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Homeowner Loans – Are They Different From Secured Loans?
Let’s face it, getting a loan can sometimes seem traumatic. Where do you go to get a loan? How much can I borrow? What sort of loan is best for me? …and i’m guessing that these are only some of the questions you’ve asked yourself recently, right?
If you’re a homeowner, it’s even worse in some respects because there’s a much wider choice available to you and yes, it includes homeowner loans and secured loans.
So, what’s the difference?
Well, the truth is – “not a lot”! There are many providers out there, lenders and brokers, that use either one or the other term, but in reality, they mean the same thing. So, if you’re looking for a loan and intend to use some of the equity you’ve built up in your property, then a homeowner secured loan could be for you. (Sorry – that means the same as homeowner loan and secured loan as well! Getting a little carried away with the choice thing there for a minute!)
If you don’t have a mortgage, ie you own your home outright, then you cannot opt for a secured loan. This is because in the loans industry, the correct technical term for a secured loan is a 2nd charge loan; so called because a mortgage is a first charge. If you defaulted on your mortgage, the mortgage lender would be able to foreclose on their loan and receive proceeds from the forced sale of your property, equal to the amount they are owed, before a 2nd charge or secured loan lender was able to claim their share of the proceeds to cover their loan to you. So, you can’t have a 2nd charge on your property if a 1st charge doesn’t exist.
Similarly, if you rent your home, ie you’re a tenant, you cannot apply for a homeowner or secured loan because you do not own the property. You will have to go for a personal loan or an unsecured loan (by another name). Confusing isn’t it?
What can I use a homeowner loan for?
The most common purpose for a homeowner loan is debt consolidation (converting lots of existing credit into one secured loan). This happens at any time of the year but is especially common just after Christmas and the summer holidays, when many people have decided that they can reduce their interest payments on credit cards by opting for a homeowner loan.
The next most popular reason is home improvements. If you’re having the builders in or even doing it yourself, you could use the bricks and mortar you already have to help you to raise the cash necessary to cover the costs of the changes you want to make.
..and other common reasons for taking out a homeowner loan are:-
– a luxurious, far off holiday – a new car, caravan or motorbike – a wonderful wedding to remember, – or just to treat yourself to something special.
So what are you waiting for? Go on, pamper yourself! A homeowner loan is easier to apply for now than ever. It’ll only take a few seconds to enquire with an online loan broker and you could have a decision in principle back to you within minutes. Of course, you’ll still need to complete and sign a credit agreement and make sure that you allow enough time for the loan to complete which is typically around 4-6 weeks. Happy hunting!
Debt Consolidation Loans for quick loan repayment and savings on overall loan costs
You may have landed yourself into a bundle of loans, each taken up for special purpose. Now you are at loss and totally confused on how to handle so many loan payments considering your money inflow. Wondering how to come out of this situation? Well, you could always go for a debt consolidation loan and follow it with serious intent.
As the name suggest debt consolidation is undertaken when you wish to merge all the existing small loans into a single loan. Afterwards, you can receive a lump sum amount of loan amount equivalent to the debt amount. Begin with repayment of all the debts and at the end you will be left with a single loan and its repayment i.e. the debt loan and its repayment installations.
The main advantage of debt consolidation loan is that you save quite amount by paying off the loans in lump sum leaving you with enough cash to splurge a little. These loans are ideally availed to pay off credit card bills, online shopping bills, utility bills and even other small loans which you could have taken on off and on basis.
Just before taking up a debt consolidation loan, you could actually prepare a sheet of your loans and their break up structure which includes
1.Loan amount 2.Rate of Interest 3.Repayment Instalment
Keeping this sheet ready, you could approach for a debt consolidation loan which will provide you with a loan amount equivalent to your debt and also the rate of interest so applicable. If you actually compare both the sheets, you will conclude that a debt consolidation loan works out cheaper and advantageous for you.
A Debt consolidation loan with a fixed rate is not advisable. Also you should check out the terms and conditions in case of pre payment of loan. In most cases debt consolidation loans do not charge fixed rates of interest and no charges in case of pre payment of the loan.
A Debt consolidation loan may prove to a god send blessing but it remains so provided you actually use it repay off the existing loans. In case you fail to do so and use up the loan amount for some other purpose, all possibilities of a huge financial burden are likely to take place with you.
There are many money lenders who offer debt consolidation loans online. You could ask for quotes online, check out their rates of interest, additional charges, the prepayment terms and conditions which you are liable to pay in case you go ahead with the debt consolidation loan.
On the overall, if you get a good debt consolidation loan which offers to charge you with a lower rate of interest and minimal or no additional costs especially in the case of prepayment of the loan, you do need to be smart and swift enough to go ahead with the same and relive yourself from a mental tension as well as financial burden.