It has been reported recently that the secured loans market in the UK is somewhat doomed, with the availability of secured loans becoming more and more rare as a result of falling house prices. (more…)
Posts Tagged ‘secured loans’
Problems arise in secured loans market
Sunday, June 14th, 2009
Watchdog to keep close eye on loan adverts and comparison sites
Thursday, May 21st, 2009It has been revealed recently that an industry watchdog is going to be keeping a closer than usual eye on loan advertisements and financial comparison sites in order to try and provide consumers with increased protection during the recession. (more…)
PPI ban sees spike in loan rates
Friday, May 15th, 2009According to recent reports the PPI ban that has recently been announced by authorities will result in further spikes to loan rates, which many industry officials have said are already spiralling despite the all time low base interest rates, which stands at just 0.5 percent. (more…)
Secured loans – the risks and benefits
Wednesday, August 20th, 2008Secured loans have become increasingly popular over the years, and with property prices in the UK having soared over the past decade many people have turned to secured loans for their finance needs, using the rising equity in their homes to give them increased financial leverage and the chance to obtain affordable finance. Whilst property prices have been falling over recent months industry officials are quick to point out that property prices are still way higher than they were two, three, and even five years ago, and this means that many homeowners may still have considerable equity levels in their homes, and so may find that a secured loan is their most suitable option. (more…)
Should you take a secured loan or an unsecured loan?
Monday, June 30th, 2008Consumers these days can choose from a range of different loan options to suit their needs and circumstances, and all loans come under one of two categories, which is either secured or unsecured. The type of loan that is likely to best meet your needs will depend on your circumstances, as there is clear eligibility criteria in place when it comes to these different loan types. (more…)
Securing A Loan Against Your Home
Wednesday, March 12th, 2008If you are a homeowner in the UK and you are looking to raise finance for one of a wide range of purposes you may be able to enjoy great value borrowing by securing a loan against your home. Your ability to get a secured loan will depend upon the market value of your property and the amount that is still outstanding on your mortgage. Other loans that may already be secured on your property will also affect your ability to take out a secured loan. (more…)
Is A Secured Loan The Right Choice?
Sunday, March 2nd, 2008Secured loans are loans that are aimed at homeowners with some level of equity in their homes. Equity is the difference between the market value of your property and the amount that you owe on the property by way of mortgage or other secured loans. Unlike an unsecured loan these loans are secured against the home, and this why you need to be a homeowner in order to be eligible for a secured loan. There are a number of lenders that are able to offer this type of loan, and you need to compare a range of loans from a number of lenders to ensure that you get the best deal possible on your borrowing. (more…)
Preparing to Apply for a UK Loan
Friday, February 29th, 2008Many people find the need to apply for a loan in the UK for one reason or another, and there are all sorts of loans available these days from car loans to help you purchase a new vehicle to mortgage loans to buy a new home. You can also find a wide range of other loans, such as consolidation loans, homeowner loans, wedding loans, holiday loans, secured loans, unsecured loans, and more. (more…)
Different Types of UK Loans
Thursday, February 28th, 2008The variety of loans available on the market in the UK these days means that many of us should have no problems finding the right loan for our needs, although those with poor credit may face more difficulty. In the current financial climate getting a loan can prove a little more difficult because credit conditions have tightened as a result of the credit crunch, but if you do your research you should be able to find a choice of loans from a variety of lenders, enabling you to find the right one to suit your needs, circumstances, and budget. (more…)
Keeping up with your secured loan repayments
Monday, February 25th, 2008Secured loans have become an effective and affordable way for homeowners to raise finance, and the increase in property values over the past few years has given homeowners in the UK more financial leverage to raise money by way of a secured loan. Secured loans offer a range of benefits, such as increased borrowing power based on equity levels and longer repayment periods to help keep costs down. This is why an increasing number of homeowners have turned to secured loans in order to get the money that they need. (more…)
What can you use a secured loan for?
