Loans

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Loans

Loan Calculators

There are two things to watch out for in particular. First, find out what you can afford to borrow given your monthly in/out goings. Then find out what your repayments on any loan will be. Be sure also to account for payment protection premiums if required.

We offer loan calculators, not least of all because it's too complicated to work out loan rates by hand. It's also your right to know how much you're going to have to repay. Incidentally, this is a separate issue from the equally pervasive comparison tables which show how much better one product is than another.

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Loan Companies

Loan companies fall into three main categories. There are traditional lenders such as banks and building societies. Then there are direct lenders, ranging from supermarkets to insurance brokers and many of them offer innovative products that push the lending boundary. Finally, if you're in financial difficulties, consider specialist bad credit lenders, debt consolidation and debt negotiation companies. All of whom will reduce your monthly payments but not necessarily reduce your overall debt.

There was a time when you had to pay the bank a visit to get a loan. Now, you can get a loan in a supermarket, and a credit card from your football club. Seriously though, loan companies split out pretty much into three ways.

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Low Cost Loan

Compared to lending practices a generation ago, every loan is a low cost loan. Lending rates have been stable and low since the early 1990's, and despite some recessive economics the financial markets are still lending at very low rates. That said, enjoy the value and keep checking the APR for the best deal - there's still up to 10% between the best and worst performers at any given loan amount.

If you asked most people what makes a low cost loan, almost all will say a low interest rate. If you didn't know, the rate is quoted as an APR (Annual Percentage Rate), which is a universal assessment of a loan's appreciation value. They account also for any administrative costs and accounting for the entire period of the loan. The main exception is bridging loans, which are usually quoted monthly.

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Low Interest Loan

For a low interest rate, look at the APR and be sure to add on any payment protection insurance for a true assessment of the cost.

In an ideal world, loans would be clear cut - the one with the lowest quoted rate would be the one to go for. But we don't live in an ideal world as the lowest quoted rate might be introductory rate. What matters is the APR (Annual Percentage Rate), which is a rate including all charges you might have to pay across the entire term of the loan. It's the best judge of whether a loan can really be called a low interest loan.

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Personal Loan

A personal loan isn't the only option when you're short of cash - consider credit cards or overdraft facilities. But if you like the organised and structured repayments or if you're buying a large purchase, then a personal loan could be right for you.

Personal loans have a rather unenviable reputation. In actual fact, these days loans are only one of several options if you find yourself short of cash, and if it proves to be the right one, there are plenty of places you can get your loan. So if you just find yourself a bit short at the end of each month, we can help you get a cheap loan.

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Personal Secured Loan

Getting a personal secured loan over an unsecured loan allows you to borrow more by placing your property as collateral to the loan. For business or home improvement purposes this is a clear advantage. However, in debt consolidation purposes it should only be used as a last resort as all your existing debts will then be settled by your own home if you fail to meet repayments.

A personal secured loan increases your borrowing options dramatically against an unsecured loan. Plenty of lenders who would refuse to lend you an unsecured loan on the grounds of lending responsibly will suddenly change their tune when the loan is secured against your home. This is why the vast majority of debt consolidation loans are of the personal secured loan variety.

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Secured Loan

A secured loan gives you a better interest rate, larger borrowing facility and longer repayment periods than an unsecured loan. That's because if you don't keep up repayments, you can lose your home.

A secured loan means that although you are borrowing money, you have enough specific property of your own, identified in your contract with the bank, for the bank to legitimately confiscate to cover the cost of the loan if you default on repayments. Usually that means your house, but loans can have anything as collateral. That of course sounds horrible, so "secured loan" is the preferred term! It's the opposit to an unsecured loan, and they cost more in interest. This is because the bank is taking a higher risk lending to you without any guarantee that you will put any of your property up as collateral against the loan.

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Secured Personal Loan

A secured personal loan is secured against your home, so it's only available to home owners. The advantage over unsecured lending is that by putting up collateral you benefit from a low interest rate. Be aware though that a secured personal loan is usually at a variable rate.

A secured personal loan is also called a homeowner loan - because your property is put up as security for the loan. So if you don't have a mortgage or own your property outright then an unsecured loan is the only way forward.

