Tag Archives: property
Unsecured loans A sub-type of personal loans
It is a known fact that in a secured deal, collateral protects the lenders investment, and thus makes it easy for him to part with his money and facilitate the borrower with loan benefits like quick attention, high credit limit, competitive low APR, variety of rate plans, different repayment methods, and negotiable loan terms and conditions.
Unsecured loans, a sub-type of personal loans, do not offer the above-stated benefits. But, they are still catching up in the UK loan market. So, what are the reasons behind the growing popularity of unsecured personal loans?
The most significant reason is that irrespective of the loan seekers capability and willingness to pledge collateral, this personal loan sub-type can be availed by all tenants, students, homeowners and property owners.
We all know that homeowners and property owners can easily take advantage of their valuable assets to avail favourable secured loan deals. However, pledging collateral may not be always practical or essential.
Hence, unsecured loans is a better alternative for people who are capable of offering collateral, but are unwilling to get into property related legalities or risk their property for a small monetary requirement.
Also, as every UK resident is not a homeowner or a property owner, unsecured personal loans is the only credit option for people who are incapable of offering an asset as collateral tenants and students. This no collateral attribute in turn leads to:
Less paperwork and quick service in the absence of lengthy property evaluation procedures
No immediate risks in the event of repeated defaults or non-repayment of the loan amount
Hence,unsecured loans are ideal for small monetary requirements, as offering collateral may be unnecessary. And, for urgent requirements too, as getting into extensive property evaluation procedures may be unfeasible.
Besides advantages, no collateral attribute has disadvantages too, as the lenders investment remains unprotected limited amount, high interest rates, fixed payback option, and preset loan terms and conditions.
Homeowner loan: A Chance for Financing yourself using your Home Equity
Homeowner loan is basically secured loans. This requires you to pledge your property as security. This is possible only for those who own a home. Homeowner loans are thus the special privilege of the homeowners.
Homeowner loan can be availed by any homeowner and legal resident of UK whose age is not below 18 years. It is an open secret that lenders are more open to lending homeowners as they feel more secured with them. The pledging of property provides them the assurance of repayment. Homeowner loan is thus quite popular in UK.
A homeowner loan, since it builds the confidence of the lenders, ensures for the borrower several benefits. The rate of interest on the loan amount is lowered to less than 7 % although it may go a bit higher for those with bad credit history. The terms and conditions, which includes the tenure of repayment, is relaxed. This results in reduced monthly installments, which are thus convenient to pay off.
Another feature of a homeowner loan which stands to a borrower’s benefit, is that large loan amounts can be got approved. Much of it depends on the value of your home equity.
Since a homeowner loan is based on your property pledged as collateral, it is obvious that your property is at some form of a risk. This risk can become an ordeal, in the event of your inability of repayment. The home of the borrower can be repossessed if she happens to be regularly defaulting on his/her repayments. This means that the borrower should not be lax in repaying and take care not to overspend.
Homeowner loan is also an ideal option for all those who have huge bad debts. This is because the fairly easy terms and conditions of these secured loans makes debts more manageable. Secured debt consolidation for homeowners is a similarly good idea. Homeowner loan is, on the whole, for everyone who wants a loan to fulfil some important need.