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How Much of a Gamble is a Student Loan?

Student loans are a difficult type of debt. Many people see them as good debt because they help you towards a career. So they are an investment in your future and therefore you will be able to possibly get a better job as a result of it. This could mean that you will be able to get a larger salary for the rest of your working life, which could have a huge impact on your future.

When university education was free, it was a pretty easy decision in that anyone that was clever enough should go to university and get the degree so that they could get a better job. However, now that students have to pay for their university education, they tend to use a loan and then pay it back using their tax code over up to 30 years. This usually just covers the cost of the course and perhaps rent but they often need to make this up, with some students being able to claim a small grant and the rest having to find the money through working part time or being given it by their parents.

When the loans first came out it was said that they looked pretty good. The repayments were pretty small and depended on how much you earned so if you were not earning you would not have to repay anything and as your income rose you would have to pay more, with the outstanding amount being written off after 30 years. However, the rules have been changed over the years and different students have had different terms with regards to the amount of interest charged and how much they have to pay back. This is likely to change as governments change and possibly even within the same government depending on the economic situation, their policies etc. There was even a case where the terms were changed for graduates who were already making repayments and so they then had to pay back more than they had been told they would have to. This is something no lender would be able to do, but the government managed to. This means that even if you sign up to a student loan and think that you are getting a reasonable deal, you could find that things will change in the future.

As well as the risk of taking a loan and wondering what effect that might have on your future there is also the risk of wasting time. An undergraduate course will usually take three years and afterwards you should have a qualification. However, to decide whether you got good value for money from your loan, will depend on what sort of job you can get afterwards. If you cannot get a graduate job then you may end up doing a job that could have done without having studied for the degree and it may therefore mean that you end up with a lot of debt for nothing. You may also find that certain degrees with prepare you for a specific job but there may be others that are much more general and will mean that you need further qualifications in order to use that degree to carve a career path.

Of course, many people will see the worth of the degree to stretch beyond your salary earning potential. They may feel that just having had the experience of student life is well worth the money. This is very much down to personal opinion and also may depend on the university that you attend and the course that you do. The more involved you get with the activities on offer form the university, the better value for money you are likely to get. Make sure that you attend all lectures and classes on offer to you but also get involved in the extra-curricular activities which are likely to be free or cheap.

It can actually be quite difficult to tell whether you will get good value for money from your degree. Finding out exactly what you get form your course with regards to teaching time, employment prospects and extra-curricular on offer could help you to make the decision. However, it is also worth thinking about the reasons why you are doing the course and whether you will actually achieve your goal by the end of it. Consider whether having to make the repayments will be a big burden in the future or whether the potential increase in salary ill make it worthwhile.

Pitfalls of a Payday Loan

The media, press, financial advisors and many people have a lot to say about payday loans. Most people seem to be against them, but there are still many people who use them and seem to see benefits from them. However, it is really important to approach them carefully.

One of the problems with payday loans is that they are relatively easy to get. You do not need a credit check and so as long as you are old enough and have an income you will be likely to have your application approved. They are also very fast which means that they can be more appealing than more mainstream forms of borrowing such as credit cards and overdrafts. The fact that there is no credit check means that they could also be the only form of borrowing available to some people as well. This speed not only makes them more appealing than some cheaper alternatives but it also means that you have no time to properly think through your decision to borrow. You normally have to wait a while and this may give you time to think through things and decide that maybe the loan is not the right thing for you at this time anyway.

Not thinking things through can also mean that you end up not having enough money to pay the loan back. This can be a particularly bad problem with payday loans because the fees for missing the repayment are extremely high. They do try to ensure this does not happen, by organising a direct debit on your payday so that the money you owe comes out and you should have enough to cover it However, if you have other bills that come out on that day as well, you could find that there will not be enough money there and you do not pay it when due. This will be very costly as the lenders tend to start applying fees very quickly and they will soon add up meaning that you can soon owe a lot of money. If you have to wait until your next payday then you could end up with a huge debt. You therefore need to be really sure that there will be the available money there to repay the loan so that this does not happen to you. Some people will even get another payday loan, from a different company so that they can pay off the other one. This can lead to trouble very quickly as it is likely that they will not be able to pay that one back either and they may even get a third to pay for it. In the end there will be a lot of debt with no way of paying it back.

