Managing your personal loan repayments can be an even harder task than deciding on the kind of loan you want in the first place. Here is some sound advice to help to keep up to date with your repayments, whilst still remaining flexible.

How do I know I can afford the repayments?

When taking out a loan it is important that you can handle the repayments. Work out how much you can realistically afford to repay each month. Whilst you need to be comfortable with the monthly amount, you should also bear in mind that the longer you take to repay, the more interest you will pay in the long run, so try to find a balance between the two. Using a Budget Calculator can be invaluable for calculating your expenditure and a Loan Calculator can assist with budgeting for loan repayments.

What if I fall behind on my repayments?

If you find that you are struggling to keep up your repayments, contact the lender and explain your problem. Contrary to popular belief, money lenders are not all bad, and most would prefer to work out a new repayment plan that you can afford, rather than start legal proceedings against you or take it as far as repossessing your home.

What if the worst happens?

No matter how carefully you budget, there are some things that you just can’t foresee. What if you suddenly fall ill or lose your job, or worse? You may feel more comfortable with borrowing money if you take out payment protection insurance.

Payment protection insurance is offered by all reputable lenders. Prices and terms will differ from lender to lender, but by and large, standard insurance should:

1. Cover your repayments for 12 months should you lose your job.

2. Cover your repayments for 60 months (or until the debt is repaid in some instances) if you cannot work due to injury or illness.

3. Repay the balance of the loan in the event of permanent total disability, critical illness or death.

Be aware of all your options. Take control of your finances, don’t let your finances take control of you!

In May 2010 the new UK Government announced their proposal to make changes to the Child Trust Funds which were introduced by the Labour Government in 2005. Any changes are required to pass through parliament before they can become effective. So for now the Child Trust Funds remain active and unchanged.

However, changes are quite possibly imminent. So what do these changes mean to your child?  Any child who already has an existing child trust fund will continue to keep this fund but will not receive any further government contributions. These funds provide a good platform for future savings and allows friends and family to contribute, this will remain to be the case. They are a long term tax free savings account, which is accessible by the child once he or she turns 18. This could give your child an invaluable start.

Many parents receive the government voucher then spend a great deal of time researching the best possible fund to invest in. What is often overlooked is the ability to transfer the funds if it begins to perform below expectations. This can easily be done through the adviser who set up the account on your behalf and there are often no charges involved in this.

So, for the parents of children have Child Trust Funds make the most of them. The Internet is a great place to see best buy tables and make comparisons. It really could make a difference to your child’s fund.

A discounted mortgage rate is exactly what it says on the tin. You benefit from a pre-determined discount from the lender’s standard variable rate for a pre-determined period. This period is usually between six months and five years.

The advantage of the discounted mortgage is reasonably obvious. You can find very competitive initial rates, with some quite substantial discounts available. Some introductory rates could be as low as 1% with a large 1-year discount. Should you know that you will be lumbered with a large amount of expenses having just bought your house, these discounts could be very useful.

Another advantage of the discounted mortgage is that if base rates go down, your pay rate should get even lower. Now, it is also true that your pay rate will rise if interest rates rise, but it is this fact that makes lenders set their initial rates lower than they might do with an equivalent fixed rate product, as lenders know that if interest rates rise they can charge you more.

But there are quite a few disadvantages of discounted mortgages. In general, in return for the discount, you are likely to be tied to the mortgage for at least the period of the discount. You’ll find redemption penalties stop you from moving during this period, and unlike a fixed rate, you can’t control how high your rate will go. The MPC have been known to make up to six increases in the base rate within a year, and your interest rate will follow this.

You should also bear in mind that the heavier your discount is, the higher the jump in the level of your repayments will be when you discount period ends. How will you budget for this? What happens if you forget that your discounted period is about to end, and suddenly find yourself going into overdraft on your bank account because of the large amount of money that leaves your account that month.

You must also watch out for overhanging redemption penalty periods. This is the most basic way that the lender makes their money back from providing you with the discount on your mortgage. In general, you don’t get anything for nothing, and you’ll find that the higher the discount, the longer the overhanging redemption penalty period is likely to be.

Make sure you understand how discount mortgages are marketed. Take a look at the ‘Key Facts’ document which itemises all costs involved and how the mortgage works now and in the future.

Zero APR credit cards are obviously extremely desirable. The possibility of borrowing money for free has an inbuilt appeal. Unfortunately, while you see cards advertised promising 0% APR the reality will be that, once you read the small print you often find that this low rate has conditions attached (or is only relevant to one aspect of the card). For example: many cards promise 0% APR, but this refers only to balance transfers or to new purchases. You’ll also find that preferable rates tend to be limited to six months or so, after which the transfer and purchases will be paid for at the normal APR rate.

One Reason that so many companies offer 0% APR on balance transfers is because customers owe money on other cards and are looking to transfer this debt to cut costs. The hope is that they will be able to pay off some (or all) of their outstanding balance in the introductory period. It’s also not unheard of for customers to switch cards again once the introductory period is over – and thus avoid paying interest at all. At the same time credit card companies are happy to take on new customers in the hope that they will retain their business for a long time to come.

