Types of loans and credits

The loan-backed loans (secured loan) allows you to borrow more money, and the repayment period is from 3 to 25 years. There is also the option to pay off the loan faster or extend the repayment period. Normally this type of loan is cheaper than the others, also has a lower interest rate. It is an ideal solution for those who do not have a good credit history and do not have the opportunity to take unsecured loans.

The loan without collateral but can borrow a smaller sum of money (usually £ 25 000). Exposes the lender to greater risk, as well as costs. The loan interest rate is higher, usually you also need to pay for insurance for the lender. The repayment time is between 3 to 10 years. In this case, based on the credit history: the better, the greater the chance for a loan and better repayment terms. Loans of this type are present in the form of credit card, debit in bank bonds or loans consumer (Personal Loan). The latter means you can borrow from £ 5 000 to £ 75 000, and the time for repayment is from 5 to 25 years. Other loans, which can be distinguished among loans with collateral and without it: home loan holder (Homeowner Loan), which allows you to borrow from £ 500 to £ 5000; loan tenant (Tenant Loan) offered to those who rent public housing from a private owner or live with their parents. It allows you to borrow from £ 1000 to £ 50 000, and the repayment period is from one to 25 years. Requirements for this loan is a positive balance, payslips, proof of address, regularly paying rent and having a landline or mobile phone.

Other loans are, eg., Car loan (Car Loan) or business (Business Loan) intended to develop their activities. Examples of business loans: Real Estate Loan, Income Property Loan or Loan Seasonal Comercial.

It is worth mentioning also popular Cash Loans: Instant Cash Loan or Fast Payday Loan. In these cases, the money gets quickly - even on the same day - but the interest is huge (Fast Payday - 300%). Instant Cash Loan gives you several years to pay off, but Fast Payday undertakes to repay the loan the next day. These are loans, after which we reach rather only in a really difficult situation.

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You have to know that the submission of an application for a loan is not equivalent to its receiving. The lender on the basis of our application and information provided by the agency credit (credit reference agency, for example. Experian Ltd, Euifax plc or Callcredit plc) is doing scores for our creditworthiness (credit scoring system), on the basis, which will assess whether to grant us a loan. we ask for, how to establish credit limit and how to determine interest rates. To get a loan, so we have to achieve. pass mark, that we reach the number of points required to obtain a loan. If we do not reach the threshold, our application will be rejected.

The lender may offer us a loan for a smaller amount, but interest in this situation will be higher. To increase the chance of getting a loan (and gain more points), we should work for a long time, have your own house or to live a long time at the same address. Preferably have a good credit history. Greater chance of credit are also people in middle age, married. Opportunities may, however, reduce to a large extent, to submit multiple applications at once. There are known cases of brokers while lending without prior verification of income of the person taking the loan, which is for example. She signed the statement of earnings. In this situation, many people could not fulfill the contract and repay the loan. A matter of interest to the Financial Services Authority, but the number of such accidents is constantly increasing.

As you can see, the choice is huge. It is so good idea of ​​the topic of loans to choose the most convenient option for us and not a random increase ill-suited to our financial situation. Because the wrong choice can cost us a lot.