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Hot Topics
- In what circumstances should I consider taking out a personal loan?
- You can get a personal loan for any reason you want.
- How quickly can I get the decision?
- More and more loans companies are selling themselves on how quickly they can make a decision. Many promise an instant decision, however they will still have to carry out a variety of checks to verify the information you have provided in your application.
- Why would my Loan application be turned down?
- If a lender decides that you are a bad risk for a loan, they will reject your application.
- What if I want to move house during the term of my loan?
- Moving house is only an issue if you have a secured loan – as you have borrowed against the value of your house. How your loan company deals with this varies greatly. Some allow you to transfer your loan to your new property, using your
- What happens if I can't meet the loan repayments?
- If you are having problems repaying the loan, you will need to talk to your lender straight away to discuss the problem.
What is the maximum value of the secured loans I can have in relation to the value of my property (LTV ratio)?
The industry average for the LTV ratio (Loan to Value Ratio) is 75%. This means that if your property is valued at £100,000 – you will be able to borrow £75,000 against it. It may be possible to get more than that – for example 85% or 90% - however you will need an excellent credit history and must in general be considered a ‘no risk’ customer by the loan provider.
If you want to take out a secured loan against your home, you will have to have an appraisal to work out the value of the property. On this figure the lender will decide the maximum amount you can borrow against the property.
Especially in the current environment where house prices are rising and rising, homeowners are getting the chance to borrow large sums against their house as the value of their property soars. The risk here is that you will end up in negative equity. This happens when house prices fall, and lenders find that they have borrowed more than the value of their house. As a result, each month you would be paying interest on a loan greater than the real value of your property. This only becomes a real problem when moving house, as you will owe thousands of pounds more than your home is worth.
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.
- County Court Judgements ?
- What exactly is a personal loan?
- If i decide a personal loan is best which type of lender is best ?
- What is a unsecured loan ?
- How long can I take the loan over?
- How much can i borrow ?
- What if my loan application is not accepted ?
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