You can now get a competitive rate of 7.90% with a Barclays Loan.
You can borrow between £1,000 and £25,000 with a Barclays Unsecured Loan and pay a competitive typical APR of 7.9%.
The news is currently full of stories about the ever-worsening credit crunch. Because of this we have come up with our at-a-glance guide to what is going on in the world of personal finance, how it will effect you and how you can reduce its effects.
Contents
1. Credit cards & loans
2. Savings
3. Mortgages
4. Tips to further reduce the effect of the credit crunch
In recent weeks, the news has been full of stories reporting on the global credit crunch and how lenders are refusing more people credit with the aim of minimizing their exposure to debt and therefore to risk.
Your credit rating will be looked at when you try to get credit facilities (such as credit cards, loans, mortgages, mobile phone and broadband contracts and store cards) and when you go to open bank accounts and savings accounts.
In light of this, we have compiled a list of the best tips to help you to improve your credit rating so that you can increase your chances of getting the credit you want.
You need £3000. What do you do?
A number of options are available to you depending on what you need the money for i.e. if you need it for existing debt consolidation or to go out and buy something.
If you have outstanding balances on several credit cards, and want to make it easier to keep track of your debt and repayments, the obvious choice might be to take out a loan because they have lower APRs, right? But, this may not be the case.
Moneyback Bank currently offer the lowest typical APR on an unsecured loan at 6.7% subject to status. However, if you wish to borrow £3000 you will be repaying the loan at 7.8% APR (more about Typical APRs).
So, what other options are available? Another idea might be to transfer the balance(s) to 'a life of balance' credit card like the one offered by Barclays with an APR of 5.9%, which will stay the same until you have paid off the balance.
If you need the money to go out and buy something, a 0% purchases card might be the solution for you. These cards offer you a fixed period where no interest will be charged on the balance you owe. This would work best for you either if you knew you could pay off the balance within the fixed interest free period (normally ranging from 6-14 months) or are willing to reconsider your situation after the period ends or, otherwise, start paying interest on your balance.
When applying for an unsecured loan, the most obvious thing to do would be to choose the one with the lowest typical APR. STOP! The key word in the phrase 'Typical APR' is 'typical' i.e. the rate you would get in ideal circumstances. The loan companies work out your APR by considering certain pieces of information such as the amount you wish to borrow, your past credit history and the length over which you will be making the repayments.
If, for example, the loan company offers loans between £1000 and £13000, a lower amount is less likely to get the typical APR. There is usually a midway figure that will be the least you have to borrow to qualify for the lower APR, say £7500 in our example above. Of course, on top of this a better credit rating will involve less risk for the company and will so also mean a smaller APR.
When you are looking for a loan you are likely to have a set amount in mind that you want to borrow e.g. £7250. Bearing the above in mind, it might be in your best interests to take out a larger loan of £7500 to qualify for the smaller APR. Then you could either repay the money straight back, if the terms and conditions allow you to, or keep it in a savings account to be paid back at a later date.
Why not try our 'compare personal loans' service.
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