Business Loans

All businesses need to obtain finance from time to time. A business loan will normally be required when you start your company up, to pay for the necessary infrastructure and commence trading before your profits start to roll in. Obviously, the size of the business loan that you will need will depend on the nature of your new business: setting up a florists shop will probably be substantially cheaper than establishing a niche private air charter company, for instance!

It could be possible that an agreed overdraft may be all you need to get up and running, but it’s more likely that you will need a business loan from your bank. Again, in difficult financial times such as these, it pays to shop around. You should talk to as many financial institutions as possible to get the best deal for your business loan – but you may find that one lender has an edge over another in the type of support that they may offer to start-up companies alongside the business loan.

Depending upon the magnitude of your ambition, it may also be worth talking to some venture capital firms who may underwrite your business for a stake in it as an alternative to a business loan. In any event, whether you obtain a business loan or other form of funding (and for your own sake) you will need to provide a well thought out business plan to convince people to back you, or offer that all important loan.

A business loan will typically require some form of security (in the event that the business fails, the lender will want some surety of getting their money back); often this will mean using your home as collateral. As with any loan, a key factor to look at will be the APR (annual percentage rate or interest). Loans usually come with a fixed rate of interest or a variable rate of interest and both have different implications for you as the borrower. Both have advantages and disadvantages: a fixed APR means that you agree on a set amount that will be added to your monthly repayment to the bank, regardless of how the Bank of England base rate changes.

This has the advantage of predictability as you can determine the cost with certainty and they will not vary over the lifetime of your loan. If you could obtain this type of financing, now is the best time since UK bank lending rates are at historically low levels (and will probably only go up). On the other hand a variable rate of interest is less attractive at a time of low rates because (as the name suggests) it can fluctuate. This means that you loose the predictability over the cost of your business loan. In the current global financial climate, your variable APR will start out quite low, but as the world economy claws its way out of recession, the rate will rise, increasing your business costs.

A variable rate loan may be the only option open to you. It is often sold at a slight discount to a fixed rate loan to make it more attractive. In times when interest rates are relatively high (a couple of years ago compared to today’s rates), you might want to gamble on a falling rate – making your business loan cheaper – but you’ll need nerves of steel or a good crystal ball!

As you will have noticed from the news, at the moment the banking industry is in crisis.

It is likely that as a consequence of the current world financial crisis that business loans may become harder to come by or the conditions may be less attractive than before. It is surely ironic that, in the face of a global financial crisis that largely stems from a loss of confidence about and within the financial sector, financial institutions have become much more cautious about lending money to members of the general public, including small businesses.

Lending money is at the very heart of banking sector activities and it is only through the granting of new loans that the global recession that the world is experiencing will be brought to an end. Your small business could help this by increasing the UK’s GDP (Gross Domestic Product, or turnover) by trading with other companies for the things you need and through people buying your goods and services. But of course to be able to do this, you need the banks to give you that all important business loan, so we find ourselves in a “Catch-22” situation.

The recession was largely triggered by the so-called sub-prime lending crisis in which major financial institutions lent money to individuals that were ultimately unable to repay their debt. At the moment, the financial sector seems to be in a “once bitten, twice shy” mindset. Confidence will return to the sector, but the system has had a nasty shock and it will take some time before the money supply recovers.

Student Loans

Back in the mists of time when I was a student, in the mid 1980s, student loans were just a Conservative Party wish list item. I was lucky enough to get a full grant from my local education authority (LEA) which was just about enough to survive on. Of course, students have always needed more money than they had available (and always will!) and we financed this through overdrafts, part-time and summer vacation working or, if you were lucky enough, rich and indulgent parents. In those days, only a very small proportion of us took out student loans with the local high street banks. These student loans were more of the nature of personal loans (often underwritten by the student’s parents) and did not enjoy any special conditions, in general.

Whereas former UK governments had taken the view that education was a right and not a privilege, Mrs Thatcher, the then Conservative Prime minister, took a different view. It had been believed that attending a UK university would mean that the graduate would get a better job than his peers who went straight into the workforce after leaving school. As a consequence, they would earn more money and pay more taxes, so contributing to the public purse for the cost of their education throughout their working lives. But in the 80’s, the times they were a changing! At first, student loans were proposed as a “top up” measure to support the inadequate LEA grant.

The idea that students should contribute to the cost of their education with fees crept in and the era of the student loan was born – after all, the Conservatives argued, students in the USA had followed the system for years. Nowadays, anyone going into higher education is likely to have to have a student loan.

The UK government has set up a public sector organization, the Student Loans Company (SLC), which provides financial services such as student loans and grants to students studying in the UK. They handle over a million students each year and are also responsible for the administration of the collection of repayments for more than two million graduates. Most student loans are made up of two components: a tuition fee loan and a maintenance (or living costs) loan.

For the majority of students in higher education, their courses will make them eligible for a student loan. Such students are entitled to 75% of the maximum loan, regardless of their personal income with the remainder of the loan being means-tested. These days, for most people, student loans seem to be the only feasible way to pursue higher studies for the average student in UK. Universities can charge students a maximum of £3145 per year and most UK undergraduate degrees have a duration of three years.

The maximum amount that you can borrow on a UK student loan is £4625 for courses outside the London area or £6475 for courses in the capital. So, if you were studying for a first degree in London, the maximum debt you could expect to have upon graduation would be £28860. The loan APR (annual percentage rate, or interest) is fixed at the official rate of UK inflation which means (in principle, at any rate!) that the amount to be repaid has the same value as the amount borrowed. Once the student has graduated and has employment paying more than £15000 per year, the loan must be repaid through the UK tax system. Once this income level is reached, you will pay 9% of your income above the threshold level, until the debt is paid off. If you are self-employed, you will be responsible for calculating and making your own repayments on your self-assessment tax return.

