Loan choices these days are vast and in many cases very confusing for the borrower. It is highly recommended before you take on a new loan to get qualified advice as a wrong move could cost you dearly in the long run.
The expert will look at all your choices and may well select a secured loan as right for your needs. This won’t always be the case. Of course the final choice will always be yours but let’s look at why secured lending may help.
One reason you may wish to choose a second charge loan is that it’s likely to offer better rates of interest as the loan is secured.
Unsecured loans from high street banks and other sources can be notoriously expensive, we have all seen the rates charged by the so called “pay day” lenders.
The reason for a secured loan being more cost effective is due to the lender having to assess the risk. If you are a high-risk borrower they will need to offset the risk with higher interest rates. So if you offer security on the other hand, then the risk involved is much lower and the lender will offer far better rates.
This is indeed 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 the choice is between a second charge loan and re-mortgaging rather than between second charge and unsecured loans. There are a number of reasons a second charge loan may be preferable over a re-mortgage but there are two key very common factors.
1) Your credit history has deteriorated since you took out your mortgage.
2) 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 call our advisers who will be happy to help you achieve the correct loan for you.