15 10 / 2013

15 10 / 2013

What is a one-year loan?

12 month payday loans are about getting cash that customers need when they need it, quickly. While banks may have require going to meetings and filling out mountains of paperwork,it is the 12 month loan lender’s job to make getting cash quick and easy.

However, over the past 12 months, there has been an attempt to crackdown on payday loans by the Office of Fair Trading. Despite this, the petition has had little influence over the companies themselves. The market leader, Wonga.com, has reported 35% increases as loan demands rocket. Not to mention the £1.2million profit PER WEEK, and annual turnover of £84.5 million.

The government are now stepping up their attempt to divert financially struggling individuals from turning to these companies. Undeterred by this, there is now a new breed of companies offering short-term loans to watch out for – the 12-month lenders.

Why are lending sites so popular?

Another firm in the payday lending market is Pounds to Pocket. Their website boasts that “there are no hidden fees” and “you can even repay your loan early with no pre-payment penalties”.
While this may be a comfort to someone with fairly low expectations of being treated fairly, there are some other areas of real concern. The inflated interest rate, for starters – they cite an example loan of £1,000 over 365 days with 12 payments of £158.19, equivalent to 278 percent APR.

The likes of Wonga have appalling annual percentage rates (APRs) of 5,853 percent while many companies offering 12-month loans "only" charge 299 percent.
The truth is that the APR on a 30-day loan is somewhat misleading because they are – theoretically at least – designed for very short-term borrowing, but over a whole year you’ll be paying interest for much longer and that’s when an extortionate rate is a worry.
One-year loans have managed to escape some of the resentment aimed at payday lenders, but they are potentially more dangerous because the headline interest rate is lower.

There may be long-term harmful side effects too, as payday loans and one-year borrowed loans can both make it more difficult to get a bank loan, mortgage, overdraft and even a credit card, so who knows why these companies are popular?

Picking on the vulnerable:

They may dispute otherwise, but the target audience for both payday and one-year loan companies is the vulnerable and the liable. Their television adverts and marketing material tempt borrowers by offering a large sum of money in their bank accounts in a matter of minutes. Many say that they accept people with bad credit histories, raising concerns that short-term lenders fail to check whether borrowers can really afford to repay the loans in time. Regulators have also criticised firms for encouraging customers to roll over loans, which can lead to the total debt spiralling out of control.

Some alternatives to short-term loans:

The good news is that, yes there are many alternatives to short-term loans. Following these tips can ensure you’re never owing private lenders extortionate amounts of money.
According to Independent.co.uk, If you use an existing credit card and clear the whole card in full the following month you don’t pay any interest at all. If you have a poor credit history you may be able to apply for a card offering a 0 percent introductory deal.

An authorised overdraft can also be a useful way to borrow small sums. Most banks offer arranged overdraft limits charging an average interest rate of 16 per cent according to Moneyfacts.co.uk. Some also offer interest-free overdrafts for a certain period. But you should steer well clear of unauthorised overdrafts as these have monthly fees from £5 to £35 or more as well as transaction fees for every cash withdrawal, direct debit, standing order, cheque and card payment.

http://www.independent.co.uk/money/loans-credit/is-oneyear-borrowing-worse-than-a-payday-loan-8816670.html

09 10 / 2013

  • Budget during the first weeks of term

Your student loan is here and you’re positively itching to spend it. There are so many things to spend your cash on but WAIT! You won’t have any money at the end of term at this rate, so start budgeting wisely.

It’s hard to budget when you’re keen to have fun, but it is worth holding off on extravagant spending early on. 

  • Enjoy student discounts

NUS Extra cards cost £12 for the year, and open the gates for a ridiculous number of discounts in your favourite places, including Topshop, ASOS and Odeon. This doesn’t mean you should increase your spending just to enjoy them, but it does mean savings when you do go shopping.

  • Plan your meals in advance

You will be so tempted to pick up a coffee after a lecture, or grab some lunch with a friend during your free time. However, this slowly adds up. Preparing your own meals is a lot cheaper, as well as being a lot healthier for you 

Travelling home for a weekend or visiting friends at other universities can be a costly affair, but that doesn’t have to put you off. There’s the 16-25 railcardthat can get you up to a third off rail fares.

  • Sell your unwanted stuff

Your university textbooks are surprisingly rather valuable, instead of leaving your books to sit and gather dust, head to Amazon to sell it to new students. The same applies to your clothes! Pack up anything of value and put it on eBay.

  • Look online for top money saving tips

Now you’re at university, you’ll probably spent 99% of your time online. Make the most of your browing time by heading to studentbeans.com or studentmoneysaver.co.uk for offers, discounts and budgeting tips.

