Low APR Loans: What is the need?
Loans prove to be helpful in the times of financial crisis, but if not managed properly it leads to a complete vicious circle where to pay a loan the customer takes another loan and it continues… low APR loans are quite helpful in these circumstances as they provide loans at lower rates compared to other loans. Whether a person wants to build a new home or wishes to repay the existing loans lent at higher rates, low APR loans are present for the rescue.
Low APR loans solve the problem of financial stress to a greater extent. These loans are a boon to the borrowers who really want to settle their financial problems. Low APR loans are crafted so as to help the majority of the people.
Low APR Loans: Eligibility, Interest Rates and Loan Amount
Low APR loans are available for people of the age group 21 to 80 years. Homeowners and non-homeowners are equally eligible for the low APR loans.
The interest rates for these loans vary in the range of 6% to 12%, which is quite low compared to other loans. The rates are very much dependent on the loan amount and the repayment period. Any sum in between £1000 and £25000 can be sanctioned without any proofs. But a customer is required to have some proofs regarding his/her income in order to have a greater sum. The income proof can be in the form of recent pay slips or assessment in the case of self employed persons.
One of the important point that distinguishes from other loans is the lower interest rates. The rates are very much influenced by the repayment period. Obviously short term loans will fetch maximum profit to the borrower. In these loans too, secured type has got an edge over the unsecured one. The reason is quite clear, as in the case of secured cheap APR loans the borrower keeps some property as collateral which lowers the risk factor associated with the loan. People with bad credit rating need not worry much as loan is sanctioned to them but at a bit higher rates.
Low APR Loans: Repayment Mode
Repayment mode is one of the prime factors which make low APR loans different and customer friendly when compared with other loans. At the time of issue of the loan, the monthly repayment is fixed and afterwards it has nothing to do with variation in the rate. At times, there may arise a situation when a person is in a position to repay the loan before the tenure. And low APR loans here also provide the freedom to repay the loan in between, without imposing any extra financial burden on the borrower.
Low APR Loans: In a Nutshell
Low APR loans are helpful in situations like building a new home, repaying the loans taken at higher rates, buying a car etc. So go to different lenders, have loan quotation and judge which is well suited to your requirements
Source: EzineArticles.com
Tuesday, June 19, 2007
Secured cheap homeowner loans – For your larger loan need
What are secured cheap homeowner loans? A secured loan is a type of loan that requires the borrower to furnish a security to the lender. In case of a secured homeowner loan the security is the borrower's property. Secured homeowner loans are available in varying amounts can be used for different purposes. The loan amount usually is £3,000 - £50,000 but some lenders may lend up to £100,000. Repayments are made monthly and over a period that is agreed at the outset which can range from 3 years to 25 years. A penalty could be charged for pre-paying the loan so the borrower should check the lender's policy regarding the same.
Term to know: Home equity
Home equity is a key thing that separates secured homeowner loans from standard personal loans. It is based on the equity that a homeowner has in their house or real estate. Equity is the portion of borrower’s home that he/she actually owns. If the borrower pays off more mortgage then the home equity increases. So, the more equity the borrower has, the more money he/she has invested in the house and hence the more of it can be converted into a secured homeowner loan. Home equity becomes the collateral for the loan and hence larger amounts of equity usually translate into larger maximum loan amount available to the borrower.
About interest rate
The interest rate charged by the lenders is referred to as the Annual Percentage Rate (APR). The APR quoted by the lender acts as a guide to find the exact rate offered on an individual basis. Borrowers in their own interest should compare the APRs of different loans, as this is a good way to determine how competitive they are.
The amount a borrower can borrow depends on the term available and the APR depends upon the equity that the borrower has in the property, the lender's view of borrower’s ability to repay the loan and other personal circumstances like adverse credit history. A borrower may be able to borrow up to 125% of the property value if the lender finds the other conditions satisfying.
More advantages:
Since it is a secured loan it is much easier to obtain than unsecured loans. The reason is that the lender has the added benefit of security, which provides protection in the event of a customer's inability to repay. It is very helpful for the self-employed, people with an adverse credit history etc. to take a loan. They are very useful when the borrower wants to take a loan of a large amount. Through these kind of loans the applicants can take the loan for a longer period. How is a borrower protected?
A secured home owner loan is subject to The Consumer Credit Act 1974. The Act contains regulations about how money should be lent and covers loans up to £25,000. Loans for sums more than £25,000 are not regulated. Lenders offer insurance policies and payment protection schemes to cover the borrower’s monthly repayments in the event of an accident, sickness, unemployment and death. Both the cover as well as the cost varies from one lender to another so the borrower should check the loan terms and conditions.
Since the home of the borrower is at stake it would be wise on the part of the borrower to be proactive and know as much as possible about the loan product.
How can the loan be used?
There is no limit on what use the loan is put to by the borrower. It can be used like most personal loans: buying a new car, paying for education expenses, making home improvements or repairs, debt consolidation etc.
Shopping for a loan
The main things that a borrower needs to know in order to find the best deal is to know how the loans work and the process of researching loans and loan rates. In order to simplify the search for UK secured homeowner loans, it's best to get several loan quotes from a variety of sources and then take a decision.
Source: EzineArticles.com
Term to know: Home equity
Home equity is a key thing that separates secured homeowner loans from standard personal loans. It is based on the equity that a homeowner has in their house or real estate. Equity is the portion of borrower’s home that he/she actually owns. If the borrower pays off more mortgage then the home equity increases. So, the more equity the borrower has, the more money he/she has invested in the house and hence the more of it can be converted into a secured homeowner loan. Home equity becomes the collateral for the loan and hence larger amounts of equity usually translate into larger maximum loan amount available to the borrower.
About interest rate
The interest rate charged by the lenders is referred to as the Annual Percentage Rate (APR). The APR quoted by the lender acts as a guide to find the exact rate offered on an individual basis. Borrowers in their own interest should compare the APRs of different loans, as this is a good way to determine how competitive they are.
The amount a borrower can borrow depends on the term available and the APR depends upon the equity that the borrower has in the property, the lender's view of borrower’s ability to repay the loan and other personal circumstances like adverse credit history. A borrower may be able to borrow up to 125% of the property value if the lender finds the other conditions satisfying.
More advantages:
Since it is a secured loan it is much easier to obtain than unsecured loans. The reason is that the lender has the added benefit of security, which provides protection in the event of a customer's inability to repay. It is very helpful for the self-employed, people with an adverse credit history etc. to take a loan. They are very useful when the borrower wants to take a loan of a large amount. Through these kind of loans the applicants can take the loan for a longer period. How is a borrower protected?
A secured home owner loan is subject to The Consumer Credit Act 1974. The Act contains regulations about how money should be lent and covers loans up to £25,000. Loans for sums more than £25,000 are not regulated. Lenders offer insurance policies and payment protection schemes to cover the borrower’s monthly repayments in the event of an accident, sickness, unemployment and death. Both the cover as well as the cost varies from one lender to another so the borrower should check the loan terms and conditions.
Since the home of the borrower is at stake it would be wise on the part of the borrower to be proactive and know as much as possible about the loan product.
How can the loan be used?
There is no limit on what use the loan is put to by the borrower. It can be used like most personal loans: buying a new car, paying for education expenses, making home improvements or repairs, debt consolidation etc.
Shopping for a loan
The main things that a borrower needs to know in order to find the best deal is to know how the loans work and the process of researching loans and loan rates. In order to simplify the search for UK secured homeowner loans, it's best to get several loan quotes from a variety of sources and then take a decision.
Source: EzineArticles.com
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