Loans
Summary
This webinar hosted by Finance Medic, with special guest Dr. Asha, covers the various types of loans available to medical professionals, such as personal loans, secured loans and debt consolidation loans. Dr. Asha provides an in-depth look into the features, benefits and risks of each loan, and explains tips for shopping around for the best interest rate, loan option and repayment schedule. Attendees will also learn how to identify the Annual Percentage Rate and compare it with other loan options. Tune in to find out more about these loans to help you make more informed decisions.
Learning objectives
Learning Objectives:
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Describe and explain what a loan is and the different types of loans.
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Comprehensive understanding and comparison of annual percentage rate (APR) in relation to loans.
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Comprehension and analysis of the advantages and disadvantages of secured loans vs unsecured loans.
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Appreciation of the importance of loan affordability.
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Evaluate the debt consolidation loan option and its suitability to financial needs.
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Computer generated transcript
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The following transcript was generated automatically from the content and has not been checked or corrected manually.
Okay, I everyone welcome to our finance Medic. Talk on student loans and other loans. We'll just give it a few more minutes for more people to draw. And sorry, you've had some technical problems, but we should start soon. I ever once or acute tuned in were running a little bit late. We'll just give it a few more minutes, people to find the webinar, and then we'll start. I think we'll just give it another minute, and then we'll get started. But okay, Sarah Jones thing will just get started, and we'll just tell everyone that's recorded. They can watch back. We've got a few more people joining now, so I think if you guys are ready, we'll stop. Okay. Sounds good. Eso Good evening, everyone. And welcome to another, uh, finance webinar from Finance Medic for pus I rash. I'm sure you're all very familiar with now. So, Doctor ASHA is a academic, uh, foundation doctor in the Oxford injury. And it's also a charted accountant. Uh, this evening's topic is on lows. Um, it's quite a short talk. Eso doctor Asher has said with the q and A afterwards, if you want to ask any questions, to whether that's about previous sessions. Obviously this session or stuff that you want answered kind of in future sessions, um, post in the face, But comments. And, as always, I'll be monitoring. I'm passing those questions across. So over to you, doctor. Thanks. James s o. Hi, everyone. Um, so this installment is about loans. Now, it's know exactly a very long large topic. Um, well, I think it's just really important to cover for completeness sake that I wanted to cover it. Um ah. Lot of us will be starting. Ah, Why one jobs on For many of us, this will be the first job we've ever had. Um, so the temptation to, um, use your paycheck on the plans that you have for your paycheck? I mean, that you might think of getting alone to try and splash out on a nice new car, which you totally deserve, um, or Teo by something Ah, holiday, possibly. Or to just pay off some debts that you've accumulated such a sphere overdraft. So I thought I'd cover loans just to make sure that you knew the fact about it and knew what you were going into. I'm just what to look out for a swell just to get the best out of the loans you might look at. So, um, we're going to talk about what is alone. We'll talk about the types of loans, or it's a student loans, and it is just loaded. My God. Um, and keep fact about loans. So this is me. I'm Sira. I'm currently the oxygen arri on. I'm just not a day for one. So this is our induction week. Um, So what is alone? Basically a method of popular method of borrowing. Eso you borrow money on it attracts a particular interest rate. These interest rates tend to be lower than other ways of borrowing, such as credit cards or overdraft. No, I have previously done a weapon on student overdressed, and they're normally not percent. But actually, once you go into a normal, um, current account for non students, the overdraft but interest rates could be quite high. And you can actually get fines and penalties if you go into a from a plant overdraft to an unplanned overdraft. So alone could be a better way of managing. Not, um, it covers a fixed period of time. So you agree to have your loan over a fixed period off X amount of months. Two years, um on That means your payments are also fixed. Eso once the amount and time period has agreed, your payments are fixed particularly usually for 11 day, eight per month. Um, regardless of your personal situation, So you have to make that repayment regardless of if something happens with your job. If you are unable to work or if there's a non, um, expected expense, you still have to make that repayment. So types of lose. So we've got three specific types of loans on other loans and just type that they're just They're just some versions of these loans. So I'm going to go over these on if you do come across any other loans, they'll usually this kind of alone. So first one is gonna be the personal loans, which you would have heard a lot about. Secured loans tend to be for a larger amount of money and debt consolidation loans, which I genuinely hope you never have to use. So, first of all personal loans. So this is a loan that is based on your personal credit rating. Now we've done the webinar on credit score of the credit score already, so feel free to go watch. That is Well, um but basically, the better your credit rating, the more you can borrow And for a better interest rate. Um, the maximum anyone? Congar I was 25,000 lbs on the maximum term for which