A secured loan is a second charge on the property. The first charge is always the mortgage. A secured loan works in the same way as a capital and interest mortgage. The main reason people take a secured loan out rather than remortgage is this is ideal for people that need to raise capital for the equity in the property but the redemption penalty for remortgaging is to high.
Secured loans range from £3,000 to £250,000. The maximum loan to value the lender will offer is 125% of the value of the property. However if you have adverse credit the lender will only in most cases go to 90% of the loan to value. The loan to value is a calculation of the value of the property less the outstanding balance. The secured loan is then added to the mortgage outstanding balance. This is then calculated as a percetge and this is the loan to value. Secured loans terms range from 5 years to 30 years. The interest rate is often a little higher than a standard mortgage.
It is estimated that there is over 1,000 secured loan products on the market. Most high street lenders offer secured loans but the best place to get a quotation form is a secured loan broker. These brokers have coverage of the whole market and there job is find you the best deal.
HOW TO GET A LOW RATE SECURED LOAN
Our needs vary from person to person. Some might be looking for a home whilst others might need money to meet various expenses. Money is the foremost factor involved in fulfilling all our needs. This is when secured loans come in handy.
Low rate secured loans are a great way to get the much needed money to meet these various expenses. This kind of loan is essentially an amount drawn against a property that is put as security. The security placed should be of a higher value than the loan amount required as this will all add up to getting a truly low cost loan for you.
Loan term is another important factor in determining the best low rate secured loan deal. Ideally, a borrower looks for a longer repayment period with smaller monthly installments. This enables the borrower to repay back conveniently.
The borrower can get money ranging from £1000 – £500,000 and can repay the cash in the form of monthly installments between 3-25 years.
Low rate secured loans provide financial assistance to all groups of people irrespective of their credit history, if you do have a bad credit but are willing to place down security, low rate secured loans are still at your reach.
Low rate secured loans provide a range of benefits-:
– Reasonable rates of interest.
– Speedy loan procedure.
– Reduced paper work.
– Smaller monthly repayments.
– Flexible repayment options.
– Ideal for homeowners.
– An effective tool against bad credit.
Various kinds of low rate secured loans exist in the market. Some of them are debt consolidation, home improvements, car loans, business loans, holiday loans and wedding loans. While opting for the loan the borrower has to be sure of which type of loan is suitable for him depending upon his requirements and financial status.
While hunting for an appropriate lender dealing in low rate secured loans, the loan seeker should first approach their local bank, where he has already done business. Apart from traditional banks, there are other financial institutions offering better deals.
Nowadays, online lenders have an edge over traditional lenders. Applying for low rate secured loans online can prevent you from facing hours of hassle. The borrower is required to fill in a simple online loan application form. If you are unable to decide among the various kinds of loans, you can seek advice from an online loan adviser.
Before offering low rate secured loans, the lender ensures whether the person is eligible for the loan or not. He checks the employment history, income and the repayment potential of the borrower. Keeping all such details in mind he prepares an appropriate deal for the loan seeker. The moment the lender finds an appropriate deal for the borrower, he will approach him immediately.