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Everything You Need to Know about Secured Loans

If you’re the kind of person who struggles with a bad credit history, or you’re simply looking for a way to reduce the amount you pay on your loan in terms of interest, then a secured loan might be the best option for you. While many people regard secured loans to be somewhat dangerous, because it is essential to pay off the amount owed on time – or else you might risk losing valuable property – if you know that you can make regular repayments as you are supposed to on your loan, then you may be able to save money by going for a secured option.

Secured loans are a type of loan that require you to use some kind of property as security against the loan – meaning that the bank or other lender that gives the cash to you can get some kind of compensation if you fail to make payments. The amount that you can borrow on a secured loan is often much higher than the amount allowed on non-secured loans. However, the exact amount that you will be able to access will depend on a range of circumstances, including your individual background, and the lender you choose to go with.

The Interest on a Secured Loan

As mentioned above, the interest that is offered on a secured loan is likely to be much lower than the amount you would expect to pay on an unsecured loan. After all, in this case, the lender knows that they have a safety net in place if you fail to pay back the amount that you owe. However, as with most types of loans, you will find that the term available and the annual percentage rate that you are expected to pay will depend on numerous factors. For instance, you will need to consider the overall value of the property that you are offering as security, your ability to repay the loan over time, and thee personal circumstances behind you, such as your credit history.

It’s important to make sure that you think very carefully about your ability to make the regular repayments required on a secured loan. After all, one of the most common securities to use in a secured loan is your home. This means that if you fail to make the repayments that you agreed to with the lender, they have the right to repossess your home and use that property to get the cash that they are owed.

Why Should you Consider a Secured Loan?

When you’re choosing what kind of loan to get to give you access to extra cash, you will usually have the option to choose between secured or unsecured loans. Obviously, although secured loans come with the risk of losing your home or another property if you fail to make the payments owed, they also allow you to borrow more money and often repay the amount that you borrow over a longer period of time. Secured loans can be used for a range of different purposes, and because the lender has the added benefit of the security, these loans can be offered to people who would otherwise be excluded from various forms of loan because they are self-employed or have poor credit histories.

Anyone who might struggle getting their hands on an unsecured loan will usually be able to turn to a secured loan as a way of getting their hands on the emergency cash that they need.

How to Find the Best Secured Loan

Finding the best secured loan for your specific circumstances is a similar process to finding any kind of ideal loan. You will need to look around at the different options available to you, while taking numerous different factors into account. Many people find that attempting to compare and contrast the benefits of different secured loans themselves is very difficult. After all, there are dozens of different providers out there to look at. Because of this, it is generally a better idea to go online and use a comparison website to do the hard work for you. These comparison websites simply ask you to answer a few basic questions about the kind of secured loan you are looking for, before providing you with a list of solutions that are best suited to your circumstances.

If you want to be absolutely sure that the secured loan you choose is right for you, then you can also consider speaking to a loan broker who will help to make sure that you’re getting the best deal for your specific needs. Some lenders will prefer to work completely through brokers, which is why many of the online comparison websites available today will allow you to be transferred through to a broker when you want to talk about the details of your upcoming loan. Approved brokers often have access to a wide range of lenders, as well as a great deal of long-term expertise.

Loans

A Step-by-Step Guide to Unsecured Loans

People often get confused when they start off by looking for a personal loan, only to find that they get side-tracked along the way and start applying for unsecured loans. The truth is that unsecured and personal loans are actually the same thing. The only difference is that your typical lender might use a different name to describe the same product. Unsecured loans are better understood than personal loans, because the information that you need is right there in the title. An unsecured loan means that you don’t have to offer any form of security against the money that you borrow. In other words, you don’t have to worry about losing your home if you can’t meet repayments, because you haven’t secured the loan with any of your assets.

Rather than using a security to make sure that they can trust you, an unsecured loan provider decided whether or not they’re going to give you the money that you need by looking carefully at the details of your personal credit history. Once they have run the numbers and learned as much as they can about the way that you spend and look after money, they will determine whether you are considered to be a high-risk lender, or a regular-risk. If the threat of lending to you is not too high, then you will probably be given the unsecured loan, though you will possibly have to pay higher interest rates than you would on a secured loan.

The Basics of Credit Checks: How they Work

If you have never been exposed to the idea of a credit check before, then you might be a little confused at how someone can simply take a look at your financial history. However, credit checks are a common way for companies to decide whether or not you are too big of a risk when it comes to offering loans. The lender that you want to borrow money from will generally use an approved credit reference agency to search your address and name, as well as any previous addresses that you might have had. All of this information will be asked for when you fill out your initial loan application.

Once the credit check agency has all of the information in needs regarding your finances in the past, they will be able to calculate your credit rating, which is a number that basically indicates how risky it is to give you a personal loan. One important thing to remember about credit checks is that every time a search is requested by one of your lenders, that will be noted on your credit rating and detailed in future credit checks. Unfortunately, if you run too many credit checks and are refused loans, this could end up giving you a black mark on your record that makes future lenders more unlikely to deal with you.

