When Loans Can Save Your Day

With a rock solid credit history, you can successfully apply for personal loans and expect a swift processing of the same for meeting temporary financial glitch in life. Personal loans are all-purpose loans that can be availed as secured or unsecured loans. These can be used for multiple reasons and the purpose need not be disclosed ever to the lender.

The interest rate of loan depends on the tenure and credit score of the borrower. These can be drawn for a few months to several years as per your requirement.

5 situations when you can use personal loans as a smart financial move:

  1. When you have immediate cash needs: It is practical to use short-term personal loans to bridge the shortage of funds in your life. You can use the funds to support any of the sudden cash emergencies like medical expenses, home repair or funding a foreign trip. The purpose of loan doesn’t affect its interest rate, however your income and duration of loan does. All you need here in a planning stage is to have a strong back up plan for repaying the loan. The repayment will improve your credit score and add to your future worth at the same time.
  2. To avoid bad credit situation: In case you have lost a job or face a sudden spurt of personal expenses such as a wedding or some other expense in your life, you can take recourse on personal loans. Bad credit is a situation you should always avoid. If you have shortage of funds, rather than missing a loan repayment you can borrow some funds. The idea is to not let the score fall for temporary financial challenges.
  3. Consolidate multiple payments: When you have multiple payments to be made every month, it is better to simplify the process by consolidating the loan into one personal loan. By consolidating loans, you just have to pay a single repayment and that will pay for other loans. Availing short-term loans for bad credit is a practical means to mend mounting debts and save a financial mess.
  4. Additional funding for students: Being a student it is not always easy to keep a track on your expenses. Sometimes you need funds for reasons that your education loan misses to pay for. Herein you can apply for short-term loans for students as these are readily available. The short-term loan can also be used as a right way for building a good history.
  5. Business funding: Every new start-up or a business entity needs positive inflows. You need to maintain adequate supply of funds for maintaining sound terms with your suppliers and business associates. The short-term personal loans can be used as business loans to keep the flexibility of operations in your business.

In all of the above cases, personal loans can be used to better manage your finances. However it is prudent that you carefully read terms and conditions of a loan agreement and do not sign a very expensive loan. In case you find yourself unable to make a mind on the loan terms, you should contact a loan broker for a financial advice. He would guide you on the ways to manage your funds and keep your credit score healthy.

Understanding Deal Before Committing in Personal Loan

The loan is secured by the lending company by way of ‘second charge’, which is a different regime compared to the main mortgage that holds the property on a ‘first charge’ basis. The latter is a legal arrangement in which the property securing the loan is registered with the Land Registry.

A homeowner loan obtained through this process can be used for anything the borrow wishes safe for illegal activities or purchases. However, second charge mortgages are usually restricted to funding home improvements or funding huge purchases such as car buying. Alternatively, second charge loans can be used to consolidate existing loans and help reduce the debt obligation of a struggling borrower.

With this arrangement, the borrower is expected to make regular monthly repayments throughout the life of the loan, which can run up to 25 years. The process of selling and administration of first charge secured loans is regulated by the Financial Conduct Authority (FCA) for a considerable length of time.

Today, second charge loans are now exclusively regulated by the FCA and are expected to conform to the same regulations, rules and procedures of ordinary mortgages. What this means is that borrowers will be expected to demonstrate that they can pay back both first charge ad second charge mortgages.

Who is Eligible for a Secured Second Charge Mortgage?

Do you have an existing secured loan(s) or mortgage loans that are currently running? Do you wish to borrow a huge amount of loan than what standard personal loans can provide? If your answers to the foregoing questions are the affirmative, then you are the right candidate for second charge mortgage loans. These loans can go up to £250,000 and are suitable for borrowers who have accumulated sufficient equity in their homes to guarantee the security needed for the loan.

What to Look for Before Taking Out a Second Charge Mortgage

There are numerous things that you need to know before taking a second charge mortgage loan. Here are some of the things to look out for:

By second charge, it means that any default can mean the lender taking you to court and instituting repossession procedures. When this happens, the first lender recoups his or her money back while the second lender gets thee remaining out of the sale of the repossessed home.

Second charge loans come with variable interest rates, meaning that borrowers need to exercise a lot of restraint, as the rates are likely to go up and down. If you have secured a loan that comes with variable rate, you are likely to suffer most if the rates go up, so it is important to assess your ability to pay before committing to this type of loan.

Debt is often perceived as the last option by most homeowners, but financial experts say it can prove to be the only way a borrower can get out of a financial problem in a short term. When you restructure your loan to increase the repayment period, you certainly lower the monthly repayments but increase the overall payment in the long term.

Compare thee Loans before Borrowing

After assessing your need for money (loan), you need to shop around for the best loans warehouse to understand the affordability and the conditions. You need to schedule an interview with various or selected loans agencies before you sign up. Remember that unsecured loans do not have interest rates similar to secured loan types. Unsecured loans have a maximum ceiling of up to £25,000 but this amount may vary from lender to lender and from borrower to borrower depending on the circumstances.

