makes sense to them. You may have better luck from a local lender who may already be familiar with your business or perhaps with your local market.