There are countless financial institutions offering secured loans in the UK today and finding the best deal for you can be a daunting task. In brief, a secured loan is a loan where the consumer?s home, or another valuable asset, is used as collateral to secure a loan from the lender.
First of all, you should ensure that a secured loan is the right choice for you. If you are looking to borrow a smaller amount over a shorter term, or you are not willing to use your home as security, you should look for an unsecured loan. As such, there is no best secured loan deal available that will offer the best rate and options for everybody. The key is to find the best secured loan for you, given your own personal preferences and your financial situation.
Fortunately, there are many cheap secured loans on the market today as more and more loan companies come on the market, creating increased competition. This is good news for the consumer, and it offers a great opportunity to save money.
In an ideal world, the cheapest loan would be the one that offers the lowest annual percentage rate (APR). However, it is not so simple as there are can be many hidden charges that bring the true cost of the loan up, even though the APR is low. For example, some lenders will charge you if you pay off the loan before the agreed term. This is known as a redemption fee. If you feel you might pay off the loan early, find a lender who does not charge these fees, or negotiate so that the your lender agrees to waive such fees. Paying off a loan early can significantly reduce the total amount you repay.
Also, ask your lender to be flexible with the amount you repay. If you pay a little extra than the agreed amount every month, you can significantly reduce the term of the loan and save on the amount of interest you pay. Some lenders may also look to charge a loan arrangement fee when the loan is finalised. Again, try to find a loan that does not charge this fee or ask your lender to waive the fee.
So where to start looking? These days it can be difficult to know where to start looking for that perfect loan as there are countless products on offer. All the high street banks offer secured loans, and it may be a good idea to start with the bank or banks you do your personal banking with. If you have built up a relationship with a bank, and if you are in good financial standing you may have more negotiating power when it comes to getting fees waived, and you may even be able to negotiate a reduced interest rate.If you decide to go it alone, try to have all the necessary paperwork in place before you approach a lender for a loan as it will speed up your application. The amount you can borrow will vary between lenders, but all lenders will assess the value of your property (or any asset you use as collateral), your ability to repay the loan, and your personal circumstances, so be prepared before you apply and don?t be afraid to negotiate. If you would like to save some time and effort in finding the best secured loan deal for you, take a moment to fill out our simple questionnaire, and we will connect you with a lender that is picked for you based on your particular financial needs. It is quick, simple, and you're under no obligation to us or the lender we introduce you to.