If you work overseas, you need to make a repayment arrangement with the SLC. You can also make additional loan repayments by paying the SLC directly, whether or not your income is above the repayment threshold. Of course, if the interest rate that you could earn on money you have deposited in the bank or stock market pays above inflation (and it should) then you’d be foolish to pay your student loan off early. I can’t help but look back on my college days with a warm feeling of nostalgia for a kinder age before the evil of the “market forces” mantra was unleashed on an unsuspecting world!

Home Equity Loans

By using your equity as collateral to your loan, you can have access to a sum of money you can use for different kinds of purposes: perhaps your child needs to continue his/her studies and funds are needed, or the family might want to buy a new car, or you could use that money to consolidate your debts. As seen, there are many uses of a home equity loan; the most important thing is that you make use of that amount smartly. Ideally, when contracting a home equity loan, you should spend the money on something useful rather than just on expensive vacations or luxury items. For example, if you use it on making home improvements, that is a good investment, because this way the real value of your asset increases, so that in case you plan to sell your house in the future, you will earn extra on it. While in case you use your money just on spending without investing it, there is practically no profit for you. The most important thing you need to know about home equity loans is that everything works just as in the case of a secured debt (where your home is at risk), and until you manage to fully pay off your debt, there lies the risk for your home to be sold. That is why you must act responsibly in such cases, not to jeopardize your family’s well-being. There are advantages but also disadvantages to this type of loan too. The first disadvantage is the problem of foreclosure that may rise in case you can’t make the regular and steady payments you are supposed to; then, you should expect to pay higher interest rates, and depending on the purpose of your contracting such a loan you should be able to anticipate whether this type of loan is convenient to you or not. It is also important to mention that there is more than just one type of home equity loan you should consider: there is the fixed rate mortgage loan and the HELOC (Home Equity Lines of Credit). In the case of fixed rate mortgage there are little to no changes regarding the sum you have to repay, so all you need to do is steady, regular payments for the time of the loan. The good side of this option is that recalculations or changing interest rates all the time are not factors to hinder you, because there is a set amount with a set interest rate and that’s it. From the point of view of flexibility it is not the best option, but in case you have a regular income this is the option for you. The fixed rate mortgage loans are also known as close end home equity loans. As an other option, there is the open end home equity loan, or, as mentioned above, the HELOCs. As its very name suggests, it is credit you will be dealing with, in case you opt for it. With this type of credit, you will have access to a line of credit, usually a sum agreed to by your lender (these amounts can be as high as the real value of your home), and you can each time just borrow up the amount you need. From a procedural point of view, think about it just as the use of a credit card is; only in this case you are playing against yourself in a way, because in case you fall behind with your payments on a regular basis, there is the risk of losing your home. The good thing when using HELOC is that there is a variable interest rate involved. There is always a minimum amount of money you have to pay back, but of course never forget the interest rate. It can be said that by choosing this type of loan you are practically your own boss, you have a free hand in making your calculations, being your own financial manager and accordingly setting a monthly sum you will pay back. As long as you act wisely, advantage is on your side. Of course, you can await some extra fees such as title fees, arrangement fees, or appraisal fees, but these also might come with just any kind of loan also. In case you don’t know which type of home equity loan to choose, or which one would advantage you, seek the help of a financial counselor which may broaden your horizons and you will be able to understand debt and credit related problems better and also get valuable information regarding the best option that suits your case in particular.

Bridging Loans

Traditionally, a bridging loan is designed to help home owners who want to move from the property they own to a new home that they intend to buy. They are usually high value (£25000 to £5000000), short term loans with lifetimes running from a few days up to a year. In happier times, the UK property market was very buoyant, but cursed with a phenomenon known as “the chain”.

Simply put, for you to buy somebody’s home, they need to be able to buy another and move out (and so on and so on…). If, for one reason or another, they cannot complete their purchase then you will be unable to buy their home. On the other hand, if you can’t sell your own home, it is unlikely that you will have the funds available to complete the purchase of your dream home and the chain is born.

The thing about dream homes is that they don’t come along all that often. So if you have found your personal Shangri-La, you won’t want it to slip through your fingers. But you still have to sell your existing property, perhaps in a slow market, so what do you do? Well, you could consider the option of a bridging loan. In this case, you can complete a form right here and apply for one, which will allow you to complete the purchase of your dream home. Armed with your bridging loan, you are now a cash buyer and much more attractive to the vendor as you don’t come with the risk of a chain. This means that, courtesy of your bridging loan, you may be able to get the vendor to agree to a better selling price on the “a bird in the hand is worth two in the bush” principle.

At the moment, with the downturn in the UK housing market, property prices have fallen by as much as one fifth in some parts of the country (and depending on whom you ask and how they do the calculations!). It is certain that there are bargains to be had out there because some people will be compelled to move for a wide variety of reasons. In the current climate, cash is king and a judiciously chosen bridging loan coupled to a business savvy mind could reap very big dividends. Of course, you need to calculate the costs of your loan carefully and have it open for the shortest period of time. So, you’ve found your dream home or made your killing in the property market; congratulations! The next step is for you to sell your existing property and then repay the loan.

