Loans Guide

Many people are confused by the different types of loans available. Here is a helpful loans guide of the most common loans available today.

Bad Credit Personal Loan

A Bad Credit Personal Loan is a loan designed for the many people with a bad credit rating. However created, your past record of County Court Judgements, mortgage or other loan arrears can live on to deny you access to finance that other people regard as normal. If you are a home owner with equity in your property, a Bad Credit Personal Loan can bring that normality back to your life. Secured on your home, a Bad Credit Personal Loan can give you the freedom, for example, to do the home improvements or buy the new car you really wanted. With a Bad Credit Personal Loan you can borrow from £5,000 to £75,000 and up to 125% of your property value in some cases.

Bridging Loan

A bridging loan as the name implies is a loan used to “bridge” the financial gap between monies required for your new property completion prior to your existing property having been sold. Bridging loans are short term loans arranged when you need to purchase a house but are unable to arrange the mortgage for some reason, such as there is a delay in selling your existing property.

The beauty of bridging loans is that a bridging loan can be used to cover the financial gap when buying one property before the existing one is sold. A bridging loan can also be used to raise capital pending the sale of a property. Bridging loans can be arranged for any sum between £25000 to a few million pounds and can be borrowed for periods from a week to up to six months.

A bridging loan is similar to a mortgage where the amount borrowed is secured on your home but the advantage of a mortgage is that it attracts a much lower interest rate. While bridging loans are convenient the interest rates can be very high.

Business Loan

A business loan is designed for a wide range of small, medium and startup business needs including the purchase, refinance, expansion of a business, development loans or any type of commercial investment. Business loans are generally available from £50,000 to £1,000,000 at highly competitive interest rates from leading commercial loan lenders. They can offer up to 79% LTV (Loan to Valuation) with variable rates, depending on status and length of term.

They are normally offered on Freehold and long Leasehold properties with Bricks and Mortar valuations required. Legal and valuation fees are payable by the client. A business loan can be secured by all types of UK business property, commercial and residential properties.

Car Loan

The main types of car loans available are Hire Purchase and Manufacturer’s schemes. Hire purchase car finance is arranged by car dealerships, and effectively means that you are hiring the car from the dealer until the final payment on the loan has been paid, when ownership of the vehicle is transferred to you.

A Manufacturers’ scheme is a type of loan that is put together and advertised by the car manufacturer and can be arranged directly with them or through a local car dealership. You will not be the owner of the vehicle until you have repaid the loan in full, and the car will be repossessed if you default on repayments.

Cash Loan

Cash Loans also known as Payday Loans are arranged for people in employment who find themselves in a situation where they are short of immediate funds.

A Cash Loan can assist you in this situation with short term loans of between £80 and £400.

Loans are repayable on your next payday, although it is possible to renew your loan until subsequent paydays. To apply for a Cash Loan you must be in employment and have a bank account with a cheque book. A poor credit rating or debt history is initially not a problem.

Debt Consolidation Loan

Debt consolidation loans can give you a fresh start, allowing you to consolidate all of your loans into one – giving you one easy to manage payment, and in most cases, at a lower rate of interest.

Secured on your home debt consolidation loans can sweep away the pile of repayments to your credit and store cards, HP, loans and replace them with one, low cost, monthly payment – one calculated to be well within your means. With a Debt Consolidation Loan you can borrow from £5,000 to £75,000 and up to 125% of your property value in some cases. It can reduce BOTH your interest costs AND your monthly repayments, putting you back in control of your life.

Home Loan

A Home Loan is a loan secured on your home. You can unlock the value tied up in your property with a secured Home loan.

The loan can be used for any purpose, and is available to anyone who owns their home. Home loans can be used for any purpose such as, home improvements, new car, luxury holiday, pay of store card or credit card debt and debt consolidation.
With a Home Loan you can borrow from £5,000 to £75,000.

Home Improvement Loan

A Home Improvement Loan is a low interest loan secured on your property. With a Home Improvement Loan you can borrow from £5,000 to £75,000 with low monthly repayments. The loan can be repaid over any term between 5 and 25 years, depending on your available income and the amount of equity in the property that is to provide the security for the loan.

A Home Improvement Loan can help you with a new kitchen, bathroom, extension, loft conversion, conservatory, landscaping your garden or new furniture. You can even use it on non-house expenditure like a new car or repaying credit card or other debts.

Home Owner Loan

A Home Owner Loan is a loan secured on your home. You can unlock the value tied up in your property with a secured Home Owner loan. The loan can be used for any purpose, and is available to anyone who owns their home. Home owner loans can be used for any purpose such as, home improvements, new car, luxury holiday, pay of store card or credit card debt and debt consolidation. With a Home Owner Loan you can borrow from £5,000 to £75,000.

