Our leading lenders offer a wide variety of competitive loan
products, including flexible loans. These are available in range
of different amounts and repayment terms. Loans can be used for
many purposes including buying a home or a car, going on a
holiday or for debt consolidation.
If you are thinking of using flexible loans to consolidate debts
then you have a couple of things to consider. Although you could
be paying less than the sum of your present debts with your
monthly repayments, you will be paying for a much longer time.
You could also find that having just one creditor will reduce
the pressure you may have been under from your present
creditors. Even though you may have to pay early settlement
charges to your creditors when you pay off your debts you could
save a lot of money, especially if you use a secured, low
interest loan. It will also help you to bring your debt under
one roof and work towards lowering your debt in the future. It
is vital that you make sure that you can afford the repayments
before you take out a debt consolidation loan.
The main categories for flexible loans are secured and unsecured
loans. Unsecured loans do not require the borrower to provide
the lender with any security to back the loan and this added
risk to the lending company results in higher interest rates.
There is less risk for the borrower but if they fail to pay back
the loan the lender could take them to court. In the case of
secured loans, of which a mortgage is a prime example, the
borrower provides the lender with collateral, their property.
This is low risk for the lending company because they always
have the property as insurance if the borrower defaults on
repayments and fails to repay the loan. The borrower is risking
their home and this why it is so important that you make sure
that you can afford the repayments on a loan before committing
to an agreement. Secured flexible loans are usually approved
faster than unsecured loans but can take longer to process.
Flexible loans are repayable on a monthly basis and you will be
charged interest by the lending company. This is called the
Annual Percentage Rate or APR and the exact amount you are
charged will be determined by the amount you borrow, the
repayment term and the lender's view of your ability to pay back
the loan as agreed. This is where your credit history, the
equity in your property and your circumstances are considered.
The typical rates advertised by lenders are only an indication
of the APR you are likely to get but not a guarantee.
Depending on the loan company, you could be given the
flexibility to make over-payments and to pay in lump-sums with
flexible loans. This will allow you to clear the debt over a
shorter period than agreed at the outset and can potentially
save you a substantial amount of money. You may even be able to
withdraw amounts from the loan account, providing you stay
within you credit limit. A further option is payment breaks
which will allow you to take a break from you monthly repayments
at the beginning or during the term of the loan. An adjustment
will be made to your monthly repayments to include any accrued
interest so that you still pay off the debt in the term agreed.
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