Loan
repayments
Borrowing money, costs money in time and interest.
Taking out a loan only to plunge yourself into
a financial crisis, due to a steep repayment schedule
is pointless. You should seek to borrow an amount
that can be repaid comfortably every month. You
should seriously consider the repayment period
and what you can comfortably afford out of your
monthly income. A loan over a greater period of
time will cost more in interest repayments, however
the monthly payment will be far less. Read our
section on interest
rates.
Taking out a personal loan, and then defaulting
on the payments and placing you in a potentially
financially ruinous situation with the possibility
of CCJ's against you or worse, is something you
should think about.
WARNING - CREDIT CRUNCH SPECIAL
Once upon a time an unsecured loan was exactly
that - these days it appears every loan is secured
against your property, if not what you take it
out but at anytime in the future, through the
UK Courts
Creditors are using tougher tactics to make debtors
pay back their debts - with a recent surge in
applications for charging orders.
These court orders enable lenders to secure bad
debt on credit cards and on loans against borrowers'
properties.
This would result in a loss of equity were the
borrower to sell, however, some lenders are now
unwilling to wait, and according to a recent BBC
panorama program are now applying for an 'order
for sale' forcing the property-owner
to sell up straight away and pay off their debt
from the capital. |