Payday Loan

Payday Loans also known as Cash Loans are arranged for people in employment who find themselves in a situation where they are short of immediate funds.

A Payday Loan can assist you in this situation with short term loans of between £80 and £400.

Loans are repayable on your next payday, although it is possible to renew your loan until subsequent paydays. To apply for a loan you must be in employment and have a bank account with a cheque book. A poor credit rating or debt history is initially not a problem.

Personal Loan

There are two categories of personal loans: secured personal loans and unsecured personal loans – See individual titles below. Homeowners can apply for a Secured personal loan (using their property as security), whereas tenants only have the option of an unsecured personal loan.

Remortgage Loan

A remortgage is changing your mortgage without moving your home. Remortgaging is the process of switching your mortgage to another lender that is offering a better deal than your current lender thereby saving money. A remortgage can also be used to raise additional finances by releasing equity in your property. You can borrow from £25,000 up to £500,000. Rates are variable, depending on status.

Secured Loan

A secured loan is simply a loan that uses your home as security against the loan. Secured loans are suitable for when you are trying to raise a large amount; are having difficulty getting an unsecured loan; or, have a poor credit history. Lenders can be more flexible when it comes to secured loans, making a secured loan possible when you may have been turned down for an unsecured loan. Secured loans are also worth considering if you need a new car, or need to make home improvements, or take that luxury holiday of a lifetime. You can borrow any amount from £5,000 to £75,000 and repay it over any period from 5 to 25 years. You simply select a monthly payment that fits in your current circumstances.

Secured Personal Loan

A Secured Personal Loan is simply a loan that is secured against property. Secured personal loans are suitable for when you are trying to raise a large amount; are having difficulty getting an unsecured personal loan; or, have a poor credit history. Lenders can be more flexible when it comes to Secured personal loans, making a Secured personal loan possible when you may have been turned down for an unsecured personal loan. Secured personal loans are also worth considering if you need a new car, or need to make home improvements, or take that luxury holiday of a lifetime. You can borrow any amount from £5,000 to £75,000 and repay it over any period from 5 to 25 years.

Student Loan

A student loan is way of borrowing money to help with the cost of your higher education. Applications are made through your Local Education Authority. A student loan is a way of receiving money to help with your living costs when you’re in higher education. You start paying back the loan once you have finished studying, provided your income has reached a certain level.

Tenant Loan

A tenant loan is an unsecured loan granted to those that do not own their own property. A tenant loan is always unsecured because in most cases, if you are renting your accommodation, you do not have an asset against which you can secure your loan. Tenants sometimes find that some loan companies will only lend money to homeowners. If you are a tenant you need to look for a company, bank or building society willing to give you an unsecured loan.

Unsecured Loan

An unsecured loan is a personal loan where the lender has no claim on a homeowner’s property should they fail to repay. Instead, the lender is relying solely on the ability of a borrower to meet their loan borrowing repayments. The amount you are able to borrow can start from as little as £500 and go up to £25,000. Because you not securing the money you are borrowing, lenders tend to limit the value of unsecured loans to £25,000.

The repayment period will range from anywhere between six months and ten years. Unsecured loans are offered by traditional financial institutions like building societies and banks but also recently by the larger supermarkets chains. An unsecured loan can be used for almost anything – a luxury holiday, a new car, a wedding, or home improvements. It is good for people who are not homeowners and cannot obtain a secured loan for example; a tenant living in rented accommodation.

Unsecured Personal Loan

An Unsecured personal loan is a personal loan where the lender has no claim on a homeowner’s property should they fail to repay. Instead, the lender is relying solely on the ability of a borrower to meet their loan borrowing repayments.

The amount you are able to borrow can start from as little as £500 and go up to £25,000. The repayment period will range from anywhere between six months and ten years. An Unsecured personal loan can be used for almost anything – a luxury holiday, a new car, a wedding, or home improvements. It is good for people who are not homeowners and cannot obtain a secured loan for example; a tenant living in rented accommodation.

Unsecured Personal Loans – A Practical Guide to Finding Lenders

1. Practical Guide – Consider Your Situation

Nowadays unsecured personal loans have become more and more popular. A number of phenomenon have had a hand in making this so. For one thing, unemployment has been rising, prices have been rising, the whole world is in a bit of economic turmoil. Consequently, many folks have had to make some hard financial decisions that has left their credit rating somewhat battered. Where do you stand financially?

2. Practical Guide – Consider Your Way Out

If you have less than perfect credit but are need of an unsecured personal loan, you need to make a budget. You have to figure exactly how much cash you need and you need to know how much you can afford to pay back on a monthly basis. At that point it is time to approach a lender. If you have a poor credit rating, do not even think about approaching a bank or other traditional brick and mortar financial institution. You need some alternatives.

