Tag Archives: rate interest
Save Money Do Not Borrow it on your Credit Card
Lets face it we have all been in a position where we have needed a little hard cash depending on if it is at the end of the month or a unforeseen bill that needs paying straight away. However before you go off down to the ATM and take that cash out on your credit card, lets just take a look at the reasons why you should be careful before borrowing from the credit card company.
Firstly every time you take money out of the ATM the fee for that money comes into play immediately. The cash advance that you are thinking about can have between 2 and 4 percent Higher interest rate than your regular credit card rates.
Not only will you be charged by the credit card company for borrowing the cash you will also find that you are charged a percentage by the ATM vendor. Those handy little ATM’s in the gas station can charge up to 1% to give you the cash! That is an extra 1% you have to pay to get that money.
Confused? Ok let us take a quick look at how this all works:
You see on a market stall a fantastic stereo that you have wanted for ages. The vendor being a street trader would prefer it if you pay in cash (lets face it if you use your card there he gets charged for the fact that he is using the credit card companies facilities). You decide you must have it so you go to the ATM and draw out $200 on your credit card.
This cash will be the last thing that your credit card company lets you pay off the card. So if you have $500 on your card and you take a further $500 out at the higher rate of interest as it is cash, you will pay that rate of interest until you reach zero balance even if you pay off $500 the next day! So you will still end up paying over the odds to borrow that money.
Eventually when you hit the zero balance you will notice that you have over the time that you borrowed the money been charged three times. Once by the ATM where you got the money from. Once by the credit card company for taking the cash option and once more by the credit card company who will charge you a higher rate of interest for the privilege of having cash in your hand.
Is it really worth it to get something a few days early?
Top 5 Things to Consider When Making a University Loan Comparison
With the cost of education higher than ever, it’s commonplace for people in the United Kingdom and elsewhere to rely on educational loans to pay for their classes. These loans can have a severe effect on financial stability later on. Doing a good loan comparison before you sign an agreement can save you hundreds of pounds, especially if you’re thorough about examining the following elements.
Credit Check
Depending on where you go for your university loan, you may be subject to a credit check. If you are younger, this can be problematic, because most students who are just starting out on their own haven’t established much of a credit history. You might need your parents or someone else to cosign for you, which makes the loan more complicated.
Interest
You probably know that you should try to get the student loan that has the lowest rate of interest, but there are other things to consider as you compare loan options. For instance, does interest start to immediately accrue, or are the calculations delayed until you graduate? These kinds of elements have a big effect on your ability to pay back the loan and how long you’ll take to get out of debt.
Payments
Similar to interest, you will want to compare when you must start making payments. You should look at the amount you would need to pay every month and make a determination about whether that figure is reasonably within your budget. Your goal should be to find a payment level that allows you to pay down your debt while still living a somewhat comfortable life. Keep in mind that, in general, the longer your loan term, the more you’ll usually pay in interest, but the lower your monthly payments typically are. Compare how much of your payment gets applied to the principle balance, as well as what happens to the loan in the event you become disabled.
Another thing to consider under payments when you’re looking at different loans is whether the lender allows forbearance or deferment. These two options basically allow you to pause paying down the debt. Most people do not want to think about needing to do this, but the reality is that, if you get into financial hardships down the road, you might not be able to meet all your debt obligations, including your student loans. In this circumstance, having the option for some breathing room can be good.
Benefits
Some lenders that provide school loans offer additional benefits as part of the loan agreement. For example, they might offer you perks such taking a specified amount off your balance (essentially giving you a discount) if you make a set number of payments on time. Others might give you a slightly better rate of interest if you agree to conditions such as working online or setting up automatic payments.
Loan Limit Amounts
Loan limits are important to look at when you are comparing sources for university funding because they can mean you need to use multiple lenders to cover your costs. Ultimately, this makes paying for your schooling more complex, but several smaller loans might be worth this complexity if you are able to get lower rates of interest. As an example of loan limits, in England, you can get a maintenance loan from the government of up to £4,418 for the 2014 school year if you are living at home, whereas the amount increases to £6,600 if you want to study abroad. Remember, just because you are eligible to borrow a certain amount doesn’t mean you must do so–live within your means and only borrow what you really need to cover your costs.
Conclusion
A thorough loan comparison ensures you get the best deal and fit when you must borrow to cover the cost of university. You should look at elements such as the necessity for a credit check, the way the lender treats interest, payment amounts and options and benefits such as routine-payment discounts. The cap on the loan amount is another big factor. As you go through the comparison process, don’t be surprised if getting the information you need takes time. It helps to start looking for providers well before the semester or school year is scheduled to start.