Welcome to Loans 4
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.
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. This enables you to compare the various offerings properly in order to work out which is the best value.
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. This enables you to compare the various offerings properly in order to work out which is the best value.