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  Category: Articles » Finance » Loans » Article
 

The UK Consumer's Guide to Shopping for Secured Loans Online




By Mary Simone

The Very Basics
If we start at the absolute beginning, a secured loan is any loan that's purpose is used as collateral, for example, a house. If the borrower does not make the previously arranged payments, the lending institution (perhaps a bank) can simply take the collateral as the repayment for the loan. For this reason, secured loan rates are usually significantly lower than that of loans that are unsecured.

The Numbers
The average secured loan will vary, ranging between £3,000 and £50,000, but have been seen as high as £250,000 depending on the property in question. The payment amount will depend on the amount borrowed and the APR (also known as the Annual Percentage Rate, which is the amount the lender charges the borrower for granting the loan), and the loan's term or length. Payments are generally paid monthly for between 3 and 25 years. APR's are usually lower when the loan is taken out for a shorter period of time.

The Credit History
The history of your payments, including those on time, late, in-full and partial are all key to the rates you'll be charged for a secured loan. If your credit report is well maintained and free from late payments and such, the interest rate a lender will charge you will be significantly less than someone who makes the same amount of annual income, buying a similar property, and has a credit report full of blemishes. Strong credit histories and scores qualify for the absolute best loan programs, such as 125% loan-to-value (borrowing more money than the home is worth).

The Future Credit History
A generalized rule of thumb is to make sure that you can afford the loan payments of your new secured loan to protect both your property and your credit history. If you're late on your payments by even a few days, late fees may be added to your payment and a black mark may be added to your credit history.

If you're interested in a secured loan to combine all of your smaller credit card bills onto one payment, be sure to cut up the cards after you've paid the balance, or at least hide them from yourself for a very rainy day. Many times, an open line of credit is an open invitation for a shopping spree, so be sure to have the self discipline necessary to make it work, otherwise you could end up in a deeper hole.

The Final Note
Since the Internet has brought the world to your fingertips, why not utilize this resource to help shop for the best rates on secured loans? There are a few quality websites out there who assist in the appropriate comparison-shopping, free of charge for the borrowers.
 
 
About the Author
Mary Simone recommends that you visit http://www.onlyloans.co.uk for more information on secured loans.

Article Source: http://www.simplysearch4it.com/article/50412.html
 
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  Some other articles by Mary Simone
The UK Consumer's Guide to Shopping for Car Insurance Online
To be truly successful at shopping for car insurance online, the consumer must find the best deal available on the Internet, ...

The UK Consumer's Guide to Shopping for Mortgages Online
Starting with the absolute basics, a mortgage is a loan for a house or other piece of property, financed by a bank or other financial institution. If loan is taken out against a property that already has ...

Guide to Getting UK Car Insurance
Remember back when you had to travel from insurer to insurer or spend hours on the telephone ringing up possible insurers to find the best deal on car insurance? Who actually has the extra time anymore ...

The Secured Loan- Uncovered and Explained
Have you ever tried to have a business conversation with a loan professional that spoke to you in such a way that the fancy ...

Everything You Always Wanted to Know About Secured Loans
Since the very first bank in the world opened its doors in 14th century Italy, lenders have been asking for some sort of collateral in order to lend a borrower a sum ...

Shopping for Car Insurance in the UK
Just like with shopping for just about everything else in the UK, finding the best deals on car insurance is as quick and easy as the ...

  
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