CTC Lending

Many people are cautious about getting a payday loan or wonder whether it is the right loan type for them. It is wise to learn a bit about the loans and then you will be able to make a decision as to whether it is the right loan for you or whether another option will be better.

Do you need a loan?

With all loans it is really important to make sure that you really do need to borrow the money. It is a costly process and so if you do not really need the loan then do not take it. Think about the alternative options such as using savings you already have, saving up or even going without. It is so important to make sure that you are aware of the cost of the loan and that you consider what you are using it for and whether you happy to pay that additional cost for the items. It may be that you have no choice and you really need the money, but if you can wait, then it may be wise to do so and see whether you can afford the items some other way.

Do you have a poor credit score?

A payday loan is available for anyone regardless of whether they have a good or bad credit record. There are very few restrictions apart from age, location and needing a bank account with a regular income. No credit check is done and this means that the loan is available for a lot of people who will not be able to get other loan. However, even if you do not have a poor credit record, you may still see benefits from the loan. This is because you borrow just a small amount of money for a small amount of time. The loan therefore does not last very long and so for anyone worried about having a loan hanging over them for a long period of time, this should prevent that worry.

Do you need money fast?

Payday loans can be organised really quickly. This means that if you need money fast then you might be able to get it within a few hours. This is significantly quicker than many other lenders and if you do not have an overdraft facility or credit card then it can be one of the only ways of having money available to you really quickly. It is therefore really useful for anyone who needs some money urgently and has nowhere else to turn.

Risks

All loans carry risks and it is important to be aware of these before you decide whether this loan will be right for you. Firstly, if you cannot repay any loan, there will be fees and charges. This means that the loan will end up being even more expensive. With a payday loan there is usually just one repayment. This can seem easier, especially as it is taken form your account on your payday. However, if you borrow a large chunk of money, then it can be difficult repaying it all at once. If you have other bills going out that day you may not have enough left to repay the loan. Even if you do repay it, you will need to then manage all of your other expenses without that chunk of money. Hopefully you will be able to cope, but it is wise to be very careful with your spending. In fact, before taking out the loan you should consider how you will manage it. Look at your previous bank statements and think about what you normally have to pay for. Then you will be able to work out whether you will be able to afford it or whether there are places that you can cut back in order to help you to afford it.

If you have decided that you need to borrow and are prepared to take the risks, then it is not only wise to look at all of your options with regards to loan types but also to compare lenders. You will find that lenders vary a lot in how much they charge and what they are like and so you should take some time to decide which you think will be the best. It can be tempting to just choose the cheapest, but they may not be the best. Therefore, make sure that you look at their websites, read reviews, ask people and contact their customer service department to help you to figure out whether they are the right lender for you. It will be well worth the time and effort as you will know that you did everything that you could to get the best possible loan. Hopefully it means that things will turn out well, but if they do not, you will still know that you did everything that you could to try to go with the best lender and things may have been even worse with anyone else.

If you have decided to get a fixed rate mortgage then you may wonder which rate you should go for. Lenders will vary and you might be tempted just to go for the cheapest one. Although this might seem to make financial sense, it is worth thinking about other factors as well.

Is a fixed rate right for me?

It is worth thinking about whether a fixed rate is right for you. Although the security of knowing that the amount that you are paying will not change can be great and knowing that you will be able to afford the repayments is also good, there are disadvantages too. If the base rate falls, for example, you will not be able to take advantage of the fall. It means that you could end up paying more than necessary for your mortgage. It is a risk having a fixed rate. If you feel that you will only just manage the repayments then having a fixed rate will give the security of knowing that you will be able to manage. The fixed rate term will last a few years, perhaps up to five and then you will move onto the variable rate. You may then be able to move to a more competitive lender for a while but you may be tied in.

Am I tied in?

A fixed rate mortgage will often tie you in. This means that for the period of the fixed rate, which could be around five years, you will have to stay with that lender and sometimes beyond the fixed rate period. This means that if there are more competitive rates elsewhere, you will not be able to take advantage of them. It also means that if rates fall you could be stuck paying a high rate when others are taking advantage of a lower one. It is therefore worth checking if you are tied in and how long for. It is worth noting that often you can get out of a contract by paying a fee and you could look to see whether you think that is reasonable or not. It could be a few hundred pounds, which you might quickly save if you switch to a cheaper lender but it is more likely to be thousands, which will probably make it worth staying with them. If you are happy to be tied in for a while, then you will need to think about how long you are prepared to do this for. The time will vary between lenders and so you may be happy to only be tied in for a few years so that you have the option to move lenders after that if you wish.

Are there other costs?

It is also worth looking to see what other costs there might be. There will be fees if you do not make your repayments on time and things like this and it is worth finding out how much these will be. These can vary a lot between lenders and they can be significant but many potential borrowers will not look at them. They will be in the terms and conditions, but this could be tricky to read through so it can be better to get in touch with the lender and ask them.

What is the lender like?

It may be important to check out what the lender is actually like. It might be that you have queries or you are looking for flexibility or good customer service. This service that you get will vary between lenders and so it is good to compare them. You may want to read reviews of them to find out more or ask friends and family.

Once you have checked out all of these things, then you will be in better position to choose your lender and therefore your rate. You may find that the one with the lowest rate is not one that you want to go with and so you are prepared to pay a bit more in order to get peace of mind. However, you may feel that the cheapest is fine and you are not prepared to pay more than necessary. You may even feel that all of the fixed rates are too expensive compared with the variable rate products and that you would rather go with one of those.

Obviously, the decision is a very personal one but without doing the research you will not have enough information to base your decision on. This can take time which is why some people decide to use a financial advisor. They will have a good understanding of the different options as well as the costs and will be able to explain it all to you so that you can make the right decision based on your circumstances.