How Not to Waste Money

Posted on October 13, 2010 by Loanfinder

 

A new report from research company YouGov, has revealed that a most of us waste an amazing amount of money each day – to the tune of billions of pounds.

According to the survey, we are double tipping in restaurants, throwing away money off vouchers, and accepting hefty credit charges.

The survey showed that:

· Almost 1 in 3 (29%) tip in restaurants even when the food or service is poor
· 78% have thrown away or failed to use money off vouchers
· 67% of women have bought clothes or shoes and never worn them
· 40% haven’t bothered to take faulty goods back
· 1 in 10 (10%) say they would never negotiate over price
· Only around one third of consumers are comparing bank (31%) and credit card (35%) interest rates before purchasing.

(Source: www.journalism.co.uk press releases) 8th October 2010.

So to stop making these common mistakes, here’s a guide to how.

Tipping

There is no legal requirement to tip, but restaurants often include a ‘suggested gratuity’ at the bottom of the bill, which is a request for a tip. But if service is already included, and you don’t notice this on the bill, then leaving a tip means you are effectively paying a tip twice.

If you have experienced truly terrible service, (ie, the waiter spilt soup in your lap and didn’t even apologise) then you shouldn’t be embarrassed to leave no tip at all. New rules over tipping and salaries in restaurants mean that staff must receive the minimum wage, so any tips are to top up their wages.

Vouchers

Yes – snipping vouchers out of magazines might be something your mum does, but it really can save money. Sign up for loyalty cards to get money off vouchers sent to you, and use voucher sites to get money saving codes and deals for use in hundreds of places.

Sales Shopping

The survey shows that woman make their biggest mistakes in the sales. 60% of women have bought clothes that they thought were a bargain – and then never worn. When you shop in the sales, always ask yourself – would I buy this if it wasn’t on sale? Quite often, the answer is no!

Faulty Goods

The law says that anything you buy must be ‘fit for purpose’ and of ‘satisfactory quality.’[1] If not, then you can take it back. Always keep your receipts.

Haggling

Interestingly, the survey revealed that 94% of people in the South East, South West and Wales said they would try to negotiate over price, as opposed to 86% in The North East and East Midlands.

The most haggling appeared to be on driving down the cost of a car, with 55% saying they had done, or would be willing to try it.

But haggling can be tried anywhere, from department stores to mobile phone dealers. Always ask for more off than you want, to allow them to beat you down. For example, if you want 10% off, ask for 20%. The trick is to be confident, and prepared to walk away!

For more haggling tips, click here.

Shopping around for best Interest Rates

Always do your research to get the best deals on borrowing. If you have a good credit rating, then you should have more options to find a loan with a good APR.  If your credit rating is not so good, then you’re more limited, but using a good loan broker can help you with your search, by finding the best deals for your financial situation.

[1] http://www.which.co.uk/consumer-rights/making-a-complaint/how-to-complain-to-companies/consumer-law-a-summary/

 

Posted in Loans, Saving Money | 1 Comment

The Truth about Loan Brokers

Posted on October 11, 2010 by Loanfinder

Just  at the point that the banks appear to have slammed their doors in the face of borrowers, the average person is more in need of credit than ever. The result is that more and more of us are finding that accessing credit means a dispiriting trawl through hundreds of lenders, hoping that someone, somewhere, will be kind enough to offer a loan.

So if, like many people, you find searching for a loan daunting, confusing and time consuming, you may have wondered about the growing number of loan broking services offering to do all this for you. And because it’s what we do, we thought it would be a nice idea to help uncover the facts about loan broking.

What are Loan Brokers?

Basically, loan brokers are a type of middle-man for matching people with lenders. By giving them your details, a loan broker will find you a lender who is most likely to lend to you. You can then apply for your loan.

Yet the industry itself suffers from an image problem. Mention bad credit loans, and you instantly think of a murky world of subprime lenders, loan sharks,  and interest rates of 3000 per cent. Many loan brokers claims are attractive; no fees, guaranteed finance within seconds, and instant credit for anyone who applies.

But online forums include complaints from people who claim they’ve been ripped off or scammed, or want their money back, and warnings about loan brokers who are not providing a proper service are regularly publicised.

So is there any truth in the claims about loan brokers? Do they offer a good service, or are they simply exploiting people?

The personal loans industry is worth billions, so it’s easy to see how  brokers could take advantage of people who need credit. But is this fair? The flip side is that some people argue they have received a good service, and that loan brokers have provided them with real help in solving their borrowing problems. So what is the truth?

Most borrowers would agree that having someone take the leg work out of applying for a loan is a good thing, especially for someone with poor credit. Using a loan broker can be a quick and simple way to finding finance that you will be accepted for. Yet there are also some companies out there who are ripping people off.