Therefore you do need to think very carefully about the amount of money that you are borrowing and how capable you are at paying it back. Consider what bills you already pay each month and whether you could afford to pay back a loan and whether you could then manage financially until you are pad next, having paid the bills that you have to and the loan repayment. Payday loans usually make you pay everything you borrowed plus the interest all back in one go and that means that you have a big sum of money to find. Some people may be able to manage this, but for many it could not be easy and so it is worth thinking hard about whether you would personally be able to manage this.

So a payday loan can seem really great in theory and as long as you pay it back in full and on time, you should be okay. However, if there is a risk that you will not be able to pay it back, then you could find yourself in trouble. It is also worth thinking about the fact that there may be cheaper ways to borrow. They may not be as easy or as quick, but they could save you a lot of money and so are well worth considering. Take as much time as you can to do some research and then you will be able to find the best way to borrow for you.

Tips on getting a Good Mortgage Rate

If you are looking to get a mortgage for the first time or to remortgage then you will want to try to get the best rate possible. There are a number of things that you can do in order to achieve this.

Before you start researching rates, you need to make sure that you are in the best situation to get a good mortgage rate. It is worth noting that when you apply for a mortgage you may not get the advertised rate. This is because the lender will assess how risky you are and then they may charge you more if they think that there is a risk that you will not be able to make the repayments. There are two main things that you can do to improve your chances of getting a good rate. If you have a large deposit saved up then this will show that you are well disciplined with money and you will not necessarily need to borrow such a huge percentage of the value of the house, which will help. Improving your credit record will also be a really big help. This can be done by checking it and seeing what items on there are working against you. It may be that there is incorrect information in there, that you can get changed, that there are loans you can pay off which will improve things or that you need to keep up with paying your bills more regularly to do better. It is well worth looking into.

Once you have done this you then need to start comparing lenders in order to see which rate is the best. Of course, rates will change over time and the most competitive ones may not remain so. However, predicting the future is not possible so it is best to go with the information that you have available to you, which is the current rates. You can use comparison websites for this, which could save time, but there are companies that are not on these websites and you may miss out on seeing what these have to offer if you only stick to comparison websites. An alternative is to pay a financial advisor to look for you. They will not only compare the lenders but they will also be able to explain to you about the difference between different types of mortgage and which they consider to be the best for you.

When comparing rates, you do need to make sure that you are comparing like for like. You may find that there are good rates but they are only fixed for a short period of time and you will then have to move onto an expensive variable rates. You may also find the better rates are for a certain type of mortgage such as interest only or repayment and you may have decided on a particular type and this may not be it. You also need to be aware of other fees they may have. Most will charge an administration fee when you set up a mortgage with them, They may also have fees for things like overpaying, late payments, statements and missed payments. It is worth finding out what those are so that you can see whether when you take those into account, they are actually dearer.

If you are remortgaging you also need to take into account the fees from your current lender as they may charge you to leave. This will depend on the company and it can vary between different types of mortgages as well. Some may tie you in to a fixed rate and then have a penalty of you leave because they want to prevent you from changing accounts if there is a more competitive rate on offer elsewhere. You can find out whether you will have to pay anything by simply telephoning your lender.
It can take a lot of research to actually find out which mortgage will be the best for you, taking into account the rates, fees and any fees from your current lender. You will also need to consider doing this regularly as they will not be the best forever. It could be wise to research again after five years to see whether you are still being offered a competitive deal. If you are likley to do this though, check how much the fees are for leaving the lender you are considering moving to as this could also then be a factor when choosing which to go for.