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

Unsecured loans are available from a range of lenders, from high street banks and building societies to online lenders and credit unions. The good thing about these loans is that you are not risking your home or any other asset in the event that you fail to keep up with repayments, although this will clearly have a negative impact on your credit rating.

There is a downside to unsecured loans too. The repayment periods tend to be a lot shorter than with secured loans, usually between one and five years – although there are some lenders that offer seven or ten year terms. The shorter repayments periods mean that you will be paying more out each month. Also, the borrowing power is not as great as with secured loans, and most lenders will only consider a loan of up to £25,000. The actual amount you will be able to borrow will depend on your income, credit rating, and employment status amongst other things.

Although there is a downside to unsecured borrowing, as outlined above, the benefits are what often sway people to opt for an unsecured loan over any other type of finance. Many homeowners do have the option of going for a secured loan as well as an unsecured one, but in some cases the consumer does not wish to put his or her home at risk. When you opt for an unsecured loan you are basing the loan on trust and contract, which means that none of your assets will be at risk if you default, although your credit will obviously be affected if you do default on the loan.

Although the shorter repayment periods that come with unsecured loans can mean higher repayments it is also important to remember that it means that you will be out of debt more quickly, which is important for anyone that doesn’t want to be caught in a web of debt for years to come. You won’t have to worry about negative equity with an unsecured loan either. With house prices set to keep falling some people that take out a secured loan could find themselves in negative equity where they owe more on their home that the property is actually worth. However, an unsecured loan is nothing to do with your home, and therefore will not affect your equity levels.

Related articles:

• Requirements For An Unsecured Loan
• Is A Secured Loan The Right Choice?
• Options That Can Help Clear Your Debts

The Benefits Of Unsecured Loans is a post from: Glitec Loans

The two main types of loans that are available on the market these days and secured and unsecured loans. Secured loans are loans designed for those with their own home, and homeowners will usually need to have some level of equity in their home, although this is not always the case. The loan is secured against the home, and there are risks involved, the main one being that if you default on repayments you do not only risk ruining your credit but could also risk losing your home.

Even if you are a homeowner and are therefore eligible to take out a secured loan it is vital that you determine whether you can comfortably afford the loan before you commit. If you take out the secured loan and then realise that you cannot keep up with repayments you could find yourself in a very sticky situation, and you could end up losing the roof from over your head. This is why you need to be certain that you can afford repayments on this type of loan.

If you are worried about whether you will be able to keep on top of repayments in the long term – after all, nobody knows that the future holds even in terms of finances – then it may be best to avoid risking your home with a secured loan. If you have good credit, however, you may find that you are eligible for an unsecured loan, which is based on contract rather than being secured against an asset, and therefore does not pose the same risks as a secured loan.

If you default on repayments on an unsecured loan then you will suffer damage to your credit history and rating, and this could make your financial future difficult. However, there will be no risk to your home, so you won’t have to worry about losing your property as a result of being unable to keep up with repayments. Of course, you should always try and keep on top of your repayments, and if you are struggling then you should speak to the lender, who will often be able to come to some agreement with you with regards to reducing payments for a short period or extending the loan term to reduce the repayments on your loan on a permanent basis.

Related News and Articles:

• Requirements For An Unsecured Loan
• Keeping up with your secured loan repayments
• Different Types of UK Loans
• Using a UK Loan Broker To Get Finance
• Is A Secured Loan The Right Choice?

Avoiding risks with an unsecured personal loan is a post from: Glitec Loans

An unsecured loan can be used for a wide range of purposes, and amongst the popular purposes for which these loans are often used are the purchase of a new or used car, paying for a holiday, paying off smaller debts such as credit cards, funding an educational course, paying for a dream wedding, purchasing items for the home, and more. In order to find the best personal loan for your needs you need to compare a range of loans from a number of lenders, as this will increase your chances of finding a competitive loan for your needs.

It is important to remember that the eligibility criteria is very specific for most unsecured loans, and you should avoid making applications for a loan unless you meet the requirements, otherwise you could find that your application is rejected, which can damage your credit. Many unsecured loans are available online, and this makes it easy to check the eligibility, compare different loans, and make your application once you have found a suitable loan.

The maximum amount that you can borrow by way of an unsecured loan is around £25,000, but the exact amount that you will be able to borrow will depend on your credit rating, your income, your employment and financial status, your outgoings, and various other factors. The repayment terms are generally significantly shorter than with a secured loan, with repayment periods of one to five years with most lenders, although there are some lenders that will offer up to ten years.

In order to be eligible for an unsecured loan you need to have good credit in most cases, as most unsecured lenders will not consider lending to someone with damaged credit. This is particularly true in the current financial climate, where the global credit crunch has resulted in far tighter lending conditions, making it more difficult for consumers to get loans. There are some lenders that offer unsecured loans to those with damaged credit, but the interest rates charged on these can be extremely high.