The trouble is that a bridging loan can be notoriously expensive in comparison to other types of loan (which is why chains exist in the first place), so the first thing to do if you are looking for a bridging loan is to shop around for the best deal and ensure that it fits your needs.

In principle, there are two types of bridging loans; open and closed ones.

A closed bridging loan would be granted to you if you have already exchanged contracts on your existing home, but have yet to complete the financial transaction (it “bridges” the period between purchasing your new home and completing the sale of your old). The open bridging loan would be given to somebody who does not yet have a potential buyer in their sights. An open bridging loan is inherently more risky since, particularly in these uncertain times, you don’t know just when you will be able to find a buyer and complete the sale. As time passes, the financial pressures would probably force you to lower the asking price for your home so as to attract that elusive buyer.

If you take out a bridging loan you would be well advised to consult an independent solicitor for a professional opinion about the contract and its implications. Indeed, the lender may insist that certain clients obtain this before they will agree to the loan. For instance if you were over the retirement age, or if they are lending to limited companies and when a property is not owned by you, but the owner of the property is party to the bridging loan. These legal costs would be separate to the fees associated with the loan, but represent a wise investment, no doubt.

A bridging loan represents a very convenient tool for the house purchaser, but before taking one out, you should be sure that you thoroughly understand what you are doing and be aware of all of the potential pitfalls that may be associated with it – your solicitor should be able to explain this to you.

Loans For Disabled - Put a Stop to Financial Woes

Loans for disabled are designed especially for people who are meeting with physical and mental disabilities and live under the benefits of DSS group. People under benefits receive money to live their daily life but if any extra expense crop up, they have to suffer in order to combat the crisis. Disable people were earlier discarded from availing loans since they are unable to earn. But, the emergence of online lenders with loans for disabled has been a panacea for them. They find the loans handy in times of emergency.

Disabled people who are getting benefit of DSS can easily be eligible to apply for loans for disabled. The borrowers need not to go through any strict or complicated terms and conditions of the lenders. Also, the approval for these loans comes instantly within hours. These loans are provided to disabled without taking their credit history into account. Whatever may be the credit record of the borrower, the lenders will get them the eligibility. Moreover, these loans are a preferable option during emergency. So, the loan procedure has been customized simple and hassle-free. When applying for it, the applicants can receive the loan money in the same day.

There are certain requirements which every borrower must abide by. The applicant must have at least £500 as savings in their account. It is necessary only for the assurance of the lenders that the repayment will be made on time. The loan amount is given only after the verification of the borrower's deposited money.

Loans for the disabled are generally small loans. Under such loan borrower can obtain £30 to £1000. The interest rate is higher due to short term of the loan. Being unsecured in nature, borrowers do not require pledging security. So, find out a suitable lender online and apply for the loan right away!

Martin Maxie has completed master in finance and working as professional financial consultant.

Small Cash Loans - Fast Cash For Your Unforeseen Financial Expenses

Financial emergency can caught you at anytime and in this situation you only think about instant cash arrangement. But, financial arrangement on instant basis is not an easy task for anyone especially salaried borrower. In this circumstance, small cash loans will ready to assist you with proper finance without completing many formalities. This loan facility is easily available in the market.

Do your electricity bills are still unpaid due to shortage of funds? Can not postpone it much as it is repaying date is nearer? Then, small cash loans are here to assist you with proper finance. You can freely grab the amount as per your need and requirements without placing any security against the amount. Thus, you need to pay high interest charges to your lender. But, if you think that it is not fit into your monthly budget then do proper online research and comparison then surely you will able to fetch an affordable loan deal for you.

Good news for all the borrowers who do not wish to complete tedious loan application process and stand in long queues. Now the whole application process of small unsecured cash loan can be completed online with expediency of your home. All you just need to complete 2 minute application form with basic details and the rest thing will leave on your lender. Once it gets verified the cash will automatically get credit in your checking account.

As these loans are mainly proposed for handling short term expenses so you can grab amount varying from £100 to £1500 according to your need. Even, this amount can be simply repaid within short term duration of 14-31 days. In case of delaying of you need to pay high penalty charges along with original amount.

Small cash loans are destined for short term requirement and hence it is free from all the tiring and tedious loan application process. Even, if you are suffering from the problem of bad credit score like bankruptcy, insolvency, arrears etc. can freely make use of these loans.

You can use the loan amount to fulfill several of your requirements like pay off credit card dues, electricity bills, education expenses, home renovation etc. Now, there is no requirement to wait much to fulfill your important needs due to lack of funds as these loans are available for you.

Richard Kamau is associated with loans for people with bad credit. He is engaged in providing free professional and independent advice. To find Unsecured cash loans

Cash Loans For Unemployed - Timely Money For Urgency

Unemployed people do not have much money in hands for regular expenditures or for emergency purposes. but they can always take out cash loans for unemployed even if they have no jobs in hands. These are specially carved out loans for the UK unemployed people in order to provide them instant monetary help within 24 hours. The loan amount is quickly approved and the money is electronically transferred into their bank account in the same day.

Though you are unemployed, still if you have a debit card of any bank in your name, you can pledge the card as collateral with the lender to borrow the money. These loans are generally approved instantly against your debit card, when you repay the loan along with the interest charges, you will get back the card for use.

Cash loans for unemployed are useful in borrowing the cash in the range of £100 to £1500 for a short-term of two weeks. On the due repayment date of the loan, you can pay in cash or you can ask the lender to take back the loan from your account.

