What to Consider Before Applying for Payday Loans and Logbook Loans

Before filling out that application form for a payday loan, logbook loan, or any other type of loan for that matter, be sure to ask yourself the following questions:

  • Can you afford to pay the loan back on time?
  • What interest rates will you be dealing with?
  • Do you need a long term loan, or will a short-term deal suffice?
  • What are repercussions of not being able to pay the loan back?

Keep in mind that the longer the loan period, the more times you have to pay interest. Be sure to consider how much you make and how much you can reasonably set aside each month to pay the loan back. Don’t borrow more than you can afford to pay back, as you risk ruining your credit score and burying yourself deep in debt.

 

Interest

In lending, there are two types of interests – fixed and variable. Fixed interest rates often result in high but constant repayment amounts, which means you generally pay the same amount back spread over a certain period of time. With variable interest rates, the amount you repay depends on several financial factors. This arrangement can result in lower repayments over time, although you have very little control over how much you have to repay each payment period. It helps to consult a broker or a financial advisor to determine what interest type best suits your needs and financial capabilities.

For more information about logbook loan interest rates, you may want to visit Just Logbook Loan.

Terms

Another factor to consider is how long you will need the loan for. Short-term loans such as payday loans gives you about one calendar month to repay your debt, just enough to make it to your next month’s salary. Logbook loans, on the other hand, offer lower interest rates and the ability to spread your repayments over longer periods of time.

While payday loans may technically incur less in interest rates than logbook loans, it is important to consider that there is also a shorter amount of time to pay the loan back, and missing your due date can sometimes be more expensive than simply stretching the loan period for affordable monthly payments.

Penalties for Failure to Repay

Make sure to understand the terms of agreement before signing up for any type of loan. Understand what penalties you might be facing for late payments or failure to pay the loan back altogether, just to make sure you know what you are getting into. Most reputable lending companies will check your credit report anyway before approving your loan application just to make sure that you are capable of paying the loan back over time.

The Bottomline

Applying for any type of loan and trusting your financial freedom to someone else can be understandably stressful. But with the right lender, and the right type of loan to manage, you can get by financially and not have to worry about getting buried even deeper in debt. At the end of the day, the decision on what type of loan to apply for and which lender to work with falls on you, so do your research and make sure that you are always on top of your financial situation.

 

 

Tips on How to be a Smarter Shopper

Have you ever stepped out of a store having splurged more money than what you intended to spend? You’d be surprised to find out how often that happens, and that you are not alone. Here are a few handy tips that can help you shop smarter and save money at the tills.

  • Forget about being picky with brands. There are plenty of commercial products out there that are just as good and just as effective as their more expensive branded counterparts. Brand loyalty can be a tough habit to break, but if you open your mind to trying lesser known products you can save a significant amount of money. For instance, both branded and non-branded paracetamol contain the same active ingredient, but the price difference between the two can be as high as £2.

  • Speaking of foregoing brand biases, try expanding the idea and do the same for your family. A good way to save money is to try non-branded versions of products that you usually use at home, like paper towels or laundry detergent, and see if your family can tell the difference. You’d be surprised to see how much money you can save without compromising on quality.
  • Take advantage of as many supermarket deals as you can get your hands on, but be smart about them. Discounts are a great way to save money, but they can also have the opposite effect. You might find yourself buying something that you don’t really need simply because you saw that it was on sale. Try shopping with a friend some time and go for those buy-one-take-one deals. That way, you end up buying products for half the price. Or, you can shop on your own and come home with twice as many items for the price of one. Either way, you’d still be shopping smarter.
  • Smart shopping also means not falling for the many tricks that supermarkets and other commercial establishment employ to get you spending more money than you intended to when you first walked in. For instance, supermarkets display big money items right at eye level, making them seem more attractive. But if you can get past them and look at the lower shelves you will surely find a bargain.
  • Avoid impulse buying at all cost. Those chocolates you see at the tills are the store’s efforts to get you to buy more at checkout. Try not to be tempted into making that last-minute purchase simply because you have a sweet tooth!
  • To curb those impulse purchases, it also helps to follow the 24-hour rule. When you encounter something that you want to buy but is not included in your shopping list, the rule suggests that you skip on buying the item and wait for 24 hours instead. You should only buy the item if you decided 24 hours later that it’s really worth it.
  • A shopping list can be helpful, as long as you can stick to the plan. Making a list of items that you intend to buy can help prevent unnecessary purchases. If you have a particular product on your list but can’t find it in the store, always look for a less expensive alternative. If possible, hold off on buying it until the store restocks so that you don’t end up spending more money unnecessarily.