you borrow is 10 years now. Based on your credit rating, you might not get this level of borrowing. You might not be approved for this level of loan, and you might not be approved for this level of this period of borrowing was well, so always make sure that your shopping around and and actually think about what you need the loan for on how big it needs to be. The repayments are always fixed, godless of what's happening in your personal life. Um, something I wanted to highlight is the word annual with the phrase annual percentage rate or a PR. You would have seen this when on television we were having a lot of adverts by payday loans, which is longer, um, and it in bottom, in tiny, tiny, usually white 100 thing, you'd have the A PR or the annual percentage rates on it used to be something ridiculous, like 1000% or something really don't like that. Um So the annual percentage rate is the interest rates on the cost of borrowing for each year, which means it's the interest rate added with all the charges that you might expect on how much it would actually cost to borrow that money. So say you borrowed 1000 lbs. Um, it would tell you, in percentage terms how much off that 1000 lbs you'll be paying as a fee on, so you might borrow 1000 lbs, but pay back 1200. So your AP all would be won't we do present. So personal loans are available from high street banks on building societies. On Internet loan providers. You can get personal loans from actual like finance providers as well. Um, on you wouldn't usually approach, um, the more private firms because they tend to work in wealth management on and they would be doing other types of finance products as well. So the most likely places to get a person alone would be from your High Street bank, so next would be are secured loans. Now the personal loans that I just talked about their unstick your It means that they in case you default or miss a payment, there's nothing of yours that's a risk of being repossessed. It's not secured against something or an asset that belongs to you. Where's the secured loan is secured against an asset for a piece of property that belongs to you in case you default on the loan. So if you miss a payment or failed to repair the loan, the property or acid that you've secured the loan against could be repossessed. So usually this tends to be a house. Ah, building that that that tends to be what you secure loans against. It's very unusual to be able to secure and own against anything else. Um, it depends on the provider of, obviously, that it depends if you have, say, an extremely valuable piece work of art that you secure against, or an extremely valuable car. But usually it's a building or a house. The maximum you can borrow is 100,000 lbs on the maximum term you can borrow for is 25 years again, based on your personal situation on the value of your asset, you might not be able to borrow the 400,000 lbs, or you might not be able to borrow for the full 25 years. So keep that in mind that even though that's the maximum you can borrow and how long borrow for it might not be how much you actually get offered secured loans because they have a lower risk for the lender because they can actually offset any losses against the item or asset that we've secured against. They tend to have better interest rates. So even though you're putting your property a risk, hopefully fingers crossed that never comes to it. And it means that you can actually benefit from a better interest rate and so a better APL and lastly, did consolidation loans. I just want you to know about these because a lot of people don't know that they exist. Which means that say, you've been living on the edge over the last few years, you've accumulated a lot of debt on student loans. Well, not so apologies, not student loans on credit cards on an overdraft that isn't a student overdraft. Um, so you might want to bring all of that under one long, which might actually have a better interest rate than the credit cards and the overdraft that you're currently dealing with. Um, it means it simplifies everything, so you're only making one payment a month. The term might be longer, which gives you a bit more time to pay off rather than the pressure of paying it off on the on a fixed period of time. And it pays off your other debts whilst giving you a better chance of being able to pay off your debt. Using this one is simple alone, so that's consolidation. Loans are a specific type of loan in themselves. You have to apply for them as a debt consolidation loan. Um, because if you have, um, debts already outstanding on a credit card or an overdraft on order of the draft, your likelihood of being able to get an unsecured alone is lower because your credit score would reflect that you've already got debt outstanding. So in order to get around this, a debt consolidation loan takes into account that the credit card in the overdraft debt will be disappearing as a result of the loan paying it off, which means they can actually offer you more, Um, instead of the personal on where they don't look at your, um, current situation and what you'll be doing with the money. So that's why you specifically apply for a debt consolidation loan, when that's your intention, in order to be able to get enough to pay the credit cards in the overdraft back. So those are the different kinds of loans. Some key points. I wanted to make sure you were aware off affordability, so please make sure you can make the repayments, even if there was an issue for it with your income for a couple of months. So make sure that you're able to actually make those monthly payments on. If there was some sort of heck up that you be able to cover it least a month or especially to three months in case you were, um, to have any issues. This is so you don't miss any payments and affect your credit score negatively. The next thing would be checked the A PR. So the annual percentage rate, which is all right, Britain in teeny tiny handwriting or teeny tiny print um, in a color that you can't read um on tells you how much is gonna cost