How To Secure That Secured Loan With Your Security

At some point in your life you might require a large sum of money, maybe to invest in a new business or project or for your child’s education or even to pay off other outstanding debts. Getting a secured loan is one way of raising money fast. You can then pay off that loan in installments that could range from 3 to 25 years. A secured loan requires a collateral in the form of property or vehicles or even stocks or bonds to be transferred, not physically but on paper to the lender as a form of security until the loan is not fully repaid with interest. Even if your home has a mortgage on it, you can still avail of a secured loan and this type of an arrangement is known as ‘second charges’ whereas a property free of any outstanding mortgages is known as ‘first charges’. There are many factors on which the amount sanctioned for your loan will depend upon. You can get upto 125% of the value of your property as a loan provided your credit rating is up to the mark. It is also easy to get a secured loan as compared to an unsecured loan since your collateral gives the lender a feeling of security that you will repay the loan. There could also be some hidden charges attached to that loan and there might also be a penalty clause in case you want to repay your loan before the due date. If you are already in debt with various credit card payments to be done, then availing of a secured loan is a better way to consolidate all your loans into a single loan since the penalties on credit card defaulters is quite high.     In case you have a running business, then you would be required to produce your previous three years profit and loss statements and balance sheets. The lender will check those out along with your credit rating and based on that, the lender will quote the rate of interest applicable to you. There are many Websites on the Internet too, which offer secured loans, but do a proper cross check on all of the short listed lenders before finalizing on any one of them. Check out the fine print in each of the contracts so that you do not get a nasty shock after availing of the loan.  So, whatever the reason, if you have sufficient collateral, you can get a secured loan to tide over any financial problem. Whenever you take any loan, keep your priority on paying off that loan as soon as possible so that your life becomes ‘interest’ free. 

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March 18th, 2008 - Posted in Secured Loans | | 0 Comments

Re-mortgages – To “Re” Or Not To “Re”

If you have a mortgage on your home or business property then the recent cut in interest rates by The Bank of England would be welcome news in case you have taken a variable interest mortgage. However, there could be various factors, which could make you have a look towards the remortgage scene.  A remortgage could offer you significant benefits if your property has appreciated dramatically over the last few years. If you need some cash then you could go in for a remortgage. You could go in for a longer term and thus would have to pay lower installments. If your credit rating were quite good, then you would not have any problem in a remortgage on your property. Even if your credit rating has slipped and you are in dire need of money, a remortgage can bail you out. This will offer you a chance to clear off your other debts and in case you have increased the duration of your loan, you would also have to pay smaller installments but over a longer period of time and also with a lot more interest. This move will increase your credit rating and will also give you a chance to clear off your other debts so that you can concentrate on only one loan. Another way to speed up your mortgage payments is to start pre-paying or overpaying your mortgage payments, if your lender does not have a penalty clause. Many lenders now allow borrowers to overpay upto 500 pounds per month while others have set an upper limit of 5000 pounds in a year. You can take advantage of every drop in interest to clear your mortgage by utilizing that extra money to clear your mortgage faster.  The cost of shifting your mortgage should also be considered before making a move. There will be revaluation costs to revalue your property, penalties to be paid to your old lender to exit out early, arrangement fees when you enter into a new arrangement with your new lender and your attorney’s fees to get your documentation done. You will need to add up these fees along with the new interest rate applicable to you and then compare it with what you are presently paying. If you do not have any choice due to cash constraints and if you feel that this remortgage deal will give you some breathing space then go for it, but if there is no noticeable difference between the two then it is better to stick to your existing mortgage.   So, either way, take the advice of a good mortgage broker and your attorney before making any decision. Any hasty move could turn your remortgage into a ‘remorsegage’.

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February 25th, 2008 - Posted in Secured Loans | | 0 Comments

Will The Subprime Crisis Make Remortgages Costlier

Living in UK, you might not be feeling all that threatened by the ongoing subprime crisis, but what you probably do not know is that the subprime crisis is having an adverse affect on financial markets, not only in the United States but also the world over. Banks and lending companies in UK have already started to feel the heat and it will not be long before they too will be forced into writing off millions of pounds in bad credit accounts, just like their counterparts are doing in the US. Many lending companies have already started redefining their lending rules and policies, something that is making it difficult for individuals to open new credit accounts such as remortgages.

Now all this may seem quite scary and it actually is to some extent, but I would still not recommend that you jump of the roof because I believe that there’s still some hope even though the subprime crisis seems to be getting worse with each passing day. So, if all these days you were planning to take out a remortgage, I would recommend that you go ahead with your plans and stop worrying about the adverse affects that the subprime crisis can have on your remortgage deal. The property market in UK might slow down even more in the coming months, but that should not be a cause for concern because remortgages can last as long as 35 years; enough time to guarantee that the subprime crisis and many more like it will be over by then.