Monday, February 25th, 2008A secured loan is a loan that is secured against the equity in a property, and as the name suggests, these loans are available to homeowners with some level of equity in their property. With equity levels rising at remarkable levels over recent years, as property prices have rocketed in the UK, homeowners have found themselves sitting on a tidy nest egg when it comes to their equity, and homeowner loans are a great way of unlocking the equity in your home without having to sell up first.
There are many benefits to taking out a secured homeowner loan. These loans are often available to those with bad credit who cannot get unsecured finance, making them accessible to more people or for applicants wishing to borrow over £20,000. You will find that based on the level of equity that you have in your home the borrowing power with a homeowner loan compared with an unsecured loan can be far greater. Also, the repayment periods with homeowner loans are longer, which means that you can spread your repayments over a longer period and enjoy lower monthly repayments.
You will find a number of lenders that offer secured loans, and both the eligibility requirements and the terms and conditions can vary from lender to lender. It is important that you compare different homeowner loans from a number of lenders in order to get the best deal and the most suitable loan for your needs. You should compare the interest rate to ensure that you get a competitive rate of interest, although you should remember that if you have a bad credit rating the interest rate that you get is likely to be significantly higher than for those with good credit.
You can use a secured homeowner loan for all sorts of purposes, making this both an affordable and a flexible way of borrowing money against your home. You can use the cash to improve your home with new fixtures and fitting or simply a decorative facelift. You may want to reduce your monthly outgoings and make financial management easier by paying off al of your smaller, lower interest debts, so you could also use your homeowner loan for debt consolidation, leaving you with just one lower interest loan to pay rather than a number of higher interest debts.
You may be considering treating yourself to the trip of a lifetime, whether it is backpacking around Europe or exploring far flung destinations, and a homeowner loan provides an effective way of raising the money to fund this type of trip, so you won’t have to miss out on seeing the world simply due to a lack of finances. You may be looking for ways to fund a dream wedding either for yourself or for a child who is getting hitched, and again these loans provide an effective way to pay for this type of event.
There are many other things that you can use our secured homeowner loan for, from buying a new car to paying for an education. By comparing different homeowner loans and finding a low rate loan you can enjoy value for money on your borrowing and you can untie the equity in your home without having to worry about selling up and moving on.
Never try to fib your way into a loan
Wednesday, March 14th, 2007There are certain times in life when you should not lie: On your resume, when visiting the doctor, or when applying for a loan. Yet, according to one study, nearly one third of people applying for a loan have lied about some aspect of their history. Why? A need for a loan combined with fear of not getting it if the truth be told. (more…)
Secured v. Unsecured Loans
Wednesday, March 14th, 2007What are the differences between secured and unsecured loans? Essentially, whether or not the loan is secured by property in the event the borrower defaults on the loan. (more…)
Your Home as Collateral For Other Loans
Wednesday, March 14th, 2007When you become a home owner you immediately open up more doors for yourself in terms of being able to borrow money to make things happen. It might be a business idea or an investment opportunity, but buying into property can open more doors than you might think. (more…)
Why Banks Prefer Secured Loans
Wednesday, March 14th, 2007Banks like secured loans, in fact, many of the banks prefer secured loans over those unsecured loans. There are a number of different reasons why banks prefer secured loans. (more…)
Have You Got A Toxic Loan?
Monday, March 5th, 2007A secured loan can seem like a dream come true, especially for someone with a poor credit rating. Finally, there’s a way to afford that new car, expensive holiday, wedding or other family treat. And with a secured loan, your credit history won’t count against you. But could some lenders be so eager to get you signed up that they lend too much? (more…)
Can I Consolidate my Debts with a Personal Secured Loan
Saturday, January 6th, 2007Debt consolidation continues to grow in popularity as more and more people realise the savings they can make from doing so. Debt consolidation is a relatively simple concept. You first assess all your existing debts. Most people will have a number of outstanding debts from various sources such as credit cards, store cards, bank overdrafts, car loans and other personal loans. These will all be charged at different interest rates but because of the nature of the debts, the rates charged are generally quite high. For example, typical credit card rights currently run at over twenty per cent and sometimes as high as thirty per cent. (more…)
Why Take a Secured Loan for Home Improvement?
