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Hot Topics
- How long can I take the loan over?
- How long you take the loan over depends on how much you need and how much you can afford to repay on a monthly basis.
- What happens if I am suddenly injured or taken ill?
- To protect your loan repayments in case you are unable to work due to accident or illness, you will have to take out either personal loan or short-term income protection insurance.
- What happens if I want to borrow more?
- To borrow more you have the option of either taking out a new loan independent of your other loan(s), or arranging with your loan provider to add onto your existing loan.
- I’m self-employed, am I still eligible?
- Self-employed loans used to be difficult to find and expensive. But today, now that more and more people are working for themselves, self-employed loans are widely available and, as interest rates have fallen to their lowest in years, more affordable.
- Is there a way to get a debt consolidation loan that does not require offering your house as security or a way to get a debt consolidation loan if you do not own a house?
- You do not have to take out a secured loan in order to consolidate debt, but you are likely to pay a higher interest rate if the loan is unsecured and you are not a homeowner.
What is an unsecured loan?
An unsecured loan is a loan where no asset is pledged as security for the loan. (The most frequently used security is the family home.)
Because you are not guaranteeing the loan against the value of your home, you will not be able to borrow such large amounts of money as with a secured loan. You can usually apply to borrow anything from £500 to £25,000, but this depends entirely on the loan provider and how much they are willing to lend you.
To repay the loan, most lenders will give you the option of paying the loan back within between six months and ten years, depending on how much you are borrowing. It's your decision how much or how little time you need to pay back the loan in full, however do not be tempted to overstretch yourself as you will end up missing payments. On the flip side you also need to pay back enough each month so that the loan doesn't drag on for years and years, because the longer it goes on the more interest you will have to pay, and the more the total loan will cost you.
Without security, the risk to the loan company is higher. Therefore, without security, the loans company will take out extra insurance to cover any money lost should you default on your payments. This cost gets passed onto your loan, and means higher interest rates. This is why unsecured loans almost always have a higher APR than secured loans.
Risk Warning
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. Security by way of a charge on your home may be required.
Think carefully before securing other debts to your home.
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- Is there a way to get a debt consolidation loan that does not require offering your house as security or a way to get a debt consolidation loan if you do not own a house?
- How much can i borrow ?
- Can I borrow again in the future?
- What if my loan application is not accepted ?
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