Personal Loans to Clear Debt

There are many different types of personal loans available in the UK today, some of the more common loans that people search for are listed below with brief information on each;

Unsecured Loans

Unsecured loans are not secured against any property.  Usually, the rates of interest can be high due to the fact that the lender has no property acting as security should you default on the loan. Unsecured loans are commonly used for purchases such as Holidays, Cars, and Domestic Emergencies.

• Secured Loans

Secured loans are secured against property or items of equal value to the loan. This provides the lender with a secured asset that can be taken from or off you in the event that you fail to repay your loan instalments or the full loan as agreed. Secured loans are used for any purpose but the most common are Home Improvements and Debt Consolidation, personal debts should not be cleared with equity from your property without considering all other debt solutions.

• Payday Loans

Payday loans are only offered to people who are working and this usually has to be full time not part time. The payday loan company will advance you an amount of money that will be deducted from your next salary, the very next date you get paid.  Payday loans are very much like overdrafts and are difficult to clear once you have taken the first one. This is because you need two wage packets in one month, one to clear the loan and one to live on! This does not happen to most people.

• Debt Consolidation Loans

Debt Consolidation Loans are loans that people use to consolidate (put into one) all other credit agreements such as credit cards and store cards, personal bank loans and overdrafts, catalogues and book clubs. Debt consolidation loans are offered on an unsecured or secured basis, however, it is not common to find an unsecured debt consolidation loan for any more than £25’000.  Most loans over this value then require security against a home.

• All of the above loans require credit checks and the rates of interest will all be subject to your personal credit status.

If you have a bad credit rating the cost of borrowing will be higher and your loan/s will cost you more to repay because of the risk presented to the lender of possible none repayment.

If you have a good credit rating the rate of interest should be lower as the lender will be keen for your business. Not many lenders are keen to lend to people with bad credit or arrears on household bills such as Council Tax, Rent, Gas, Electricity and Water.

These are priority living costs and if a lender sees that you are unable to manage these very important bills in an organised fashion, they will not believe that you will manage and prioritise the repayments of the loan you may be asking them for.

• Refused a Loan?

When you are making general enquiries for personal loans and credit, whether it is online or over the telephone, you should be very mindful of certain finance industry facts if you have been refused a loan or credit,

• Not all loan companies will tell you the truth!
• Not all loan companies have the consumers’ best interest at the core of what they do!
• Not all loan companies will be operating above board and compliantly!
• Not all loan companies are lenders, most are brokers and do not even lend money!

If you need friendly loan advice from people who care about your financial future, please contact Larry the Loan Broker today and allow his team to offer you simple and constructive personal loan advice and help.

Call free using 0800 118 2345, our lines are open 24 hours – 7 days!