Sharp rise in Scottish home loan figures

The number of loans advanced to first-time buyers in Scotland rose sharply in the second quarter of this year, according to new figures.

The Council of Mortgage Lenders (CML) said those entering the market took out 4,700 loans between April and June, a rise of 18% on the previous quarter.

The loans amounted to £419m, which was an increase of 27%.

Meanwhile, home movers in Scotland took out 8,000 loans in the second quarter, a rise of 36% on the previous figures.
Overall, loans advanced rose from 9,800 to 12,700- a larger percentage increase than the UK as a whole.

CML also said home movers in Scotland needed to use less of their income to cover their mortgage interest than anywhere else in the UK during the second quarter.

The proportion fell to 9.3%, the lowest share anywhere in the UK since 1996.

The council's data showed "modest signs" of a further easing in lending criteria in the second quarter, with first-time buyer deposits shrinking for the second quarter running - from an average of 21% compared to 23% in the first quarter.

However, CML added that remortgaging activity in Scotland remained "extremely subdued", reflecting a similar trend across the UK.
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“Start Quote

The hard times are not completely behind us yet ”

End Quote Kennedy Foster CML Scotland

'Positive signs'

CML Scotland policy consultant, Kennedy Foster, said: "There have been some positive signs for the housing and mortgage markets in Scotland in recent months with increased activity and reduced deposits and it's encouraging to see that for home movers, mortgage interest payments as a share of income currently cost the least out of any region of the UK."

He added: "But the hard times are not completely behind us yet. Regulatory and funding pressures will affect Scotland as much as the rest of the UK and the upward trend we have seen in the second quarter may not continue to the end of the year."

House building industry body, Homes for Scotland, gave a cautious welcome to the latest data.

Chief executive, Jonathan Fair, said: "Whilst the CML statistics are welcome and encouraging news, they must be seen in the context of what remains a very low base.

Visit:http://www.loancompaniesinuk.co.uk/home_loans.html

Source:www.bbc.co.uk

Better alternatives to a Personal Loan

A personal loan can address your urgent need to get money, but did you know that there might be better alternatives of getting funds at far cheaper rates, and perhaps on better terms. Let's discuss what these are:

1. Borrow from family, relatives or friends: When you find yourself in a financial crunch, the first option you should consider is to borrow money from someone in the family. Often, this might be the safest option since these types of lenders might be willing to give you a loan on more generous terms than a bank. Additionally, if you can pay the loan sooner than what you had promised, you're your family or friends will not charge you a penalty fee to foreclose the loan.

When borrowing from your near and dear ones, you must keep the following things in mind:

If the loan amount is high, you should ideally have a written transaction to avoid any complication later, especially if you are borrowing from friends.

Have other witnesses present at the time of borrowing the money.

Make sure you repay from time to time to signal that you are taking your obligations seriously.


2. Loan against property (LAP): If you own a house you can use it as collateral to get a loan. The sole benefit of taking a LAP against a personal loan is that it is available at lower interest rates, in the range of 12% to 14% compared to up to 24% for a personal loan (rates as of May 2010).

3. Loan against investments: In case you are in need of urgent funds, another safe option is to cash out your investments in shares, gold or mutual funds. If you are not comfortable liquidating your investments in case you are holding them for long-term or are concerned about the tax liability on exiting these investments, then you can consider raising a loan against these instruments. Some potential options are:

a) Loan against public provident fund (PPF): You can avail of a loan against your PPF investment from the third to the sixth year. Loan is available up to a maximum of 25% of the balance in your account at the end of the second preceding financial year. If you repay the loan in 36 months, interest will be charged at 12%. Otherwise, interest will be charged on the outstanding sum at 6% per month. A second loan can be obtained before the end of the sixth financial year if the first one is fully repaid.

b) Overdraft against fixed deposits: This is another safe option when you are in need of urgent cash. You can use the fixed deposits by taking an overdraft against it rather than breaking it. You can get up to 80% to 85% of the deposit amount and the interest rate is typically 1% to 2% higher than the deposit rate. The repayment needs to be made within the time period for which you have the fixed deposit.

c) Loan against securities: You can use your investment in shares or mutual funds as security to immediately receive a loan or an overdraft facility to meet your financial needs. This way you will not have to sell your shares or redeem funds in case you have invested for a long-term. The tenure for such loans varies from lender to lender. Typically, the overdraft limit is around 50% of the value of the securities used as collateral. The rate of interest on such loans ranges from 13% to 16%. There are no foreclosure charges on such loans.

d) Loan from employer: Under some conditions, employers might also agree to offer a loan to you and adjust the repayments with your salary. Another option that you may have is to request for advance salary from your employer so that you can address the financial requirement. Check with your employer if this facility might be available to you.

source:www.in.finance.yahoo.com

Payday loans industry needs extra safeguards

Borrowers are becoming dependent on high-cost credit they cannot afford to repay, research published today reveals. People are turning to supposedly "last resort" payday loan companies again and again, rather than using them only in emergencies, says the Government-funded consumer champion Consumer Focus.