Because you will pledge the debit card as collateral, the lenders do not make any credit checks on you. This implies that even with risky bad credit history of payment defaults, late payments and CCJs, you are at complete ease of borrowing the cash in the same day for emergency expenses.

However, due to short repayment period, the lenders tend to charge interest at higher rate. Expensive APR may result in debts as well if you extend the repayment for couple of more weeks. So, borrow an amount that you can repay without extending it for a month.

For competitive APR, you should search the Internet extensively in order to find affordable lenders who are providing cash loans for unemployed people at comparatively lower rate of interest.

Gordon Mitchell is offering loan advice for quite some time. Apply For Unsecured Loans For Unemployed has a vast network of lenders who provide loans to the borrowers at lower APR. To find Cash Loans For Unemployed, unemployed loans, unemployed tenant loans, loans for unemployed people, unsecured cash loans

Finding Unsecured Loans vs. Secured Loans

For most people, loans are a fact of life. Whether car loan, mortgage, college loan, or personal loan, everyone needs money for big purchases or debt consolidation every now and then.

The financial world breaks loans down into two categories: unsecured loans and secured loans. Which loan type the debtor chooses depends on his or her financial circumstances. For example, a homeowner who seeks debt consolidation may elect a secured debt consolidation loan to pay down his or her debt.

What Are Unsecured Loans?

An unsecured loan is any loan that is not backed by an asset (collateral). The most common unsecured loan is a personal loan for use in situations such as college tuition, medical expenses, or to pay down other debts.

Unsecured loans are based primarily on the debtor’s credit rating. They generally carry less risk and are cheaper than secured loans. However, unsecured loans can sometimes prove difficult to qualify for if the debtor’s credit rating is less than stellar.

What Are Secured Loans?

As opposed to unsecured loans, a secured loan is any loan that is backed by collateral. Mortgages and car loans are prime examples of secured loans. The debtor pledges the asset against the secured loan until the secured loan is fully amortized.

Unlike the unsecured loan, secured loans are based not simply on the debtor’s credit rating but also on income. Secured loans carry more risk then their unsecured counterparts, and they are more expensive. Yet at the same time, secured loans are generally easier to qualify for because they factor in income as well as credit rating.

The downside to the secured loan is the risk that the creditor could take possession of the asset in the case that the debtor falls behind on monthly payments. The recent upswing in home foreclosures is a prime example of creditors repossessing homes from debtors who could no longer afford their mortgage payments.

Car repossessions are common as well when debtors can no longer afford their monthly car payments. In this case, the creditor takes over the secured loan and seizes the asset. It is not uncommon for a car to be repossessed right out of the debtor’s driveway in the middle of the night.

Where to Find Unsecured Loans or Secured Loans

People who need a loan can find both unsecured loans and secured loans at their lending institution or online. Popular financial websites include E-Loan, LendingTree.com, and Bankrate.com.

Another loan option for those who have incurred debt is the debt consolidation loan. Debt consolidation loans combine debts such as college loans, credit card balances, and personal loans into one manageable loan package.

Debt consolidation loans can take the form of either a secure loan (e.g., home equity loan, cash-out refinance, auto loan refinance) or an unsecured loan (e.g., personal loan).

In summary, the most common type of loan is the secured loan which includes car loans, mortgages, or other loans where collateral is pledged by the debtor.

While the secured loan is more expensive and carries more risk, the unsecured loan is used in cases where the loan is not backed by collateral such as a college loan or personal loan.

Ultimately, the type of loan selected by the debtor is dependent upon the debtor’s financial status and tolerance for risk.

Read more at Suite101: Finding Unsecured Loans vs. Secured Loans: Two Loan Options for Different Financial Situations | Suite101.com http://mortgagesloans.suite101.com/article.cfm/finding_unsecured_loans_vs_secured_loans#ixzz0ZZ00wse8

Improve your credit score

Ten tips to improve your credit score

Whether you're looking for a credit card, a loan, a mortgage or even a new mobile phone contract, your credit score plays an important part in whether or not you get the deal you want.

Don't panic if your credit score isn't perfect, our top tips could help you to improve your credit score and make your credit report look more appealing to potential lenders.

1. Check your credit report

Lenders look at your credit report when you apply for a loan, credit card, mortgage or any other type of credit account to see what you already owe, how well you are keeping up with your repayments and whether you can afford to borrow more. Checking your credit report can help you to improve your credit score because you can check how accurate it is and that it reflects your circumstances. You can see your credit report for free with a 30-day trial of CreditExpert from Experian.*

2. Make sure you're on the electoral roll

If you haven't done so already, register to vote at your current address - lenders use the electoral roll to check that you live where you say you live, so it can help to improve your credit report. If you aren't registered or are listed at another address, the lender may ask for further proof of your identity and address, or could even turn your application down.

3. Pay on time

Paying your bills on time and in full can help to improve your credit score. If you miss payments or don't make them on time, as well as incurring penalties, a note will stay on your credit report for at least three years - which could give a bad impression to lenders.

4. Close any credit accounts you don't use

It can help to improve your credit score if you close any credit accounts you don't use. When looking at your credit report, lenders take into consideration the amount you could borrow, not just what you actually owe. As a rule, it's better to have a few well-managed accounts, than a lot of accounts which you don't use.

5. Think about consolidating your debts

Consider consolidating your debts - identify which of your credit accounts are most expensive and see if you could consolidate them into a one, lower-cost loan. This could help to improve your credit score, as well as making your debts more affordable.

