Loans Know How

Loans in the UK can be confusing, knowing how to compare loans is the first step to making an informed decision. This financial website was created specifically to help those who take out personal loans save money. Our loan glossary provides all the information you need to know about loans A-Z.

Secured Loans

Secured loans are secured against property in the UK, this means your home is at risk if you fail to make payments. This loan is "secure" for the lender but it offers you no security at all. These products have become increasingly popular targeting the sub-prime(bad credit) market often offering larger amounts for borrowing.

Who should use secured loan debts?
Ideally no one who has trouble making regular payments or who has a debt load larger then they can realistically afford. If you have good credit, find the best rates available for unsecured loans. If you are able to repay your loan without any problems consider this option only when the lender is prepared to offer a rate which is better then the most competitive unsecured rate. Ideally a percentage or two lower, as you should be compensated for the "lack of risk" on the lenders part. read more here: Secured Loans

Unsecured Loans

Unsecured loans are loans that are not secured against property. These personal loans are available to non-homeowners and homeowners alike. Unfortunately for those without property they are harder to qualify for and bad credit applicants will find it even more difficult. Rates are generally higher but not always, especially if you shop around.
Important information for homeowners about unsecured loans read more here: Unsecured Loans

Check the actual APR of your personal loan before committing to a lender. Some lenders charge fees and indemnities. The Annual Percentage Rate is the REAL cost of the loan not the rate shown in bigger bolder advertising.

Interest Rates
Keep an eye on The Bank of England’s Monetary Policy to see if  interest rates are set to fall or rise. The Committee voted to maintain the Bank’s repo rate at 4.5% last month. This is the rate banks are charged to borrow money and it directly effects the rate they will charge you.

www.fsa.gov.uk/
Financial Services Authority.
FSA Debt Test
Know how much debt you can afford.
Consumer Credit Act
Know your rights.
http://www.oft.gov.uk/
Office of Fair Trading.
Bank of England
Know what rate banks are charged from BoE.