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The cost of credit is a worry for anyone borrowing money at the moment. Large corporations are finding their normal channels of funding restricted and more expensive and individual borrowers need to shop around carefully to find the best loan deals.
The topic of interest rates is a key one for anyone arranging a loan and it's certainly been a dynamic area over the past 2 weeks. Twice interest rates in the US have been slashed and the UK has follwowed suit today, albeit with a more conservative reduction. We've just updated our loans best buy tables and left the old data from last July in place so that you can compare how rates have changed.
Loans and mortgages rates are under review following the global turmoil in credit markets.
With lenders around the world now worried about increasing defaults on loan and mortgage repayments, which were first seen in the US, many of them are now reviewing interest rates across product ranges. The general direction is towards a period of more conservative lending, with companies approving smaller loans and restricting lending for applicants with poor credit histories. This does not mean that loans will not be available to those borrowers, just that they may be caharged more interest or be only allowed smaller loans.
Interest rates were again the focus in July with the base rate remaining static at 5.75% after last months increase. Most industry watchers expect one further increase before the year-end unless the economy rapidly recovers it's inflation rate situation. Confidence in this situation is displayed by many loan companies now setting their lowest rates at just above the 6% mark on their 3 year deals for borrowers with clean credit records taking an unsecured loan.
Credit card fraud hit the headlines again recently, when it was leaked that the government had released new rules about how police forces should deal with card fraud. The rules mean that reported cases should be refered back to the banks. Many see this as decriminalising card fraud and the BBC has already identified 2 police forces who have not tackled any reported card fraud cases since April. This all points to lack of police resources and there are reports that because they unable to tackle these crimes, there is little point in recording them when they are reported. The BBC also reported decreasing police numbers in fraud departments across the country. So the message seems to be "Take car of your own credit card", because there will be less help if you experience any trouble.
The start of summer brought an unwelcome, but expected, increase in base interest rates, with 5.75% now the highest rate for six years. Back in 2000 the rate stayed at 6% for almost the whole year, so we should be used to coping with these levels, but the housing and mortgage situation looks very different now, with house prices having more than doubled and many people spending much more of their net income on mortgage payments. The net effect is that each increase in rates hurts these unfortunate people very quickly and if rates continue to rise over the summer months, then there could be some serious consequences for those who have stretched themselves to get on the housing ladder.
The Financial Services Authority has been busy reviewing the way finance companies are promoting and selling payment protection insurance. It's a product designed to help people maintain repayments on credit arrangements like loans, mortgages or credit cards should their earnings be reduced through unexpected sickness or unemployment. It's also known a Accident Sickness and Unemployment (ASU) insurance. The FSA has been conducting some in-depth research into hundreds of firms, looking at the way the product is promoted and whether customers are being treated fairly. The FSA doesn't have an issue with the need for such a product, just the way in which sales staff get customers to sign up for it (if they even know they are), whether they are being given good advice. They are looking a the transparency of the sales process, ie do customers know what they are buying and do they really need it?
Interest rate predictions for the next few months and years are elemental for deciding on which fixed rate mortgage deals are worth considering. Many people whose fixed rate deals came to an end in recent months were faced with a tough choice. Did they lock themselves into another fixed rate deal at a rate much higher than the one they had just left behind or did they take more of a gamble this and bet on a variable rate deal and hope that rates would start to go back down again? Well some indications to help them decide have recently come to light, with several mortgage lenders chosing to drop their 3 and 5 year fixed rate deals.
For larger loans it's even more important to borrow with the best interest rate. Do your research carefully and you could stop throwing thousands of pounds of your money away. Most lenders should offer cheaper rates on larger loans, so if yours is not, then shop around.
Deciding on the right time to remortgage used to be fairly simple - you checked your rate every 2 years, normally found you were on course to get ripped off and made a switch. It's not that simple now with sign-up fees and admin charges taking the cream out of new deals, so use our pages to help you research the best remortgage deals.
It's now very easy to recover overcharged fees on any mortgage completions you may have carried out in the past 2 or 3 years. The banks and building societies have been handing back millions of pounds recently, so read our article on how to get your money back.
The mortgage market is set to tighten up soon with all the fallout from the US Sub-prime situation still to surface. One thing not in doubt is that fewer firms will offer cheap mortgage deals to applicants with poor credit histories, so with literally thousands of deals and rates to chose from finding a cheap mortgage if you have adverse credit history will become more difficult. Use this site to help yo uget on the right track.
How do you judge the best rate loans from those available at the moment? Rates are changing almost weekly at the moment, with lenders evaluating their deals in the light of interest rate increases and uncertainty in the mortgage marketplace.
Statistics show that many people stick with their credit card for several years without paying much attention to the deal they are on and the money they are paying. Taking a regular look at what's on offer could pay dividends!
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Betterborrowing.co.uk is dedicated to offering easy loans and finance information on how to borrow money, news, guidance, opinion and tools to help you get the best deal on any borrowing you need. Whether you need to borrow with a short-term cash loan (or payday loan) to help you get by or you need to borrow money with a larger loan (personal loan) to purchase a car or perhaps need a mortgage on a property, then our pages contain all the information you'll need to find the best deals and make an informed decision. We are not tied to any company and act independently so we can bring you borrowing information from the whole market.
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You can use the site in a number of different ways - If you know what you want then you can go straight to our QuickAccess tools to get a quotation or you can read our information pages to find out a little more before you look to borrow money. We provide step-by-step guides to help you through the decision making process and we also have individual reviews on hundreds of companies so you can read up on who you are dealing with. We update our information and articles on a regular basis so you can be sure to stay in touch with what's going on in the finance space.
We also carry all the current news related to any type of borrowing: including the latest offers on loans, mortgages and credit cards and other forms of finance.
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If you have the time, the site has dedicated sections for each type of borrowing; tips and tools for finding the best deals and various partnerships with companies to bring you fast access to the latest offers. You can also sign-up to our email news service to stay in touch with the best rates and offers on the market.
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