So to spot the companies who are only interested in getting their hands on your money and not helping you, it’s important to distinguish between the unscrupulous brokers who often claim to be able to deliver £10,000 to your door within hours, and the legitimate companies who provide a good service.

The majority of complaints surrounding loan brokers, are when customers are supposedly ‘guaranteed’ a loan, and then asked for immediate payment of a fee, to ‘release’ a loan, which doesn’t actually exist.

As a general rule of thumb, a broker can never guarantee a loan for an upfront fee. Actually being accepted for a loan will always be down to the lender. The broker’s job is to find you a lender who is most likely to lend to you, and therefore they simply can’t make these kind of promises. If they guarantee a loan in exchange for an upfront fee, then you may not get the service you are expecting.

So to be on the safe side, you should always ask the following questions:

Are they ‘guaranteeing’ you a loan?

Is the fee refundable if they do not find you a loan or you choose not to accept it?

Will there be any other fees added?

Is the loan dependent on paying for lots of insurance policies?

Are you able to easily cancel your application?

Finally, always check all information you have provided is correct, and truthful to get the best out of a broker. For example, you must make always sure your broker is aware of any other loan providers you have applied to, so that they don’t refer you to someone you have already tried.

As with any type of business, there will always be companies who don’t offer a good service. But by remaining vigilant, and taking care to avoid the pitfalls described in this article, a good loan broker is able to save you time, and money if you need a loan.

 

Posted in Loans | Leave a comment

Understanding APR

Posted on October 5, 2010 by Loanfinder

Given the choice, would you rather, a) sit down and get stuck into a copy of Heat/FHM magazine, OR b) settle down with a book explaining everything you need to know about managing your personal finances?

Hmm.  Well, admittedly, reading about personal finance isn’t exactly as fun as wondering why Colleen Rooney is still holding hands with Wayne, but understanding finance is key to getting on top of it.  New research from uSwitch.com, shows that almost 71 per cent of us, say that a lack of basic personal financial understanding is to blame for debt.

So with the level of personal debt in the UK now exceeding £1.5 trillion,[1] understanding not only how credit works, but how much it costs, is the first step to sensible borrowing.

I need to borrow money. But what is APR?

In very simple terms, when you borrow money – you have to pay for the privilege! You can tell how much you will be paying for taking out a loan or  credit card, by looking at the Annual Percentage Rate (APR).

So the annual percentage rate is how much you will pay for your loan every year.

Supposing you borrow 2,000 at an APR rate of 10% over 36 months, it will cost you 323.24 in total.  As you continue to pay every month, you pay more and more of the original amount down, so every time the debt gets lower, the 10% will also be less.

(A very easy to use calculator to work out the real cost of your borrowing can be found here.

http://www.moneymadeclear.org.uk/tools/loan_calculator.html

It’s important to remember though, that when you are considering a loan, the advertised APR is only a guide – what you actually pay can be very different, and  it may not include additional charges you may incur such as early repayment charges for loans and late payment charges for cards.

Why is it all so confusing?

Apart from the horrible maths involved in working out APR, loan and credit card providers can confound their customers with complicated rules about the rates.

Credit cards, for example, have what’s known as Multiple APR’s. This means that they charge different interest rates for purchases, cash advance, balances transfers and other types of transaction.

Card issuers may also give you tiered APRS so that, for example the first £400 of your balance may have one rate, and the next £400 have another rate.

And while some cards offer a 0% introductory APR rate, you still need to check what the APR goes up to after that time.

Loan providers too, might offer you a variable APR. This means the rate may go up or down. So always check if your loan has a non-variable APR to make sure that your payments will remain the same

You also need to check which fees are included in the APR, such as admin fees, or introduction fees. This could cover charges for optional payment protection insurance, default charges (for missing a payment or being late or going over your credit limit), and certain other charges such as balance transfer fees.

Choosing a loan…

To make a good decision, you need a true comparison by focusing on the amount you repay by checking the APR, and how long you are paying it for. Normally, the shorter the loan, the more you will end up paying, (eg, payday loans) so if you can’t afford high monthly repayments, aim to spread your loan over a longer period of time. However, bear in mind this will cost you more in interest payments in the long run.

[1] www.walletpop. 30th September 2010

 

Posted in Loans, Saving Money | Tagged , | Leave a comment

How to get ahead in renting

Posted on September 30, 2010 by Loanfinder

 

If high house prices have made even buying a small shed in Scotland beyond your reach, then you have probably resigned yourself to renting. Living with magnolia walls and your landlords choice of curtains has its downsides, but at least it’s a roof.

