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At some stage in most people's lives the need to borrow money arises. In fact we borrow money in more ways that we would expect. Credit cards, car finance, personal loans, mortgages are all forms of borrowing that crop up at some stage. Making sure you get the best deal available to you needs a bit of homework. Understanding whether you may qualify for the best rate loans or whether you should take out a particular car finance arrangement needs access to information and on this website we strive to provide plenty of that. We'll bring you lots of simple background information to help you understand the basics of borrowing money and we'll also bring you the latest news on interest rates and new borrowing offers.
The general perception is that loans are much more expensive than during the period before the credit crunch all started, but a quick review of deals being advertised show that rates for borrowers with appropriate circumstances may only be around 1 per cent higher now. For appropriate circumstances, take clean credit record, full employment, low debt levels and a suitable borrowing requirement, meaning not borrowing too much and being able to provide a reasonable deposit yourself. Look at our recent interest rate updates on the link below.
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.
The British Bankers Association has reported on business activity for high street banks. It shows that mortgage approval rates are still recovering, apart from the usual seasonal dip in the first couple of months of the year. However equity release activity and remortaging is still very low and shows no sign of recovery.
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 charged 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 rates are now at an all time low and mortgage payers who signed up to fixed rate deals are now experiencing the downside of such arrangements. Picking a fixed rate deal proved attractive over recent years as rates tended to be on the rise and borrowers appreciated the security of knowing their monthly repayments would not increase. But as we often read on financial contracts "rates can go up as well as down" and down they have certainly come. The real winners here are mortgage payers who found themselves signed up for a variable rate tracker without a lower ceiling. Some of these people are now paying hardly anything at all compared with previous months. Fixed rate mortgage deals still look expensive compared to today's base rates and that is an indication that lenders don't expect these very low interest rates to be around for long.
For larger loans it's even more important to borrow at 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. Also take with loan insurance which could significantly add to the cost of your loan. If you think you need some kind of repayment insurance then make sure you shop around for the best cover and price.
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 choose from, finding a cheap mortgage if you have adverse credit history will become more difficult. Use this site to help you get 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 decreases and uncertainty in the mortgage marketplace. Risk assessment is however paramount for lenders and borrowers who represent an increased risk will be charged higher rates accordingly.
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! Use our credit card information pages to understand the credit card marketplace and check whether you are getting a fair deal with your card.
What do we cover?
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.
How can we help you?
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.
Where do you start?
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.