3. Practical Guide – Lending Alternatives

You may recoil at this thought, but if you need cash urgently, you should consider asking family or close friends. You do not need to provide them with a lending contract, no real conditions are set. But do come to some repayment agreement, write it down so all feel better. You can do the payback as your financial health improves.

Some folks do not want to borrow from family members for a number of reasons. Dignity. Exposing a personal situation. Or other reasons associated with some sort of guilt. Consider colleagues. Of course, this requires a bit more care. Do not accept the money until a contract is drafted. Meet the terms religiously.

4. Practical Guide – Lending Companies

Many folks are facing financial difficulties and many folks have take bad hits on their credit ratings. The usual financial institutions will not deal with bad credit loans. Private lenders have seen this market and today there are a plethora of companies willing to lend to people with less than perfect credit. Even though requirements are less stringent than with the banks, employment is an important consideration.

5. Practical Guide – Go Online

Go online and punch your browser with key phrase: personal loan. You will be rewarded with a vast array of companies. Competition is so fierce, you may be able to pick and choose among the lenders. Certainly do not go for the first bid you get. Be aware that interest rates will be high because you are considered a high-risk borrower and no collateral is presented to secure the loan either.

Pick out the lenders who are offering interest rates and repayment terms you can live with. Once you have a list, check out their credentials. You might want to check the customer service history of each by checking their listings and ratings with the Better Business Bureau (BBB). If the lender is not listed there, find another. Some companies are actually loan brokers. You submit an application and the company will go out and find the best loan for your situation.

6. Practical Guide – Keep Obligations

Whatever you do and from whomever you get it, meet your small personal loan repayment agreements. If you already have a smudge on your credit record, you can improve your scores greatly by meeting these small loan obligations. And do not make a friend, a family member or a colleague an enemy buy not doing what you said you would – pay them back.

Being bruised by the global economic turmoil should be approached with a positive attitude. Things will improve. Meanwhile, in a practical manner take advantage of lenders offering unsecured personal loans to give you a lift through cash-flow problems.

How $10,000 Personal Loans for People With Bad Credit Can Exist

It may seem ludicrous that lending institutions are willing to approve $10,000 personal loans for people with bad credit when the risks involved are so high. After all, does a low credit score not indicate a lack of trustworthiness on the part of the borrower? Does it not mean that the loan is almost certain to be defaulted upon?

Well, the short answer to both of those questions is: No. There is a general misconception that a low credit rating means the applicant cannot be trusted, and so lenders who provide large loan approval are asking for trouble. The truth is that the economic crisis has seen many honest people develop poor credit ratings.

This has forced a change in thinking amongst lenders, with the reliance on credit scores is no longer particularly strong. These scores are only used as an indication of what the best interest rate to charge is. Only then can it be calculated if the $10,000 personal loan, for example, is affordable.

But how are such large loans affordable for these applicants, and how can lenders avoid making huge losses?

How These Loans Are Affordable

Calculating whether or not a loan is affordable comes down to two factors: the income and the interest rate. When it comes to $10,000 personal loans for people with bad credit it might seem that the application is doomed, but in fact this is not always the case.

The interest rate is influenced by the credit score of the applicant. The simple rule is that the lower the score, the higher the interest rate. This can translate to a difference of a few hundred dollars in monthly repayments. A borrower with an excellent score of 700 may pay $500, while a borrower with a low score of 450 faces repayments of $750.

Large loan approval might seem out of reach for the latter, but what makes these repayments affordable is not the income that is earned, but the amount of income that is free to cover the repayments. To this end, the debt-to-income ratio on a $10,000 personal loan is essential.

The Debt-To-Income Ratio

This ratio is used as a guide by lenders to ensure borrowers are not allowed to over-extend themselves. While $10,000 personal loans for people with bad credit can be a lifesaver in these difficult times, repaying the loan can become difficult if some unexpected bills come through the door.

What the ratio does is protect the borrower by ensuring a percentage of their income remains available for such eventualities. So, medical bills after a sudden illness can be paid, for example. Only when this is protected can a large loan approval be deemed possible.

The debt-to-income ratio is set at 40:60, which means that no more than 40% of the available income can be used to repay the $10,000 personal loan. So, an applicant earning $5,000 per month may not get the green light, while an applicant on $3,000 might be approved.

Realistic Loan Applications

Every time a lender approves a loan, they are putting themselves at risk. It is the nature of the game. So, it is fair to believe a $10,000 personal loan for people with bad credit is asking for trouble.

But with debt-to-income ratio and interest calculation taken into account, they have protected their interests quite well. The only remaining aspect is to entertain only realistic loan applications. Large loan approval is fine so long as the large sum is not a crazy amount.

For example, while a $10,000 personal loan may be approved for an applicant with a poor credit history, the chances of approving a $50,000 loan are extremely low – unless there is collateral provided, of course.