Although low-rate loans are becoming increasingly scarce, prospective borrowers can still access competitively-priced products. In research released by MoneyExpert, the typical annual interest on an unsecured loan of 5,000 pounds stands at about 9.44 per cent, with the most expensive and cheapest rates standing at 13 and 6.7 per cent respectively. Compared to interest rates on credit card accounts these personal loan rates are still good deals for personal loans.
In the last 5 years interest rates on personal loans have been at the lowest level in many years. Many governments have been trying to stimulate their economies by making it relatively inexpensive to borrow money. Consumers who qualify for personal loans have been able to obtain loans at some of the lowest rates in recent history, however many people feel that this situation will not last much longer. In fact over the past few months interest rates have begun to rise on mortgages and loans as well. Banks are slowly increasing the lending rates for new loans.
Economies, although fluctuating and volatile are generally improving around the world. Unemployment rates have been slowly declining as more and more companies are beginning to invest in new plants and increasing production. More people have money in their pockets and beginning to spend some of this money as they feel that the situation is improving. Badly needed renovations and repairs are now being considered driving up the demand for personal loans as well. Some investment advisers and lenders are speculating that the good deals for personal loan rates that borrowers have enjoyed will come to an end in 2014. Rates will go up in late 2013 or early 2014 making it more expensive for borrowers.
Knowing this possible trend in rates, borrowers can lock in these great deals on personal loans that we enjoy today and borrow money now to complete the upgrades and renovations that they are planning. They may also be planning to purchase a car and need a personal loan for this purpose. Regardless of the reason that borrowers need a personal loan the rates are at their very best at this time. Some car dealers in North America were even offering interest free loans to entice buyers into show rooms and help them make a decision to buy a new car. A zero interest car loan is pretty attractive!
Utilize a Broker to Get Good Deals on Personal Loans
Regardless of what the rates are, borrowers must still qualify of personal loans. Income levels, credit ratings, ability to repay the loan are all factors in whether the loan will be approved. Borrowers can apply online for a personal loan, they can utilize a broker to find the best deal for a personal loan or they can search themselves with their local banks. Often a broker is the simplest way to find a deal on a personal loan. Consumers can apply once to the broker, provide all of the information needed and then sit back while the broker checks various lenders for the best deals available. They get paid a finder’s fee for their efforts and the consumer receives the best deal on personal loans that are available.
Many consumers do not use brokers simply because they are not aware of the services they offer. These same people are more comfortable using their own bank to find a personal loan. But they may not be receiving a good deal on a personal loan when they take this route. At the very minimum, consumers should at least compare interest rates and terms for their loans and them make a decision as to which one to use.
Brokers will always be up to date on the best deals for personal loans and may even include your bank as well if they are offering competitive deals for personal loans. Take your time and make sure that as a borrower you still get good deals on personal loans.
Are Car Loans Really Interest Free
When it is time to buy a car, most people need to consider a loan for their car. They are really making two deals when they buy a car. The first is on the price of the car and the accessories that are being purchased with the car. They negotiate the cost of the car and really try to obtain the best deal they can for the car that they are buying.
The second deal is the loan that they need in order to purchase the car. They can borrow money at their local bank, some other lender of take advantage of financing that is offered by the car dealer or the car manufacturer. It varies depending on how is motivated to sell cars the most. We have all heard of zero interest car loans and these are considered to be the best deals on personal loans available. But are they really interest free?
The loan document will indicate that it is an interest free loan. When they calculate the payments, they take the total price and divided it by the number of months you are going to take to repay the loan. No interest charges are added and if you did a good job negotiating, there are no processing fees for the loan either. Looks like an interest free loan doesn’t it.
The only way to really know if the loan is truly interest free or not is to offer to pay cash for the car. You may have to borrow money from somewhere else to do this, but this might actually be ok. If the dealer offers you a lower price for a cash deal, you have just found out that the interest is really buried in the price of the car! You will have to calculate the real interest rate to find out if it is worth your while to use the so called interest free loan offered by the dealer or find your own financing from another lender.
It is always a good idea to confirm your price with a cash deal vs. borrowing money through the dealers arrange financing. They often offer financing arranged by the manufacturer and this is a real indicator that the interest cost might be buried in the price of the car. They have to pay for this somehow, nothing is free these days. If the dealer has arranged for financing through a local bank, then chances are there is no interest cost in the price. It all comes down to negotiating the best price for the car and the best loan terms to make sure you get the best deal. Good luck in your negotiations.