Summary
Personal loans are becoming increasingly popular as an alternative to piling up credit card debt.
Original source:
http://www.smh.com.au/news/banking/more-fantastic-than-plastic/2005/07/12/1120934232701.html?oneclick=true
Details
Before whacking the cost onto an already-overburdened credit card, it's worth investigating a lower-cost alternative.
Personal loans have shed their daggy image and are emerging as a smarter debt option, with interest rates and a convenience factor positioned somewhere between home loans and credit cards.
The research firm Cannex recently released its first personal loan star ratings report, which compared the cost and features of more than 390 car and personal loans from more than 90 banks, building societies and credit unions.
Andrew Willink, the managing director of Cannex, says the report was prompted by a combination of "increasing levels of personal debt" and the increasing complexity of products on the market, which made borrowing decisions more difficult.
In addition to funding fresh spending, personal loans are also popular for the purposes of "debt consolidation" where borrowers swap an expensive form of lending - perhaps several maxed-out pieces of plastic - for a single (and single-digit interest rate) alternative.
You might be able to consolidate debts on to a home loan, but you'll actually fork out less if you make a personal loan the centrepiece of this strategy, Willink says.
"Personal loans are generally more expensive than a home loan because the lender has bricks and mortar as security, [but] personal loans can be cheaper [in the end] because borrowers take out a loan for a shorter period and pay off the loan at a quicker rate than a home loan.
Laura Menschik, the managing director of WLM Financial Services, says they typically allow for bigger loans than do credit card facilities.
However, unlike cards, which allow people to maintain revolving (and often ballooning) lines of credit,
personal loans require regular, fixed repayments, which requires the borrower to exercise a greater degree of discipline.
About the author: Mike Adams is a natural health author and award-winning journalist with a passion for sharing empowering information to help improve personal and planetary health He is a prolific writer and has published thousands of articles, interviews, reports and consumer guides, and he has created several downloadable courses on survival and preparedness, including his widely-downloaded course on personal safety and self-defense. Adams is a trusted, independent journalist who receives no money or promotional fees whatsoever to write about other companies' products. In 2010, Adams created TV.NaturalNews.com, a natural living video sharing site featuring thousands of user videos on foods, fitness, green living and more. He's also the CEO of a highly successful email newsletter software company that develops software used to send permission email campaigns to subscribers. Adams also serves as the executive director of the Consumer Wellness Center, a non-profit consumer protection group, and pursues hobbies such as martial arts, Capoeira, nature macrophotography and organic gardening. Known as the 'Health Ranger,' Adams' personal health statistics and mission statements are located at www.HealthRanger.org
Have comments on this article? Post them here:
people have commented on this article.
Tuesday, July 26, 2005
Email this article to a friend
Share
this article on: 
