• Business and Finance
• Family
• Computers and Internet
• Auto and Trucks
• Education
• Health
• Hobbies
• Home Improvement
• Legal
• Marketing

• Home
• Arthur's Articles Home
• Browse Categories
• Browse Authors
• Submit an Article
• Search for Articles

Home » Business And Finance Articles » Tips On Using Loan Repayment Holidays

Tips On Using Loan Repayment Holidays

If you find yourself struggling to pay off your loan in the short-term because of unforeseen financial difficulties, then perhaps you should consider taking a repayment holiday. Also, if you are looking to get a loan and want to know that you can take a short break from repayments if things are tight, then repayment holidays are probably for you. Here are some tips about how to use repayment holidays effectively and the consequences of doing so.

What is a repayment holiday?

Just as it sounds, a repayment holiday is when your lender will allow you to take a break or holiday from your monthly repayments, thereby helping you to sort out any financial difficulties that you have. A repayment holiday is often taken at the beginning of a loan, although many companies also offer the option to take a holiday at any point during the loan term.

Criteria for repayment holidays

Although not all lenders offer loan repayment holidays, it is becoming a more common practice. If you want to take a repayment holiday at the beginning of the loan, then you can usually get a few months break before you need to start paying the amount back. However, if you want to take a break later in the loan, this usually cannot be done within the first or last six months of the loan period. Also, you need to have made a number of consecutive payments before being allowed to take a repayment holiday. The length of the break you can have varies, but usually ranges from 1 to 3 months, with not more than 3 months out of any year being taken as a holiday.

Repayment holiday advantages

The main advantage of taking a repayment holiday is that it allows you to deal with unexpected financial problems without worrying about paying off your debts straight away. This can be useful if you are between jobs or have had an unexpectedly large expenditure for one month. Instead of getting into more expensive debt on a credit card, you can take a repayment holiday and just extend the loan period.

The costs of repayment holidays

Although repayment holidays can be very useful, they do come at a price. When you take a repayment holiday, interest on the loan amount still accrues. When you start paying again, you will either have to pay the normal monthly payment for longer and pay the interest at the end, or pay a slightly higher monthly payment to deal with the extra interest you have accrued. This means you should only use repayment holidays in a real emergency. If you are struggling for more than just a month or two, you need to sort out the problem with your lender rather than take a repayment holiday. As long as you use repayment holidays sparingly and understand the costs involved, they can be a great way to keep yourself financial stable during unexpectedly tough months.

And here is another random article you might be interested in...

Learning From History: 5 Common Ebay Mistakes

Errors in Judgment

Certain mistakes are common among eBay sellers, even those with experience. But avoiding them can result in higher close rates and better final prices. Lynn Dralle, of http://TheQueenOfAuctions.com, shares the five top mistakes she sees eBay sellers make:

1. Writing a Bad Title. Look at the keywords other sellers are using for similar items, and use every relevant keyword you canâ€"make the most of your 55 characters! Avoid wasting characters on punctuation, and using come-ons like L@@K to get people's attention.

2. Setting the Wrong Starting Price. Look at lots of Completed Items listings and see what your item is going for. If you start too high, you may lose buyers' interest.

3. Posting an Inaccurate or Incomplete Description. Failure to include the details of your product, such as size, condition, markings, age, or history, will result in numerous questions and emails. And shoppers will feel less confident bidding without having all the information. Make sure to note any damages or defects as well, to avoid many unnecessary returns. People will be more likely to trust you if they see you're honest and up-front right away.

4. Putting Up Bad Photos or No Photos At All. Use a background or shoot outside in indirect sunlightâ€"no one wants to see your living room or your messy desk in the background. If you sell clothes, don't attempt to model them yourself, or put them on your childrenâ€"buy a mannequin. Advises Dralle, "Keep your environment out of it. It makes your auctions look more professional."

5. Putting Up an Auction at the Wrong Time. Both time of year and time of day affect the success of your auction. You won't get a lot of bids for a toboggan if you decide to sell it in August. While if you sell video games, you might find that ending an auction at twelve noon results in a lot fewer of your potential buyers being online than ending it at twelve in the morning.

Sufficient Knowledge

"At the base of all these mistakes is research," explains Dralle. "You've got to do your research." Look at eBay's Completed Items listings, and use their Marketplace Research. Or try a third-party tool like http://Terapeak.com or http://HammerTapNow.com, which can help you figure out the best way to list your items. An informed seller is always going to see more success, more closed auctions and higher profit margins.