It estimates borrowers each take out an average of 3.5 payday loans a year. "Demand for short-term borrowing has risen significantly despite the eye-watering interest rates charged by some lenders," says Marie Burton, a financial services expert at Consumer Focus. "Such high rates can leave consumers who defer payments, or take repeat loans, caught in a debt trap." The number of workers using payday loans has climbed by 400 per cent to 1.2 million in four years, according to Consumer Focus. Collectively, these people owe £1.2billion. Last year, the average payday loan was for £294, so with people raturning to the lenders 3.5 times a year, it means they are each borrowing an average of more than £1,000 – and paying top whack for it.

Payday loans are controversial, with critics saying the companies that offer them prey on hard-up borrowers by charging extortionate interest rates and fees. With charges ranging from £13 to £30 interest on every £100 borrowed, the annual percentage rate (APR) can soar to as much as 2,500 per cent or higher.

For instance, one online short-term lender, Wonga.com, quotes a typical APR of 2,689 per cent on its website. But the company refutes claims that it is ripping people off. "We spent three years developing decision technology that means we are very selective about who we help," explains Errol Damelin, the founder of Wonga.com. "Our customers tell us they are choosing to use our short-term service over traditional alternatives of raising urgent funds, such as bank overdrafts and credit cards, because they know exactly how much it will cost and repay it quickly."

It is true that quoting APRs for payday lending can be a little misleading because the loans are short-term, normally up to 28 days, while APRs are worked out on the basis that someone has borrowed money over a year. Wonga points out that if other charges had to be quoted at an annualised rate then the cost of hiring a DVD, for example, would have to be £1,095 over a year, which is clearly a nonsense. Indeed, the Office of Fair Trading gave a thumbs up to the payday loans industry two months ago, saying the market worked "reasonably well" and there was no need to impose price controls.

Furthermore, there is an argument that payday lenders help people to avoid falling into the hands of dodgy doorstep lenders who use strong-arm tactics and bullying on top of charging rip-off rates to their victims.

That's the view of Consumer Focus, which is calling for reform of the market rather than an outright ban, which it warns could push people into using illegal loan sharks. "Instead, we need sensible safeguards now to stop borrowers becoming dependent on this high-cost credit and to prevent even more stringent controls being needed in the future," says Burton.

The group wants the number of loans taken out or rolled over to be limited to five per household per year. "We also need banks to provide alternative short-term credit to suit the needs of cash-strapped consumers," adds Burton.

The facts

What is a payday loan?

It is short-term loan that is typically repaid on the borrower's next payday. They are often paid with a post-dated cheque or a lender demands authorisation to make an automatic withdrawal from someone's account.

What sort of people use payday loans?

They tend to be young and single with few responsibilities and below-average incomes. It is estimated that more than half of borrowers are under 35 and three out of five are unmarried or cohabiting. An estimated two-thirds of payday loan borrowers have a household income of less than £25,000.

So how can people get into debt trouble?

The problems start when someone takes out a loan and cannot repay it the next month. If they defer payments or take out repeat loans, charges can quickly balloon. Some people can find themselves becoming dependent on the loans and simply rolling them over from month to month, never actually paying them off. It can quickly lead to a downward spiral of increasing and out-of-control debt.

Source: www.independent.co.uk

Research shows 1.2m taking out payday loan each year

According to research by watchdog Consumer Focus, the number of people taking out a payday loan has quadrupled in the last 4 years.

The consumer group said 1.2 million people are now taking out a payday loan every year – borrowing more than £1 billion.

Payday loans are becoming more popular and are seen as attractive – particularly to those who have been finding it hard to secure finance.

However, it is recommended that these types of loans are best reserved as a product of last resort, since loan interest rates offered may not be competitive by comparison to high street rates.

If the money is paid back promptly on the next pay day, this type of lending can be cheaper than paying an unauthorised overdraft or a credit card charge.

However, if the loans are rolled over, the debt can quickly increase sharply.

Loan charges for these types of loans, on average, range from £13 to £18 interest for every £100 borrowed, however, they can rise as high as £30 per £100 for some online providers.

