Fixed Rate Home Loans Provide Certainty: Newcastle Permanent Building Society Says

If there is one thing that home buyers could use more of, it’s certainty. The financial world is notoriously unsure. Investing money in a business can be a boom or bust proposition. Trying to flip real estate might work well or lead to disaster. Almost everything comes with risk.

Should buying a home be risky?

Home buying shouldn’t be this kind of experience, though. Most people today are buying homes because they think purchasing that home will lead to more financial security. In many respects, they are right, especially if these people are able to purchase a home with a fixed rate loan.

Today’s home buyers are looking to visit NPBS for fixed rate home loans. Lenders like this give home buyers the certainty to know precisely what they are going to owe over the course of the loan. Monthly payments will be certain, giving these individuals the ability to budget their lives moving forward.

For a young person who might want to get started with a real financial future, this kind of certainty is priceless. It only comes for those individuals when they make the smart choice to go with a fixed rate, and leaves them with room to grow their careers and families without additional stress.

Variable vs. Fixed: Cost vs. Security

Some argue that it’s best to go with a variable rate loan. They argue specifically that variable rate loans allow people to take advantage of lower future payments. If you have full confidence that rates are going to go down in the future, then perhaps this approach makes sense.

The problem is that it is very difficult to know what interest rates are going to do in the future. Interest rates on homes are a function of many different factors, most of which are not in your control. While you might think it’s a good idea to take a chance in this regard, many young home buyers come to understand that taking these sorts of risks is not wise.

Fixed Rate Mortgages 1: Variable Rate Loans 0

Home buying should be a secure process that helps the prospective home buyer sink some of his money into a stable asset. This is the purpose of the mortgage, and it’s long served home buyers well. With fixed rate mortgages, this becomes much easier.

Buying a home is a major decision that one should only undertake after looking at many relevant factors. While there may be some people who decide that the risk of a variable rate loan makes sense, most find that fixed rate loans are easily the better choice, esp. if interest rates start to rise.

And remember, not even Janet Yellen can tell you what interest rates will be next year or how much they will rise in 5 years!

Loans in Tough Times: Banks can make it just that much harder

Trying to apply for a loan in a tough economy can often be a challenge. People with bad credit reports and scores have difficult times in securing loans for small amounts. Banks simply do not trust certain people with poor credit history.

Less Formal Lending

Fortunately, there are some institutions and companies that are willing to provide loans without any major hassles and problems. Some companies can lend money by taking any form of collateral from burrowers. For example, a burrower that has an expensive home entertainment system can get a loan for placing such property security for a loan.

Similarly, a vehicle can be used as collateral for a loan that involves thousands of dollars. You can visit for more information on applying for a loan from alternative sources.

Easier to process

These days, loans can be given out online by filling out simple surveys. Loan companies ask potential borrowers a few quick questions. An automated system checks the official information of a client and then accepts or rejects a request for a loan.

Loans that are given out with personal property as collateral usually come with lower interest rates compared to some banks and credit unions. Anyone that has a car title can essentially apply for a quick loan that would be very difficult to obtain from local financial institutions.

Check the interest rate before you borrow, and don’t be seduced by the lowest tier rates. They are teaser rates, for good reason… you could end up paying much more.

Considerable Caveats

There are some considerable caveats that you should note when borrowing finance like this, however.

Firstly, your car (almost any car) is a depreciation asset. In other words, over time your car is becoming less valuable, not more valuable. Therefore, should you be forced to sell your car to repay the loan, it will be worth less than when you borrowed. Check your car resale value yourself so that you can determine how much it is worth, and how quickly the value is depreciation.

Secondly, if you are forced to sell the car to repay the loan, it is likely that the fire sale will reduce the sale value even more as you have to sell in a hurry. And if the company that owns the car title sells the car … well then, as long as they get their money back, they won’t worry too much about the excess value.

Thirdly, and as a consequence of the first point, your interest rate will be higher than a secured loan on a property that you own; because the value is on a depreciating asset, the total amount is lower in value, and therefore the profit margins for the lender will be lower too. You might not want to know this, but this will result in a higher interest rate, and bigger potential penalties for late payment, etc.

However, if you are stuck for short-term funding, and family & friends can’t, then this kind of loan might make a lot of sense, even though the cost & risk is much higher for you.

So cover your a$$ first

You need to make sure you can make the payments! Don’t repeat this kind of borrowing, the interest rates over long periods will skyrocket! And, NEVER EVER, roll the loan over or borrow another loan to repay this one.

PayDay Loans: Fix Your Cashflow Problems, People

If you get a payday loan, it is crucial that you have a plan in place from the very beginning so that you can pay it off. Without the plan, you may not make those payments on time, and then you have to deal with the seriously higher or penalty interest rates. Avoiding those rates should be your goal all of the time because it makes the loans far cheaper.

You will have to pay some initial interest on the loan that you just cannot avoid, but paying over an extended time increases the amount that you pay, making the loan cost more with every passing month. In fact, some payday loans have to be paid back almost immediately, so the rates would be much higher if you do not do so. These tips will help you out.

Keep track of your spending after you get the loan

You want to spend as little as possible, increasing the odds that you have enough money to pay the loan off when it comes due. Keep track of everything, even if it seems tedious. Do not buy things that you do not need. Cutting back can make it easy for you to pay off the loan on time, whether you got it from or another lender, and you are going to love that.

Mark the date that it is due on your calendar

This could mean a physical calendar in your home or it could mean a calendar on your phone. Either way, you need to make a note of this date so that you do not accidentally miss it. You would not be the first person to pay extra in interest just because they did not know that it was time for them to pay off the payday loan. You have to keep track of what is due and when it is due so that everything falls into place.

Use online banking if it is offered to you

Most modern payday loan companies will allow you use to use online banking when you pay them, meaning that you can transfer the money straight from your account to theirs. You definitely want to use this if they offer it to you. It means that you can make the payments in seconds. It also means that you can still pay on time even if you forget until you just have a few hours – or even a few minutes – left.

Fix your cashflow issues

Ultimately, you have to look at the reasons you are running out of cash. Payday loans are an expensive form of credit, designed to stopgap cashflow problems. If you are running into cashflow issues frequently, then there is no other solution but to solve the problem. Extending credit on your outstanding payday loans is seriously detrimental to your cashflow and your personal balance sheet.