With so many outgoings and not as much coming in people are being stretched financially and still have to find ways to pay for many items that they need, including utility bills and monthly insurance cover to basic items such as food.
One longer-term solution that some of us follow is to acquire a personal loan and pay it off on a monthly basis. If you make a mistake when agreeing to a loan then it can be one of the major errors you make as it will stay with you, both financially and on your credit rating, for a long time. If you choose the right deal you will find it a great relief.
Many people now take a look at sites like uSwitch or The Motley Fool's loans comparison site for tips on the cheapest deals around at the moment. Don’t be worried to ask questions about finances; a personal loan is a financial commitment like any other and should be given the same deliberation as you might to the holiday, car, food or clothing that you or your family enjoy. The Motley Fool has a discussion board where you can ask questions and so do most of the other sites you will visit.
Never be unrealistic and borrow more than you can comfortably afford to pay back. Take into consideration that you should not be putting all your monthly resources into paying off the loan as it will mean you getting into a cycle of debt.
A sensible measure before you take the plunge and borrow money is to make use of a Loans calculator - they're pretty straightforward and can be found on most lenders’ websites. The calculator on the Natwest Loans page, for instance, allows prospective borrows to enter the amount they want to borrow and the timescale they would prefer to pay it back over and gives them the monthly payment and the total amount payable; say you wanted to borrow £5000 and pay it back over 4 years the calculator will inform you that your monthly payment would be £214.72 (including Loan protection) and that the total amount payable would be £10,306.56. Loan calculators do not provide exact details and so can only be used as a guide. Any estimates from loan calculators should be compared across the board.
The table below shows some of the typical loan rates for some of the big lenders (figures are accurate at the time of writing):
|
Lender |
Loan Type |
Typical Rate |
|
ASDA Finance |
Personal Loans |
Typical 6.9% |
|
Natwest |
Personal Loans |
Typical 6.9% |
|
RBS |
Personal Loans |
Typical 6.9% |
|
Alliance & Leicester |
Personal Loans |
Typical 6.5% |
|
Moneyback Bank |
Personal Loans |
Typical 6.3% |
Never procrastinate if you get into any difficulties with payments and remember that if you overstretch and cannot pay off the loan it could potentially impact you in the future as it will stay on your credit record. Contact your lender as soon as possible and try and work out an arrangement.
Whichever ways you decide to gain extra funds make sure that you do plenty of research and stick to the figures you decide on.