Personal Loans – The Best Way To Borrow?

Are personal loans the cheapest method of borrowing?
Wellsometimes is the best answer, personal loans can be a
cheap and effective way to access funding but lets examine the
alternatives
using lifetime or 0% balance transfers on credit cards
if you have several cards, or your credit can handle obtaining
additional cards, and you are looking to borrow short to medium
term, say 2-5 years, then why not take advantage of all those
balance transfer offers you probably already recieve via junk
mail almost daily! For example if you have £5000 of available
credit on an existing card simply write a cheque on the card for
£5000 ( or maximum available under card terms and conditions)
deposit into your bank account and then transfer debt on
existing card to a new card at 0% interest Note – 0% APR is
a pretty good rate not beaten by any personal loan offers no
matter how cheap!
Do you have access to any other borrowing already? Many
nowadays have a flexible mortgage, or at least a mortgage with
some amount of flexibility built in, in terms of repayments and
further borrowing Are the rates better with your existing
mortgage company for the further borrowing required, or, if you
have not remortgaged in last 5 years could you save money on
existing mortgage AND include further borrowing in a remortgage
deal? It is worth crunching some numbers in this situation, a
few hours spent investigating the remortgage options can save
thousands of pounds over next few years>
Ok, a personal loan is the best/only option for me, what should
I look out for? Firstly, do a bit of research before calling or
applying online, be forearmed with repayment figures both with
and without the optional insurance for the advertised rates It
is all to easy to find cheapest loan rate available then end up
paying through the nose for insurance as this is subtly added to
almost all quotes via telephone or online, remember insurance is
optional and can be arranged by many companies, once again shop
around for best rates just like you did for the loan – it is a
seperate product afer all!
Secondly beware of the “typical rates” scam, typical rate means
the rate that most people pay, not the rate you will be offered!
make sure you are aware of the exact APR before committing to
any agreement, it may well be that another lender with a higher
“typical rate” may in fact offer you as an individual the best
ACTUAL rate
Lastly checkout the rate tiers – by this I mean that many lender
offer reducing rates of interest on higher amounts, for example
£1000-£5000, 117%

£5001-£10000, 99%

£10001-£25000, 79%

In the above example if you were looking to borrow £5000 it
would make sound financial sense to borrow £5001 at a much
cheaper rate!
Pers
onal and secured loans along with other financial products
are becoming more and more complex due to increased competition
within the industry caused by deregulation To cut through the
jargon and sales patter visit FM Money, the financial
site designed for UK people looking for best deals and lowest
bills For USA residents check out FM Moneycom for all the
latest news on loans and finance matters in the US

Tags | cheque, flexible, lifetime, medium, mortgage, optional, remortgage, repayments, transfer, transfers