08 10 / 2013

What is a one-year loan?

12 month payday loans are about getting cash that customers need when they need it, quickly. While banks may have require going to meetings and filling out mountains of paperwork,it is the 12 month loan lender’s job to make getting cash quick and easy.

However, over the past 12 months, there has been an attempt to crackdown on payday loans by the Office of Fair Trading. Despite this, the petition has had little influence over the companies themselves. The market leader, Wonga.com, has reported 35% increases as loan demands rocket. Not to mention the £1.2million profit PER WEEK, and annual turnover of £84.5 million.

The government are now stepping up their attempt to divert financially struggling individuals from turning to these companies. Undeterred by this, there is now a new breed of companies offering short-term loans to watch out for – the 12-month lenders.

image

Why are lending sites so popular?

Another firm in the payday lending market is Pounds to Pocket. Their website boasts that “there are no hidden fees” and “you can even repay your loan early with no pre-payment penalties”.
While this may be a comfort to someone with fairly low expectations of being treated fairly, there are some other areas of real concern. The inflated interest rate, for starters – they cite an example loan of £1,000 over 365 days with 12 payments of £158.19, equivalent to 278 percent APR.

The likes of Wonga have appalling annual percentage rates (APRs) of 5,853 percent while many companies offering 12-month loans "only" charge 299 percent.
The truth is that the APR on a 30-day loan is somewhat misleading because they are – theoretically at least – designed for very short-term borrowing, but over a whole year you’ll be paying interest for much longer and that’s when an extortionate rate is a worry.
One-year loans have managed to escape some of the resentment aimed at payday lenders, but they are potentially more dangerous because the headline interest rate is lower.

There may be long-term harmful side effects too, as payday loans and one-year borrowed loans can both make it more difficult to get a bank loan, mortgage, overdraft and even a credit card, so who knows why these companies are popular?

Picking on the vulnerable:

They may dispute otherwise, but the target audience for both payday and one-year loan companies is the vulnerable and the liable. Their television adverts and marketing material tempt borrowers by offering a large sum of money in their bank accounts in a matter of minutes. Many say that they accept people with bad credit histories, raising concerns that short-term lenders fail to check whether borrowers can really afford to repay the loans in time. Regulators have also criticised firms for encouraging customers to roll over loans, which can lead to the total debt spiralling out of control.

image

Some alternatives to short-term loans:

The good news is that, yes there are many alternatives to short-term loans. Following these tips can ensure you’re never owing private lenders extortionate amounts of money.
According to Independent.co.uk, If you use an existing credit card and clear the whole card in full the following month you don’t pay any interest at all. If you have a poor credit history you may be able to apply for a card offering a 0 percent introductory deal.

An authorised overdraft can also be a useful way to borrow small sums. Most banks offer arranged overdraft limits charging an average interest rate of 16 per cent according to Moneyfacts.co.uk. Some also offer interest-free overdrafts for a certain period. But you should steer well clear of unauthorised overdrafts as these have monthly fees from £5 to £35 or more as well as transaction fees for every cash withdrawal, direct debit, standing order, cheque and card payment.

http://www.independent.co.uk/money/loans-credit/is-oneyear-borrowing-worse-than-a-payday-loan-8816670.html

http://www.churchwoodfinance.co.uk

08 10 / 2013

08 10 / 2013

  • Ask yourself: do I really need this? 

Picture the scenario. You find yourself in a department store and there’s a sale on. You select an immaculately packaged collection of dinner plates and other associated crockery paraphernalia. Did I mention it was less than half price? Before the pesky impulse buy, go ahead and ask yourself: Do I really need this? Exactly. Put the plates down and walk away!

Estimated save: £34.99

  • Walk/cycle to the station/work

It will keep you fitter, and your wallet bulkier. It’s also a lot more eco-friendly. Result! 

Estimated save: £50 per month

  • Cancel your gym membership

If you use your gym three or more times per week, good for you! But how many of you have a gym membership that never gets used? Cancel it immediately! You’ll burn the calories with all of that walking/cycling from work

Estimated save: £40 per month

  • Buy clothes and presents in the sale

So you need new clothes this season and the ones you like all combine to form a total of £300. Hold on! Buy out of season clothes at outlet malls to avoid the prices at peak times, for example … buy your winter coat in June!
This same method applies for birthday and Christmas presents. Buy in bulk in the sales and you will not only save yourself money, but you enjoy a stress-free Christmas and no last-minute birthday worries.

Estimated save: £150 

  • Give up smoking

As well as the bad smell, the guilt, and the health implications … 20 cigarettes per day is costing you a lot. QUIT!

Estimated save: £2000 per year