Secured Loans

A loan is a financial deal in which one party - the lender - agrees to offer another party - the borrower a exact amount of money which must be paid back in full.

Loans approach in all shapes and sizes but in general there are two main types, secured and unsecured loans. With a secured loan the lender can legally ask the sale of the assets the borrower has pledged as security next to the loan. On the other hand for an unsecured loan the lender relies on the borrower's undertake to pay the money back. There are many loans on the market planned for different purposes and people in different conditions.

There will also be interest payments at an decided rate, and sometimes there are extra charges for the management of the loan by the lender. The terms and conditions of a loan will vary from lender to lender but will be specified in the contract. The lender can ask for interest payments in count to the original amount of the loan which is also occasionally known as the principal. The borrower must stick to the repayment terms declared in the contract particularly repayment dates and interest rates. Some lenders may also assign financial penalties for missed or late payments.

For those who need to borrow, loans can be vicious - even the best deals have more tricks than Paul Daniels' sleeve. Recently, a price war between loan providers means you can now borrow for as little as 3.9% a year, the lowest we've ever seen.

Borrowing should always be budgeted for, and cautiously planned, so you know how you will meet the expense of the repayments.

Personal loans let you borrow up to £25,000. The key sell is "structured repayments", so you know how long you're borrowing for and what it'll cost each month. However in common, borrowing on the cheapest credit cards considerably undercuts the cheapest loans; meaning in many circumstances, they should be used first. But much depends on why you're receiving a loan, and how much you want to borrow.

Choosing the right loan

Loans have not at all been as cheap as they are right now. A mixture of access to cheap Government money, and a price war between competitive lenders mean that rates have plummeted over the past couple of years.

But even the lowest interest rate loans can have concealed costs. Before you pick the type of loan, it's critical to make a decision one thing.

How much, for how long?

The formula's simple for best. Borrow as little as possible, repay as quickly as possible. To avoid complications, forever base your borrowing on what you can contentedly afford to repay (preferably after doing a budget), as over-borrowing can cause debts to twisting out of control.

Be careful - whilst borrowing over a longer period spreads the debts and decreases monthly repayments, it extremely increases the total interest you'll repay. Borrow £10,000 at 7% over three years and the interest cost is £1,100. Borrow the same over 10 years, and its £3,900.


Call us or send us enquiry and we will help you decide the best possible options to get you secured loan as per your circumstances.
Call us to get free initial advice.
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