How To Borrow Money The Easiest Way


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While saving enough money to fund any business you might have in mind is always the safest – and cheapest – option, sometimes it just isn’t possible. However, in a constrained credit environment, getting a personal loan to finance a new car or renovate your home has become much more difficult.

This is especially true as unsecured debts are included in the new insolvency regime, which means that credit providers may have to write down a loan if you are unable to repay it.

In addition to this, the number of credit providers in the market has declined, while some credit unions have implemented restricted lending practices.

However, if you need the cash, there are options, with some banks offering great interest rates on particular products.

Save to borrow

Last month, Permanent TSB introduced a new offer that allows the bank’s customers to benefit from reduced interest rates on loans, provided they guarantee the loan with corresponding deposits.

The annualized percentage rate (APR) for secured cash loans starts at around 7.5 percent, which compares favorably to the standard rate of 10.5 percent, as it equates to a saving of around $ 25 per month on a loan of € 20,000 over five years, or € 1,500 over the term of the loan.

Under this program, consumers will be able to borrow between € 13,000 and € 75,000 for up to 10 years with savings of around 3% on a typical personal loan, provided the amount borrowed is less than or equal to the deposit value. .

For consumers, the benefit of the new loan structure is that it allows you to access cheaper financing – while keeping your “bad days fund”. It also increases the chances that you can borrow because the loan will not be unsecured. However, it is also important that you read the fine print before committing to such an offer.

As the term “cash-secured” suggests, the bank will place a lien, or assign a bond or policy, to your deposit account. So if you don’t repay your loan, the bank can use your deposits to collect their loan.

Additionally, you might find that if you need to access this fund, it might be difficult to do so.

According to a spokesperson for the bank, no withdrawals are allowed under the terms of the loan. However, he says it “would work with any customer who needed to access their funds at any time during the loan.” This could include the release of excess funds after a certain period of repayment ”.

The bank also offers a “Save’n’Borrow” product. This allows you to borrow up to four times your savings, with a minimum loan of € 1,500 up to € 24,000, with a term of between 12 and 60 months.

Another way to quickly access funds – without touching your lump sum – is to open an “interest first” account. For example, if you were to deposit € 50,000 into KBC’s initial interest account, you could walk away with € 1,003.75 (excluding tax) in cash within 16 days. However, the risk of this approach is that your lump sum will deteriorate in real terms if inflation takes off.

To buy a car

When the credit crunch first hit car dealerships, several manufacturers stepped in, setting up financial branches based in Ireland and providing car buyers with new cars and low-cost finance.

So it’s no surprise to learn that Ireland’s most popular new car makers, as evidenced by new car sales – Volkswagen, Toyota and Ford – all offer finance to their customers.

A key point to remember is that these deals are generally structured as hire-purchase deals – and under an HP deal, you won’t own the car until you make the very last payment. . You are effectively renting it out to a finance company. This means that if you cannot maintain the refunds, you will forfeit the car and any payments you made to it.

But if you are happy with this structure, opting for an HP financing deal, rather than a personal loan, will likely save you money.

Peugeot, for example, offers an APR of just 3.9% on sales of its range of vehicles, based on a minimum deposit of 30% and a maximum term of 61 months.

Volkswagen also offers very competitive offers, with 0% financing available on new Polos or a Golf SV. This means that a Polo retailing for € 14,995 will cost you the same amount to buy over three years, based on a 30% down payment. However, the total HP price is a bit higher, at € 15,745.

Additional fees and costs are often added to an HP contract. Peugeot charges a documentation fee of € 63.49 and a one-time purchase payment of € 63.49, while Volkswagen has two payments of € 75.

College funding

And, when it comes to funding postgraduate education, the need for a loan may be even greater, given that the typical fee for a full-time taught postgraduate is around 6,000. € per year, and almost all postgraduate maintenance and grants were cut in the 2012 budget. Therefore, it is worth looking for the cheapest loan to fund your extra years in college.

The Bank of Ireland just cut interest rates on postgraduate loans to just 5.6% APR, while students will also be able to borrow up to € 7,500 and defer repayments for up to a year while they are finishing their studies. The AIB also targets graduates with a special account, which offers a loan with a special 3% discount, which currently equates to 8.45% on amounts up to € 75,000.

You can also request an interest-free overdraft up to € 1,000 and you will not have to pay the overdraft fee of € 25.39, as long as you have an AIB graduate account.

Renovate your home

Bank of Ireland has set up a loan fund of € 75 million for this purpose, and in conjunction with the tax credit scheme, it offers a low rate of 9.9% on amounts over € 5,000 and less than € 30,000 under conditions between one and 10 years. Any amount borrowed outside of these parameters will be charged interest at the normal rate.

If you want to get new doors and windows for your home, at a cost of around € 10,000, you can count on monthly payments of around € 209.90, for a total cost of credit of € 2,594 over five years. . This compares well to the bank’s standard variable rate, which would cost you around € 217.10 per month, or € 3,026 over five years.

It is also possible to free up the equity in your property with BOI to finance your home renovations. The bank allows you to borrow from $ 10,000 up to 90% of the value of your home, and the rate that applies depends on the equity in your home.

If your loan-to-value ratio (LTV) is less than 75%, you will be eligible for an APR of 4.4%, reaching 4.6% for higher LTVs. Remember, however, that since these are variable rates, they can be increased at the discretion of the bank, and make sure you are comfortable with reducing your home equity beforehand. to opt for this option. While house prices could rise again, any downward change could tip you into negative equity, depending on the level of equity you have accumulated.

Ulster Bank also has special offers for homeowners who want to modernize their properties. Its green loan offers an 8.9% rate for the purchase of energy-efficient home improvements and the purchase of renewable energy heating systems.

The local option

A key advantage of going with a credit union is that the repayments are calculated on your declining balance, so you pay less interest on each repayment, which reduces the total cost of the loan.

Plus, you might find that the rates are lower. Wexford Credit Union, for example, has a standard loan rate of 9.6 percent, while in Tallaght the rate is 12.6 percent APR and Drogheda has an APR of 8.2 percent.

And, in the event of death, you may find that your credit union offers loan protection insurance, which will effectively pay off your outstanding loans.

However, as mentioned, credit unions now also have strict lending practices in place. For example, Tallaght Credit Union will only allow you to borrow after you’ve saved for 13 weeks, and the maximum first loan is up to € 1,250 on savings and the maximum term is five years. To be eligible for a loan, loan repayments must not exceed 35% of net income.

A short-term solution

Failure to do so, however, turns a quick fix into an expensive option, so if you know ahead of time that you’ll need extra funds to help you out, it’s worth applying for a formal personal loan.

For example, a balance of € 10,000 on your credit card will take you over five years to repay on the basis of repayments of € 250 per month.

And finally . . .

don’t fall behind on your repayments Delaying a loan repayment in this environment will seriously damage your credit rating and will also affect your ability to obtain mortgages and other forms of loan. It will also cost you.

Take the home improvement loan from BOI. If you are late on repayments, the bank will charge you an APR of 12% on the upaid sum – in addition to the interest you are already paying.

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