Some companies, though, are charging interest rates of more than 2,500% a year and, as a result, the watchdog is urging the industry to bring in more protection for vulnerable borrowers.

Sarah Brooks, head of financial services at Consumer Focus, comments: ”Payday loans are a valid form of credit and it’s much better for people to take one out rather than go to a loan shark.

Source:http://www.financemarkets.co.uk

Personal Loans: Easy Loans To Help You On Many Occasions

Borrowing money to meet personal needs is a commonplace event. But, what has changed is the purpose of borrowing money; the needs and requirements of the borrowers; the types of personal loans available in the market and much more.

Personal loans are easy-to-get-loans. They have wide availability and even wider uses. These easy loans remain an all time favourite of most of the loan seekers. Existence of following types of personal loans explains their popularity and uses:

Secured personal loans: If you want an easy loan with a low rate of interest, opt for secured personal loan. You need security to get such a loan. The APR ranges from 7.9 per cent to 19.9 per cent. The more suitably situated borrower gets interest rate on the lower side.

Unsecured personal loans: [http://www.easy-loans-shop.co.uk/unsecured-personal-loan.html] Forget about security and get the loan amount quickly. Short term needs can be effectively met with these loans. The loan amount will depend on your income and repayment capability. Usually, the APR ranges from 7.4 per cent to 41 per cent.

Bad credit personal loans: These loans are available to help you out when the going is adverse. A bad credit history puts you in separate category and you need bad credit loans in such situations. Further, these loans can also be secured or unsecured.

Personal debt consolidation loans: If multiple debts have put you on a slippery ground, take the help of personal debt consolidation loans. These loans ease your financial problems and make your debts more manageable.

This is definitely not an exhaustive list of types of personal loans. People take these easy loans for many more purposes like car purchase, holidays, etc. With such a wide use and availability, personal loans no doubt eat up a very big portion of the loan pie available in UK. It is up to the borrowers how to use these easy loans for their maximum benefit.

source :ezinearticles.com

Pounds Till Payday - Avail Cash Any Time of the Month

Facing an unexpected monetary eruption in the middle of a month? Have no funds left as you have exhausted your salary? To put an end to your small endless financial difficulty before your salary day pounds till payday loans are a suitable solutions. Now you will not have to wait till your salary with a financial load on your shoulders and will be capable to sort them much before. These loans will help you to do that by offering small cash help instantly. The best part is that now the frantic formalities will not trouble you.

Features:

• One can get success for this help even if he doesn't have an ideal credit report. Those facing awful credit records such as CCJs, IVA, late payments, insolvency and missed payments can easily meet the criteria. No credit check is necessary prior applying.
• Through this smart monetary solution, one can access small loan amount of £ 100- £ 1500 easily. The term of repayment of borrowed amount usually varies from 15 days to a month. The funds being presented for short-term are provided at somewhat higher rates of interest.
• There is no collateral requirement. Lenders do not bother about the security of the loan. So tenants and non homeowners can apply for this loan option simply.

The qualifying criteria for pounds till payday loans are:

• Applicant must be 18 years old or above.
• He/she should be UK citizen.
• Applicant must be working permanently.
• He/she should have a bank account at his/her name.

Applying procedure:

Borrowers can apply for these loans through online. There is no need to go outside and meet with the lender. Lenders provide online application form which is easy to fulfill and lenders approve the loan immediately.

source: EzineArticles.com

How to deal with mounting debt

It is estimated that more than a million people have "problem debts" – as recession, rising unemployment and the credit crunch take their toll.

Many of these people will put their finances back on an even keel by careful budgeting. But those whose debts continue to spiral may have little option other than to consider one of the arrangements now available to help people escape their debts.


Television advertisements may make these options look like an easy way to wipe the slate clean. But some of the "solutions" advertised can saddle people with even larger debts in the long run.

Mark Sands, national head of bankruptcy at RSM Tenon, says: "There are a number of options, from an informal agreement with your bank to Individual Voluntary Arrangements (IVAs), a Debt Relief Order or filing for bankruptcy."

Here we list the pros and cons of each. Anyone in this position should seek independent advice, for example from a bank, credit card provider or debt counselling charity (see box). Louise Brittain, the head of bankruptcy at Deloitte, adds: "All licensed insolvency practitioners should give clients one hour's free consultation."
Debt Management Plan

This is an informal arrangement with your creditors, so it doesn't fall under the aegis of the Insolvency Act. On the upside, it means your name will not appear on the Insolvency Register, so theoretically your credit rating shouldn't be further impaired – although by the time you need to set up such a plan, your credit rating is likely to be shot to pieces anyway.

