One reason you may wish to choose a second charge loan is that it’s likely to offer far better rates of interest as the loan is secured. Unsecured loans from high street banks and other sources can be notoriously expensive. Just check out the rates charged by the “pay day” lenders.
Secured loan – means the amount borrower is secured against a property giving the lender far less risk.
Unsecured loan – means the loan is free of any securities and therefore higher risk to the lender.
Secured lending is particularly useful for those who might find it difficult to obtain the loan required without security. Such groups of people may include the self-employed or those who have had past credit problems.
For many people wishing to raise funds the choice is between a second charge loan and re-mortgaging. There are several reasons a second charge loan may be preferable over a re-mortgage but there are two key very common factors.
-Your credit history has deteriorated since you took out your mortgage.
-You currently have a mortgage with penalties to change.
These two factors alone make a second charge deal an attractive way forward to securing the funds required.
Need some assistance?
If you think this type of loan could assist you in your future planning, it is very important to ensure you get the right one to suit you. There are many different lenders offering numerous second charge loans so please do contact one of our advisers who will be happy to help you achieve the correct loan for you.