In addition the lion’s share of credit card companies offer 0% APR on new purchases for a fixed period. Again once this period has worn off the APR kicks in as per normal. However, some cards maintain an interest free period on new purchases of up to 50 days ad infinitum. This means that you can buy a product and have a period of leeway before you actually have to pay for it (which represents a financial saving – as long as you clear the debt within the specified period). The flip side is that many people don’t make the repayments in time and end up paying hefty charges.

In effect this means that 0% APR credit cards are something of a false promise. While there are plenty of credit card companies that won’t charge for balance transfers or new purchases; you’re unlikely to find one that offers 0%APR on actual money borrowed. Hence it’s a much better idea to look for a card with a low APR which remains stable over time. With this in mind you’ll find that there are some attractive packages available, and it’s up to you to find the one that best suits your needs.

A business loan is specifically taken out to fund your business. They are normally available to be paid back over a period of between 1 and 15 years. In order to decide whether to get a loan, you should take a careful look at your business investment needs. Then take a good look at your cash position. Your decision about how to fund whatever you wish to invest in should depend on your cash position but also on your business position.

Why is this?  When you take out a loan, you are preserving your cash position, which means that your liquidity is also preserved. You will find it a much more difficult to get a business loan on favourable conditions if you are in dire need of cash. This is because your interest rate and amount you can be loaned will depend on your ability to pay your loan back. If your cash position is precarious, then you’ll find that your interest rate is higher as the lender would feel that they are taking more risk. Should your cash position be strong, then you’ll get better loan conditions.

Some people think that if they are in an adverse personal credit position, they can get a loan through their business. But many lenders will look at your personal credit history as part of your decision whether to give you a business loan. This will particularly be the case should you be a sole trader or a member of a partnership. Should you have a bad credit history, with maybe a bankruptcy or a late payment or two, then you should write a letter explaining the circumstances that brought you to your credit position and, presuming they have changed, how they have, and include it with your application. Don’t cover up your problems under any circumstances, because if you are found out, then you’re extremely likely to be shown the door by the lender. So be honest, and hope that honesty lessens the impact of the black marks held against you.

In order to improve your chances of getting a loan, you need to show the lender why you will be reliable with your loan repayments. If you have accounts, show the lender your earnings history, and if possible a realistic assessment of your future earnings potential. It will also help you if you have personally invested in your own business. This will show the lender that your interest will be aligned with theirs, and you are both sharing the risks in your business.

Should you be a sole trader, you will be responsible and liable for the repayments. In a partnership, all partners will be jointly responsible. Finally, if you are a company, the directors are likely to be liable.

If you have a second property that you are letting out, then this means that you’re getting a second income on which you must pay income tax. Tax is levied on the profit that the property makes, which is calculated as the gross rental income minus any costs that relate specifically to the running of the property. Deductible costs include the following:

Management or letting agent’s fees: tax breaks may mean that it actually pays to have someone else managing your property.

Insurance: any insurance policies directly affecting the property (such as building or public liability insurance, plus policies covering white goods) can be written off against your tax bill.

Maintenance: repairs and maintenance carried out on a property are tax deductible, but exactly what you can and can’t do is something of a grey area. As a rule of thumb it’s fair game to replace like with like, as long as you steer clear of improvements (hence if you’re intending to replace a tatty bathroom suite forget about the new spa-bath, bidet etc).

Wear and tear: if you’re letting a furnished property you will be able to claim 10% depreciation annually on all your furnishings (but not fittings).

Anyone who takes out a buy to let mortgage is able to offset interest payments against tax (but not capital payments), which makes interest only mortgages an attractive proposition. However, if you’re using your second property as a savings vehicle (for example as an alternative pension) then a repayment mortgage can make more sense; certainly in terms of security.

Don’t forget that when you sell the property you will also have to pay Capital Gains Tax on any capital accrued. The laws relating to Capital Gains Tax  in the past have always been a little complex to say the least, however, since 1st April 2008  Capital Gains Tax is charged at a rate of 18% making things a whole lot simpler.

Home Equity loans, also known as Equity Release,  can offer excellent way of gaining extra income, by utilizing the equity you have built up in your UK property over the years. Because many people do not want to move from their house in order to access some of the equity they have built up in it, they borrow money on the house whilst continuing to live there.

Clearly this type of finance has attractive features but make sure you are fully aware of the terms and conditions with any policy before making the commitment as ending the agreement early maybe costly!

What do I need to ask before refinancing with an Equity Release Loan?

No doubt there will be hundreds of questions you’ll want to ask, but here are a few of the more basic queries you should consider discussing before you sign on the dotted line:

1. What is the minimum age requirement?

2. Is there a minimum property value requirement?

3. Will I have to cover arrangement fees and legal costs?

4. Will the loan be paid as a lump sum or in regular instalments?

5. If the loan is paid in instalments, will my income payments increase in line with inflation?

6. Is the interest rate fixed or variable?

7. Can I remain in the property for as long as I wish?

8. Are there any financial penalties if I move house?

9. Are there any financial penalties if I move into sheltered accommodation?

10. If I marry, will my spouse be able to live in the property when I die?

11. How will the loan affect my tax contributions and/or state benefits?

12. What if the amount owed becomes greater than the equity in the property?

It is highly recommended that anyone considering an Equity Release Plan should seek advice from an Independent Financial Adviser. A list of registered advisers who are regulated by the Financial Services Authority can be found on their website; www.fsa.gov.uk/register.