6. Don't apply for lots of credit accounts in a short space of time

Each time you apply for credit and a lender looks at your credit report, a record of their check called a 'footprint' is made. If other lenders see a lot of footprints on your account in a short space of time it may hurt your chances of getting credit. Keep the number of footprints on your credit report down and it could help to improve your credit score.

7. Build a credit history

Many people struggle to get the credit they want, not because they have a bad credit history, but because there isn't enough information on their credit report for lenders to go on. Lenders want to see evidence that you're a responsible borrower and if you haven't taken out many credit accounts before, this history won't be there. Apply for credit products that are open to people with less than perfect credit - these may not have the best rates, but they can help you improve your credit score, which will help you to get the credit you want in the future.

Another option is the cashplus prepaid MasterCard® with creditbuilder. With this prepaid card, the provider gives you an interest free loan, equal to a year's worth of monthly fees. You then pay back the loan with the monthly card fee. If you make all the payments in full and on time, it could help to improve your credit score, by showing that you are a responsible borrower. Find out more and apply now.

8. Be careful of credit repair companies

Exercise caution when it comes to credit repair companies claiming they can improve your credit score. Credit repair companies claiming that they can remove or change the data on your credit report often charge hefty fees and may not be able to deliver on their promises.

9. Set the record straight

Check your credit report regularly to make sure that all the information it contains is correct. If you notice any errors, you can contact the relevant lender and ask for them to be corrected - you will be expected to provide proof that a mistake has been made. If you have a good reason for any credit problems, for example if you were ill and couldn't make your payments on time as a result, you can add something called a Notice of Correction to your account. Potential lenders will be able to see this explanation - again, be prepared to provide proof.

10. Protect your identity

Check your credit report regularly for unfamiliar or suspicious entries, like a new account you didn't open, an increase in the amount you owe which you can't explain or new applications for credit you didn't make - these could all be signs that you've been a victim of identity fraud.

See your credit report for free with a 30-day trial of CreditExpert from Experian *

Unsecured loans

What is an unsecured personal loan?

Actually, a personal loan and an unsecured loan are the same thing, but providers use different names to describe the same product.

A personal loan is sometimes described as an unsecured loan because it allows you to borrow money without having to provide security against it, such as your home or car.

Instead, an unsecured (or personal) loans provider will base their decision on granting you a personal loan by using your personal credit history. This is verified by a credit check to determine your credit rating.

How does a credit check work?

The lender will use an approved credit reference agency to make a search on your name and address, and any previous addresses, which you give in your personal loan application.

This credit check involves calculating your credit rating, which shows how risky it will be to give you a personal loan.

Each time a credit check search is requested by a lender, it will be noted on your credit rating by the credit reference agency and detailed in any future credit checks.

If you have had no previous credit issues, a credit check should be very straightforward and you should be eligible for the majority of personal loans. You can see your credit report for yourself with services like Credit Expert from Experian.

Will using uSwitch.com's loans comparison service affect my credit rating?

No. Any information we gather from you is used solely to make an accurate comparison of unsecured personal loans. A loan provider will only ask for an actual credit check when you complete and submit a personal loan application.

The lender should always inform you if a credit reference check is being carried out. And you should also be told if credit account information will be stored with a credit reference agency.

I have a bad credit rating. What can I do?

Be honest and tell us when you make your comparison. There are some unsecured loans available if you have bad credit. If we cannot find a suitable unsecured loan, we will provide you with details of how you can still borrow the money you require.

It is always a good idea to check your credit report before you apply for an unsecured loan - that way you can see what a potential lender will see before you apply. Get free online access to your credit report*

Unsecured personal loans made safe and easy

Now you know that an unsecured loan is just another name for a personal loan, and have understood how lenders rate those applying for them, it's time to take the next step. To find the best personal loan for you, at no risk to your credit rating, go straight to our personal loans calculator .

Payday loans: uSwitch explains

You may be tempted to borrow money using a payday loan, but with interest rates as high as 2,000% APR or more they could prove very expensive.

uSwitch explains how payday loans work, why they could prove very costly and what cheaper ways there are to borrow money.

What are payday loans?

Payday loans let you borrow small amounts of money for as little as a week or a month, but with very high interest rates, which mean a payday loan could end up costing far more than you bargained for.

Why shouldn't I take out a payday loan?

Payday loans let you borrow from £50 to £1,000 for a few days or up to a month until you get paid the following month. Payday loan companies typically charge up to £30 for every £100 cash loan you borrow for up to 31 days. This may sound reasonable on the face of it, but it equates to an APR (annual percentage rate) of a whopping 2,255%. The idea of payday or cash loans is that they give you access to emergency cash for a short period without you having to go to your bank. However with such high interest rates borrowing a small amount of money can be very expensive.

Applying for a payday loan is easy as lenders make few checks and in some cases credit checks are not carried out at all. However payday loans can be a very expensive way to borrow money. For example, a cash loan of £500 for 31 days could cost almost £150 in interest - or almost £5 per day.

One of the biggest problems with payday loans is that the following month when the loan is repaid you may find that you are short of money again and a further loan is needed. In this way the cost of borrowing a small amount of money can increase dramatically. Payday loans have been blamed for getting people into debt problems they are unable to get out of.

As a last resort a payday loan could provide an emergency cash advance for up to a month. However make sure you budget so you can pay the cash advance back within the agreed term and so you don't have to take out another payday loan the following month. Although payday loan interest rates are very high charges vary - shop around to find the best deal on cash loans.

What can I do instead of taking out a payday loan?