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Small Business Loan

Unlike with personal lending, the only place you'll easily get a small business loan is with a bank - most are equipped with business managers for this purpose. Most such loans are secured against your house and if pure cashflow is the issue, you should also investigate factoring.

When you're running a small business, you don't have many options. Big businesses that need to borrow in the millions can go to venture capitalists, angel investors or pursue an AIM listing. Small businesses can't. To make matters even worse, getting a small business loan isn't easy, because all the new lenders don't lend to businesses.

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UK Car Loan

Getting a UK car loan is no longer a straight forward process. As well as the dealer, you can now go to your bank, a supermarket, a specialist car credit dealer, or sign a part-purchase scheme contract. Which deal is right for you will depend on how much you value several criteria.

The UK car loan marketplace is increasing in size all the time, not only because of many new players but also new products which give different groups of people more options on buying a car. This includes the interest rate, your credit worthiness, fixed price motoring, deferral of costs, and ultimately whether you want to own the car outright at the end of the day. This is because the value, price and longevity of cars is not only quite specific, but well known throughout the finance industry.

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UK Loan

The UK loan market is much broader than it was a decade ago, because of shiny new banking products from internet lenders and supermarkets. For many consumers these put the banks in the shade, but for specific lending needs high street banks are still a good bet.

The UK loan market has changed dramatically in the past 10 years. This is largly due to two major areas that appear to shake up the cosy UK loan arena dominated by the high street banks. They are the internet banks and supermarkets.

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UK Personal Loan

The internet isn't the only thing to cause a stir in the UK personal loan market. Thanks to credit scoring and a benevolent economic environment, you now have many places to look for a loan. Beside your bank, there is a huge number of direct lenders - provided you have a good credit rating.

As with investing in the stockmarket, the arrival of the internet has given the UK personal loan market something of a shakeup. By cutting the costs of lenders, rates to you the customer can be cut too.

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UK Secured Loan

With your property as a guarantee, you're more likely to be accepted for a loan, and pay a lower rate of interest but with higher risk. The UK secured loan market is largely still restricted to mortgage lenders and a new breed of consolidation experts, but you can obtain your top-up loan from a different provider than your mortgage.

Getting money from a lender is always easier if you already have property to set up as a guarantee against the loan. You will inevitably pay a lower interest rate, because your property reduces the risk to the lender of never getting their money back. In the UK, secured loan lending is also affected by some other factors. Overseas, a higher proportion of home loans are at fixed rate, an intrinsically higher risk factor to the lender. In the UK, we have variable rate lending, which exposes you to the chance that interest rates will rise, but means the lender has little or no risk at all resulting in a very keen interest rate for you. Add to the mix a favourable economic climate and the fact that we are a small island without an endless supply of unregulated building space, and you can see why property prices have been rising steadily and the UK secured loan market has been stable and predictable.

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Unsecured Loan

An unsecured loan is the opposite of a secured loan. Despite the fact that most loans are unsecured, they cost more in interest than secured loans, and there's a good reason for it.

An unsecured loan comes at a higher premium than secured loans because the bank is taking a higher risk by lending to you. Also you might be less inclined to be responsible with the money when your house isn't riding on it. But for lower borrowing amounts, it's a negligible difference and simpler to arrange too.

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Unsecured Personal Loan

An unsecured personal loan is basically a plain loan - it's not secured against your home

An unsecured personal loan is pretty much the normal way to borrow a large sum of money for a range of expensive things. Unsecured personal loans usually carry an interest rate of between 7% and 12% APR. Within the consumer credit act, unsecured loans can reach a maximum of £25,000 but generally most lenders will only offer you between £500 and £15,000. Typical purchases include home improvements, holidays, cars and wedings.

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Second Mortgage Loan

A second mortgage can raise extra cash, but it's not the only option

If you need extra money for home improvements, to send the kids to school or start your own business, a second mortgage loan can help. However, expect to pay a higher interest rate than on your existing mortgage and make sure you can afford the repayments. Consider remortgaging instead.

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Loan Lenders

Facing financial difficulty? Looking to consolidate your debts? In need of a cheap loan? Don't worry, we are here help. View our extensive list of loan lenders.

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