Finance Types
Personal Loans
A personal loan is a loan for personal use and can be used for any purpose, it may be unsecured or secured on property and can be in single or joint names dependant on circumstance and size of loan.
Personal loans can be arranged be Banks, Finance Houses, Brokers and ever through your local Super Market. When looking for a personal loan it pays to shop around and talk to experts.
Banks and Super Markets in the main only offer there products where as a true
Independent Finance Broker will have a selection of products covering the market.
Secured Loans
A secured loan can normally give you more scope to borrow and the lender more flexibility to lend.
By offering security in your property you would normally expect to get a better rate of interest than with an unsecured loan.
Secured loan lenders can be more flexible with their terms of lending than unsecured lenders, for instance you my want to borrow a larger some of money, say over £25000 or you my not be able to prove all of your income and or have picked up a few credit problems, if so a secured loan could be for you.
A secured loan can also be great for consolidating all of your smaller unsecured debts like credit cards, catalogue debts or hire purchases and stretching the term over a longer period.
Secured loans can be repaid over periods of up to 30 years.
Unsecured Loans
An unsecured loans is as it says a loan that has no security and with this type of loan you can normally expect high rates of interest and less flexibility than with a secured loan.
You will also be restricted to the amount you can borrow.
Normal unsecured loans range from £500 to £15000 with some lender occasionally going up to £25000, but you will have to have an impeccable credit history and a great credit rating.
Commercial and Business Finance
If you are starting a business or running a business and need a cash injection you may want a business or commercial loan.
You can go to your bank or to a finance broker the choice down to you, but don’t get trapped and have all you’re finance through the bank.
Banks are great when the goings good but once they turn on you they can stifle a business.
A finance broker can be more flexible and can search a whole range of finance products and lenders.
So all we say is shop around for your finance don’t just think banks, it’s never a good thing to have all your eggs in one basket.
Search the market for what’s right for you and your business.
Student Loans
The financial help a new full-time student can get depends on the course, where they live while they are studying, and their individual circumstances.
Customers can find details on how to apply for financial support, maintain their account and repay any loan(s), by accessing their appropriate websites.
Types of help for new full-time higher education students include:
- Tuition Fees loans to cover the full cost of tuition fees
- Maintenance loans to cover the cost of living expenses
- Grants for living costs to cover the cost of living expenses
- Bursaries and scholarships from universities and colleges
- Students can also get extra help if they have children or adult dependants, or have a disability or specific learning difficulty.
For the majority of students, a loan will comprise of the tuition fee loan plus a maintenance loan, and this will be paid directly at the start of each academic term. Everyone on an eligible course qualifies for 75% of the maximum loan, regardless of income, and the rest is income-assessed. These loans accrue interest at the rate of inflation, which means that the amount repaid has the same value as the amount borrowed.
The repayment of loans is repaid through the tax system, and only begins after the student has left higher education and is earning over £15,000. This system of collection is known as Income-Contingent Repayment (ICR), because it tapers the repayment obligation according to the gross income of the account holder. It is distinct from the previous mortgage-style scheme in which the monthly repayments were fixed and account holders whose incomes exceeded the deferment threshold, were required to repay the entire installment each month.
What is an APR
Typical APR is the headline interest rate figure lenders quote when advertising a personal loan. It’s tricky because although a lender may quote an Annual Percentage Rate (APR), which is the amount the loan will end up costing you including interest and charges, you may end actually paying more or less than that rate.
This is because many lenders calculate the typical APR of a personal loan in conjunction with a system called risk based pricing. This means that they assess each individual's circumstances and credit history before deciding what interest rate to offer the individual. Although a lender has to offer the typical rate to 66% of people that successfully apply, it is possible that you won't get this rate.
Your credit report will include a detailed account of information related to your overall debt. It will show any delays that you have made with payments along with any notes that you may have added to explain why payments were late. For example, you may have run up a large debt on your mail order catalogue because you were the victim of identity theft or perhaps you were charged for items that you have previously returned.
If you have no valid excuse for late or missed payments, this will result in a negative light on your record.
