Welcome to Loans 4

Loans can be used for different purposes. Most people take out a loan to finance a large purchase, such as a new car or furniture. Sometimes a loan can be useful to consolidate other debts, such as credit cards and store cards, in order to obtain a cheaper rate and fixed repayments.
Whatever the reason for taking out a loan, you need to check what's available in order to ensure you get the best deal. This means checking the interest rate charged, repayment amount and period, terms and conditions and the total amount you have to repay.

POOR CREDIT? Free Credit Repair Information. Raise your credit score. Apart for store cards, credit cards are generally reckoned to be one of the most expensive ways of borrowing. The annual interest rate is generally 2-3 times greater than a personal loan. However, cards are widely available and, if you already have one, you'll have a pre-set credit limit so borrowing up to that limit requires no additional arrangement. In short, credit card borrowing is easy.
The usual message with credit cards is to pay off the balance every month. If you do that, the rate of interest is not relevant and you should try to use a card that offers other benefits such as earning reward points or giving cashback on everything you spend.

In general, home ownership has been rated as one of the safest investments in the long-term, although there are the occasional price falls that lead to negative equity and other problems. Even then, buying a home saves on rental payments and will almost certainly provide an appreciating asset over a number of years.
Unless you have access to large amounts of money or are moving down to a cheaper home, you'll need to arrange a mortgage to finance the purchase of a property. If you're a first time buyer, you'll almost certainly be in the market for a mortgage, while you may also be an existing borrower looking to switch lenders at the end of a deal.

Perhaps the best known type of secured loan is a mortgage where the money you borrow to buy a property is secured against that property. This means that the lender effectively owns more of the property than you do at the start and it will generally be many years before the balance swings in you favour. The main consequence of this arrangement is that if you persistently default on the agreed repayments, you're likely to lose your home. The property will be repossessed and sold by the lender in order to recover the amount lent to you.
Secured loans also apply in other situations, particularly to finance the purchase of high value items such as cars and furniture. You'll generally find that a secured loan comes on better terms than an unsecured one simply because the lender has some security against bad debt and is therefore at less risk of losing money on the deal.

An internet search will reveal that there are lots of loans available from all sorts of providers. Lending is no longer the preserve of the UK banks and building societies, with supermarkets and other organisations in on the act as well as a multitude of foreign businesses. As a result, it's a very competitive business, which at times might have some attractive rates on offer.
Although the interest rate charged is given as the headline figure, you need to look a little deeper before committing yourself to a loan. Lenders have a habit of quoting 'from' rates that never seem to be actually available. Some lenders will have a set-up fee and possibly a termination charge that add to the overall cost of the loan. You really need to add up all your payments over the full term of the loan to calculate the full cost.

Representative Examples

Small Loan: To borrow $1000 over 28 days, you would repay $1300 with an interest rate of 30%. (1934% APR variable.)
Unsecured Loan: To borrow $1000 over 12 months, you would repay $1700 with an interest rate of 70%. This is 234% APR variable.
Secured Loan: If you borrowed $10,000 for 7 years, you would repay $19,566. This is 17.8% variable.

*Loans under $500 can be paid to your bank account within 15 minutes of approval. Loans under $1000 can typically be paid into your bank account on the same day. Loans over $1000 may take between 3-5 working days.

The APR will vary depending on the amount borrowed, and the length of time the money is borrowed over. Before applying for any financial product or service, you should always read the terms & conditions in full.

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