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4 Tips When Applying for a Secured Loan

21/08/2016 admin 0

Before you consider a secured loan such as a car loan or a mortgage loan, you should understand that there are higher risks involved than if you settle with an unsecured loan. With that in mind, it is highly recommended that you plan your loan carefully. Here are some tips that can help you when applying for a secured loan:

Decide how much to borrow

One of the first things to decide on when applying for a secured loan is the amount. How much do you need to meet any specific financial need you have at the moment? Whether you’re planning to buy your first home or you want to consolidate all your debts, the amount should be clear from the start. When deciding on how much to borrow, also take into consideration your financial resources. Decide to borrow based on your financial capability and you’ll avoid problems of delayed or missed payments in the future.

Decide on how long to borrow

With larger loan amounts offered by secured loan providers, the repayment terms can be flexible and long. When you’re planning your loan, this is one factor to carefully work out. Some loans, for instance, offer a lengthy 25-year repayment period for a £100,000 mortgage loan. You can opt to apply for the maximum term or you can shorten it to 20 years or even 15 years if you’re up to it. When working out the repayment term, be realistic. Set the term in a way that you can commit to your monthly repayments without compromising your budget.

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Compare interest rates

With a clear borrowing plan on hand, you’re now ready to compare the price. Most secured loans come with lower interest rates but higher risks. If you have good credit then you’ll have plenty of options to compare. When comparing prices, the one key thing to look at is the representative APR attached to your loan. APR, which stands for annual percentage rate is already inclusive of your loan’s interest rates, admin fee, completion fee and other related fees.

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Find the best deals

To find the best deals on your secured loan, there are a couple of things you can do. If you have an existing mortgage lender, ask them. If you are a good repayer, chances are your lender has special terms to offer. You can also use online comparison sites to find the best deals. These websites often have a list of the best lenders offering secured loans in the UK. For non-internet users, you can seek recommendations or perform the old-fashioned way of comparing loans by inquiring from different banks in your area.

 

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Best UK Mortgage Loan Options for First-Time Buyers

21/08/2016 admin 0

If you’re in the process of planning your first home purchase, congratulations! There are only a few purchases in life that are worth celebrating and one of which is buying a new home. Unfortunately, buying a home is not as simple as looking for the best design or best location. It gets more complicated once you get to a point where you have to consider financing options.

If you’re like most people who cannot purchase a home upfront with cash then you need a secured loan, specifically a mortgage loan. To save you time and the hassle, we’ve compiled a list of the best mortgage loans for you to check out.

If you’re a first-time buyer looking to borrow £90,000 over a 25-year repayment period repaying capital and interest on a property valued at £160,000, here are your options:

HSBC

If your initial interest rate is fixed at 0.99% for 24 months and the remaining months at a current variable rate of 3.94% then your total mortgage loan payments will amount to £137,088. That’s about £338.78 monthly payments for 24 months and £461 for 276 months.

Yorkshire Building Society

Given the same loan amount of £90,000 at repayment terms of 25 years, you can expect to repay a total of £150,433 for your mortgage loan. This is if the initial interest rate is fixed at 1.19% and the remaining months at a current variable rate of 4.99%. On a monthly basis, you’ll be paying £346.98 for 26 months and £509.46 for 274 months.

Tesco Bank

A little cheaper than Yorkshire Building Society, Tesco Bank offers mortgage loans of £90,000 over a 25-year term at 0.97% for 25 months and the current variable rate at 4.24% for 275 months. Given the rates, you can expect to repay a total of £140,792 inclusive of interest rates, valuation fee, and arrangement fee. This translates to £348.22 per month for 25 months or £475.19 for 275 months.

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First Direct

Another competitive mortgage loan to consider for first-time buyers is a deal offered by First Direct. With a fixed rate of 1.24% for 24 months and current variable rate of £3.69% for the remaining months, you’ll be paying a total of £134,622 in total. On a monthly basis, you’ll pay £349.05 for 24 months and £450.81 for 276 months.

Barclays

If you can’t settle with the aforementioned mortgage options, there’s still Barclays to check out. With Barclays’ mortgage loan, the rate for the first 24 months is 0.99% while the remaining months is at a current variable rate of 1.99%. This means that you’ll be paying £349.05 for 24 months and £388.71 for 276 months or a total of £116.980 inclusive of all related fees.

Chelsea Building Society

Chelsea Building Society also offers a competitive mortgage loan at fixed rate of £1.26% for the first 26 months and current variable rate of 5.15% for the remaining 274 months. In total, you’ll be paying about £152,489, which is inclusive of £60,869 interest plus valuation fee, arrangement admin fee, and completion. On a monthly basis, you’ll be expected to pay £349.88 for 26 months and £517.42 for 274 months.

The co-operative bank

Another option to consider for first-time home buyers is the co-operative bank who offer loans of £90,000 at initially fixed rate of 1.24% for 24 months and current variable rate of 4.74% for 274 months. By the end of 25 years, you’ll be paying a total of £147,401. That’s about £349.05 for 26 months and £497.93 for 274 months. Total payment is inclusive of interest rates and other related fees.