Remember that supermarkets and other commercial establishments are not only there to provide you with access to products; they are also there to make money. It’s just business. Be smart about things the next time you shop and watch your savings grow. Don’t just fall for those special offers and loyalty rewards that cost a pretty penny. It might just be a smarter decision to shop somewhere else instead.

 

 

How Changes with the FCA Regulations Protect Consumers

The recent changes in payday regulations have most consumers in the lending market more confused than ever. With more than 1.6 million people taking out payday loans each year, how much of an impact will the changes made by the FCA have on the market?

What Changed?

The new regulations set by the FCA introduces three significant changes:

  • Cap on the total cost of credit
  • Clarification on CPA, or Continuous Payment Authority
  • Clarification on affordability assessments

What They Mean

With the implementation of a cost cap, borrowers will no longer have to pay back more than twice the loan amount. The cap limits all interests and fees to a maximum of 100% of the total loan amount, ensuring that borrowers pay only what they are supposed to pay. Before the changes in the FCA regulations were made, lenders charged up to three times the total loan amount. The rule change sets up a fair arrangement where borrowers pay less and lenders see fewer defaults on payment. .

Another change made in the FCA regulations concerns clients whose accounts have CPAs, or Continuous Payment Authority. In the past, lenders could take out multiple payments from their clients’ accounts within a period of one week via a CPA. The recent FCA rule change no longer allows this, setting a limit that lets lenders use the CPA on a client’s account a maximum of two times. It also adds emphasis on the fact that the clients are free to cancel the CPA if they so choose.

Lastly, the FCA rule change puts a stricter implementation of affordability checks. Under the new FCA rule lenders will be required to carry out procedures that ensure affordability based on the client’s income and credit score. This means borrowers will no longer be lent more than what they can reasonably pay back. On the other hand, the rule change also makes it difficult to improve one’s credit score because lenders do not base their decisions on the client’s credit report. Affordability checks are now an important component in the lending approval process, with some lenders already being penalized for failing to comply with the new FCA regulations.

The changes in the FCA regulations have had a significant – but not crippling – impact on the payday loans market. More information about the rule changes can be found on the FCA’s official website, and through Money Advice Service

Your Credit Report from a Creditor’s Perspective

In this day and age, the one thing that best reflects how well or how poorly you are doing financially is your credit report. How well you score on your report determines whether you can afford to make large expenses or not, such as buying a house or a car. It is also crucial in determining whether you can get approved for a loan or not. A good credit score makes all the above mentioned situations possible, while a bad rating can get your loan application denied outright. It is therefore important that your credit report is accurate. Errors in your credit report can lead to delays and aggravation. They can also get your application declined even if you have a good credit rating. It helps to request a copy of your credit report before filing any loan or credit card application just to make sure that all of the information creditors will see on it are correct.

Personal Information

While this section of your credit report does not impact your score, it does serve as your identification. The fields included in the personal information section are as follows:

  • Legal Name
  • Current Home Address
  • National Insurance Number
  • Birth Date
  • Employment Information

Make sure to have all the required data filled out correctly in order to avoid delays in filing your report.

Credit Accounts

The credit accounts section of your report is also sometimes referred to as your trade lines. Establishments that you have had credit with submits the following data and includes them onto your credit report:

  • Type of Account (credit card, mortgage loan, etc.)
  • Date the Account was Opened
  • Credit or Loan Amount
  • Current Balance
  • Payment Records

Your payment records also show any late payments that you may have made in the past.

Credit Search

The credit search section of your report shows a list of every individual or company that you have allowed to run your credit in the last two years. The list is generally divided into two sections:

  • Voluntary Inquiries – These are requests that you have made for your credit report
  • Involuntary Inquiries – These are when lenders and other credit agencies request for your report

Review this section of your report and make sure that no one has run your credit without your knowledge. If you happen to find any anomalous entries, especially in the involuntary inquiries section, identify the lender that ran your credit and find out why they submitted an inquiry.

 

Public Records and Collection History

This section provides information that is readily available for public viewing, including records obtained from county courts and collection agencies. Other details include:

  • Bankruptcy Claims
  • Insolvency
  • Home or Property Repossession
  • Unpaid Debt Under Previous Address
  • Any Fraud Committed
  • County Court Rulings

It is important that the information reflected in this section is accurate. If you find errors, contact the lender or agency listed in your report and have them update the information on your report. Remember that public records don’t always get updated automatically, so be sure to check for errors and make all the necessary inquiries appropriately.

Familiarity with what information is on your credit report can help you prepare for any questions that lenders or credit agencies might have for you. It is important that your report accurately reflects your current financial standing, as any inconsistencies may result in your loan or credit card application being declined.