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If you work from home or have access to daytime TV, chances are you’ve seen one or two adverts promoting personal loans. It is also likely that you have seen or even responded to such ads, tempted by the promise of attractive “typical rates”. And statistically, around 1/3rd of you, responding to the ad have been disappointed to learn that the rate your saw on TV doesn’t apply to you.

So how can that be? How can a company purporting to offer loans at great rates (or at least great enough to warrant a response), get away with offering something different once you apply. The answer is in the description.

Buying a loan can be compared (in part) to buying a pair of shoes. Unfortunately one size doesn’t fit all. When brokers and lenders advertise their products, the rate you’ll see will always be followed by the word “typical”. No two loan plans are ever the same, and the rate you pay will very much depend on your financial circumstances.

However, for all intents and purposes loan providers are able to promote a rate that is typical of at least 66% of all customers. By definition, the rate you see tagged to any type of promotional material will be the rate that the majority of applicants receive, although 1/3rd of those who apply will not qualify.

So how do lenders decide who qualifies for the better rates?

The term of any loan is calculated using a tool called “risk based pricing”. In essence risk based pricing is a system of analysis, which determines the risk you pose to any lender as a potential borrower. Factors such as credit score; residential status and age are some of the measures used towards the final calculation. The lower the risk you present as a borrower the better the overall rate offered to you will be.

What factors affect my credit score?

There are many factors that contribute towards your overall credit worthiness. Although this list is by no means exhaustive, some of them include: -

• Your proven ability to manage credit, expressed through previous loans, credit cards ect
• The duration of your credit history
• How much you owe on average
• Your tendency to source new credit

Is their any way of attaining my exact credit score before I apply?

Yes, if you would like to get a better understanding of your credit worthiness before you apply for a loan or any other form of credit, you could try contacting one of the following agencies: -

Equifax
Experian
Callcredit

Lenders will use any one of these agencies to obtain a copy of your credit information once you apply. However, they will be more than happy to provide a copy of your file to you directly, for a nominal fee.

In conclusion, typical rates are not designed to deceive potential applicants, in fact far from it. They are, in reality the only way a loan broker or lender can provide an accurate description as to what rate a “typical” customer is likely to qualify for. If you understand the mechanism used to promote a loan, you are less likely to be disappointed.

After many years of substantial growth for the English housing market, it appears that all good things must come to an end. Reports earlier this year, suggest that market growth for the first quarter of 2007 was marginal and speculation of a possible decline is rife.

However, the trend is not typical for the whole of the UK suggests a leading insurance broker. Reportedly, Wales has experienced a huge property boom over the last few years with house prices rising a staggering 73%. The average house price in Wales has rose from around £65,000 to £118,000. 

The Welsh market is also showing no signs of slowing down, at least for the time being. The insurer also suggested that if the market continued to grow at is current rate of inflation, the average Welshman would be sat on property, with an average valuation of around £430,000 by 2011.

Of course the likely hood of growth sustaining at its current level, for the next 4 years is highly unlikely. In reality, the Welsh housing market is more than likely playing catch-up with the rest of the UK in order to achieve stability. However, due to the sudden change in the market, the number of Welsh citizens procuring secured loans has increased, similar to that in the rest of the UK.

If you’re considering a secured loan, and are looking for some good quality advice the market has never been more suited to help.

According to a recent report compiled by a leading loan broker society, more brokers than ever are focusing their efforts on secured loans. For the consumer, this presents greater choice with over 25 percent of all brokers sourcing plans from 10 or more lenders. It also ensures you receive better advice, with over 60 per cent of brokers claiming to specialise in the secured loan arena.

Of the total sum of brokers offering secured loan products, only 20 per cent do not advise on payment protection insurance. However, recent studies conducted by the finance industries watchdog has confirmed that it intends to “tighten the reigns” over brokers offering PPI due to reports of miss representation from certain organisations.

On the whole however, the secured loan industry offers great value to the consumer, as overall industry competitiveness, from both brokers and lenders increases.

Greenhouse gases, global warming and being just a little bit kinder to mother earth, are priorities at the top of many people’s agendas at the moment. Turning off a light to save energy, having showers rather than baths and walking rather than driving are disciplines we should all practice, when we can.

It seems however, that eco friendly features are the new “must have” for homeowners. Apparently, over 80% of people on the hunt for a new home consider such features as solar panels and wind turbines to be important deciding factors. This is a stark change from previous decades, which considered good schools and traditional architecture to be major selling points.

Maybe we’re all just a little more aware of our combined effects on the planet, or maybe the government’s new climate change bill is to blame. Regardless of the cause, aiming to live a little be greener can only be a positive thing, for both the planet and maybe even for the value of your home.

It is likely, that over the coming decades homes that have incorporated certain environmental features may receive kudos from the market. Reducing home energy usage may even become mandatory in coming years, environment permitting. If you are considering going green the conversion costs can be low, especially if you take advantage of a market beating home loan. And as suggested previously, it could have a positive impact on the value of your home.

Geographic information may hold the key to your financial success and/or downfall new studies reveal.

A leading investment bank has recently conducted a study to find out where the UK’s best savers reside, and the results may not be what you’d expect.

The old adage relating to the Scots and their uncanny ability to hold on to their cash, was in part, proved to be correct. Accordingly, the average Glaswegian sits on top of a cash pile equating to around £15,000, which is impressive. However it’s a mere drop in the ocean compared to 1/6th of residents in Edinburgh, who have managed to accumulate saving of around £30,000.

Back in England, East Anglian residents seem to be just as good with their finances as those in Edinburgh, with around 10% of people amassing a similar figure. On the other side of the coin, people living in the North West are said to be the worst at saving.

With analysts suggesting further rises in interest rates, if there has ever been a time to consider saving a percentage of your hard earned cash, now could be it. Having a little put a way is always a good idea, it helps lesson the blow if you experience sudden financial difficulties and can be called upon for such luxuries as a new car or a well-earned holiday. On top of that, learning to save lessons your dependence on other forms of credit such as loans or extending your overdraft facility.