Saturday, January 6th, 2007There are many reasons why people borrow money, and just as many ways in which to do so. Common borrowing purposes can basically be divided into two categories. The first would cover things such as buying clothes and other purchases on credit cards, using store credit, and taking advantage of buy now pay later or other store financing offers, or perhaps borrowing to pay for a holiday. (more…)
How Much Can I Borrow with a Secured Loan?
Saturday, January 6th, 2007With the rate that consumer debt continues to rise, it may appear to some like as if there is no limit to the amount they can borrow. This will appear particularly true if the debt is to be secured with a secured loan. However, all lenders still impose strict limits on the amount they will lend to you. In fact, if it appears as if a lender is too willing to lend you more than you believe appropriate, it is a good sign that you should begin to be getting suspicious of the practices and standards of the lender.
What is Your Credit Rating?
The way lenders calculate how much they are willing to lend depends strongly on your credit rating. This will be a score calculated by a credit rating agency that will use various pieces of personal information to determine what kind of borrower you are likely to be and how much of a risk is involved in lending to you. Your credit rating will involve looking at your address, how long you’ve lived there, whether you own or rent the accommodation, your age, if you are married or single, your education, your income, your past repayment habits, your outstanding levels of credit, and whether you’ve ever been declared bankrupt or legally pursued for debt before. Of all this information, probably your current income will be one of the most important, although lenders do try to build up an overall picture using all the information that is available to them.
Credit agencies – Experian UK & Equifax UK
Eligible for Greater Loan Amounts?
Lenders will also have different classes of loans, with different terms and conditions attached to each class. These will also be charged different levels of interest for the different types of loan that are on offer. These various terms will be applied to different borrowers depending on their credit rating. So for example, if you are a judge, with a high income and no unpaid bills ever in your life, you will be very attractive to lenders who would like to lend money to you, and therefore, they will offer you very good rates based on the fact that they believe you are likely to be able to pay back the amount without difficulty.
On the other hand, if you have a lower income, plenty of outstanding debt and some unpaid bills in the past, then lenders may still be willing to extend credit to you, after all, this is their business, but the terms on which they are willing to do so will be less attractive and the interest rates will be higher, to represent the greater risk involved in lending to you.
Apart from the terms of the loan, these kinds of criteria, will also be used to determine how much you are entitled to borrow. While there may be little risk involved in lending you one thousand, and thus the terms will be attractive, there is a greater risk involved in lending you say fifty thousand and the terms of the loan will represent this. On the same principles, there comes a point when lending you the sum of money you seek is so high that the risk is simply unacceptable and you therefore will not be able borrow this amount.
Security Required for Large Loans
In fact, practically speaking, there are certain sums which lenders will never give to anyone without some amount of security in return. This will be the case no matter how good your credit rating is. By security is meant that you will have to provide some assets, such as your house, which the bank can take legal security over. This means that if you become unable to repay the loan, the bank can come in and take the asset and sell it to recover the debt. Therefore, securing a loan over your home is always a move that you should only make after careful consideration because there is always the risk that if you fail to keep up with repayments, your home will be at risk. Particularly if you have a family or young children, this is a risk that you will not be willing to run and therefore you should only borrow on a secured basis if you are certain that you can afford to repay it in line with the terms and conditions of the loan.
Conclusion
Therefore, for most people, the limit to how much they can afford to borrow will depend on the value of their home. Homes generally have extra equity in them. This is the value of the home in excess of your current mortgage, so for example, if you have a home worth one hundred thousand, and a mortgage for fifty thousand, then you will have fifty thousand in unused equity in the home which banks will be willing to lend against. These days, with house prices continually increasing in value, most people who own their own homes will be able to borrow a substantial amount on a secured basis, depending on how much equity they have free in their home.
External Sites with more information
- Managing Your Borrowing from MoneyLaidBare – The new site from the FSA with sensible, practical advice
- Don’t pay upfront for a loan warns Citizens Advice – New scam that is fooling lots of UK residents, read the advice from Citizen’s advice and don’t fall into the trap.
- Dealing with debt from AdviceGuide – feeling snowed under with your debt? Free impartial advice from the charity organisation.