However, new research from the Association of Residential Lettings Agents, shows that for most people finding a place to rent (especially in London) is getting harder and harder. Competition for rental properties is now so stiff, that demand is outstripping supply. (http://www.bbc.co.uk/news/business)

And because there are so few properties, prices are heading ever upwards. According to figures from findaproperty, the average asking price for rent in the capital at the end of the second quarter of 2010 stood at £1,729 per month. That represents a 6.4 per cent increase compared to a year ago. (Source: www.docklands24.co.uk)

So how to get ahead in the rental market?

Firstly, you need to move fast. In some cases, property is going within 30 minutes of being put on the agents list. Although it’s never wise to rush an important decision like renting, if you dither, you could lose the place.

Put your best foot forward. Make sure the agents or landlord know that you’re in a secure financial position. That way, they’re more likely to pick you. If you have poor credit, do what you can to improve it before deciding to move. Landlords don’t like to think their rent is not going to be paid on time!

If your  job is insecure – think twice about moving, or check your contract for a ‘break clause.’ If you have a fixed term contract, this will allow you to give two months notice to move out should you be struggling with the rent.

Make sure you’re using a proper estate or lettings agent. There are many unscrupulous lettings agents out there. Make very sure of the fees before you sign anything, and check that they are registered with an approved tenancy deposit scheme. By law, agents and/or landlords collecting deposits from tenants must be registered, to safeguard the return of your deposit when you move out.

Check that the agent is registered with either the Association of Rental Lettings Agents, or the National Association of Estate Agents. You can check here:

http://www.naea.co.uk/

http://www.arla.co.uk/

Finally, if you find yourself struggling with the rent – always inform your landlord or agent. They will be a lot more sympathetic if you explain your situation. You may even be able to claim Housing Benefit if you find yourself out of work. Bear in mind however, that you will only be able to do this if your landlord is not restricted by their mortgage company.

 

Posted in Saving Money | Tagged , , , | Leave a comment

Saving Money on Home Phone costs

Posted on September 28, 2010 by Loanfinder

BT tell us that it’s good to talk, but the news that both they and Talk Talk are raising their prices again on October 1st, means that talk isn’t exactly cheap on a BT or Talk Talk line.

The new charges mean that BT have raised the cost of call connection by 10 per cent, daytime call costs by eight per cent and standard line rental by four per cent. (Source: News of the World. 25th September 2010)

Talk Talk customers are also seeing an increase in price from 5.8p to 6.4p a minute for daytime calls, with line rental charges to rise by 55p to £12.04 a month, and call set-up fees up 1p to 10.9p. (Source: The Guardian. 25th September, 2010)

So what can you do to cut the costs?

Apart from using two old baked bean cans and a piece of string, the obvious answer is to switch to a cheaper provider. However, if you don’t want to do this, you can change your BT package. They are offering a 12-month Line Rental Saver deal costing £113.88 for the year , which works out at £9.49 a month – and includes free weekend calls. However, the downside is that you will need to pay for the whole year in advance in full by 29 October. See www.bt.com for more details.

If you do want to switch, but are tied in to a contract, don’t worry. New Ofcom guidelines about to come into effect say that you can escape your contract by paying just £2 – £4 per unused month rather than the full line rental. You just need to check that this will actually save you money by getting your pencil and paper out and doing a few boring calculations comparing costs. Or try the homephone calculator.

For more info about the new OFCOM regulations click here.

Best Deal

Primus are offering Line rental plus weekend calls for £8.25/month.

For £99, paid up-front for a year, The Primus Saver Plus promo works out at £8.25 per month, and includes weekend calls to landlines. (www.primussaver.co.uk/saver-plus.aspx) Alternatively, pay £8.99 monthly and get evening calls too (see www.primussaver.co.uk).

(Source: News of the World. 25th September 2010)

Try Uswitch, to calculate the best deal for your phone useage.

http://www.uswitch.com/home-phone/

Use prefix codes

A little known but clever trick which can cut the costs of your calls by half, is to use a phone firm which reroutes your calls by asking you to enter a number before you dial. This works on all BT and Primus lines. All you do, is sign up for a provider such as http://www.18185.co.uk/index2.php who charge just 5p per call, no matter how long you talk for. Amazing!

Other prefix call providers include http://www.superline.co.uk/ or http://www.firstnumber.co.uk/.

Peak Times – Save the Chat

Don’t forget – most phone companies have now also changed their peak rate (most expensive time to call) from 6am to 6pm, to 7am to 7pm. So if you save your calls until after then, you’ll be saving money too.

 

Posted in Saving Money | Tagged , , , | Leave a comment