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Secured Loans And Remortgages Are Great Debt Consolidation Loans
Hassled by creditors everyday? Then perhaps it’s time to sit down and think about an appropriate solution that will make all your problems go away.
Being in debt can be painful. The ongoing harassment by creditors isn’t going to go away just like that. It’s up to you to do something about the situation. There are many approaches when it comes to debt management. One of the easiest ways is to take a good look at your existing assets. For instance, you may be the owner of a home that has acquired equity over several years. Maybe now is the time to cash in on that equity and solve your debt problems.
You can do so by either taking out a secured loan, or go for a remortgage.
What is a secured loan?
A secured loan is a loan that is backed by your existing assets. The exact terms depends on numerous factors such as the loan amount, the value of the assets, and the repayment terms. If you fail to pay back the money on time based on the repayment terms, the lender has the right to forfeit your assets.
What is a remortgage?
A remortgage is like having an extension for your existing mortgage loan. For instance, your home may be full paid up. But in order to raise the amount of money you need, you opt for a remortgage. The bank provides you with another home loan and you get a lump sum payment. You can use the amount of money you receive to pay off your debts and manage your finances. Of course, now you have to service a new loan. Note that you don’t have to wait for your home to be fully paid up to qualify for a remortgage. As long as your home has equity, you can opt for a remortgage.
Secured loans and remortgages are two options you can choose from. To find out which option best serves your interest, speak with a professional debt management consultant. They will be able to provide valuable advice. You will need to find out the prevailing interest rates for the amount of money that you will be borrowing. An appraisal on the property may also need to be conducted to find out the current market value of the property.
Some homeowners are fearful about pledging their property for a loan as they are afraid of losing their home. But look at it this way.
If you are in debt, and you are unable to meet your monthly payment commitments, you are going to lose your home anyway. So it’s better to take up a loan just to tide you over the current tough patch. Understand that this situation is only temporary – no one stays in debt forever.
When you borrow money to repay your debts, you are taking passive action. And that is commendable. The monthly repayments may also force you to stay focused on managing your finances. In the process, you will be developing better money management habits. That will help you to stay off debt once your current debts have been fully repaid.
Know Loan, Loan More
Every time we hear the word loan, what is that first thing that comes in to your mind? What is does loan really mean?
Like all the other kinds of debts, a loan involves the redistribution of financial assets over time, among the two parties who are the lender ad the borrower. Usually it is the borrower that accepts or borrows an amount of money which is technically called the principal, from the lender and is the one responsible to pay back the same amount of money lend to the lender at an agreed time. The borrowed money is usually paid in return through regular installments, or partial installments; annually, each is installment has the same amount. The interest which is the cost provided to a loan offers an inducement for the lender to indulge in the loan. Each obligation and limitations in legal terms is compulsory by agreement- either written or verbal form- which can put also the borrower under the additional limitation such as loan treaty.
Below are the types of loans with the corresponding meaning:
Secured loan. A type of loan wherein the borrower promises some asset like a car or a house as a guarantee for the loan
Mortgage loan. This is a type of loan which is very common one that is used by most people in buying housing. The money is use to achieve the property in this kind of contract. However, the institution is rendered a security until the mortgage is paid fully. While if the borrower had fail to paid the loan, the right to possess again the house and sell it is in the hand of a bank just to cover the sums owing it.
Recourse note is another kind of loan that is especially use in limited partnership agreements. It is secured of course by a pledge of collateral, typically real property therefore considered as secured loan but for which the borrower is not personally responsible.
Unsecured loans. Unsecured loans are budgetary loans that are not secured over the asset of the borrower. These are may available loans from financial buildings under various marketing packages like credit card debt, personal loans, bank overdrafts, credit facilities and corporate bonds. In these forms, the applicable interest rate depends on the lender and the borrower. However, these may or may not be arrange by the law.
Therefore make sure you:
1.Always take a walk round the shop and look for the best loan fit in your situation. 2.Ensure that you have read all necessary paperwork and details about your loans. 3.Make sure that you can manage easily the monthly payment or you may find yourself sinking in financial trouble.