What You Should Understand About Secured Loans Before Getting One

Sometimes it is necessary to get a secured loan when you want to buy a new house, car or something else, but there are numerous things that you should understand about this borrowing option. The last thing you should do is to get one of these loans without understanding their ins and outs. The better of an understanding you have about secured loans, the easier it will be for you to get the money you need without any problems or complications. This information will help you out when you plan on getting a secured loan for any reason.

When is it Appropriate to Apply for a Secured Loan?

Secured loans are usually taken out for bigger purchases, such as with cars and houses. If you get a mortgage, you are getting a secured loan. The loan is backed by collateral, which in the case of a mortgage would be the house itself. If you are unable to pay back the lender on time, they take permanent possession of the collateral. When you need to borrow a significant amount of money, you will most likely get this type of loan.

Getting a Secured Loan with Bad Credit

Fortunately for those with low scores, the credit of those who apply for secured loans doesn’t really matter all that much. The lender has the collateral that they can use to get the money you owe them if you stop making payments for any reason. This means that they aren’t very concerned with what your credit is like. A lot of people in the UK who fail to get unsecured loans from banks turn to secured loans, though there is some risk involved.

Think Twice Before You Apply

Because secured loans can be so risky, you will want to think twice before applying for one. You will need to put some kind of property up as collateral, so you are risking losing it if you cannot pay back the loan by the agreed upon date. Some lenders are willing to grant extensions to those who are having trouble paying back their loans, but you shouldn’t count on this. It is also a good idea to look at your finances a couple of times before applying so you are confident that you can pay back your loan without any issues. This will ultimately save you a lot of hassle later on.

Where to go for a Secured Loan

There are tons of lenders who give out secured loans, including banks, credit unions, and private lenders. A lot of these lenders are based online with websites that you can visit to fill out and submit a loan application. Private lenders have become increasingly popular in the UK because there are so many of them to choose from, and many offer great deals. If you’d rather not go through a bank for your loan, this is an excellent alternative to look into.

Interest Rates

The low interest rates that are associated with secured loans is definitely a plus, and it will ultimately help you with paying back the full sum of the loan on time. Not everyone gets the same interest rate on these loans though, as it depends on a number of factors.
Your lender is the one who sets your rate, so you will therefore want to find the right one. Each lender looks at many different things before deciding which rate to give borrowers, including their employment history. If you have a fairly solid employment history, you could get a lower rate. Take the time to compare loan deals on the web before you settle on one in particular.

Borrowing Amounts

It isn’t uncommon for private lenders to give out secured loans of up to £25,000 and sometimes even more. You will only be allowed to borrow as much as you can realistically afford to pay back. The lenders that you apply to for a loan will look at the documents you provided for proof of income to determine what you can afford. If the lender decides that you don’t make enough to pay back your loan in time, they are well within their rights to reject your application. Some lenders are willing to give out bigger loans than others, so you will want to keep this in mind as well. When you spend time researching your lender options, you should be able to find one that can accommodate your borrowing requirements.

Applying for a Secured Loan

One of the great things about quick loans is that they can be acquired very easily and without even having to leave your home. When you find a lender that you are confident can provide you with a good deal on a secured loan, you will need to fill out an application on their official site. This application will ask you for a number of personal details that are required before you can submit it for approval.

Failure to Repay the Loan

In the event that you aren’t able to pay back your secured loan, whatever property that is being used as collateral will effectively become the property of the lender. This is the main reason why taking out a secured loan can be so risky. You might be able to get an extension to pay back your loan if you are late, but it’s not always a certainty. Some lenders are more flexible than others with accepting late payment from borrowers. Your credit will be negatively impacted, whether you are simply late paying back the loan or don’t pay it at all.

Is Taking out a Secured Loan a good idea?

Some people are in a better position than others to get a secured loan, and it largely depends on the current state of your finances. You should think very carefully before getting this type of loan, because you will be taking a risk. Sometimes getting a secured loan is unavoidable, but you should still be very careful.

