Tag Archives: rates
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.
Home Equity Loan Rates: Why Theyre So Damn Low
Whos the “girl” thats always there for you when things go sour for you with everyone else? The answer is not your life partner or your mother, but its your home shes been there for you no matter what happened, does a good job at keeping you safe and sound, as well as “comforting” you in times of trouble. Aside from acting as a place for you to crash and relax, what else can your house do for you? For those that dont know, you can use it to pull off a home equity loan. Whats so good about this type of loan anyway? Well for starters, home equity loan rates are considered to be one of the lowest there is today, because of the loan collateral youll have to put up to apply for one.
And you know what that is, dont you, old chum? Thats your house there is a “condition” that needs to be met, in order to harvest the cheap home equity loan rates, naturally. These rates will be dependent on the equity of your house, and the lending companies will take it as one of the biggest factors for the determination of your worthiness. Im sure that you understand what that means, if not, dont break a sweat; let me explain. Equity is in some sense the “value” of your house. Its computed by simple math, and the formula thats used here is: how much of the house youve paid for so far, minus the amount you havent paid for yet.
Its a simple formula, and yet there are many out there that dont fully understand the whole thing. For every simpleton and dim-witted friend of mine out there, Ill give an example, in hopes that you ALL understand it better. Here it is: you own a house, and so far you paid for $300,000 for it. But you still have a remainder of $100,000 to pay. To solve for the equity of your abode, you take $100,000 from $300,000, which gives you $200,000. Therefore, the equity of your house is 200 grand I hope this I perfectly clear to all readers.
This isnt the only determining factor when it comes down to knowing the home equity loan rates youll get, hell no. The knowledge you have on the entire matter and process on how all of this works will be your “best friend” when it comes to talking down the rates. In order to get the best rates possible, youll have to go to a number of different financial institutions dealing this type of service. Having good negotiation skills would also be an edge. Theres a lot to take into consideration before applying for this type of loan, like whether or not the value of your shack can get you approved for the loan in the first place.
Also, youd most definitely want to be sure whether or not youre actually capable of paying off the debt when you actually do get approved. This is one of the most important things you should think about. Having defaults with your payments can spell trouble for you. Ask other people that have taken out one for themselves you might find one that has lost his home because of his incapability to pay.