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<!DOCTYPE HTML PUBLIC "-//IETF//DTD HTML//EN"> <html> <head> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> <meta name="GENERATOR" content="Microsoft FrontPage 2.0"> <title>Untitled</title> <link rel="STYLESHEET" href="style1.css" type="text/css"> <base target="_top">  </head> <body bgcolor="#FFFFFF" topmargin="0" leftmargin="0"> <table border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td valign="top"><table border="0" cellpadding="0" cellspacing="0" width="100%"> <tr> <td align="right" valign="top" width="174"><a name="top"> </a> </td> <td align="right" valign="top"> </td> </tr>  <tr> <td align="right" valign="top" width="174"> </td> <td valign="top"><a><img src="mi_logo.GIF" width="200" height="36"></a> </td> </tr> <tr> <td align="right" valign="top" colspan="2"> </td> </tr>  <tr> <td align="center" valign="top" width="174"><img src="002007.jpg"><table border="0" cellpadding="0" cellspacing="0" width="138"> <tr> <td align="right" valign="top" width="138">C O N T E N T _______________ <A HREF=#1 target=_self>Best Deals on Loans </A> <A HREF=#2 target=_self>Interest Rates </A> <A HREF=#3 target=_self>Consumer Protection </A> <A HREF=#4 target=_self>APR </A> <A HREF=#5 target=_self>Loan Offers </A> <A HREF=#6 target=_self>Cancellation </A> <A HREF=#7 target=_self>Hire Purchase </A> <A HREF=#8 target=_self>Loan Sharks </A> <A HREF=#9 target=_self>Married Couples </A> <A HREF=#10 target=_self>Guaranteeing Someone Else's Loan </A> <A HREF=#11 target=_self>Your Rights </A> <A HREF=#12 target=_self>Payment Protection </A>Expert A s s i s t a n t <SCRIPT LANGUAGE=VBScript></SCRIPT> </td> </tr> </table> </td>  <td valign="top">Consumer Credit by <A HREF="money:navigate/guide/guide/010005.html">Annette Brown</A>, personal finance journalist, contributor to the Saturday Telegraph and Money Mail, and personal finance editor of Saga magazine. Consumer credit has never been easier to obtain, but don't be tempted by something you can't afford. Interest and charges add to the price. Institutions shouldn't offer credit to minors. Anyway no-one under 18 can be taken to court for their debts. Responsible lenders will check that everyone else has the ability to repay. <a name=1>Best Deals on Loans</a> When you buy something large, like a car, on credit, check if you could get a better deal with a bank or building society before you accept the terms of a finance company loan (see <A HREF="money:navigate/guide/guide/002004.html">Bank Loans and Overdrafts</A> and <A HREF="money:navigate/guide/guide/002002.html">What Are My Options?</A>). Beware salesmen who encourage you to buy expensive items like double glazing or big household items with a loan. They earn hefty commission on the deal. But they leave you with a commitment you may not be able to afford. Buying through mail order catalogues often gives you around 20 weeks' free credit. Credit Unions also keep down the cost of a loan. They pool members' savings and lend to those who need it. Pawnbrokers still advance money against jewellery, watches and other valuable items. When you repay the loan and accrued interest, you redeem your item. If you can't, the item is sold. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=2>Interest Rates</a> A loan which is secured against a re-sellable item like a house will have a lower interest rate than a unsecured loan which the lender sees as riskier. Interest can rise on a variable rate loan. What you can afford now may be over your budget if rates go up. You could lose the roof over your head if you fail to keep up payments on your mortgage or a loan secured on your house. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=3>Consumer Protection</a> Paying by credit card for goods or services which cost over ú100 gives you some protection if you have a problem that the trader can't or won't sort out. Under the Consumer Credit Act 1974, the credit card company is normally also held liable for the quality of goods and services paid for by credit card. So if you get no satisfaction from the supplier, get your card company to sort it out and get your money back. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A><A HREF=money:navigate/guide/guide/222001/8>G L O S S A R Y ______________ APR</A></td></tr></table></td><td align=left valign=top><a name=4>APR</a> The annual percentage rate (APR) should represent the cost of the loan, being the interest rate added to any other charges. In practice, you still can't always compare like with like especially with variable rate loans (see further <A HREF="money:navigate/guide/guide/002003.html">What is APR?</A>). </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=5>Loan Offers</a> Get a written quotation from the lender before you sign and study it carefully. Understand your commitment and make sure your budget allows for it. Unless it is a very short-term loan, don't rely on part-time earnings to repay. If your loan is arranged through a broker, he or she will charge a fee or the fee will be taken from the amount you borrow. