Below you will find a description of some of the most popular loan types:

Secured loans are loans that are available to homeowners, and these loans are secured against the home. Secured loans are often available to those with bad credit as well as those with good credit, and in order to qualify for one of these loans you need to be a homeowner ideally with some level of equity in your property. Secured loans offer greater borrowing power depending on your equity levels, as well as longer repayment period enabling you to reduce your monthly outgoings. It is important to keep up with monthly repayments on a secured loan otherwise you could risk losing your home.

Unsecured loans are available to both homeowners and non-homeowners, but you will generally need good credit to get one of these loans. These loans are not secured against any asset, and are based on contract and trust. The borrowing levels are not as high as with secured loans, and repayment periods are shorter.

Consolidation loans are designed to reduce monthly outgoings and reduce the number of debts that borrowers have to deal with. These loans are available on a secured or an unsecured basis, and are used to pay off smaller, higher interest debts, leaving the borrower with just one lower interest loan to repay rather than a range of higher interest debts.

Payday loans are short term loans that are usually offered for a one month period. These loans do not usually involve a credit check, but are subject to proof of employment and income. These are short term loans offered to tide you over until payday, and are ideal for emergencies where you need to raise cash until payday comes around. By way of interest you will be charged a set amount per £100 borrowed, and borrowing levels are low – usually up to around £1000 subject to income and eligibility.

Car loans are loans designed to finance the purchase of a car, and these loans can often work out cheaper than taking finance from a dealership. Some lenders offer additional perks with car loans, such as free HPI checks and reductions on breakdown cover or insurance.

These are just a few of the different types of loans available these days. No matter which type of loan you decide to go for you should make sure that you compare the market in order to find the best deal and the most competitive rate of interest.

Different Types of UK Loans is a post from: Glitec Loans

Scrutinize special offers. There are many things, which go into calculating the overall price of the purchase and you shouldn’t forget any of them. For example, most people look straight at the interest rate to see how good an offer is, but you should also look at the size of the down payment required, arrangement charges and early termination and other penalties. All of these are important aspects of the offer.

Understanding Low Interest Loans

When considering a dealer’s credit offer, ask the following questions:

• To qualify for the financing, will you be charged more for the car? Or put another way, would the price be lower if you paid cash?
• How much of a down payment is required. 25% to 30% would be higher than usual.
• Is the loan unusually short, for example 24 or 36 months?
• Is there a payment due at the end of the loan, possible a couple of thousand pounds?
• Are you required to buy optional extras such as power steering in order to qualify for the loan?
• Is the financing offered ending soon? Do you have to order the car immediately?
• Does this rate apply to all the cars in the showroom, or just selected models?

Questions About Other Promotions

Other special promotions include high trade-in allowances and free or low-cost options. Some dealers promise to sell the car for a stated amount over the dealer’s invoice. Asking questions like these can help you determine whether special promotions offer genuine value.

• Does the advertised trade-in allowance apply to all cars, regardless of their condition? Are there any deductions for high mileage, dents, or rust?
• Does the larger trade-in allowance make the cost of the new car higher than it would be without the trade-in? You might be giving back the big trade-in allowance by paying more for the new car.
• Is the dealer who offers a high trade-in allowance and free or low-cost options giving you a better price on the car than another dealer who doesn’t offer promotions?
• Does the dealer have cars in stock that have no expensive options? If not, will the dealer order one for you?
• Are the special offers available if you order a car instead of buying one off the lot?
• Can you take advantage of all special offers simultaneously?

You never have to accept a dealer’s financing options. You should always drop by the bank and see what rates they will offer you. It may be that the dealer’s offer is not as attractive as it first appeared.

Once you decide which dealer offers the car and financing you want, read the invoice and the installment contract carefully. Check to see that all the terms of the contract reflect the agreement you made with the dealer. If they don’t, get a written explanation before you sign. Careful shopping will help you decide what car, options, and financing are best deal for you.

