The notoriously gruelling Tour de France kicked off in London at the weekend and will take the fearless riders another three weeks to complete. But as the riders set off on their journey thousands of Britons were left contemplating a challenge closer to home – how to pay the bills.
Last Thursday’s Bank of England interest rate rise brought the cost of borrowing from 5.5% to 5.75%, putting particular pressure on most people’s biggest bill, their mortgage. MoneyExpert however has some tips on how to cope.
Experts reckon the move from 5.5% to 5.75% interest on borrowing will now leave almost eight million of us struggling to pay the mortgage. MoneyExpert’s own figures show that 7.4 million household bills were missed in the passed six months as the country struggles to scrape together the cash for utilities, mobile phone bills, rent and council tax.
The loan option
If cash is tight then it may be time to consider an unsecured personal loan. By borrowing a lump sum from a loan provider you can pay off the immediate bills and ease the financial pressure. You will then be able to pay back the loan in monthly instalments.
Make sure your loan is at an affordable rate though. There are hundreds of loans out there, so click here to find the right one for you.
For example, Alliance and Leicester offer a 6.4% APR on a £8,000 loan over three years. This means that you pay back £244.83 every month but you will have a pool of cash which will cover your outgoings while things are tight.
If you can avoid it, try and stay away from loans with an APR of nine per cent or more. These will be significantly more expensive each month and will mean that you have less money to tackle your current bills. An Egg loan with an APR of 9.9% for example will cost you £257.56 a month. Loans with higher APRs however often have features which more competitively priced loans do not. In the case of the Egg loan, you do not have to have minimum income in order to apply.
There are plenty of ways to keep on top of your bills without resorting to a big commitment such as a loan. Most of us have credit cards but few us choose to check whether we could get a better deal. And given that we will put many of our bills on to these cards it’s important to keep reviewing your cards. With hundreds of 0% introductory cards on the market there’s no excuse for paying over the odds.
With mortgages being the biggest expense most of us face at the end of every month it’s worth checking the terms of your deal. Some lenders will allow you to take payment holiday, meaning you get a break from your regular instalments while you sort your finances. Speak to your lender first.
Reaching the summit
The Tour de France is famous for its mountain stages but keeping on top of your finances can be almost as much of an uphill struggle, and there’s little doubt that many of us are going to have some hard work to do before we can see over the crest of the hill following the recent rate rises.
The best advice is to consider how you intend to meet your bills over the next couple of months. Will you need a big injection of cash? If so consider a loan. If things are tight rather than a breaking point go in search of the best deals in terms of credit cards and be sure to check whether your mortgage offers a payment holiday.
Click through to MoneyExpert today