A secured loan needs careful consideration

If you are considering taking out a secured loan, then it needs to be given some careful consideration. The loan can be taken out for almost anything, and the repayments can be spread over many years. However, it is essential to remember that during this time, your home is at risk as it is secured against the money you are borrowing.

The loan will be given based on the amount of spare equity in your home. How much equity is spare is determined by subtracting the outstanding mortgage from the total value of your home. The amount that is left is the amount that lenders will allow you to borrow on your home, but occasionally for higher rates of interest, some will lend you up to 125%.

You have to make sure that the reason for taking out the loan outweighs the fact that you are at risk of losing your home. If you cannot keep up with the repayments, then repossession is a possibility. One of the reasons why many take out a secured loan is to consolidate existing loans; this means only having one low monthly repayment. While this can be beneficial, you do have to make sure that it is the right way to go. For example, if you would only have to repay existing debts for a couple more years, then taking out a consolidation loan for five years would end up costing you more.

When it comes to getting the best rates of interest for a secured loan, then you should shop around and get several quotes. The interest rates can vary considerably, and even if it is just a fraction, it can add a lot onto the loan when taking it out over many years. You do have much more to compare than just the quotes. You also need to read the small print and find out if there are any additional costs attached to the loan. Prices could include an early repayment fee which means if you are lucky enough to be able to repay the loan earlier than anticipated, you could have to pay out a lump sum. While this is just one of the clauses there can be others so the critical facts of each loan you are considering must be checked.

By going with a specialist website when it comes to taking out a secured loan, you can search the whole of the marketplace. By searching with the best UK lenders, you can be sure you are getting the cheapest rates of interest along with the best deal possible. You should never take out the first loan that is offered, and the rates of interest are usually dearer if you choose to go with the high street lender for the loan. Always consider taking out payment protection for your secured loan. Payment protection can help if you should come out of work due to certain factors and as the loan is secured against your home, this can be a safety net.

Personal loans in the UK – What you should never do

Little white lies are harmless, right? Not when they are listed on your loan application. Lies on your loan application are not harmless and can be detrimental to your chances of obtaining credit. Different people have different reasons for lying on their loan applications. Some people want to hide a bad credit history, while others do not want to reveal personal information. Still, regardless of the reasons, being a loan liar is not a good practice. It can hurt you and undermine your chances of getting a loan. Unfortunately, loan lying is relatively common in Britain.

Who are the loan liars?

Loan liars come from all walks of life. Men between the ages of 26 and 40 make up two-thirds of those who lie on their loan applications for secured loans, insurance, and credit cards. Of these men, approximately 64 percent of them lie to hide a poor credit history. By contrast, 77 percent of women lie on their loan applications to hide a poor credit history. Of this number, 17 percent use an alias. Of all the loan liars, 10 percent admit to using false documents to support their false claims on loan applications. Also, 9 percent of men and 7 percent of women lie about their status of employment or salary.

Why should you not be a loan liar

Of course, the number one reason to NOT be a loan liar is that it is illegal. Some people don’t care one whit, however, about legalities. That is OK, though, because there are other equally compelling reasons. Consider why you want to get a loan in the first place: to get approved for credit or to get approved for a higher amount of credit. You could be digging yourself into a deeper hole. Suppose you do get that credit or higher limit, now what? How will you make your payments, and what do you have at stake that you could lose? If you lied to obtain a mortgage, you could lose your home. Think about it and consider the ramifications before telling that tale.

What impact do loan liars have on overall debt?

Loan liars play a large part in incurring overall debt, meaning loans that are not repaid. Massive overall debt contributes to higher interest rates for everyone. If you are a part of the problem by contributing to the overall debt, you are part of the reason that interest rates increase. Do you want to be a part of the problem or a part of the solution? It is up to you.

How do you get caught?

More and more companies are catching loan liars before they can do any real damage. How do they do it? Lenders are working together and sharing information, and this is making it much easier to catch loan liars. They are using loan data sharing services that capture the loan liars before they are accepted.

The bottom line, it is just not a good idea to lie on loan. If you do get away with it, you will likely not be able to afford it. If you don’t get away with it, you could face legal problems. It is a no-win situation. Play it safe and tell the truth.