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Problems arise in secured loans market

admin — Sun, 14 Jun 2009 09:02:59 +0000

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.

Earlier this month one of the last four remaining providers decided to pull out of the market, adding further speculation that the secured loans market is now on its last legs, at least for the time being.

Since the middle of 2007 no fewer than fourteen lenders have pulled out of the secured lending market, and the most recently one to do this is First National.

There are now just three lenders left in the market that are offering secured loans, and these are Ocean Money, Secure Trust Bank, and Nemo Loans.

Falling profits have resulted in the greater number of lenders leaving this market, even though many cash strapped homeowners are now looking to take out this sort of finance to help them through the difficult financial climate.

Falling house prices have led to increased risk for lenders, and because lenders have to take a certain minimum level of equity in order to provide a secured loan has made this type of loan unviable for many homeowners who have seen their equity levels plummet.

In addition to this, many of those that apply for secured loans tend to have damaged credit histories, and this makes the risk to the lender even greater. Since the onset of the global credit crunch many lenders have become more cautious about lending to those that have tarnished credit histories.

One industry official said: ‘Many lenders have found it is no longer a viable business option to offer secured loans in the current economic climate and we have to wonder for how long the remaining lenders will be able to survive.‘

Problems arise in secured loans market is a post from: Glitec Loans

Watchdog to keep close eye on loan adverts and comparison sites

admin — Thu, 21 May 2009 08:34:53 +0000

It 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.

The Advertising Standards Authority plans to keep a close eye on both financial comparison sites and loan advertisements to ensure that consumers are not misled or ripped off, and to ensure that complaints are dealt with properly.

The watchdog said that there are various rulings that have been used to set the standards that advertisers and comparison sites will have to adhere to in order to be compliant.

The ASA has already taken action against firms that have been found to mislead consumers through their advertising or make the process of taking out a secured loan to consolidate debt, such as Picture Financial Services, which had to stop ad advert last year that made light of taking out a secured loan.

After the advertisement was banned the ASA issued a report that read: “The ASA Council found the advert to be misleading for implying that consolidating unsecured loans was a decision that could be taken lightly.”

The number of adverts for financial services has been growing, and the ASA is now looking at adverts that are run on television, radio, and online.

The ASA report also said: “Our priority here is to ensure that ads do not mislead consumers and to help provide a level playing field where companies can make legitimate claims about their products and services.”

The number of complaints relating to adverts and price comparison sites dealing with financial products increased by 14 percent in 2008 compared to the previous year, and the ASA expects this number to rise again over the course of this year.

Watchdog to keep close eye on loan adverts and comparison sites is a post from: Glitec Loans

PPI ban sees spike in loan rates

admin — Fri, 15 May 2009 08:56:06 +0000

According 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.

Reports show that when the base rate stood at 5 percent, just seven months ago, personal loans were available at 6.9 percent, which was a margin of 1.65 percent. However, although the base interest rate is now just 0.5 percent the same loan charges interest of 8.5 percent, which means an astonishing 8 percent margin.

Personal loan rates are expected to settle at around 10 percent by the summer according to some officials, partly because of the ban on PPI that has been announced and is due to come into force. As a result on the ban of single premium payment protection insurance, lenders could lose a lot of revenue, and officials believe that hiking up rates and charges are amongst the ways in which they will try and recoup some of these losses.

One industry official said: ‘Rates are going up on a daily basis. It’s the lenders’ reaction to the severe restrictions being introduced by regulators on the way payment protection insurance is sold. Instead of making profits on the back of this expensive insurance, they are going back to basics and having to make money out of lending you money.’

Lenders may still advertise reasonable rates, which is known as the typical APR, and is supposed to be available to at least two thirds of applicants. However, another recent report has suggested that far fewer than two thirds are getting this typical APR, with most finding that they are being charged much more, which is something that regulators are now looking into.

PPI ban sees spike in loan rates is a post from: Glitec Loans

Secured loans – the risks and benefits

admin — Wed, 20 Aug 2008 12:01:13 +0000

Secured 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.

A secured loan, as the name suggests, is a loan that is secured against an asset, in this case the home. The level of equity in your homes usually determines how much you will be eligible to borrow, although other factors are also taken into account when deciding this. You can work out your equity levels by deducting the amount that you still owe on your property from the market value of the home. The amount left over is the equity, and the higher your equity levels the more you may be able to borrow in terms of a secured loan.

There are both pros and cons to taking out a secured loan, and whilst these loans have proven effective financial tools for many homeowners it is still vital that you weigh up the pros and cons so that you can make an informed decision about whether this type of loan is suitable for your needs. You should never rush into taking out a secured loan, as you need to bear in mind that these loans are secured against the home, and therefore could put your home at risk.

