QUESTIONS YOU SHOULD ASK YOURSELF BEFORE YOU BUY
What other Deals will I Find in Comparison to the Credit Costs?
Underlying charges may be either included or not, in the Annual Percentage Rate (APR), but generally the lower the APR the less the total sum. Do plenty of comparisons including both the total amount payable and APR.
Could it really be the Best Deal Out There?
When buying anything you always want the best deal you can find, so opting for a credit deal should be treated exactly the same. Do the homework, and shop around for the best APR’s. Don’t forget there will be other charges that may not be included, uncover what they are, so you know what the total amount will be.
Would I have to use my home as security?
Many credit agreements are written with your home being used as collateral, especially large amounts. So be aware, that if you fail to keep up the payments you have the potential to lose the roof over your head!
Get to Grips with the Agreement
Make sure to read it properly, and understand it before you sign anything. If you wish, take it away with you and seek advice, after all a Credit Agreement is a legal document. Once you’ve signed the agreement that’s it, there is no going back.
What are the Interest Rates?
Find out how the interest works for your agreement. If the loan begins with a zero percent offer, find out how long this will last, and if it will cost more over the time of the loan. Some have fixed rates and some introductory fixed rates, if applicable find out when they will change.
What If I have the Opportunity to Pay off the Loan Early?
Do early redemption charges apply to your loan agreement?
What penalties are made, if I miss any payments? Find out the penalties, in that will it increase the total amount payable, the payment period, or increase the APR.
Make Sure You Know the Total Amount Payable
Generally speaking, the longer the loan period, the higher the total amount. When possible try to pay off as much as you can each month.
Payment Protection Insurance
Payment Protection Insurance or PPI as it is better known, is a type of insurance cover designed to protect the monthly or frequent payments you make on different types of borrowing if you are unable to work because of illness, a serious accident or being made unemployed. Another term for these policies are ‘Accident Sickness and Unemployment’. The regular income provided can be used for the following:
Different types of loans
A mortgage on your property
Credit and Store cards
Payments to a catalogue
This type of policy is usually added a ‘bolt on’ or separate type of protection for the area’s above, but you should be aware, they can be very expensive and have many limitations attached to them.
The policies are usually optional and does not pay out straight away, the length of payments paid out also vary, one that is used to cover a mortgage or loan for example is in the main is only 12 to 24 months. The cover provided for credit and store cards is a percentage only of the balance outstanding. You are advised to read the small print, especially the exclusions with reference to any pre-existing medical conditions. There could certain area’s they may not pay out on eg back problems. They don’t usually cover the self-employed.
If you wish to take a policy make sure you get plenty of quotes, if unsure about anything seek advice, these policies have to suit your needs and circumstances.