A homeowner loan is a secured loan this means that the loan is secured to any property that you own. Secured loans are only available to those who own their homes so lenders are then guaranteed to get their money back. There are a range of great benefits that come with the loan being secured and they are a good option if you are looking to cut down your existing debt.
Individuals are likely to actively benefit from secured loans because;
Easier to Obtain
Secured lenders are almost guaranteed to get their money back making them more likely to provide loans with those who have lower credit scores.
Bigger Borrowing Potential
The maximum amount you can borrow on an unsecured loan is £25,000. With a secured loan the amount can be up to £75,000.
One Monthly Payment
If you are looking to consolidate your debt you are can do this with a secured loan by borrowing enough to pay off your debt. You are then left with only one monthly payment.
Before you should consider taking out a secured loan is it is important to make sure you look at all the options. The loan will be secured to your home so it is important to make sure you won’t have any difficulty in repaying it. If you are only looking to consolidate your debt there are other options available.
These are an unsecured form of borrowing and are by far one the cheapest forms. Borrowing money on a credit card can be very cost effective; you are not charged interest as long as you pay back what you’ve borrowed in a set amount of time. You can also opt to pay back the minimum amount each month which tends to be very low. However there is a limited amount you can borrow on a credit card. Speak to one of our advisers today to see if this is an option for you.
Release equity in your home to provide funding for home improvements or to buy another property. Remortgaging is also a way to consolidate your existing debts into one easy manageable monthly payment. However it is dependent on the equity you have available within your home. If you are unsure speak to one of our whole of market mortgage advisers, they will be able to explain what’s available for you today.
If you are sure that a secured loan is the right course of action for you there are a few more point you may need to be aware of.
Repaying early can be costly. Overpaying to clear the debt early is rarely allowed so make sure that you work out an affordable monthly payment in the beginning. If you then come into some money it is worth speaking to your loan provider but be prepared to pay redemption penalties. For loans of less than £25,000 redemption penalties have now been restricted to two months of interest.
Find the Best Deal
If you are interested in taking out a homeowner loan our advisers can compare a number of top brands to bring you the best deal available. They will guide you through the loan process so you are fully informed at all times. It is important to make sure that you shop around to get the best deal and at Quotesupermarket.com we do this for you helping to save you time and money.