Car Advertisements: Use Caution is a post from: Glitec Loans

Because dealer rates can vary between car models, there can be huge variances in APRs (annual percentage rates). One study found that dealer APRs ranged from zero percent to nearly twenty percent.

Other Financing Options

When looking into other forms of personal loans, a person’s credit rating will have an impact on the loan and interest. Based on a five-star rating system, those with one star will have a hard time obtaining a car loan and will pay higher interest rates. Those with five star ratings will be able to obtain almost any loan they wish and will get a much better deal.

Personal financing is big business, and lenders are in competition for the business. One study found that more than half a million people expressed intent to purchase a vehicle between February and July of 2005.

Not only are car dealers working hard to obtain those financing loans, so too are other lenders. One bank recently rolled out a new buy-back financing plan that customers could apply over a two, three, or four years. Another study indicated that customers would be much better off if they did some loan shopping rather than simply going with the dealers’ programs. How much better off? About £20,000 over the course of a lifetime for the average customer.

What is the best option?

Some experts believe the best choice for consumers is to take out a personal loan first, then pay for the vehicle. Personal loans currently average around seven percent or less, while car dealers average fifteen percent or more. This is not to say that the dealer’s offer is always worse, however. Careful shopping and having a good idea of one’s credit rating can increase purchasing and negotiating power.

Good Credit = Better Deal

Those with a better credit rating will obviously have more negotiating power, but this isn’t to say that those with less than stellar credit will automatically be stuck with a higher rate. What it does mean is that for those with poor credit, even more research ahead of time can assure the best rate possible.

Depending on the type of loan, other options may include some type of refinancing down the road, before the original loan expires. It’s also important to carefully weigh the costs of long term versus short-term loans. While interest rates on a longer loan may be much less, it could end up costing you much more in the long run.

The Best Deals for Wheels is a post from: Glitec Loans

The average price of a new car is over £12,000 while a four-year-old car is almost £5,000. With prices like this it is no wonder that most consumers require some sort of financing or leasing to buy a new vehicle. There are many ways to finance this purchase.

Some people use “direct lending” to obtain a loan directly from a finance company, bank or credit union. Here, a buyer agrees to pay the amount financed, plus an agreed-upon finance charge, for a fixed period. Once a buyer and seller enter into a contract and agree on a price, the buyer uses the loan proceeds from the direct lender to pay for the vehicle.

Loans may also be arranged over the Internet.

The most common type of vehicle financing, however, is “dealership financing”. Here, the buyer and seller enter into a contract where the buyer agrees to pay the amount financed, plus an agreed-upon finance charge, for a fixed period. The dealership may retain the contract, but usually sells it to an assignee (such as a bank or finance company), which administers the account and collects the payments.

For the purchaser, dealership financing offers:

• Convenience – Everything is arranged in one place.
• Multiple financing relationships – The dealership’s relationships with a variety of banks and finance companies mean they can offer buyers a range of financing options.
• Special programs – From time to time, dealerships may offer manufacturer-sponsored, low-rate special offers to buyers.

Before You Arrive at a Dealership

Do your homework:

• Decide before hand how much you can afford to spend on a monthly payment by using the “Monthly Spending Plan” worksheet in this booklet.
• Get a copy of your credit report and make sure it is accurate and up to date.
• Identify your needs.
• Check auto buying guides and research different models to find out how much you should be paying for them.
• Find out what loans are available and at what rates by contacting various banks, credit unions or other lenders. Compare bank quotes and dealer quotes; there may be restrictions on the most attractive rates or terms so read all the fine print carefully.

If you do opt for dealership financing, make sure it is the best offer available, and not simply the easiest option to cross your way. Car finance is one of the largest financial obligations people enter into in life so it is worth doing your homework and finding the best deal possible.

More Information:

• The Best Deals for Wheels

Understanding Vehicle Financing is a post from: Glitec Loans