Exploring Your Options for a Consolidation Loan UK
Written by: John Mussi
Whether you're wanting to consolidate your debt to avoid bankruptcy, reduce the number of monthly bills that you have, or combine loans to get a lower interest rate, you might want to consider applying for a consolidation loan UK.
These loans are designed to combine several credit lines or debts into a single payment, issuing a loan for either a portion or all of the debts in question and leaving you with the loan payments instead of the multiple payments you were facing beforehand.
Various forms of the consolidation loan UK exist for people of all income levels and credit histories. with a bit of inquiry and a little shopping around, it should be easy to find the consolidation loan UK that's right for your needs.
Unsecured and secured loans
Two options that exist for the consolidation loan UK are unsecured loans and secured loans.
An unsecured loan is one which doesn't require any collateral, or property that is offered to guarantee the loan and to which the bank or other lender is granted a lien or legal claim.
Unsecured loans are not as common of a consolidation loan UK as secured loans are, and in most cases carry a higher interest rate. they do have the advantage of not having any collateral at risk should you fail to repay the loan.
Secured loans are those loans which do require collateral. These loans usually have lower interest rates than unsecured loans (sometimes much lower), but do carry the drawback of the lender having a legal claim to the property (which is usually an automobile or real estate.)
Should you fail to repay the consolidation loan UK , the lender can exercise their legal claim and repossess the collateral property so as to place it up for sale to recover their money.
The easiest way to avoid repossession is simply to make loan payments on time. after all, when the loan is paid off, the collateral property is released from the lien and the lender no longer has any claim to it.
Comparing lenders and rates
Before deciding on a single lender for your consolidation loan UK , it's best to explore all of your options so as to get the best interest rate and loan terms.
If you are getting a secured loan (which is likely the case with a consolidation loan UK ), use the same collateral and request quotes for the same amount at a variety of lenders.
If the loan is unsecured, simply request the quotes for the same amount. though you'll likely get fewer quotes. Once you've obtained several quotes from a variety of lenders, compare the interest rates as well as the repayment terms from the various banks and finance companies.
You'll want to find the offer with the lowest interest rates while having the most flexible repayment terms. this represents your best deal for your loan. When you've found it, return to that lender to apply (making sure that you get the same rates and terms that you were given in the quote.)
Repay the loan as quickly as possible, both to avoid a negative credit report and to build a business relationship that can be useful in the future.
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About the Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.
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