for you to borrow that money over one year, compare loans and find the best a pr for you. Um, sometimes a slightly higher interest rate would mean you have lower charges. Sometimes higher charges mean to get low interest rate, so these things will be reflected together as the annual percentage rate. The reason this a PR came in was that because banks were able to sort of cell something in a really low interest rate and then wham, they just sticks and charges on there, and it wouldn't truly reflect the cost of the bar away. An A p. R is a way of showing the truth cost of the borrowing in an upfront manner so that you can make an informed decision. Next is an arrangement. See, So a lot of lenders may actually charging arrangement feet to set up the loan. This might not be something you would have actually thought happened. I personally didn't realize this happened. I'm pretty sure from my friends who have taken out loans. Most high street banks, depending on who they are, wouldn't usually charge an arrangement for you. So do you ask about this and make sure you're aware if there is any arrangement. Be where I have seen arrangement fees happen is on wet like online lenders on, um, like, paid a loan lenders because that's the way of making money. Um, so I'd be really careful with them. A swell. They tend to have really outrageous a PR's, um, and they just they just on, um, a reasonable and affordable way off borrowing money. You are now learning a regular income from a reliable source on Do you have quite a stable situation? The likelihood of you being able to apply for a loan now is much better. Then you would have been as a student, so please don't be tempted by payday loans in case you're falling short for a little while. Um, I do make sure that you're checking all the available options. These include your personal loans nor percent credit cards are not percent overdraft for a graduate account. There are other options than taking payday loans because once you get paid a loan, you may be hit with these arrangements. She's the AP Arkan be outrageous and actually cost you quite a lot to pay it back on. If you go to miss any of the payments, you're quite a school would be must be affected. And then the last thing I wanted to highlight is actually, it's quite common for some lenders to charge an earlier payment penalty. This is also true for mortgages. I'm doing a mortgage webinar week after next. Um and this is a bit of a plug. We're gonna have a mortgage adviser who specializes in mortgages for medics to come and talk to us. So I I understand that this webinar isn't specific. Two medics and I apologize for that. It's just for completeness. I thought it was important that you understood these points about loans, but the mortgage webinar that's gonna be in ah week, not next week. The week after will be by me on It'll be specific. Two medics on there will be a mortgage advisor there who can answer your questions. And he specializes in mortgages for medics on for local medics, a swell onda, all sorts of healthcare professionals, not just medics. Um, sorry. Jumping back to the early repayment three s. So actually, it's quite common because if you were to pay back you alone. Really? They're lender would be losing the amount They make an interest from you. So to stop this from happening, they will call it, though they'll apply something called a redemption for you. And it means for you to pay off the feet there. Loner lier. You get charged in early repayment. Three. Another early repayment. He might not actually be a smart as the interest rate that you would have been undressed, Sarge, that you would have been paying to make the whole term off the loan. So it's worth seeing. Is it going to be less of a cost, paying it back early or is it gonna be less of a cost? Actually, just living up the the loan. You might have seen something like this with phone contracts. A swell where you get charged. A certain amount for trying to end a phone contractor early, like you have to pay off the rest of the contract. Or you have to have an early a charge believing the contract early. This is because of the money they make off you. If you continued with the contract. So the same sort of thing here. Um, so that was really yet. So in summary, don't worry more than you can afford. Make sure that you've got a little bit that you can cover in case anything were to happen for a month or a couple of months, just to your credit score doesn't get affected. Um, make sure you look at the A P R. The A PR is the cost of borrowing over one year. Um, and that will tell you how much the interest rate an additional charges together would cost. You make sure you're aware of there any early repayment penalties on. Make sure that if there was there were early repayment penalties. What would be better being paying it off early and paying the penalty were actually just seeing up the lifetime of the loan. The reason some people might want to pay it off early is because having that debt on their file makes it difficult to borrow something else. You might not be able to borrow much for you for your mortgage. For example, if you have a large loan outstanding, you might be able to pay off the loan a little bit earlier. But you're going to be hit me by these repayment penalties. So just keep in mind all of these factors when you're first of all, taking out the loan on Second. If there's any other product that you were hoping to apply for later on how that might affect it, next thing would be missed payments. Eso ms payments are detrimental to your credit scores. Check out the weapon on credit scores that I've done. They actually impact, right? It's caused quite significantly on a Ms. Payment remains on your file for six years, so it's not gonna go away anytime soon. If you can avoid missing payments. Do so. It'll cost because it will really will struggle to borrow more or struggle to borrow the same amount as you were able to after your credit scores hit and it takes a while to build it back up. And the last thing is, just look out for other