Last Updated on October 8, 2018 by Melissa S.
The world is a shocking place. Just ask the chipmunk above. But, one thing which stuns adults as much as 240 volts to the system is a personal loan. Typically, people can’t get over the repayment rates and how strict the lender is with their money. Sorry, somebody else’s money because they don’t even own it. Well, one thing which is bound to twist your melon is the fact that an application isn’t all bad. In fact, the harsh truth is that a loan from the right lender can save the family money.
You’re bound to be too astonished to move right now, but when you come around again, carry on reading to find out about the nuts and bolts.
Conventional wisdom says you shouldn’t deal with debt by adding to your arrears. Usually, this is excellent logic to follow; however, it isn’t foolproof. Why? It’s because consolidating your arrears if you have lots of them can save you a significant sum. It’s worth noting that dealing with them separately is often cheaper if you are organised. Anyone who isn’t, though, will eliminate the late fees which apply when you miss a payment. One big debt is more straightforward than ten small to medium ones.
Hard Vs Soft
There are two types of credit inquiries: hard and soft. How long do hard inquiries stay on your credit report? The answer is two years, and they tend to knock off around two to five points What about the soft kind, you ask? Well, they are different because they don’t have an impact on your score whatsoever. So, applying for a pre-approved deal means A) you’re likely to secure a loan, and B) it won’t affect your credit if you get rejected. A poor credit score adds to the costs because it means everyone from a bank to energy companies and phone providers won’t cut you a deal.
Loans come in all shapes and sizes. Probably the most common, and one of the most dangerous, is a credit card. Because it’s plastic and easy to swipe, it’s tricky to keep up with your spending. And, the monthly interest of 20% only adds to your arrears. However, use it wisely and you can recycle some of your debts for years without getting stung by the repayment rates. The trick is to transfer the balance to a new card when the promotional offer runs out so that you only have to pay the minimum.
People who need money quickly turn to traditional lenders. But, if you only need a small amount of cash, a building society or credit union might be a better option. Their lending rates are usually much more flexible and less strict. That way, it’s possible to borrow without putting your future at risk. Of course, the ultimate alternative is to stick to your budget and not overspend. When you start to resist temptation, you’ll be amazed at how much you save.
Personal loans have pros and cons, so the key is to find the balance to save money.