Pros

The pros of taking out a secured loan are many, and it is easy to see why this type of loan has increased in terms of popularity. You can enjoy a wide choice of lenders, giving you a better choice of finding a suitable loan for your needs. Depending on your equity levels and personal circumstances the borrowing power with a secured loan is far greater than with an unsecured loan, so you could potentially borrow far more. You will also find that the repayment periods with these loans are much longer, and this means that you can spread your loan over a longer period and keep your monthly repayments down. Another major advantage is that because these loans pose a lower risk to lenders you are more likely to be accepted even if you have bad credit.

Cons

One of the major disadvantages of these loans is that fact that they are secured against your home means that your home would be at risk if you fail to keep up with repayments. This is why it is vital that you do not commit to a secured loan unless you can comfortably manage the repayments. Another risk is that of negative equity, particularly given that house prices are meant to be coming down over the next year or two. If you take out a secured loan for most or all of your equity you could find that you are plunged into negative equity of property prices continue to fall further.

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Secured loans – the risks and benefits is a post from: Glitec Loans

Should you take a secured loan or an unsecured loan?

admin — Mon, 30 Jun 2008 08:46:43 +0000

Consumers 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.

For example, if you are a homeowner with good credit then you will be able to enjoy the luxury of choosing between a secured or unsecured loan. If you are not a homeowner then you will not be eligible for a secured loan, as these are secured against the home. If you do not own your own home and have decent credit then you may find that you can take out an unsecured loan. If you have bad credit but you are a homeowner then a secured loan will be your most likely option.

It is important to consider the pros and cons of both of these loan types before you reach a decision, as there are both benefits and risks to take into account. There are many different lenders that offer both secured and unsecured loans, and it is advisable to browse and compare the different loans in order to try and find the best deal for your needs. You should also avoid applying for a loan that you are not eligible for, as this will simply result in rejection, which could damage your credit.

A secured loan is a loan that is secured against the equity in your home, and whilst house prices may now be coming down many homeowners have seen their property values rocket over recent years, giving them increased financial leverage and the chance to borrow substantial sums of cash against their homes. With a secured loan you can often enjoy greater borrowing power as well as longer repayment periods, which means that you can borrow more money and keep your repayments down, although your borrowing power will be based on your equity levels and other factors.

However, there are risks to consider when it comes to a secured loan. Because these loans are secured against the home you could end up losing your property if you default on the loan. Also, if you borrow up to most or all of your equity levels you could find yourself in negative equity if property prices continue to fall. In order to qualify for a secured loan you do need to be a homeowner, but on the upside you can often get finance even if you have bad credit because of the secured nature of the loan.

With an unsecured loan you need to remember that the borrowing levels are generally lower, usually up to £25,000, and the repayments periods tend to be shorter. You do need good credit to get an unsecured loan, although you do not need to be a homeowner. The good thing about unsecured loans is that they are not secured against any asset, so you will not be risking your home or other asset if you do fall behind with repayments.

Should you take a secured loan or an unsecured loan? is a post from: Glitec Loans

Securing A Loan Against Your Home

admin — Wed, 12 Mar 2008 05:34:38 +0000

If 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.

When securing a loan on your property it is very important that you take the risks into account, the main one being the risk of losing your home if you are unable to keep up with repayments on the loan. You should assess your financial situation carefully before making any commitment to ensure that you can comfortably afford the repayments on an additional loan along with your mortgage repayments. The amount that you will be eligible to borrow will usually depend on your equity, which means that value of your home minus any mortgage or other secured loans still outstanding.

Although there are risks associated with taking out a UK loan that is secured against your property, there are also many benefits. A secured loan enables you to enjoy far longer repayment periods, and this can help to keep down the cost of your monthly repayments. You will also find that the borrowing power is increased compared to an unsecured loan, although this does depend on the level of equity that you have in your property. Competitive interest rates are available on homeowner loans too, which also enables you to enjoy more affordable monthly repayments.

For many people, an alternative to taking out a homeowner loan based upon equity in the property is to refinance their existing mortgage and take out a little extra to cover the loan that they need. This will enable you to raise the finances that you need but will also enable you to replace your existing mortgage with a mortgage that offers better terms and could save you a fortune in interest over the term of the loan. There are some very good refinance deals out there when it comes to mortgages, and more and more people have benefited from switching their mortgage to a more suitable and affordable one.

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Securing A Loan Against Your Home is a post from: Glitec Loans

Is A Secured Loan The Right Choice?

admin — Sun, 02 Mar 2008 06:35:58 +0000

Secured 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.

If you are considering taking out a secured loan you do need to bear in mind the possible risks associated with this type of finance. A secured loan is secured against your home, and this means that if you do not keep up with repayments you could lose your home. It is therefore very important that you keep up with repayments on your secured loan, and if you do not feel confident that you can do this then you need to consider whether a secured loan is the right choice for you.