• Payday loans are almost certainly not the only borrowing option. An authorised overdraft from your bank, or credit card will be much cheaper than a payday loan.
• Joining your local credit union could be a much cheaper way to borrow money than payday loans, as the most interest a credit union can charge for borrowing is 26.8% APR and many charge 12.7% APR.
• If you are in financial difficulties, before you borrow money or take out a cash loan, use our debt help tools & articles to get information on your situation that could help you get your finances on track. Find debt help now.

Debt consolidation loans

Guide to debt consolidation loans

If you are currently in a tricky situation with your finances and juggling payments to more than one lender, you are not alone. Britain as a nation, owes over £1 trillion. But rather than trying to pay off the minimum amount for each debt, a debt consolidation loan could reduce your debt to one manageable monthly payment. However, you need to look at all of the relevant issues as a debt consolidation loan may not be right or available for you.

The Best Debt Consolidation Loans from uSwitch

What is a debt consolidation loan?

In its simplest terms, a debt consolidation loan will pay off your existing debts and transfer the monies owed into one loan with one manageable, monthly repayment. You will still have to pay back all the monies owed, but with a debt consolidation loan you may be able to reduce your monthly outgoings, pay a lower rate of interest, or be able to spread the costs out over a longer time period.

How can a debt consolidation loan help with debts?

If you are careful about managing your spending, a debt consolidation loan can help by:

• reducing your monthly payments. By spreading out the term of the debt you will often be able to reduce your monthly repayments to a manageable level. Most people are often paying the 'minimum payment' allowed on the existing debts. This often just means covering the interest component of the loan while leaving the actual total amount owed unchanged.
  
  
• improving your credit rating. If you are able to pay off the loan and accrue no further debt, this will be seen as a positive impact on your credit rating. It is also a good idea to check your credit report before you apply for a debt consolidation loan - you can get online access to your credit report with a free trial of Credit Expert from Experian.*
  
  
• reducing the interest you pay. If your debts are with store or credit cards that have a high interest rate, then you will generally pay back less interest on your debt with a loan. Make sure you stop spending on your cards though.

How do I get a debt consolidation loan?

To see if you are eligible for their loan, a lender will look at how much debt you have outstanding and your credit risk.

If you have a previous history of bad credit or large debts, a lender may only consider offering a secured loan. This will require you using your property as security against the loan, reducing the lender's risk. You need to be very sure you will be able to cope with the loan repayment, as your house could be at risk if you default.

More types of debt consolidation loans

Today, the majority of personal loans can be used to consolidate your debts. As with any other borrowing the lender will look at:

• the amount you want to borrow
• your credit history
• how long you need to repay the debt

If your outstanding debt is low and you have no problems with your credit rating, a personal loan could help you consolidate and reduce your debt.

How do I find the best debt consolidation loan?

The easiest way to find a good debt consolidation loan is to compare the loans available on the uSwitch.com loans comparison service. Our service is free and we provide an impartial and independent comparison of the UK's personal and secured loans to help you compare loans more easily.

Best secured loans deal

Does the best secured loan exist?

Secured loans, like personal loans are subject to market forces and competition amongst providers. There are multiple providers whose rates change regularly with low rates of interest being offered to attract customers. Shopping around and comparing secured loans, rather than responding to the first ad you see, means you are more likely to find the best deal for you.
Access the best secured loans deal

Customers who wanted to compare secured loans in the past were often faced with a limited choice of providers to compare. This is because certain secured loan providers only worked with loan brokers and were not available directly to the general public.

uSwitch works directly with Loanmakers and Fluent Money, our approved and trusted brokers to ensure that you can compare the widest selection of secured loans available so you can find the best secured loans deal for you. By working only with reputable brokers and direct secured loan providers we aim to protect you from the pitfalls of borrowing from the wrong type of provider.
Secured loans and bad credit

Secured loans can offer the opportunity to borrow money for customers who have experienced money issues in the past and have damaged their credit history as a result. A secured loan can be your best deal as:

* you are more likely to be accepted for a secured loan rather than a personal loan
* the interest is likely to be more competitive than personal loans which are available to customers with adverse credit
* the repayment term can be longer

However secured loans work because the provider has the security of your property to fall back on if you default on your payment. A secured loan needs a lot of careful thought to ensure you are 100% confident you can meet the monthly payments over a number of years and will not find yourself in a situation where you could lose your home.
Secure your best loan deal now

To find your best secured loans deal use the uSwitch.com secured loans calculator. We compare the widest selection of available secured loans available to make finding the best deal quick and easy.

TYPES OF COMPANIES

Types of loan companies

If you're searching for good loan companies, the easiest way to go about it is to learn a bit about the loans market and decide what type of loan you need. There are so many available, you should be able to find one to suit your needs. Here's the guide to finding your perfect loan company.

Loan companies: High street banks and building societies

Pros: With this type of loan company, you know what you're getting because you're probably familiar with the brand. All high street loan companies have branches throughout the country, so you can usually speak to someone in person about your loan. The company will probably offer the option of banking online as well as in person.

Cons: A high street loan company will usually charge a bit more in interest than an online one. They may also require you to make an appointment with an advisor if you wish to discuss your finances.

Loan companies: Online banks

Pros: Because they have fewer overheads, this type of loan company usually offers a lower interest rate. In fact, most of the lowest loan rates around are from online banks. You can usually set up a Direct Debit to take care of your monthly repayments so that you don't fall behind. As well as banking online, you'll also be able to phone the loan company if you have problems or need advice.

