Best Loans News

Retirement is supposed to be a time when people can sit back and relax, without having to worry about their finances and making ongoing loan repayments. But aside from the fact that many individuals have not made adequate provision for their retirement income, around one in five are likely to retire with outstanding loan and card debts.

Research conducted by the Prudential has found that somewhere in the region of 18 per cent of people who plan to retire this year, will do so with existing debts hanging over them, either in the form of a home owner loan, personal loan or credit card bills.

Although the number of people entering retirement with loan debts has actually dropped slightly since last year, the level of individual debt has increased significantly. Last year, the average outstanding loan debt was £33,100, but this is expected to increase to £38,200 during this year.

The main sources of these retirement debts are made up of existing home owner loans and mortgages and credit card bills.

The average retiree with outstanding loan debts is expected to be dipping into their retirement savings to the level of around £260 per month in order to service their loan and card repayments, but some individuals have said that they will be paying as much as £500 per month on loan debts.

Paying off their loan debt is likely to take an average of around 4 years for a typical retiree, but some have admitted that they are never likely to ever clear their loans and credit cards completely.

Vince Hughes-Smith of the Prudential said “With a manageable repayment programme in place, debts need not become an issue for this year’s retirees and there is plenty of help available through the Money Advice Service and Citizen’s Advice Bureau.”

Ever since the credit crunch hit the UK back in 2007, a growing number of families and individuals have been struggling with their finances and finding it increasingly difficult to stay on top of their personal loan commitments and other debts each month.

A new survey conducted by Aviva on their Family Finances Report, has found that although the average family income in the UK has increased by around 7 per cent over the course of the past twelve months, the average family debt levels on unsecured loans and credit cards has increased by around 48 per cent over the same period.

Despite the fact that many families are trying to pay off their loans and other debts early, the survey found that the typical household loan debt, excluding home owner loans and mortgages has now risen from £5,360 back in January last year, to £7,944 in January this year.

The average net annual income for a typical household in the UK is £24,792, which means that someone with average unsecured loan and credit card debts has the equivalent of around 32 per cent of their net income outstanding in personal debts, without taking their home owner loan into account.

The survey also shows that, fewer families are putting money to one side in the form of savings, whilst personal loan debts are increasing at an alarming rate. This is the exact opposite of how people should be conducting their finances, particularly in the current economic conditions in the country.

Whilst many families are concerned about their increasing loan debts as well as the possibility of losing their job at some point in the near future, six out of ten families have not taken out any form of protection to protect their loved ones against loss of income or cover for their loan debts.

First time buyers who are considering buying a house, or are already in the process of applying for a home owner loan, have been advised to move quickly in order to beat the deadline for the end of the current stamp duty holiday.

Last year, the government introduced the stamp duty holiday for first time buyers to help and try and reduce the costs of buying a house and taking out a home owner loan or mortgage for those buyers looking at properties of between £125,000 and £250,000.

But the current incentive for first time buyers is now due to end on 24th March this year and those potential buyers who are either in the process of buying, or are looking for a house and thinking about applying for a home owner loan or mortgage should  act quickly in order to complete their purchase before the deadline.

Once the closing date has passed, first time buyers will once again have to pay stamp duty of one per cent on the property they buy, if it costs more than £125,000 but less than £250,000, which could cost someone up to £2,500, on top of their deposit, solicitor’s fees and homeowner loan costs.

The end of the stamp duty holiday is likely to cause an increase in the number of first time buyer loans completing throughout February and March, as first time buyers make the effort to complete their purchases before the deadline date, although this increase could be compensated for by a reduced number of first time buyer loans over the summer months.

Wendy Evans Scott of the National Association of Estate Agents said “With only two months remaining, first time buyers must act quickly to avoid paying stamp duty land tax on their first home purchase.”

“If you’re in a chain and waiting to complete your purchase then make sure others in the chain know about the end of the tax holiday too. Good communication with your solicitor can help move the process forward, helping you beat the 24th March cut off.”

January has always been a fairly depressing time for many individuals. Christmas is over, the weather is cold and wet, everybody is back to work with no prospect of another holiday until Easter and all the credit card and personal loan bills are landing on the doormat.

This week has officially been described as the most depressing week of the year, with yesterday (Monday 23rd January), the most depressing day of the year, now known as “Blue Monday”.

 Apart from the normal post Christmas blues, many individuals across the country are now particularly worried about their personal loan and credit card debts and in particular, how they are going to manage to make their full loan repayments on top of all their other household bills this month.

The Debt Advisory Line, an award winning debt management company, has said that it expects to see the number of calls from struggling loan and credit card borrowers increase by around 20 per cent over the course of this month, as people realise they are in a position where they are unable to manage their personal loans and credit card debts.

