Tag Archives: interest rate
The Basics of Credit Card Balance Transfers
There simply isnt one of us out there who enjoys paying the high interest rates on credit card balances, no matter how much money you have in the bank or make at your place of employment. I dont know about you, but I always promise myself that whatever I charge during a billing cycle, I will pay off when the bill comes due. But when I open up the envelope from my credit card company, I realize that there are many other places my money could be well spent- and that means my balance doesnt get paid in full, thus resulting in loads of pounds paid in interest. Thats why so many residents of the UK are taking advantage of the financial benefits of transferring their balances on a high rate credit cards to one with significantly lower (or even 0%) interest.
Credit card companies are in a desperate fight for your business, so they offer alluring programs (such as 0% interest on balance transfers for 6 months or so) so that youll take your old credit card balance and place it on one of their new cards. This is all done with the hopes that you will use your new credit card instead of your old one- hence the new company generates any interest on new purchases, not to mention the charges on your transferred balance when the special program expires. They want you to give them your business, never look back, and never again transfer your balance to another credit card company. Their begging can work to your advantage as long as you understand the basics.
There are mainly two types of credit card balance transfers, the first of which involves a very low interest rate, usually 0%, for a fixed amount of time, perhaps from 5 to 9 months. At the expiration of this time period, the companys normal interest rate charges will apply, generally upwards of 15% or more. So be sure to stay on your toes, keep accurate records and switch your balances when the introductory rates expire to get the most out of these enticing rates and programs.
The other type of credit card balance transfers involves a low interest rate, maybe 5% or less, but maintains this same, nominal rate for the entire time required to pay off the transferred balance. Any new purchases will be subject to the cards regular, significantly higher rate (again, around 15% or so), but if you have the self-discipline to not add any additional charges to this card, it can save the hassle of transferring your balances at every 6-month mark and still save you hundreds (or even thousands) of pounds over the life of your credit card balance.
Various Characteristics of Home Loan and Mortgage Loan
A home loan or a home mortgage loan is any loan which has a property attached to it as collateral. A builder, developer or a home buyer can take financial assistance in the form of a loan for purchase of a given piece of land of a completely built structure. In laymans language mortgage is tantamount to a mortgage loan. A home mortgage loan has characteristic like most other loans in that the method of repayment, interest rate, maturity period and size may vary to some degree on a case by case basis.
In contemporary times, most home purchases are done with the help of a home loan with few exceptions as very few households can muster enough money to purchase a property outright. In geographies where the demand for property is high, there is an equally strong domestic for home loans.
The word Mortgage is lifted from a French term which means “dead pledge”. This implies that if the obligation is left unfulfilled then the property would be taken into foreclosure.
There are many different types of loan which are disbursed worldwide. But there are several factors which broadly defines the feature of any mortgage. These characteristics and features are subjected to legal and local regulation of the land. Lets look at some of the broad characteristics of a loan.
Prepayment: a few types of mortgages completely restrict or limit prepayment of a portion or the entire loan. In certain cases even a penalty is imposed on the lender in lieu of prepayment. EMI: it is the amount which has to be paid on a regular basis as decided between the lender and the borrower. The amount can be altered by the lender or by the borrower as per their mutual understanding.
Term: home loans typically have a maximum term. This is the number of years after which a loan has to be repaid. Some of the loan has no amortization or some of the loans require repayment or even still negative amortization.
Interest: Interests are of 2 types, fixed and variable. These may or may not change at pre-defined periods. Depending upon the financial health of the country the interest rates of a home loan could be high or low.
In a fixed rate home loan, the periodic payment as well as interest rate are fixed fir the entire life of the mortgage. In an adjustable rate home loan, the interest rate fluctuates after a given period of time in accordance with some market index.