Why Guarantor Loans Are So Popular and How to Get One

There are lots of different options that are available to those who need to borrow money, but guarantor loans offer some unique benefits that the others do not. If you need to get a loan but are still weighing your options, it is important that you at least consider this option and learn about it before making a choice. The type of loan you decide to get is very important for numerous reasons, and guarantor loans are certainly one of the best borrowing solutions available in the UK right now.

They Are Perfect for Those with Bad Credit

If you don’t have a great credit score, a guarantor loan could be an option that will work well for you. These loans are shockingly easy to get for people with bad credit, provided you can find the right person to act as your guarantor. The lender doesn’t really have very high standards for the actual borrower, so you most likely won’t get rejected because of your score alone. This is one of the few solid borrowing options for people with bad credit, and it’s important that you consider this.

No Annoying Borrowing Limitations

You can borrow fairly large amounts with guarantor loans, but it is contingent on your income. This means that you will need to make enough money from your job to get approved for the amount you want. If the lender thinks that you are unlikely to get the money together to pay back your loan on time, your application will be rejected. A lot of loans have major limits on borrowing, but that isn’t the case here. As long as you make enough money, the sky is pretty much the limit.

It’s a Quick Process

There are very few other types of loans available in the UK that allows people to borrow money as quickly as guarantor loans. This is precisely why so many people who need cash right away apply for these loans in the first place. For a lot of people, guarantor loans are the go-to borrowing option.

In fact, you could get cash from one of these loans within a matter of just hours. From filling out the initial application to getting your money, you shouldn’t need to wait more than 24 hours if you are approved. This is assuming that you apply on a weekday, though some people can get these loans on a weekend depending on the lender.

The Lenders

A lot of private lenders offer guarantor loans, and most of them are perfectly reputable. You should invest a decent amount of time in trying to find the right lender for your loan, but there are a lot of great options out there. When you spend enough time doing research into these lenders, you will be able to find one that can give you a good deal. Lots of people in the UK are taking out loans with private lenders for a number of reasons, including how easy it is to get approved when compared to getting a loan from a bank.

Fewer Headaches

Anyone who has ever gotten a loan through a bank knows just how frustrating it can be due to all of the hoops that you have to jump through to get your money. While there are some things you will need to do with a guarantor loan, the entire process isn’t nearly as frustrating or convoluted. Most people who get these loans say that getting their money was relatively simple and painless.

Improve Your Credit Effectively

Most people’s credit scores could use some improving, and getting a guarantor loan can do that rather effectively. If you want to raise your score as soon as possible, you will find that taking out one of these loans can definitely do the trick. You will need to pay your loan back on time though, because otherwise your credit will take a hit. There is almost nothing worse than not paying back a loan for your credit, so you will need to take it very seriously.

Guarantor vs. Co-Signer

Some people confuse guarantors with co-signers, and it is understandable considering how similar the two roles are. A guarantor is someone who agrees to take on the payments of the borrower if they are unable to pay back the loan. A co-signer pretty much serves the same function, but they are not scrutinized as much as guarantors by the lender. In other words, it is more difficult to find someone to be your guarantor than a regular co-signer. The standards are fairly high, but it’s still very possible to find someone in your life who can be a guarantor on your loan.

Applying for a Guarantor Loan

If you aren’t convinced of how great guarantor loans thus far, you’ll also want to take into consideration that applying for them is incredibly easy. You can go online and apply for one of these loans at any time from anywhere, as long as you have an internet-capable device and a connection.

Applying is pretty simple and straightforward, but you should be prepared to provide some detailed personal information. The lender will ask for documentation to prove income and employment, especially for the guarantor. This documentation is a crucial aspect of the application process, and it’s essentially what your approval hinges on.

Is Getting a Guarantor Loan the Right Decision?

You should consider many different things before getting a guarantor loan, such as whether or not you really need the money. Sometimes it’s a better idea to not get the loan if you can help it, because you are always taking a risk. You will also need to find someone you can trust to act as your guarantor, because otherwise you are taking an even bigger risk with your credit. These loans help out many people in the UK each year, but they are not for everyone. Make sure to look closely at your finances before applying so you are sure you can afford the loan.