Ms Brittain says consumers should be wary of signing up to these plans, as they are unregulated and do not significantly reduce debts. Instead, an adviser negotiates repayment terms with creditors. If all agree, a payment plan is set up which can reduce the monthly repayments. Usually one payment is made to the debt management company, which then passes this money on to creditors – after deducting a fee.

The downside is that these plans rarely write off debt, nor freeze interest payments; usually they simply extend the credit term to reduce monthly payments, which may mean you pay far more in the long run. Ms Brittain says: "These are often the worst things you can do; you are simply delaying the whole process and people are still living with the stress of being in debt, often with no end in sight."

She says they are nevertheless favoured by credit card companies, as they don't need to make provision for the arrangements as "bad debt" on their balance sheet.
IVAs

These are formalised versions of a Debt Management Plan; provided that three-quarters of your creditors agree, the rest must abide by the terms of any repayment plan.

Most IVAs are five-year plans based on what you can afford to pay. Debt outstanding at the end of the period is written off. Mike Gerrard, of Grant Thornton, says: "Typically, debtors repay about 40p out of every £1 they owe under an IVA, so they are a way of getting on top of your finances."

But don't assume this means your credit card bills will be cut by this amount; as part of the IVA agreement you will have to realise any assets you own, be it savings, investments or your home.

Anyone opting for an IVA should remember that their name will still appear on the Insolvency Register – and it will stay there for the full five years. Their credit record is likely to be impaired for even longer.

Mr Gerrard says: "Rightly or wrongly, bankruptcy is a better option for many people, as it allows them to make a clean break and a fresh start, rather than having the millstone of unpaid debts around their neck for a further five years."
Bankruptcy

There is still a stigma attached to bankruptcy, but for many people it remains the only sensible option if debts have got seriously out of control. It is more expensive than an IVA, as those opting to declare themselves bankrupt – or being made bankrupt by a creditor – now have to pay £600 court fees (although those with debts of less than £15,000 and no substantial assets can apply for a Debt Relief Order, which works in much the same way, for just £90).

Once you have been declared bankrupt your assets come under the control of the court and will be divided between creditors. You will, however, be able to keep a modest car, your pension (in most circumstances) and "reasonable" living expenses.

At this point your debts are effectively written off. But shares, Isas, investments and your stake in any property will be sold to pay off your debts. If you jointly own property, it will usually be at least a year before the property is sold. Any spouse or partner will keep their share.

For the following year any windfall – be it an inheritance, a sudden promotion or even a lottery win – will be the property of your creditors. After 12 months you will be discharged and can start all over again.

However, for a further two years you will not be allowed to be a director of a limited company, and you will not be able to obtain credit without informing the lender that you are a discharged bankrupt.

Mr Sands says: "If you live in rented accommodation, have a fairly low-paid job – or are unemployed – and don't have significant savings, then you're unlikely to notice a significant difference, apart from the fact that you're no longer being hassled about credit card repayments. Even for those with property this may be a easier route than an IVA, as it allows them to make a fresh start."

Source: www.telegraph.co.uk

Door Collection Loans - Grab Funds at Your Door

Improve your financial part with the emergence of door collection loans where cash is provided just at your door. These loans are the best financial source of procuring funds for uncertain needs that can arise before your payday. These loans are a great help in times when you require money in a short time period.

An amount ranging from £50 to £500 can be borrowed under this scheme for meeting any of your demands. The gained loan sum must be repaid within a period of 01 to 30 days. In case you are unable to pay off the sanctioned amount on the specified date, the repayment tenure can be extended keeping in mind your payday. This allows you paying loan at payday easily. After the due date, you will have to pay some charge also along with the loan amount. Due to the short term nature of this loan, a little bit high interest rate is charged.

No paperwork or documentation is required for the approval of the loan. Lenders try to provide this facility in a hassle free manner therefore they don't ask to fax any of your documents. In addition to this, they do not check the credit report of the borrowers in order to make people with adverse credit comfortable. Every type of bad creditor like default, CCJs, IVA, late payment, arrears, insolvency, etc. can gain approval.

The cash received is sufficient to cover the immediate expenses like grocery bills, credit card bills, medical bills, library bills, home renovation, sudden breakdown of machinery, college fees, and a lot more. You have full freedom to spend the money as per your sweet will without any limitation.

For instant approval of your loan, you must satisfy some conditions like attaining the age of 18 years, having a regular working account and having permanently employed in some institution. Lenders check your credibility by checking your repayment ability that depends on your monthly salary.

Source: ezinearticles.com