Beat the Interest Rate Rise
Have Bad Credit Need A Loan What about the Interest !
The Bank of England interest rate has been at a historic low of 0.5% for just over 6 years. A rate rise is widely expected by economists by the end of 2016, but many think that the rise could come as early as the 1stquarter of next year.
But what does this mean for households across the UK? Well that would very much depend on each individual household, and the amount of outstanding debt they are paying back each month. Even though the rate rises will be gradual over the coming years, each rise will likely increase the cost of monthly credit commitments, which in turn can start to put strain on a borrower’s ability to service the debt accrued. Households who are already struggling to keep up with their monthly commitments may find that even a small interest rate rise could have a devastating impact on their ability to keep up with repayments.
How to Prepare for the Interest Rate Rises If You Have Bad Credit and Looking For A Loan
Plan ahead. Make sure you are aware of your financial position and what impact the rate rises will have on your monthly outgoings. The best way of gaining this information is by preparing a monthly budget planner. The Money Advice Service have a budget planner on their website here. Understand what income you have coming in to the household each month, along with your outgoings and write it down. Include your general outgoings for shopping, travel, etc. This will give you a figure of disposable income available to you each month. How is this figure impacted if the interest rate was 3% higher than it is now?
If you find you have a negative figure after this calculation, there are steps you can take to regain control of your finances.
If you are a homeowner, you can start by looking at your current mortgage. What is your current interest rate? Are you in a deal period (fixed, tracker, etc.) at present? Is a re-mortgage available at a better rate than you are on now? Do some research. Compare all available mortgage deals to see if you can re-mortgage to a product which allows you to budget more effectively. Fixing your mortgage rate on a payment which is comfortable for you in the medium to long term is one option in combating the hike in interest rates.
What outstanding unsecured credit commitments do you currently have? Most loans are at a fixed interest rate for the full term, meaning they will not be impacted by a rate rise, but that’s not to say there may not be more cost effective solutions available to you. If you have payday loans, you will be paying a much higher interest rate than a personal loan from the high street. Even if you have bad credit, make sure you shop around. There may be a solution to consolidate your current loans in to a more affordable single loan with one monthly payment.
Credit cards can be expensive if not handled effectively. Check your interest rates on the cards you currently possess. How much are you paying a month in interest? 0% balance transfers are available from many credit card providers, and transferring can give you time to make a dent in your balances without having to worry about the cost of doing so. If you do not qualify for a 0% balance transfer card, make a plan to repay as much as possible of the cards with the highest rate in anticipation of the rate rises. Lowering the balances on your most expensive forms of credit first is the best place to start in reducing the cost of your monthly credit outgoings.
There are a number of monthly outgoings that none of us can avoid. But are you getting the best deal for the services like energy, broadband and phone? Always start by contacting your current provider for these services. Ask them to check your usage and ask them if there is a better deal or tariff you could switch to which would be more cost effective. Just by asking the question, you’re letting them know you may be considering switching providers. You never know, you may be offered a great deal and a significant reduction in your bill. Still have a look at what’s available in the market for these services. Switching is a straight forward process and may save you money in the short, medium and long term.
Dealing With Issues Head On EVEN IF You Have Bad Credit and NEED A LOAN
If you are struggling with your monthly outgoings, and the above suggestions are not sufficient to positively impact your situation, there is help available. Dealing with financial problems sooner rather than later helps to avoid the situation becoming much worse down the line. Help is available from moneyadviceservice where you’ll find lots of information and tools on budgeting and money management. There is also information on where to get free debt advice both face to face and on the phone. further info see bad credit loans resource