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On the lookout for a loan?
A loan can be a simple, straightforward solution to a range of problems. You could be looking to a buy a new car, tackle some big project in your house or garden or get all your debts into one easily managed monthly payment.
You wouldn’t buy a car or make major changes to your home without exploring all your options first and loans are no different. It’s important to compare loans to find the best one to suit your needs. At ePepi.com, there are wide array of different kinds of loans to choose from. But if you’re not too sure what you’re looking for, here’s a little guide that can help
Unsecured Personal Loans
If you take out an unsecured loan, it means you’re lender can’t take something off you if you can’t pay the loan back. There’s no need to provide them with any guarantee that, if you fail to make payments, they are entitled to belongings of yours which are the same value as the balance on the loan.
Therefore, with an unsecured personal loan, you can borrow money without worry about whether you could lose you car or even your house.
Most providers will offer unsecured loans for as much as £25,000 and you can usually agree with them how many years you want to pay it back over. The interest rate is normally set at the start of the repayment term and won’t change, which is handy because that way you’ll know exactly how much you need to pay back each month and can budget accordingly.
Of course, you’ll need to have a decent credit rating to get an unsecured loan. Once you apply for the loan, the provider will look at your credit history and decide whether or not to grant you the loan and also at what rate – or representative APR – you’ll pay it back.
You may find that using a credit card to borrow a relatively small amount may work out more convenient.
‘Secured’ might sound safe, but the only person who’ll feel that peace of mind will be the loan provider. With a secured loan, you can risk losing your house if you cannot make the repayments. You will have to use your own property as collateral, which means the lender can take their money from the sale of your house if you can’t keep up with the repayments.
This means the lender will always get something back when they initially lend you money, but it also involves you taking a considerable risk.
You can borrow a lot more money with a secured loan, as much as £100,000 and will have much more time to pay it off than you would with an unsecured loan.
Secured loans will only be given to people who own their own home, whether that’s outright or with a mortgage.
The other difference between secured and unsecured loans is that the interest rate for secured loans can change over the repayment period. So the amount you pay each month could go up, or down, over the years.
What to keep in mind when thinking about a loan?
Taking out a loan may seem like a handy solution for many things, but you firstly must decide whether you can afford the monthly repayments. The best thing to do is to calculate all your other monthly expenses and see if you what you earn can cover the cost of paying back the loan.
Work out how much the loan will cost over different periods of time. You’ll pay less each month if you opt for a longer repayment period, but there will be more interest added to your original loan amount, so you would end up paying more back.
Make sure you do your research and compare different deals on the best loans for you. Some providers make have offers that are only available online while many banks may have special rates for their existing customers. Always check the terms and conditions – ie the small print – before you apply for any loan.
Some lenders may charge you a fee if you pay off the balance of the loan early while others may allow you a payment holiday. Make sure you look at the extra features which come with each loan.
Work out how you will pay for your loan and make sure the date you pay back the loan each month is convenient for you. Arrange for the loan repayment to come on or shortly after payday each month.
Whether you are applying for a secured or unsecured loan, you may need to dig out some paperwork. For all loans, you’ll be required to show proof of earnings and your address. You may have to have your property valued if you’re looking to take out a secured loan and you’ll also have to show evidence of how much is left on your mortgage or any other secured loans you may have.
To find the best loans, compare deals on ePepi.com today or chat to our expert team on [loannum].