Tag Archives: secured loans
The pros and cons of secured loan UK
The whole concept of secured loan in UK revolves round collateral. Collateral is a technical term which means the property that is used as security in a loan. Any property of significant money value has acceptance as collateral. However, in UK a home is most frequently used as collateral. Though secured loans in UK are offered against the equity available in a home, in special cases no or zero equity is also accepted.
Some people find it risky to take loans against their home. Being aware of the fact that they will have to lose their property if they fail to pay off the loan, they shrink back from taking secured loans. It cannot be denied that there is risk of property repossession in this type of loan. Yet, all people do not avoid taking them. Rather, plenty of people think of it as a cost-effective method of raising fund. In fact, there are genuine reasons behind the popularity of secured loans in UK.
First of all, it is a gainful bargain for the borrower. He gets the chance to undertake a major financial venture as this loan allows him to take out a hefty amount of money. He has the leverage to borrow as much as his home equity lets him to. Even in some cases he can borrow more than his home equity allows. There are lenders who sanctions loan amount of up to 125% LTV.
Besides, secured loans UK offer high level of flexibility in repayment terms. Longer duration of time to repay the loan, low APR, smaller monthly instalments are all awarded to the borrower. This is done as reciprocation to the gesture he shows by offering collateral. Moreover, the lender also gets the freedom to use the amount advanced by personal secured loan UK for a plethora of personal needs. So far the risk factor is concerned; all the flexibilities mentioned here are enough to back the borrower to easefully pay off the loan and avoid property repossession.
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.