Applying for an unsecured personal loan is relatively fast and  straight forward. Because you are not securing the loan against a property, you do not need to complete long, complicated forms. You are able to access funds from £500 to £25,000 with a repayment period of anything from 6 months to 10 years.

The loan can be used for any number of reasons; consolidating your finances, purchase a new car or maybe to pay for a well deserved holiday in the sun!

Where can I get a fast unsecured loan?

The fastest way to get an unsecured loan is to apply online. Some lenders will come back to you that  same day and let you know if your application has been approved or not, some lenders will make an instant decision in a matter of seconds.

When will I actually receive the money?

Once the forms have been signed and the lender has all the information they require, the money will be transferred into your bank account very swiftly indeed, some lenders even guarantee that the cheque will be with you within 24 hours.

What else should I look for in a loan?

Whilst getting an unsecured loan quickly might be very important to you, be careful that you don’t compromise on other aspects of the loan, in particular interest rates and repayment terms.  Make sure you check whether there are any penalties should you find you are in a position to pay back the loan early…. Always check the small print!

These days, investing in properties with the aim of renting them out is open to all kinds of people from various walks of life. Gone are the days when owning multiple properties was the preserve of the wealthy.

However, buy-to-let is not as simple as buying a property and then sitting back to wait for the money to come in. There are significant dangers in buy-to-let, and if you don’t do your homework, you could find yourself losing money instead of earning money.

Firstly; location, location, location. It’s not just a mantra you know. You can’t earn any money from buy-to-let unless you can rent it out and if it’s in the middle of nowhere with hardly any access to local amenities then you could find trouble letting it. You should buy somewhere close to a large city and within walking distance of local amenities and public transport.

Even if you are in a good area, you need to find out about the demand for rental properties and the demographics of the area your looking in. Buying a one bedroom flat where prospective tenants are predominantly young families will not bring home the bacon. The Association of Residential letting Agents (ARLA) will offer you help and advice on rent levels and regulations.

You should also understand that there are quite significant initial costs after investing in your property. You have to find a deposit likely to be around 20% of the cost of the home. You’ll need to pay for valuation, solicitors’ fees, surveys, and stamp duty.

Not only that but there are numerous home buying expenses that you need to think about. You may have to decorate the home, buy furniture and appliances. Then you have to get tenants into the flat, that isn’t free.

One of the most potent dangers of buy-to-let is that the landlord doesn’t think about what they can really afford to invest. To lend on a property, many lenders will want your rental income to be 125% of the monthly mortgage payment or more, so do your sums.

Then there is the hassle of managing the property. Do you want to be woken at 4am to fix a burst water pipe? If not, an estate agent will take care of this, find you tenants, collect rent for you and arrange the tenancy agreements and the inventory for you. They will charge you 15% of your income, but it could be worth it.

It may be a wise decision to keep some spare money aside for those rainy days when you  find yourself between tenants, not receiving rental income, lose your job or have the tenants from hell that burn your front door down! Utimately you are responsible for all of this, and your lender will still require your monthly payments whatever happens.

However, there is some good news… The Rental Index report by Findaproperty.com April 2010 shows that rents increased by 2.7% over the first four months of this year,  so maybe research is the key to becoming a successful Landlord and by entering the rental market with your eyes wide open you may just reap the rewards!

Prospective buyers can find themselves in a catch 22 situation when they first set out house hunting. On one hand they can’t begin looking for a property until they know their budget, and on the other they find mortgage providers unwilling to talk until they have a definite purchase in mind. One way out of this financial quandary is to seek out an online mortgage calculator. Once you’ve got a ballpark figure you’ll then be in a better position to begin scouring the local papers and estate agent windows to find a suitable property.

Mortgage calculators are an indispensable tool in the home buyer’s armoury. They provide assistance to borrowers helping them to assess their financial situation and calculate what their monthly outgoings are likely to be. Mortgage calculators come in all shapes and sizes, but they basically answer the questions: How much can I borrow? and What will my monthly repayments be?

It’s important to remember that mortgage loan calculators only give you a rough idea of borrowing. A common fault is that they overlook how much deposit you are able to put down, and bigger deposits tend to mean proportionally bigger loans. As a rule of thumb mortgage providers will offer 3.5x the salary of a single applicant, while joint mortgage applicants can expect either 3x the highest salary plus 1x the lowest salary, or 2.5x the combined salary.

Mortgage  calculators offer a quick way to work out how much your mortgage will cost you every month or to see how switching interest rates (remortgaging) will affect your financial standing. Monthly repayments are calculated by typing in the amount you are borrowing, the remaining term and the interest rate. Anyone who has taken out an interest only mortgage will have a much more difficult time finding out where they stand because their mortgage balance is dependant on how their additional investment (whether it be an endowment, ISA or pension) is performing.

A mortgage calculator might  be just what you need to help you begin your search for that new home.