There are many benefits to taking out a secured loan rather than an unsecured one, and these benefits make a secured loan the right choice of many homeowners when it comes to borrowing money. One of the main benefits is that the borrowing power is higher with this type of loan, which means that depending on your equity levels you may be able to borrow far more money than you would with an unsecured loan. For those that need to raise a substantial amount of money by way of a loan, a secured loan may be the only choice, as unsecured loans tend to offer a maximum of £25,000.

Another benefit of secured loans is that the repayment periods offered are a lot longer than with unsecured loans, which means that you can spread your loan over a longer period and you can reduce the amount that you have to pay out each month. If you are looking for long repayments terms and higher borrowing power then you may find that secured loans are the ideal choice, providing you with flexibility, convenience, and affordability.

If you do decide to opt for a secured loan you need to make sure that you make the right choice with regards to the loan you opt for, and therefore you should make sure that you compare a number of loans from a range of providers. Alternatively you can go through a reputable specialist broker, who will have access to a range of lenders and can find the lender and the loan that best suits you.

Is A Secured Loan The Right Choice? is a post from: Glitec Loans

Preparing to Apply for a UK Loan

admin — Fri, 29 Feb 2008 05:38:42 +0000

Many 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.

Being able to get a loan can prove invaluable to those that need to raise money for purposes such as these, but it is vital for potential borrowers to ensure that they can afford the repayments on any loan before they make a commitment, particularly when it comes to a secured loan, which is usually secured against the home and can result on the loss of the home if the borrower defaults on the loan.

It is more important than ever these days for borrowers to make sure that they do their homework before making an application for a loan, as there is little point applying for finance that you cannot afford. There are also other types of preparation that you need to make before you apply for a loan, such as ensuring that you have the necessary paperwork – by getting all of the documentation that you need beforehand you can really speed up the whole process.

First of all you need to go through your income and outgoings in order to determine what sort of repayment you can comfortably afford. You should make sure that you leave yourself with some financial flexibility rather than stretching your finances as far as they will go, as you never know when your income or other outgoings may change, and if you are getting a variable rate loan you also have to remember that your repayments could rise.

Once you have determined how much you can afford to repay each month you need to determine whether you want a secured on unsecured loan based on your needs and circumstances. Secured loans are only available to homeowners, and although unsecured loans are available to both homeowners and non-homeowners, you do need to have good credit to get an affordable unsecured loan.

Once you have decided this you can start browsing and comparing a range of loans from a variety of lenders in order to work out how much you can borrow so that you do not exceed your budget in terms of repayments. Resist the temptation to take out more than you need to, as this will simply mean higher repayments and a higher level of debt.

Also try and get together as much of the documentation that you will need. For an unsecured loan you will only need proof of earnings such as wage slips and maybe proof of address. For a secured loan you will need to get your property valued and provide details of your existing secured loans or mortgage balances, as well as proof of the value of your home. In addition you should also provide payslips and proof of earnings.

Different Types of UK Loans

admin — Thu, 28 Feb 2008 07:49:40 +0000

The 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.

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

Keeping up with your secured loan repayments

admin — Mon, 25 Feb 2008 07:11:14 +0000

Secured 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.

Secured loans are only available to homeowners, as these loans are secured against the equity in the home. You will find a wide range of lenders that are able to offer secured loans, and you can enjoy some competitive rates of interest, enabling you to enjoy affordability. By comparing a range of loans and finding the best deals you can enjoy raising the finance that you need without having to pay over the odds for your borrowing.

There are many different benefits with secured loans, which is partly why these loans have become increasingly popular over the years. However, there are also risks involved with secured loans, and it is important that you consider these carefully before you commit to such an important financial commitment. One of these risks is falling into negative equity, which has become an even greater risk given the expected house price falls over the course of this year. Negative equity is where you owe more on your home than the amount that it is actually worth, so even if you were to sell it at market value you would still owe more on the mortgage than you get for it. The other main risk is the loss of your home through failure to keep up with repayments on your secured loan.

In order to minimise on the risk of losing your home through non-payment of your secured loan it is important that you ensure that you are able to comfortably afford the monthly repayments on the secured loan that you take out. You can do this through browsing a range of different secured loans and lenders, comparing interest rates, and getting quotes on monthly repayments. You need to make sure that you do not commit yourself to the hilt financially, as interest rates and repayments can vary and this means that you have to have the financial leverage to cope with rising repayments if the interest rates go up.

If you are not sure whether you can afford the repayments on a secured loan then it is advisable to think very carefully before you take out this type of finance. The last thing that you want to do is end up losing your home because you are unable to keep up with repayments on the loan. If you already have a secured loan and are struggling to keep up with your monthly repayments you should make sure that you contact your lender right away rather than simply missing repayments, as your lender may be able to agree a solution.

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Keeping up with your secured loan repayments is a post from: Glitec Loans