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Difference Between Secured And Unsecured Loans

By | Secured Loans

There is a big difference between unsecured borrowing and secured borrowing. to try and simply this we have broken them both down for you below.

Secured loans explained

Generally secured loans are used to borrow larger amounts of money, although you can borrow less. It really depends on your personal circumstances and what the money is needed for.

When you hear people say secured loans are cheaper than unsecured loans it’s worth noting this depends on the amount you borrow, the term you borrow this money over and of course your personal credit profile. Secured loans are generally taken over a longer term and therefore the interest charged is spread over a longer period, this makes them seem cheaper than a shorter term unsecured loan.

The term ‘secured’ refers to the lender requiring a form of security in case you cannot pay the loan back. This will usually be your home or a property you own. This would then mean as a borrower, the lender can repossess this property if you do not keep up the repayments.

If you are looking for a secured loan, we always suggest speaking to a broker who arranges this. They will look at your personal and credit profile and advise you on which lender is best suited. They will then discuss how much you will pay back, interest rates, arrangement fees, set-up costs and the APRC [Annual Percentage Rate of Charge].

Unsecured loans explained

An unsecured loan is when you borrow money from a bank/lender and agree to make regular payments until it’s paid in full. The term is set at the outset and the loan is not secured against any asset or home. Sometimes you will find unsecured loans being called a personal loan – the reason for this is because you personally guarantee the money you are borrowing from the lender.

As with any loan if you don’t keep up the payments, you may incur additional charges and this could have an adverse effect on your credit rating. Also, the lender can go to court to try and get their money back if you do not pay them on the terms agreed.

Unsecured loans can be used to purchase a new car, home improvements, debt consolidation to name a few [but please note when consolidating debt you need to understand you are taking other debt, which maybe on a shorter term or lower interest rate and clearing this. By doing this you are spreading the debt over a longer term and may incur more interest charges].

How To Get the Best Deal

If you are looking for a secured loan and feel this is the right option for you then your first step will be to speak to a broker who can discuss your personal circumstances, work out the amount you require and help you find the right lender. There are many secured loan lenders in the market and speaking to them all if tedious and very confusing. A broker can you arrange this and simplify the process. Here at Simply Secured we work with Fluent Money one of the UK’s largest brokers and help you find the right loan for you. Just pop over to our APPLY FOR A LOAN PAGE, fill in the quick form and an advisor will give you a ring to discuss your options.

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Can I apply for a secured loan with bad credit

By | Secured Loans

Yes you can.

If you have been refused credit in the past or have bad credit, a secured loan may be easier to get than other types of loans. Lenders feel more at ease if they have a security against the money they are lending you.

Additionally, by keeping up with the monthly repayments, you could improve your credit rating over time.

It is possible, but not always the case and dependant on your credit rating that a bad credit loan will often come with a higher interest rate. Always best to speak to one of our advisors first to see if this is the case. You may be pleasantly surprised.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Tips to get a Secured Homeowner Loan

Tips to get a Secured Homeowner Loan

By | Secured Loans

Homeowner Loans 

you will find there are hundreds of articles and blogs on secured or homeowner loans. However, first of all, you need to understand the term.

What is a homeowner loan / secured loan?

A homeowner loan is where a property is kept as a security against the amount you want to borrow.

There are quite a few lenders who are willing to provide you with a secured or homeowner loans in UK. Before you can get a secured loan, the lender will need to ensure you are eligible and meet their criteria. Some of the key requirements  are; the amount of equity, your credit history, existing credit commitments, your income, affordability and other factors.

Is it a bad idea to take a secured or homeowner loan?

The best solution is to speak with a qualified advisor. See if securing further debt against your home is the best solution or not.

Here are a few tips to consider:

Maintain a good credit score

Your credit score is determined by evaluating factors such as income, previous loans, regular repayments, credit commitments any other factors. Always try and maintain a good credit score. If you are looking to get the best rates on further lending a good score will definitely help.

Check the interest rate

When you speak to us to discuss your options, one of our advisors will ascertain based on your affordability, income and credit commitments who the best lender will be for you. They will also discuss what the interest rate will be.

The reason your taking a secured loan

Whether it’s utilise the equity in your home for business development, travel plans, unexpected expenses or debt consolidation our brokers will advise and work out with you if a secured loan is the right option for you.

If you consolidate unsecured lending such as a personal loan or credit card you must be made aware you will be taking unsecured debt and securing this against your home. You will be spreading this debt over a longer period of time that will end up costing you more. The benefit of this is having one lower monthly payment that may work out to be more affordable.

Your Credit Report

Have you checked your credit report yet? What does it show? The lender will check this first so your credit score and report, alongside your income and affordability will determine your secured loan lender and interest rate.

There are many credit reporting agencies in the UK that might help you to get a credit report. All you need to do is to contact them. Get your credit report and evaluate it first!

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

How-to-apply-for-a-secured-loan-?

How to apply for a secured loan?

By | Secured Loans

You have decided a secured loan is the way forward for you.

There are three main things you will need to take into consideration when going ahead to apply for one:

1. A secured loan is available to people in most circumstances. The amount you are able to borrow, loan terms and the interest rates available are dependent on your credit profile.

2. When applying for a secured loan have a steady address. This will improve the chances of your application being approved. To be eligible for a secured loan, you will usually have to have been a UK resident for a minimum of three years.

3. You must ensure you have a realistic repayment plan. You must have the plans in place to ensure your monthly repayments are made on time. Although the interest rates for secured loans tend to be much more favourable, it is essential that payments are made to avoid the risk of losing your assets.

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.