Mortgaging is one of the top financial services that Britons take all year round. It allows them to buy a house earlier in life and start a family in it while young. A simpler way to end the mortgage is by following it till the end, but a smarter way is to make sure you save as much money as you can over your mortgage.

A great way to do that is by opting for a remortgaging deal. While you are down the road with your original mortgage, a time comes when the lender will switch to the Standard Variable Rate which is usually quite a bit higher than what you paid throughout as interest. This is where you can save your money – by engaging in a remortgage.

Remortgage and Bankruptcy

There are a lot of different benefits of remortgage like:

  • Borrowing at a lower interest rate
  • Consolidation of debts to affordable payments
  • Caters your financial situation
  • Allows utilization of home equity

The best part is that if used wisely, the combination of above mentioned advantages of remortgaging can lead to safety from bankruptcy.

Bankruptcy while mortgaging can occur if your interest payments have either gone higher or due to a certain personal reason, you are not able to continue the monthly payments of your mortgage. The debt keeps on rising and before you know it, there is a mountain right on top of you.

Avoiding Bankruptcy

Playing smart with remortgage can help anyone avoid bankruptcy. The moment you start to realize that things are going out of your hands financially, you should start searching the market for better remortgaging deals. If done right, the search will take a month or two at max and you will be able to find a remortgage deal on a fairly lower interest rate than what you paid on your mortgage initially.

Remortgages also allow you to consolidate your debts and make them feasible according to your present financial condition. This personalization allows you to be able to handle the finances better and give you a chance to avoid entering bankruptcy altogether.

What If it’s Already Late?

If you have already drowned under an ocean of debt, you still need not to worry. Remortgaging can even be done after hitting bankruptcy.

In fact, according to the financial experts in the UK, remortgaging is one of the best ways to restart your credit. This is because of the equity in your property. It allows remortgage to be obtained quite easily. However, it must be noted that due to the poor credit history, remortgage will be offered at a particularly higher interest rate.

On the other hand, your monthly payments will be made feasible according to your ability to pay, giving you a chance to reconstruct your credit ratings from scratch.

In a nutshell, remortgaging is the best way to both avoid, and get back up from bankruptcy. The key here is to consult a remortgage expert and come up with remortgaging options before drowning further in debt.

There are many banks and financial institutions that provide long term loans to both individuals and companies. It is often difficult to select a winner among the many available choices out there. A long term loan consists of many important elements that can distinguish between the different loans. The knowledge of these elements can be the different between selecting the best loan provider or an ordinary one.

Here, we describe some of the factors that you must compare when looking to select the winner from a long list of loan providers that you have at your disposal.

Compare the Interest Rates

The first and the foremost thing to check in all the available options is the rate and amount of interest that you will have to pay over the number of years on the principal amount. You need to ensure that you completely understand the interest value that applies to your loan, and will be able to easily pay off the interest present on the principal.

You need to therefore compare APRs (Annual Percentage Rates) of different loan options. APRs are subject to change and are often 2% to 3% higher than the national interest rates controlled by the central bank. There is a difference of minor points in these rates, but it can amount to a difference of around one to two thousand pounds during the total time of the loan.

The Required Initial Deposit

All loans that are either for a home mortgage or for auto financing start off with an initial deposit that you pay for the physical property. Banks like a deal where the borrower pays off a significant amount at the time of buying the property. It allows a bank to minimise the risks and therefore offer a better deal to the borrower.

It is therefore important to compare different long term loan providers in terms of the actual amount that a person has to pay for financing a home or a vehicle.

The Term of the Loan

Different loan providers have specific loan plans in place for different termed loans. You need to look at the different terms of the loans that are on offer. You need to ensure that you always compare loans that are for a similar term.

This evidently means that you need to compare five year loans, ten year loans and twenty year loans separately as they should match each other better in terms of financial characteristics. Some lenders give better 20 years deal while there are some lenders that are good at giving away 5 year loans.

The Repayment Option

The repayment option is highly important when comparing long term loan providers. It is the option that provides the details of the charges that you will incur if you attempt to pay off a loan earlier than its designated term. There are many loan providers that have very high processing fees for paying off a loan earlier than its term.

It is not a good financial situation to keep slowly paying off a loan as it is always better to pay off a loan if you somehow have managed to accumulate the amount of money that you are currently in debt of the lender.