charges such a Xarelto, mint fees and things like that. And make sure you take that into account when you're getting alone because these additional costs, you might know of fact it in and they might make the loan unaffordable, so just make sure you've got an eye on that. Okay, So, please, please do Give me a feedback. I use it. I read it. I go through it thoroughly, and I make sure that I've, um, apply it to the next one. I again I probably the third time I've said it. Now, I am sorry. This isn't specific. Two medics. It was for completeness. I wanted to make sure that you had an awareness of how loans worked and what they meant on the pitfalls around them. But I'm happy to open up the floor, toe any questions? Not just about loans, but any other finance topic that you want to ask about. If I have already answered it in a webinar be obstruct you there or answer your question directly here on if there's gonna be a webinar about it later, I can, you know. Okay. Thank you very much. Sira. Very informative, as always, Um, at the moment, looking at the, uh, like Facebook. We don't have any questions coming through at the moment, um, posted the link to the feedback there as well, and just give never on a reminder. Even if you watch it. Kind of a scab up. Um, please. You know, still feel that with that problem, we will get hold of it. Um, so one question is just coming from home. So anything about Islamic lose. Okay. Um, So, um, hum. Thank you for that question. That's really interesting. Um, from what I understand about Islamic loans, it's meant to work in a specific way. Because I believe, um, I thought for earning interests and it had to be under, um, a particular type of rule. So what I'm going to do for him is actually go away and look this up because I generally don't know. I understand for earning interest there certain rules, but I don't know what the payment rules are. So let me go away and please check the comments again. I'll answer your question in the comments when I've gone away and had a look. I'm really sorry. I can't answer straight away, but I will go have a look for you and answer that for you. Oh, thank you. Yeah. You better have your question answered. You know, I'm just gonna get another come from a second, just to see if any other questions roll this. Um, yeah. No, it's no question. It's just fine. Thank thanks. Look at that. It's appreciate it, but no, that was That was definitely useful. It's just good to have the grounding in the different terms. They used to advertise these things. And someone kind of comes to tell you about alone would offer whatever actually being able to make an informed decision or understand what it is they're talking about. Perhaps as you said in the weapon on decide that. Maybe it's not the best thing. Always. Okay, Anything you want to add before we go, So, uh, no, I wish you well, the best of luck. The upcoming webinars are more medic specific. So we've got our mortgage webinar coming up That will entail what specifically available for healthcare workers on doctors on what to look out for. Um, And then after that, there will be webinars on, um, the financial implications of low coming. So I will talk more about, um, how it affects you in terms of tax, how you would deal with your insured national insurance and tax payments, your pensions and what kind of financial implications that has for you. So that's very magic specific. Um, on the one after that, will be directed towards international medical graduates because I understand a lot of our viewers, um, our international medical graduates and would like to know what things are either available specifically for you or what you'll start actually on at the moment that would. That might prevent you from getting products that I've talked about. So I'll be focusing a lot of my, well, the entire webinar on international medical graduates on. I understand that mind the BLEEP has an international medical graduate section, so I've reached out to them, and I've asked them for any specific issues that are popping up on something they raised to me is about the costs of visas, Um, and how that works on your right to a certain public funds on records to public funds. So that's something I'll be covering A swell. I hope that will be useful for you guys. If there's anything specific you'd like me to cover in any of those, then just please drop a comment. I'll be more than happy to do. So, um, those are the three hour webinars coming up, So if you have any other topics you'd like me to cover, I'm more than happy to put on a webinar about that. But thank you so much for listening. Thank you so much for watching. Now, the one question is just coming, Okay. Especially, um, quite fitting with the ah weapon. Are you have time for next week? Um, so it's from Mencia. And they say if we want to buy a house, which financial Advisor's or Mortgage Advisors can we approach for loans? Are there any specific service? Is that just for doctors? Okay. Thank you. I mean, I can say yes. Do you Would you want to give them a sneak preview of next week's session? Adam? So this is this is week after next next week's atenolol. Just I'm sorry. Months. See, you're gonna have to wait for for then and I don't do any spoilers, but, yes, there are specific mortgage advisors for medics, and but there will be one joining us next week, about a week after next. Well, to answer all these questions, um, in the meantime, if you're in a nap, salute? Hurry. I would look up. Yes, we can. Um, so, yes, we can on, um, just type that in mortgage advisers. They're quite familiar with doctors. on healthcare professionals. The other one we will be who will be actually joining us is ah fellow called Tom Davies. Um, so if you'd like to look him up on the Internet as well. Um, he's a medics, Pacific Mortgage Advisors adviser. I don't spoil too much of the webinar, so I'm going to leave that there. But there's some food for thought for you. Um, until the weapon on the 10. Thank you very much. Well, enjoy the secret and enjoy the rest of your evenings. Thank you.