Search
Recommended Sites
Related Links






   

Informative Articles

Bankruptcy 101
'Bankruptcy' the term that can raise the goose bumps of almost every individual who hears it and even a nervous breakdown to those who confront it. Bankruptcy stands for the situation when a person runs into huge debts and there is hardly any...

Credit Card Counseling And Debt Consolidation
Have you ever had one of those days where bill collectors were getting on your nerves and you didn't know what to do? You though, "if I had a credit card on hand, it would take care of my debt problems!" And then you probably thought ".if only I...

Debt Consolidation Primer – Four Things You Can Do to Get Out of Debt
Problem debt is rampant throughout America. In addition to mortgages and auto loans, the average household in the U.S. has nearly $10,000 in credit card debt. As the major credit card companies have recently doubled their minimum payment...

The Basics of a Consumer Debt Consolidation Program
There are so many expenses that we have in our lives that it is not surprising that many people get into debt and consider enrolling in a consumer debt consolidation program. Education costs, home ownership bills, medical expenses and other...

What You Must Know Before Attepting Debt Negotiation
Debt negotiation should be viewed as a last-resort measure before filing bankruptcy. A lender has little motivation to accept a pay off for less than the full amount unless the debtor is already months behind on bills. Debt negotiation,...

 
The Other Side of Personal Loans

Personal loans can help you solve a number of financial problems. They can help in debt consolidation. They can be used for home improvement. They can also be used to improve credit score. There is a flip side to the story as well. A number of lenders impose penalties on borrowers, not because of a default in the repayment of a personal loan, but because of its early repayment. That's right. Repayment of a personal loan before the expiry of its loan period makes the borrower to pay early redemption penalty.

The worst part is that, most of the people in the UK are not aware of the fact that lenders impose penalties on the borrowers who repay their personal loans early. Since the interest rates are at all time low levels, many borrowers manage to repay their loans before the loan tenure ends. Moreover, lenders offer low rate second loans, i.e. if a borrower has already taken out a loan, he is offered a new loan at a lower rate of interest to replace the existing loan. What borrowers do not know is that they will have to pay early redemption penalty. This takes away the advantage of a low interest rate.

In the early stages of loan tenure, a major portion of monthly installments comprise of interest, which results in a large amount of unpaid loan. The early redemption penalty is charged on this unpaid loan amount. This results in the imposition of a heavy penalty.

So far, we have discussed about the problem that may arise as a result of early loan repayment. Let us now discuss about the non-repayment of a personal loan. If you default in the repayment of a personal loan, you will acquire a bad credit score. A bad credit score will hamper your chances of getting a fresh loan in the future. A more serious problem arises when the loan is secured against a property. In this case, your property may be repossessed by the lender. To avoid this, lenders offer insurance policies and payment protection schemes. Such policies and schemes cover your loan repayment in the event of death, disability, sickness or involuntary job loss.

About the author:

About the Author: The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Easy Loans Shop as a Finance Specialist. For More Information Please Visit us atwww.easy-loans-shop.co.u k