It seems that the final week of January is when many individuals finally realise they have a serious loan debt problem and are unable to cope with it on their own, at which point they contact someone  who is able to provide professional help with their loans and other debts.

Jim Rowley of the Debt Advisory Line said “December is one of the biggest spending months leading to a tough January for most of us. This combined with the increase of home utility bills due to cold weather conditions equals bad news for people struggling to keep up with regular direct debits and overdue credit card or loan repayments.”

The number of new bridging loans being written across the UK has seen a significant increase over the course of the past twelve months or so, as many property investors and landlords have been using this method of borrowing to release funds from their existing property portfolios for further development alongside their buy to let loans.

A new survey conducted amongst financial advisers and loan brokers, has found that a large proportion of this sector are anticipating a further significant increase in the amount of bridging loan business they write over the next twelve months.

The survey, from West One Loans, who specialise in bridging loans and finance, found that the average loan brokers is expecting an increase in bridging loan activity of around 27 per cent over the course of the next year, with those who focus on bridging loans expecting an increase of around 33 per cent for the year.

Almost two thirds of the loan brokers who were interviewed said that they had seen an increase in their bridging loan business, with some saying that the loan numbers had actually doubled within the last twelve months.

The figures also showed that the majority of new loan business written by loan brokers and advisers is now in the Buy to let sector, as both new and experienced landlords take advantage of low property prices and cheap loan deals.

Duncan Kreeger of west One Loans said “The bridging loan industry has grown rapidly since 2010. Net lending is up 56 per cent, which makes the mainstream loan market look turgid by comparison and the rate of growth shows no signs of slowing.”

“Only 6 per cent of brokers think it’s a bad time to invest in buy to let, while 83 per cent think it’s now a good time for landlords to expand their portfolios.”

With the home owner loan and mortgage market looking particularly uncertain at the moment, due to the fragile state of the UK economy and no one really knowing when interest rates on loans will increase from their currently all time low level, many people looking for a new home owner loan are uncertain as to what may be their best loan option.

 A recent survey from the home owner loan broker, John Charcoal, found that around 55 per cent of customers opted for a tracker rate loan throughout the month of December, due to the low interest rates, whilst around 34 per cent chose a fixed rate loan to avoid the possibility of their loan costs increasing.

However, around 10 per cent of new loan customers opted for the best of both worlds by taking out a hybrid loan, which offers the benefits of both a tracker loan and a fixed rate loan deal.

This type of loan offers borrowers the chance to take out a tracker rate loan for the first couple of years of their mortgage, followed by a further three years on a fixed rate deal.

As many borrowers do not feel that interest rates are likely to increase within the next two years, they are happy to choose a tracker rate loan at this stage, but would like the option of being able to fix their loan repayments in the future when a rat rise is more likely.

At the moment, there is only one such loan product available on the market, from Accord mortgages, which is only available through financial advisers and loan brokers, but if this proves to be successful, it is likely that many others will introduce similar schemes.

Simon Collins of John Charcoal said “Everyone knows that the bank rate will increase at some point, but the big question is when and how fast? The hybrid is therefore the perfect product for these borrowers who want to take advantage of low loan rates now, while securing a fixed rate element at today’s historic low prices.”

Once again, Sainsbury’s Finance has reduced the interest rate charged on their personal loan products, as the battle for who can offer the best cheap loan deal continues amongst a number of lenders and loan companies.

The supermarket has lowered the rate on the most competitive unsecured loan amount of between £7,500 and £15,000 to just 6.1 per cent APR (Annualised Percentage Rate) for those borrowers with a good credit rating, although this loan rate could be higher for someone with a lower credit score.

The additional benefits of the new unsecured loan range have now also been improved for those borrowers who hold a Nectar reward card with the supermarket, as a person who applies for a shopper reward loan will receive a Sainsbury’s gift voucher worth £100 and double Nectar points on their purchases for a two year period.

Whilst this is clearly beneficial for someone who regularly shops at Sainsbury’s, it is also quite clever of the supermarket, as it will encourage people to shop with them on a more regular basis, thereby spending their gains and, in turn, increasing the profits for the company.

When the value of the gift card, coupled with the double Nectar points for 2 years is taken into account, this has the effect of reducing the cost of the loan by around £152 for someone who regularly spends £50 per week in the supermarket.

Steven Baillie of Sainsbury’s Finance said “We continually offer competitive rates for our customers and reward them for their custom, so the new rate is great for Sainsbury’s shoppers.”

“For those who spend around £50 or more in store, it’s worth considering our Shopper Reward Loan, when taking into account the Nectar points earned and our gift card, it can make a significant difference to the total loan repayment.”