When life seems to be going on the right path, you know it’s time to bid farewell to the old car and get yourself a new set of wheels. This decision come with the tough question of whether you should take a car loan for a brand new vehicle or go for a used one that fits your current budget. Even if you decide to go for car financing in UK, you have options other than loan. However, the question is whether you should take a loan or not.

So, here we will answer some of the basic factors that go into the equation that makes car loan feasible or infeasible for you.  First, let’s understand what car loan is and how it is different from car financing.

Car Loan vs. Car Financing

Most car financing and leasing options are provided by auto dealers rather than lenders and banks. Like any personal loan, car loan is provided by a bank or a lender who deals in such matter. It is similar to taking out a mortgage. In fact, you also have the option to take a car loan against your mortgage. However, that will put your home at risk in case you miss payments. So, unless extremely sure about your affordability in the future, do not secure a loan against your home or mortgage. Also, like mortgages car loans have an APR that actually indicate how much interest you will be paying. Monthly repayment amount and APR will determine how much you will have to pay each month. Make sure you can take that amount out despite

Some Benefits to Consider

Taking out a car loan has its own set of benefits to offer:

  • For those who already have a huge personal loan such as mortgage, taking out a car loan can be much easier.
  • You can get it arranged over the phone or online. It is a more flexible option as you can choose whether you want to borrow all the money or just a fraction of it.
  • Similarly, loan period can also vary from 12 months to 5 years. You can choose according to your convenience.
  • If your credit score is good enough, you can get a great fixed interest rate that will remain the same throughout the term.
  • Car loan also gives you the freedom to sell off the car in case you get in financial trouble during the term. This may not always the case with our financing options.

The Shady Side of the Story

Like every option, personal car loan also has a few cons that may render it less favourable for some:

  • First of all, you need to bear in mind that a car loan may impact your credit rating. Be wary of this fact if you plan to apply for mortgage in the near future.
  • Car loan process may take longer than other financing option. So, you need to be patient as well.

Take out a car loan only if it suits you. It is always best to shop around and compare various financing options before settling for one.

Envelope budgeting is one of the simplest ways to save money. It is also one of the oldest methods of saving money. Envelope budgeting allows you to keep a track of your savings and finances. It also helps you to avoid debts and loans. We will explain this later in the article but let’s first understand the mechanism of envelope budgeting.

What is Envelope Budgeting?

In envelope budgeting system, the person does not save the money in bank. Instead, they create envelopes for different savings. They put the savings in these envelopes and make the payments from these envelopes. Here is a step-by-step look on how envelope budgeting works.

  1. Create a budget. Write down the total amount of money you need to save in a budget. The following table represents how you will distribute the money.
  2. Now, create the envelopes. If you take the example of this table, you will need three envelopes. Write down the name of payment or saving on the envelope and keep them securely.
  3. Put the required amount of money in the envelopes regularly.

Some Tips to Maintain Your Budget

–        Do not spend money on your wishes. Always spend money on your needs only, and that too, after considering your need at least twice.

–        Make an extra envelope, named Extra. If you are able to save more money then put it in the Extra envelope. You can pay the vacation trip fee of your kid or go on a shopping visit with this money without disturbing your emergency funds.

–        Always use the money saved in the envelopes for fulfilling your needs. Do not spend money from other resources.

–        Budgeting apps can also help you maintain your envelope budget.

Should You Try Envelope Budgeting?

Envelope budgeting is not for everyone. It requires a lot of patience and control. In envelope budgeting, you need to realize the importance of living a debt-free life than winning over your dreams while drowning yourself into loans. It cuts the benefits of credit card. At the same time, envelope budgeting also makes you stress free. However, once you learn the art of controlled spending and frugal living, you will earn the following benefits that come with envelope budgeting.

–        Envelope budgeting makes you debt-free.

–        It allows you to buy your dreams on cash, and not on loan.

–        It eases complicated spending in your life.

–        Emergency funds and extra savings allow you to tackle with emergencies and complex situations without falling for debts and payday loans.

Drawbacks of Envelope Budgeting

–        Envelope budgeting is simple and easy. However, it is suitable for people who spend the money controllably. When you have money at home, you may not resist spending it if you have bad spending habits.

–        Secondly, it is a little time consuming. You need to create your budget every month.

However, despite these drawbacks, envelope budgeting is certainly a useful way of saving money, sticking to your budget, and living a debt-free life.