Make Your Decision

With a wide variety of loans available, it can be difficult to make a decision on which loan suits your needs. However, you need to evaluate your own situation based on income, need, outgoings and your credit scores. You may also need to consider if you have enough equity in your property and whether you need a long-term or short-term loan. Perhaps the most crucial question to ask is why you need the loan in the first place.

Things Should Consider Before Taking Loan

If you have some personal needs to cover, you can go for a personal loan. There is a defined term for which these loans are granted. You have to pay off the loan as soon as the term is over. If you want to take out a personal loan, make sure you consider 9 things that are given below.

1. Opt for the best deal

You can use this type of loan for a myriad of purposes. You can use it to make an investment or consolidate the debt on your credit card, for instance. You may also want to read up on other types of loans to meet your needs.

2. Work the best lender

Some good sources include online lenders, credit unions and banks. The terms and the rate of interest may be different based on the lender you opt for. Therefore, it’s better to shop around and look for one that can cover your needs.

3. Don’t ignore the fine print

Make sure you know the loan terms. Don’t forget to go over the fine print. Based on your budget, you should decide whether the repayment terms are fine with you. Keep in mind that you may have to pay late payment fees as well.

Since lenders get paid in the form of interest, you may have to pay some fee in case of late payments.

4. Your credit rating should be accurate

The interest rate associated with your personal loan may be different based on your credit score. For example, if you have a bad credit score, you may have to pay 20% more in terms of interest. Therefore, it’s a good idea to ensure that your credit rating is accurate.

5. Consider the origination fees

Although you will find some lenders offering lower rate of interest, keep in mind that they may charge a special fee that may increase the interest rate. Therefore, it’s better to use a lender with a high rate instead of one who may add an origination fee.

6. Consider your limits

This is important. Before you apply for a loan, don’t forget to get a better idea of your financial situation. In other words, you should only go for an amount that you can easily pay off.

7. Consider the automatic withdrawals

During your research, you may find that some lenders are ready to offer incentives if you allow them access to your bank account for automatic withdrawal of your loan payment each month.

8. Repayments

If you find it hard to make your payments, you may want to take a look at the other options that you may have. Can you make changes to the loan terms? Is the lender ready for arbitration?

9. Variable rate or fixed rate

Can you choose a fixed or variable interest rate on your loan? Usually, a variable-rate loan allows you to begin with a lower interest rate, but it will involve risk as well. With the rise of the interest rate, the variable rate will also go up. As a result, you will have to make higher monthly payments.

So, you may want to consider these 9 tips before you apply for a personal loan.

Benefit Personal Loans Online

Personal loans are the prime way to get some immediate money at hand. There are many lending institutions and financiers who will provide with immediate financial assistance to genuine and potential loan applicants. These lenders provide such gratifying terms that the borrower is obligated to avail a loan with them. That said, these loans are the most convenient methods to avail a quick loan especially during emergencies. Keeping in mind the urgent needs, most lenders provide personal loans online options too so that it is more convenient for the borrower.

Personal Loans Online Options:

Most of the finance lenders provide simple online tools on their websites for availing a personal loan. You may use these online options either to apply for a loan or for exploring the details for getting a much-needed loan. These online options on the lender’s website can be used to check and compare the interest rates, loan processing fees, and other charges which the lenders might charge you for availing a loan with them. A borrower can avail either an installment loan or an instant payday loans via online application process, although most of the times it is an instant payday loans for short-term purposes.

Here are a few benefits which a borrower can seek while getting an online loan –

1. It is convenient –

Imagine a sequence in which you are filing an online loan application while sitting on your cozy bedside and then, another scene, where you are running out in the hot sun and waiting outside the lender’s room to file a loan application. Which do you think is more convenient? Undoubtedly the online option!

2. Save A Few Pennies –

Most P2P submitted loan applications are levied with other additional fees which may increase the repayment amount or the EMIs, depending on the loan type you are availing. However, with an online application, you will not have these additional fees which will help you save your cost.

3. EMI and Other Calculators –

There will be options for checking and calculating the interest rates and the respective EMIs or the loan repayment amounts. The digital calculation tool will solve your doubts regarding the complex calculations for the EMI amount with the interest rates, etc.

4. Information Accessibility –

All the information required to know about a loan process and other related details will be displayed on the website by the creditors. There will be all the data and cue related to the APR, the eligibility criteria, the repayment options, processing fees and other additional fees if charged, documents needed, and other small detail regarding the loans will be provided on the online portal.

5. Least Possible Documentation –

Unlike the banks, personal loans do not need any elaborate verification and paperwork to be done. These lenders do not consider the credit scores and will provide loans for bad credit without any collateral. The only needed documents will be to prove your age, residency, income, employment, and checking account details.