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=6>Cancellation</a> With some loans, especially those signed in your own home, there is the option to cancel within a few days of signing. But deals arranged over the phone have no cancellation protection. Check whether the loan application form mentions "Your right to cancel". You cannot cancel if you sign in the company's office, shop, exhibition stand or business premises. If there is no mention of your cancellation rights on the form, don't believe a salesman's claims that you have time to cancel You can, however, still cancel once the goods arrive if you had the right in the first place. You can also get any deposit back. If you want to go ahead, fill in the application form yourself and answer honestly. Keep your copy of the agreement and read it through. Check your statement each month to make sure the payment has gone through correctly. Act immediately if anything is wrong. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=7>Hire Purchase</a> With hire purchase, you pay a deposit, then regular payments. The goods are not yours until they have been fully paid for. If you want to end the agreement before that, you must have paid off at least half the amount owed and be up to date with your payments. Then you can hand the goods back without owing anything further. But you lose the goods. If you fall behind and the trader wants to end your loan early, you must be given seven days' notice. If you can't come up with the money, explain your problem, and if necessary ask for a court order to give you extra time to pay. If you can't pay and the trader wants the goods back, you must tell him or her where the goods are. But they need a court order to repossess them from your home, unless you give permission. If you have paid at least one-third of the cost of the goods but then fail to make payment, the trader needs a court order to recover them. (See further <A HREF="money:navigate/guide/guide/002008.html">Hire Purchase</A>.) </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=8>Loan Sharks</a> People who have no security may resort to lenders who charge prohibitive rates, and inflict exorbitant penalties for missing payments. These lenders may ask for another person to guarantee the loan or they may turn nasty if you can't repay and may try to take your benefit book (which is illegal). Some make more money from repossessions than they do on earning interest from the loan. Avoid them. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=9>Married Couples</a> In law, one spouse is responsible for the other's debts. So if one spouse applies for a loan, the lender should ask the other spouse to co-sign so that they are aware of, and accept, their responsibility. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=10>Guaranteeing Someone Else's Loan</a> Lenders normally ask any borrower under 21, or a possible bad risk, to find a guarantor, usually their father. If you are asked to guarantee a loan, beware! You are liable if the original borrower defaults. The lender has every right to chase you for the money, through the courts. Even your home could be at risk. Acting as guarantor is more than "just a formality". Your future financial security is at stake. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=11>Your Rights</a> All lenders are controlled by the Consumer Credit Act 1974 and must abide by certain rules. They must declare the APR of interest they charge and the amount of notice they must give to alter it. </td></tr><tr><td align=center valign=top><table border=0 cellpadding=0 cellspacing=0 width=138><tr><td align=right valign=top width=138><A HREF=#top TARGET=_self>ß B A C K _____________ to the top </A></td></tr></table></td><td align=left valign=top><a name=12>Payment Protection</a> Insurance is available which covers your payments if you lose your job, fall ill or die (see <A HREF="money:navigate/guide/guide/004007.html">Mortgage Protection Insurance</A>, <A HREF="money:navigate/guide/guide/005009.html">PHI and Critical Illness Insurance</A> and <A HREF="money:navigate/guide/guide/005006.html">Life Assurance</A>). However, companies are less willing to insure self-employed people and pensioners. Beware lenders who try to insist on it as a condition of the loan or add it to your account without you knowing. If you want this insurance, shop around for the best value deal (see <A HREF="money:navigate/guide/guide/005002.html">Insurance: Getting the Best Deal</A>). See also <A HREF="money:navigate/guide/guide/002002.html">What Are My Options?.</A> N E X T T O P I C <A HREF=money:navigate/guide/guide/002008>Hire Purchase</A>To access further financial articles, have a look at <Spann Class=MSNLink>MoneyManager on MSN! <a href=http://MoneyManager.uk.msn.com><img src=msn_logo.gif border=0 align=top></a> Copyright 1997 Microsoft Corp.</td> </tr> </table> </td> </tr> </table> </body> </html>