Personal Finance
Consolidation Loans Without Owning A Home
While it is a very common practice, you can certainly find consolidation loans without owning a home. You can find them with other forms of collateral, or without any at all. There are different benefits for each option.
First of all, it’s good to understand that consolidating debt is the act of finding one new source of funding and using that to pay off all of your other debts. This has multiple possible benefits but the one that is certain for everyone is that you’ll only have one monthly payment to worry about, which really simplifies the process!
Other possible benefits include finding a lower interest rate, which should be something you think about throughout your search. Lower rates will save you a lot of money over the life of your loan, and save you a bit on your monthly payment amount as well.
When you are looking at consolidation loans without owning a home you have two real options.
Secured deals, which have some form of collateral, have the benefit of lower interest rates, and more flexibility from lenders. For instance, if you have bad credit, lenders will be more forgiving of this because the collateral lowers the risk they are taking on lending to you. Even though you don’t own property, which is the most common form of collateral, you can find a lender who will work with your vehicle as collateral, jewelry, or other high priced collectibles.
If this doesn’t work for you there is still the option of finding an unsecured offer. Because you are not offering any collateral these deals are given based on your credit history. While you can still find places to borrow money with bad credit, the worse your credit is the higher your interest rates will be. Of course, this may still be preferable if your current debts have very high interest rates, the only way to know is to go out and apply at some places and see what you are offered. You can find these basically anywhere, at your bank, credit union, or online. Looking online will, of course, speed up the process considerably.
While real estate is the most common form of collateral, you can still find all other kinds of offers for consolidation loans without owning a home.
Not Protecting No Claims Discount ‘Could Cost Drivers Millions’
By not taking steps to protect their no-claims discount (NCD) policy on their car insurance, motorists across the country could see increasing strains at their attempts at money management, it has been stated.
In research carried out by uSwitch, more than 7.7 million British drivers with at least four years’ worth of NCD are putting such discounts at risk by not getting cover for it. According to the price comparison website, almost a third of motorists have built up enough time to qualify for protection on their NCD, yet have chosen not to do so. However, should such drivers have one accident each they could find their insurance costs rising by 92 pounds. With this a total of 707 million pounds, it is a figure which could impact upon their propensity to service other areas of their spending, for example mortgages, overdrafts or personal loans.
The company stated drivers can avoid running the risk of losing their NCD, also known as a no-claims bonus, by making an annual payment at an average cost of 30 pounds 72p to their insurance provider. By doing so, should they have an accident they will not lose their discount and, in some cases, may be able to avoid witnessing a rise in their annual insurance costs, which in turn may help ease pressure on their finances.
Ashton Berkhauer, insurance expert for the price comparison website, said: “No-claims bonus protection plays a really important role as it covers motorists against premium hikes when they make a claim. As the cost of claims continue to rise, insurers will increase premiums to cover their costs. Consumers should therefore consider the benefits that protecting their NCD can offer”.
“Nearly three-quarters (72 per cent) of motorists say they choose their car insurance policy purely based on price, but, with such variation across the industry when it comes to protecting NCDs, this could be a false economy. Choosing a policy should be based on good value for money and getting the most comprehensive policy for your needs”.
Mr Berkhauer added that consumers should consider spending money, whether it be sourced from a personal loan or other means, on car insurance and NCD cover wisely. He stated that borrowers should be cautious of always plumping for the cheapest deal as such an offer may not provide all the features they need from a policy. The insurance representative also asserted that “sometimes finding the best NCD protection can be just as financially beneficial as finding the best insurance policy”.
Meanwhile, research carried out by Zurich earlier this year revealed that consumers are spending an increasing amount of money running their car. With a total of 51 billion pounds splashed out every year, drivers are paying a typical amount of 1,776 pounds 62p on the likes of parking, vehicle tax and repairs. About a third of motorists have seen costs surge by over 400 pounds per year, which in turn could impact heavily on their ability to manage their finances. As a result, taking out a personal loan could be an effective way of meeting numerous motoring expenses.
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