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
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
How Your Small Business Can Benefit From Secured Commercial Loans
The bane of all small businesses has always been the lack of sufficient capital and if you are currently experiencing something similar in your entrepreneurial journey, I would recommend that you apply for a secured commercial loan as soon as possible. I am rooting for secured loans because it’s a fact that they are the easiest to get and most importantly, they provide you plenty of time to repay your debts. Since you pledge your home or your business assets as security in a commercial secured loan, all the associated lending risks are taken care of automatically and you are not put through the rigorous system of creditability checks. It means that your secured loan application will be readily accepted even if your business might not be doing all that good right now.
The funds that you get through a commercial secured loan can be used for achieving a wide variety of business objectives such as procuring essential resources such as men and material; buying machinery and equipment; improving existing infrastructure or creating additional ones; starting value-added services etc. You see there is no hard and fast rule obviously because it all depends on what are the most urgent requirements of your business.
What you eventually do will also depend a lot on the actual amount that is sanctioned to you under the commercial secured loan deal. The amount in turn will depend on the value of your pledged assets. The amount that is generally sanctioned is around 80 percent of the value of your pledged assets, but if you need more you can also apply for loans that are around 100 to 125 percent of the value of your pledged assets. However, since doing so will lead to a substantial increase in your monthly instalment amount, it’s recommended that you think twice before opting for such a secured loan deal.
The commercial secured loan market is currently going through a slump, but that should not be a cause for concern because there are still plenty of lenders out there who will be willing to accept your commercial secured loan application. For getting to the best secured loan deals, I would recommend that you contact as many lenders as possible and sign on the dotted line only when you are quite sure that you have found the most appropriate commercial secured loan deal. Interest rates, processing charges, prepayment charges, and late fees are some of the important factors that you need to consider while assessing all the different deals that might be available.
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February 13th, 2008 - Posted in Secured Loans | | 0 Comments
Secured Loan Risks – Busting The Myths
There are certainly some valid risks associated with secured loans, but that should not be a cause for concern because none of the risks are so grave that they cannot be managed. Some experts will no doubt try to paint a gory picture of the risks that are generally associated with secured loans, but you should avoid believing each and every word they say because the reality is that secured loans are the preferred choice not only in UK, but the world over. To decide what’s good and what’s not, it’s always better to use your own logic because this is a subjective matter and a lot depends on your specific needs and requirements.
The gravest of all accusations is that secured loan deals could easily force homeowners out of their homes. Not that this is all wrong, but since such an event will occur only when the homeowner defaults, you cannot just classify secured loans as a finance option having the maximum risks. Cases of loan defaults may have become quite frequent, but even that cannot be used as a definitive reason simply because the number of problem-free secured loans still exceeds the total number of defaults. In effect, it means that as long as you continue to pay off the monthly instalments as might be applicable on your secured loan, you can rest assured that your home will always remain your own.
The other most common accusation is that a secured loan increases the overall interest burden by a substantial amount. This logic that is used here is that secured loan repayment plans often stretch up to 20 to 30 years, something that automatically increases the overall interest burden. However, what the proponents of this logic often fail to realize is that the interest rates as applicable on secured loans is almost always less than any other type of loan option such as personal loans, unsecured loans, cash loans etc. It seems, they are so prejudiced that they just cannot accept the reality that a long repayment period is actually a blessing and not a disadvantage. A long repayment period helps because it allows you plenty of time to repay your debts and also you do not have to worry about paying huge amount as instalments every month.
So, if you were planning to abort your secured loan plans due to some false myths and misconceptions, I would recommend that you just ignore them and carry on with your original plans. For large amount loans, going secured is always the best option and there is no reason why you should not apply for one right away.
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February 4th, 2008 - Posted in Secured Loans | | 0 Comments
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