If you are unsure with regards to which unsecured loan is going to best suit your needs based on your needs and circumstances you may want to consider going through a loan broker. You will only have to complete one application form, and the broker will then use this information to source a range of suitable lenders in order to try and find you the best deal possible on an unsecured loans.

Requirements For An Unsecured Loan is a post from: Glitec Loans

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.

Related Artices:

• Different Types of UK Loans
• Using a UK Loan Broker To Get Finance
• Wipe Out Debt Problems With A Low Rate Loan
• What can you use a secured loan for?

Preparing to Apply for a UK Loan is a post from: Glitec Loans

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

Other reasons cited in the study included a desire for privacy or wanting to avoid embarrassment. Nowadays, loan companies have been keen to implement a new loan data sharing service that will catch fraudsters before they are accepted.

Despite some understandable reasons, however, lying on a loan application is not a good idea for a few reasons. First, it’s illegal. But if that’s not enough to stop you, consider the other ramifications of lying on a loan. The purpose for lying, most likely, is to be approved or to be approved for a higher amount.

Nevertheless, if a consumer lies on the application and is then approved for an amount beyond the consumer’s ability to pay, multiple problems can arise. In a more minor situation, such as a smaller, unsecured loan, the debtor may risk multiple penalties as payments are missed or not for the full amount, a poor credit rating, and in the worst scenario, bankruptcy. Alternatively, the consumer may try to obtain a different loan to pay off the first, and the cycle worsens.

Should an applicant lie on a large, secured loan, such as a mortgage, the consequences of not being able to make the payment can also be very detrimental–such as losing one’s home on top of the other problems mentioned, such as poor credit or having to declare bankruptcy.

It is also these people who lie or never intend to repay a loan that makes it difficult for those who are honest on their applications and turned down, or for the many people who face higher interest rates because lenders feel they need to charge more in order to protect themselves.

How much impact do the third of applicants who lie on applications have on the overall debt and higher interest rates?

It may be hard to quantify, but overall, one study indicated that the total debt in Britain has reached the one trillion pound mark. No small change, that! It stands to reason that the ones who lie on applications to obtain a larger loan could contribute to a high percentage of total debt that might otherwise not have been awarded.

However, even the honest ones have a significant role in the total debt, with over half of all loan applicants borrowing more money than what is needed. How much more?

Research indicates that nearly forty percent take out over ten thousand pounds beyond what is needed. Again, this practice leads to a higher percentage of borrowers being unable to make payments, which in turn makes it more difficult for those who only intend to borrow what they need.

What is all that extra money spent on? The results from one study indicate that the money could perhaps be better spent–or not spent at all. Over forty percent goes towards borrowers’ social lives, twenty-six percent for holidays, twenty-four percent for new clothes, and the rest used by people wanting to start their own businesses.

Never try to fib your way into a loan is a post from: Glitec Loans

Secured Loans

Secured loans are backed by personal property, usually a home. A secured loan can be made against a home whether it is under mortgage or owned outright. The amount of the loan can depend on a number of factors, particularly how much the owner owes on the property in comparison to the value of the property. The larger this difference, the increased likelihood of a larger loan. Of course, the borrower’s credit rating and amount of current debt will also be a factor.

Loan Purposes

Secured loans can be used for a wide variety of purposes, from debt consolidation (such as paying “off” credit cards), to home improvements, to vacation money. The length of time a borrower has to pay off a secured loan will depend on the lending institution and the terms set forth in the loan, but can range anywhere from three to twenty-five years.

Because secure loans are exactly that–more secure for the lender–they typically have a lower interest rate. Interest is charged on the amount borrowed and calculated into an Annual Percentage Rate (APR). The loan is paid back monthly over the term of the loan.

Some arrangements include penalties for paying back the loan ahead of schedule. Secured loans are often larger than unsecured loans, given the security of the loan. Most fall into the £3,000 to £50,000 range, although they can go as high as £100,000.

Do You Have Collateral?

Secured loans are typically easier to obtain than an unsecured loan because of the collateral involved. This makes the loan a potential option for those who are self-employed, recent graduates, or those with poorer credit ratings may be able to obtain this type of loan.Unsecured loans are given without any supporting collateral. Credit cards fall under this category. Because there is nothing supporting the loan, unsecured loans tend to be smaller and have higher interest rates to protect the lender. Unsecured loans are given on the borrower’s promise to pay.

What About Your Credit History?

A person’s credit history and current debt will have a larger impact on this type of loan because the lender has no guarantee the borrower will pay on the loan, and the lender has no collateral options to collect on in the event of default.

Can You Have a Guarantor?

Lenders of unsecured loans may require a co-signer on the loan for added security. In the event the primary person does not pay on the loan, the co-signer is then held responsible. Unsecured loans vary in the amount of time a borrower has to repay the loan; credit cards do not have a timeframe, for example, but educational loans do.

Secured v. Unsecured Loans is a post from: Glitec Loans