Cons: online loan companies have no branches, so you can't pop in and conduct your banking in person. Also, most of them are less well established than high street lenders. If you'd rather borrow from a big name bank, you might be tempted to opt for a high street loan (which might be more expensive), but did you know that most online banks are owned by high street lenders? For instance:

Online loan company	Parent loan company
Cahoot	Abbey National
Intelligent Finance	Lloyds TSB Group
Egg	Citigroup
Halifax	Lloyds TSB Group

Choosing your loan company

Once you've considered what type of company you'd rather borrow from, the best way to choose your loan company is to shop around. You can do this by using the uSwitch.com loans comparison service.

The comparison service will ask you a series of simple questions about the type of loan you're looking for. It will then perform a search of the loans market to give you a comprehensive list of those that suit your personal circumstances. Shopping around in this way can save you a fortune in interest payments, as all loan companies caters for a different type of customer.

Save time and money with us

To find the right loan for you, go now to our loans comparison service. It's free to use, completely impartial, and will only take a couple of minutes of your time.

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Low interest loans

A guide to low interest loans

If you are looking to borrow money, a low interest loan seems the obvious choice to manage your debt and keep monthly repayments low. So whether you want to take out a personal loan for a holiday or need to borrow a bigger sum through a secured loan, we'll guide you through the process.

The Best Low Interest Loans from uSwitch

How much can I save with a low interest loan?

With loan rates varying from the very low to the very high comparing loans can, depending on the amount and loan term, save you a considerable amount of money. To save even more, look at repaying your loan in the shortest time possible. The shorter the loan term, the less interest you will pay. Compare low interest loans

How do I find a low interest personal loan?

uSwitch.com's personal loans comparison service carries out a free and impartial search of the personal loans markets to find the best low interest loans that will match your loan requirements. We update our data every day, so you know you are finding today's cheapest loans.

What other low interest loans are available?

If you are a homeowner you could consider a secured loan. These enable you to borrow larger sums with a longer repayment term than personal loans at competitive interest rates. Secured loans are also available for people who have had problems with credit in the past. However it is always important to remember that a secured loan will use your property as security. If you default on the loan, you could lose your home.

ONLINE LOANS

A guide to online loans

Online loans are common these days and often promise all sorts of benefits compared to the traditional high street bank loans. Just read on for our guide to online loans and how you can benefit from borrowing online.

The benefits of online loans

Lenders who do not have branches and only offer online loans often promise lower interest rates than high street banks and building societies. This is because they have fewer overheads and can pass their savings directly to their customers. Some high street banks also offer online loans, which work in the same way. Paying your monthly repayments by Direct Debit will often accompany a lower interest rate.

Online loans enable you to check your current balance online. Updating or changing details is also often far easier as you do not have to go into your local branch, you simply have to go online, log in and enter your new details.

Find your best online loan

Online loans are fairly easy to come by - new online banks are entering the market all the time. This competition means that you can find some extremely cheap online loans if you know where to look.

uSwitch.com is a completely independent loans comparison service.

On top of that, our directory of lenders gives you all the information you need about the online loan companies you're considering and what they offer.

Compare all the online loans around and save money

Once you've had a look at what's around, you'll need to compare the online loans available to discover which one is best for you. Some online loans offer an APR of around 6%, but with others you could pay over 30% on your borrowed cash. It's worth shopping around to make sure you're making the right choice.

Find an online loan with our calculator

uSwitch.com offers a loans comparison service that will help you find the best online loan for you. All you need to do is enter a few details about the type of loan you need, and it will sort through them all to find the one that would be most suitable for you. Once you've made your choice, you just apply for your loan online.

Find the right online loan for you

UK personal loans

Guiding you to the best UK personal loan

There are around 70 types of lenders offering personal loans in the UK today, from traditional high street banks and building societies to online banks and supermarkets. So it's important to shop around to get the best deal, and that's why uSwitch.com is your best option.

Personal loan providers in the UK

Here are just a few of the places you can get a personal loan in the UK:

• High street banks and building societies. This traditional way of taking out a personal loan in the UK is still a good idea if you like to go for familiar brands. Or you might want to be able to drop in and chat to your lender, as they usually have branches in every town. But a bank on the high street will usually charge a little more interest than an online bank.
• Supermarkets, shops and post offices. UK supermarkets, shops and post offices are increasingly starting to offer their own financial products. This can be really handy as you can include shopping for a personal loan along with other types of purchases.
• Online banks. With online banking you benefit from the fact that the lenders have lower overheads, so they usually charge less for personal loans. In fact, most of the lowest loan rates around are from online banks. As well as banking online, you'll also be able to phone the loan company if you have problems or need advice. Another advantage is that you do not have to be in the UK to manage your loan.

• Borrowing and lending exchanges. Borrowing and lending exchanges work rather like a co-operative in that they offer lower cost personal loans. They are able to do this because they cut out the sorts of middlemen and extra costs that make high street bank loans so expensive. So people lend and borrow from one another directly. Their lenders and borrowers enter into a legally binding contract with their respective borrowers and lenders. The exchange manages the collection of monthly repayments and if any of that money is not paid on time, it uses exactly the same sort of recovery processes that the high street banks use. Then to reduce any risk further, amounts that are borrowed or loaned are spread between at least 50 borrowers and lenders.

How to get a cheap car loan: uSwitch's top ten tips

Due to the economic crisis, many car dealers have been forced to slash prices, and now thousands of people are looking to snap up a cheap car while prices are low.

