| 6 Million Brits Consolidating Their Loans
The preferred method of debt consolidation in the UK is where unsecured personal loans are combined into one loan with a lower monthly payment. While this is a positive move in the short term, it can be fiscally devastating over the long-term if done in the wrong way. Unsecured personal loans are the preferred method of consolidating loans. The interest rate is normally lower than interest being charged on credit cards and store cards. Research from uSwitch.com revealed that a number of Brits who consolidate their loans continue to use their credit cards and store cards to create further debt. The number of UK consumers who apply for personal loans that are higher than the amount they need to consolidate their loans are using the extra money, not for wealth generating, but to maintain a higher lifestyle.
What Do Interest Rate Hikes Mean For Your Mortgage?
If you've picked up a newspaper or caught the news recently, you've probably encountered a story about mortgage rates and the Federal Reserve banking system. Like many borrowers, you might wonder how the Fed determines interest rates and how - in the event of a rate hike - your personal finances could be affected. Here's a quick overview: Banks, credit unions, and other lending institutions borrow money from Fed banks. Since they borrow these funds on a short-term basis, the institutions are charged at a discount rate that is set by the Federal Reserve Board. This discount rate has a direct effect on the "Prime Interest Rate," the rate banks charge their top-rated commercial customers for short-term loans. .
Home loan rates set to rise further
NEW DELHI: Interest rates on loans are set to shoot up further with the Reserve Bank of India on Friday deciding to make money costlier by hiking the inter-bank short-term lending rate by 0.25% and the mandatory deposits banks are required to make with the RBI by 0.5%.
These measures are likely to hit economic growth. But, in a significant policy-turnaround statement, RBI said growth had now become a secondary concern. Controlling inflation is the central bank's top priority.
This would leave banks with no choice but to increase home loan rates by half a percentage point to 11.50%. The measure, besides affecting prospective loan seekers, will also hit those already paying home loan EMIs at floating rates. Interest rates on personal and commercial loans are also set to increase by the same amount.
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