How can interest rate changes affect you? Page 2

How can I prevent myself from getting burnt?

The safest, although possibly not the cheapest, option is to plump for a fixed rate loan in the first

Hot Topics

What is Level Term Life Insurance?: Level Term Life Insurance is a form of insurance that pays a lump sum to you or your family if you die or fall terminally ill whilst the policy is in force.
What is Mortgage Payment Protection Insurance?: Mortgage Payment Protection Insurance will pay your monthly mortgage repayments if you were off work because of sickness, an accident or unemployment.
Will my medical history affect my life insurance premium?: Yes it will. When an Life company decides how much to charge you, it works out the statistical chances of you dieing within the term of the proposed policy
Will I get charged more as a smoker?: Yes you will. But first let us give you the usual Life Company’s definition of a smoker:

place. In which case, your loan repayments will never change and this article doesn't apply to you! Note that Precision Loans can search for a fixed rate loan for you, taking all of the hassle out of the process.

If you haven't done that, you've noticed that variable rate loans can be cheaper, although more dangerous. Also a fixed rate loan might not be a viable option if you don't have a perfect credit rating. The first trick is to overpay if possible - if you don't need some surplus money, then get use it to get rid of some of that loan hanging over you - it'll always be cheaper now than in the future. Paying more than your standard loan repayment means that you'll pay less interest in total and you'll be free of your debt sooner.

Another good idea is to budget a higher rate loan than you actually take out. If you can absorb repayments 2% higher than you actually have to, then a rate increase ( remortgages ) won't be an utter disaster - and you'll have a more comfortable position looking for a replacement loan.

A final thing to consider is that a lower APR does not necessarily mean a less expensive loan. There are extra costs associated with loans from many lenders, such as arrangement fees or early payment charges. So remember - a variable rate loan might be less expensive, ( cheap loans ) but be vigilant!