However, recent research from uSwitch found that less than a third of bargain hunters looking for a cheap car think about car finance before they head to the dealer's forecourt. This could be an expensive mistake, because failing to find a cheap car loan can drive up the price you ultimately pay for your car by as much as 51%.

The average purchase price for one of the top ten best selling cars is £13,631. If you took out a best buy loan, like one from Alliance and Leicester at 8% APR to pay for one of these cars, the ultimate cost would be £16,474. However, if you went for one of the more expensive loans on the market, higher interest payments could bring the cost of the car to a shocking £20,518, cancelling out any discount you got on the purchase price.

Don't fall into the car finance trap, read on for uSwitch personal finance expert Louise Bond's top ten tips for getting a cheap car loan.

1. Best buy unsecured personal loan rates are only available to people with a good credit history, so not all car buyers will be able to get them. However, it's still worth shopping around as there are still quite a few good deals. You can check your credit report for free before you apply.

2. Having the money ready before you start car hunting will strengthen your bargaining power as you can make the purchase immediately - you are effectively a cash buyer.

3. Some car dealers offer 0% finance on new cars, these deals are definitely worth considering if you can get one - you may have to pay a hefty deposit though.

4. When looking at car dealership finance, make sure you take into account the size of the deposit and the final payment as well as the monthly payments as this can really ramp up the overall cost.

5. Leasing deals can sometimes work out cheaper as consumers may not have to pay for servicing and repairs.

6. For consumers with a poor credit score, leasing could be next best available option as they are not actually buying the vehicle.

7. It is also worth looking at cars that have been pre-registered by a dealer. They only have a few miles on the clock so in effect you get a nearly brand-new vehicle at a second-hand price.

8. The collapse of a motor manufacturer can have a knock-on effect on a car's re-sale value plus the availability of vehicle parts - these factors should be carefully considered by potential buyers.

9. As well as haggling on the price, look for free extras such as extended warranties and service packages.

10. Finally, don't forget to watch out for government initiatives like the scrappage scheme, which offers motorists up to £2000 to scrap cars over nine years old.

Comparing loans

Compare loan deals with uSwitch

With so many personal and secured loans available, knowing how to find the best loan for your needs can seem daunting. uSwitch.com makes it easy. Tell us a few details about why you need a loan, your circumstances and we'll do all the hard work for you.

Why compare personal or secured loans?

People take out secured (homeowner) or personal (unsecured) loans for a variety of reasons - everything from a new car or home improvements, to the need to consolidate existing debts. There are a huge variety of loans on offer, which is why it is important to compare all available loans.

Whether you want to compare personal or secured loans there are a number of factors to be taken into account:

• the interest charged on the loan
• cost of Payment Protection Insurance
• early repayment charges or penalties
• personal circumstances that could affect your ability to pay

In addition, for secured loans we need to ask you some questions relating to your property and any borrowing against this property. This will allow a more accurate and tailored set of results. Use our loans comparison service and we'll use all these factors to find the best loans for your circumstances.

How to use our loans comparison service

Comparing loans with us only takes a few minutes. Our loans comparison service compares all available lenders, including high street and internet providers. All you need to do is decide whether you want to compare personal or secured loans, how much you want to borrow and provide a few personal details. Your results are sorted in order of the monthly repayment for each loan, but you can order them in other ways depending on your priorities.

The loans comparison service you can trust

Our information is updated daily to ensure that your results are as comprehensive and accurate as possible. Use our loans comparison service and you'll get an impartial list of the best loans for you - we don't favour any one lender over another. That's why you shouldn't consider applying for a personal or secured loan until you've used our free loans service to compare all the loans available to you. It's the best way of ensuring you're getting the best loan deal.

We understand loans

No more shopping from bank to bank comparing rates and terms. Now you can let uSwitch do all the research for you. So why wait? There's no time like the present to find the right loan for you.

Secured loans guide

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1. Save up to £551 over 5 years on your loan.

What are secured loans?

A secured loan is a loan where you will be required to use your property as security against the loan, so the lender is able to balance the risk of lending to you. The amount that can be borrowed differs from lender to lender and your individual circumstances. The amount that can be borrowed, the term available and the Annual Percentage Rate (APR) will depend on:

• the value of your property
• your ability to repay the loan
• your personal circumstances

You need to think very carefully about how you manage a secured loan. If you default on the loan you risk losing your home.

Who should choose a secured loan?

Secured loans allow you to borrow more and repay over a longer period than a personal loan - up to 25 years. They can normally be used for almost any purpose and as the lender has the benefit of security they can be offered to people who may be excluded from other loans. Borrowers who are self-employed, have recently changed jobs or have previous credit problems will be considered for a secured loan. They are also useful for borrowing larger sums or where the applicant requires a longer repayment period.

How can I find the best secured loan?

Finding the best secured loan for your situation can be complicated as there are many factors for the lender to take into account. With so many providers offering secured loans, trying to compare them all yourself could take forever. Luckily uSwitch.com can do all the work for you with our secured loans comparison service.

All you need to do is tell us a few details about the secured loan you're looking for and your personal circumstances. It's free, impartial and any information you give us will remain confidential and secure.

How can I be sure it's the best secured loan for me?

As well as comparing the available secured loans, uSwitch.com refers you to a broker where appropriate to ensure you get the best possible deal. Some lenders prefer to only work through brokers. It is for this reason we have chosen to work with an approved broker as they will have access to a wider range of lenders and will use their expertise to match a secured loan to your circumstances.

Find a secured loan today

So now that you know all about secured loans, why delay? Let us help you find the best secured loan for you right now. Just go to our secured loans calculator.