If you have not had issues with your credit in the past, and you have paid of credit cards on time, then you should find that the credit check runs very smoothly, and you will be eligible for most personal loans. You should be able to check out your credit report yourself by using online resources too!

A good thing to be aware of is that using the comparison websites online that allow you to check whether a loan from one provider is as valuable as a loan from an alternative provider will not have any negative impact on your credit rating. With these services, the information that is gathered from you is only used to ensure that you are offered an accurate comparison of the loans that are currently available. A loan provider will typically only ask for a complete credit check when you submit and complete a personal loan application, and the lender will always inform you if a credit check is being carried out.

What Can I Do About my Credit Rating?

If you have a bad credit rating, then the chances are you will not be accepted for an unsecured loan. A bad credit rating indicates that you are a significant risk, which means that your lender will want to ensure that they have some form of security that ensures you will pay back the money that you borrow.

Fortunately, there are ways that you can start to build your credit rating back up over time. If you struggle with a poor credit rating, then making purchases on a 0% interest rate credit card and ensuring that you pay the balance owed off on time can start to give you a better reputation. However, as with most things regarding credit, getting your balance back on track might take some time.

If you are concerned that your credit rating may be bad, it might be best to check your report before you fill out an application for a secured loan. This way you can avoid applying for loans that you absolutely know you aren’t’ going to get.

Mortgages

Important Things to Know about Mortgage Loans

A mortgage is a loan that is specifically given to someone who wants to purchase a property. When you take out a mortgage, you are taking out a loan in which the property you purchase can be used as a security for the company that is lending to you. The idea is to borrow a large sum of money, which you then pay back with interest over a set number of years.

In some cases, you may be able to choose between paying off some of the capital of the loan, and the interest that accumulates on that time, or simply paying the interest and using another form of income to pay for the amount that is owed at the end of the mortgage.

When you are considering a mortgage loan, you will need to think about a number of important factors, including how much you can realistically afford to borrow, how long you want to borrow that amount for, and whether you want to invest in an interest-only, or repayment mortgage – or you’d like a combination of both. You will also need to consider the period of interest deal, and the economic climate that you are getting involved with, as this will have an impact on your decision if you are considering a tracker mortgage.

Mortgage Loan Options for First Time Buyers

Today, there are plenty of fantastic options available for buyers who are on the market for real estate for the first time. Many mortgage lenders are willing to offer special deal to first-time buyers, for instance, mortgages that are recent graduates working within the public sector. In some cases, lenders will also help with valuation and legal fees, and waive the arrangement fees that would otherwise be expected.

If you are a first-time buyer with a particularly low budget, then you may also consider opting for a shared-ownership scheme as a way of getting yourself onto the first step of the property or housing ladder. As a first-time buyer, you will need to make sure that you have both a good credit score, and a good deposit to ensure that you can get a mortgage loan. Remember that it is a good idea to check on your credit report before you apply for your mortgage overall.

Buy to Let Mortgage Options

In some cases, it is possible to get buy-to-let mortgages that usually only require you to pay the interest on a particular property. The idea is that you can use the rental income of the property that you own to cover the interest payments that you owe and pay off the capital when the property is sold. You will need to have a bigger deposit for a buy to let mortgage than you would with a traditional mortgage, and the lender will usually insist that the rent you ask for is at least 125% or more of the mortgage costs.

Remortgaging Deals: What Might be Available?

Sometimes people find themselves in search of a remortgaging solution. If you have owned a property for a long period of time, and have a good credit record with significant equity in your property, then you should find that there are a range of deals out there that could save you money when you switch your mortgage lender.
One important thing to remember is that if you are considering your remortgaging options, you will first need to find out how much it might cost you to change your lenders. For instance, if you are currently paying on a fixed-rate deal then you may have to pay out a penalty charge for a few months. On the other hand, you may also be required to pay specific valuation and legal fees – though some lenders will refund these amounts eventually.

When you take out a mortgage, remember that you need to pay various costs such as valuation and legal fees and many lenders will charge an arrangement fee to make sure that the mortgage is secured. If you have a fixed rate mortgage then you may also have to pay early repayment penalties made up of several months’ worth of interest if you want to end your mortgage before the set time. Some lenders will also charge exit fees if you choose to switch out to another lender.

Bad Credit Mortgage Options

Remember, the credit crisis today has meant that it is more difficult than ever before for people struggling with debts and bad credit records to get the mortgages that they want. Whether you can get your hands on a mortgage loan or not will often depend on your specific circumstances, and how large of a deposit you have to place down – as well as what your current credit problems are.

You may find that if you have bad credit, you can still get a mortgage deal, but you will have to pay a much higher interest rate, or put down a much larger deposit.