You might also be worrying about the possibility of an interest rate hike in the coming years, but if you ask me I won’t have to think twice to tell you that your worries are nothing but creations of your own mind. Interest rates will certainly fluctuate, but you need not worry too much because you can easily manage that by opting for a fixed rate mortgage. In a fixed rate remortgage, you might have to pay more from time to time, but considering the risks brought about by the subprime crisis, I think it is a small price to pay for securing your financial interests.

Costlier or not, I would recommend that you go ahead and apply for a remortgage because it is a fact that remortgages are always beneficial in the long run. Crisis situations such as the subprime are just cyclical macro economic events and you should not treat them as the end of this world. Just take the right decisions today and soon you will be on your path to prosperity.

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February 22nd, 2008 - Posted in Remortgages | | 0 Comments

Why Is There No Other Alternative To Secured Loans

In UK, there is certainly no dearth for finance options and based on your needs you can take your pick from a wide range that includes everything from cash loans to personal loans, unsecured loans, overdrafts, credit card EMI’s and many others. However, if you are someone who always tries to get the best value out of a deal, I will recommend that you look no further than a secured loan. Other finance options too have their respective advantages, but since none of them are as beneficial as a secured loan, I would never recommend those to you. 

For highlighting the benefits of secured loans, I would like to compare them with some of the other options that are available. I will first start with credit cards because it is a fact that amongst the credit options that are available, they are the ones that are most commonly utilized. When you compare the two you can easily notice that interest rates on secured loans is almost always less than that charged on credit cards. This means that if you apply for a secured loan, your overall interest burden will come down automatically, something that you can never have achieved through a credit card. Credit cards work best only when used for small amount credit transactions and although EMI conversion facility is generally available, I won’t recommend that you use it. EMI options are often marketed as free services, but in reality you might be charged astronomical sums in the name of processing charges. All this proves that secured loans are better than credit cards in more ways than one.

Other credit options, mainly unsecured ones such as cash loans and personal loans, also do not match up to the advantages of secured loans because these too attract a much higher rate of interest. Apart from that, they also have a smaller repayment period, usually around 2 to 3 years, which is certainly not enough for repaying large amount loans. In this context, secured loans are certainly better because their repayment period can be as long as 35 years. If you opt for secured loans, you will have plenty of time to repay your debts.

When it comes to high amount loans, there is certainly no other alternative that’s better than secured loans, but since there are just too many secured loan deals available and an equal number of lenders, I would recommend that you go online and contact lenders directly. This will make it easier for you to compare the available secured loans deals and select the one that best suits your needs and requirements.

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February 19th, 2008 - Posted in Secured Loans | | 0 Comments

Why You Shouldn’t Fall For The Freebies While Remortgaging

Offering freebies along with remortgage deals has become a common trend and it seems that remortgage applicants are flocking to none other than those offering the most freebies. Now, there is nothing wrong in getting freebies in return, but the point is that do these people ever realize the meaning of the popular saying – “there are no free lunches in this world”? Quite unlikely because if they had, they would never have opted for freebie deals, most of which attract relatively higher rates of interest and also a wide variety of costs and charges listed only in the fine print.

So, if of late, you too had been drooling over the offered freebies, I would recommend that you exercise a bit more self control and concentrate on finding the truth about the offered freebie deals. Lenders will always try to lure you with irresistible offers such as free property valuation, free loan processing, free loan arrangement and many others but if you are wise enough, you will never sign on the dotted line unless and until you have ascertained all the advantages and disadvantages of a remortgage offer. However, if you are just not able to resist the temptation, what is most likely to happen is that you will end up paying a high price for the so-called freebies, most of which will come in the form of increased interest payments.

It’s not that all freebie schemes are bad, but since most of them are there just to lure new customers, you can never tell for sure whether the freebies will really benefit you or not. So, in case you are still rooting for freebie schemes, I would recommend that you at least have a look at some of the most essential factors such as interest rates, exit charges, prepayment charges, late and missed payment charges etc. The most appropriate thing to do however would be to pick up a non-freebie scheme and use it as a benchmark to compare all the freebie schemes that might be available. This will give you a fair idea about the actual costs of these freebies, based on which you can then take the most appropriate decision.

For comparing and finding the best remortgage deals, I would recommend that you go online, contact lenders directly and request quotes from them. When you have the requisite information, you will easily be able to separate the wheat from the chaff and take the most appropriate remortgage decision. Freebie or no-freebie, you will thus be able to script a better financial future for you and your family.

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February 16th, 2008 - Posted in Remortgages | | 0 Comments