Secured Loans And Remortgages Are Most Useful Loans
Great benefits can be derived by a secured loan or a remortgage.
Before discussing this, it is essential to explain the meaning of secured loans and remortgages.
They both fall into the group of loans known as homeowner loans and this is due the fact that they require a concrete form of collateral, namely the property of the borrower.
Remortgages and secured loans are very similar in most respects, with the major difference between them being that a secured loan is a stand alone product that ranks behind the first mortgage and a remortgage replaces the current mortgage.
With their very low interest rates, with secured loans starting at 7.9% APR and remortgages even lower at from less 2%, they are low cost means of borrowing.
The most important aspect in the interest rate granted by the lender is the equity in the property, with equity being the difference between the value of the property and it's mortgage balance. The more equity the homeowner has available, the lower the interest rate will be.
The 7.9% rate is only available for secured loans at 60% LTV or less, and the same applies to remortgages.
Much money can be saved by these homeowner loans when they are used for debt consolidation which means the rolling of a number of credit card debts and personal loans into one single payment every month.
If someone has several loans and credit cards to pay every month the amount can be saved by debt consolidation can be tremendous, and can save hundreds of pounds monthly or even thousands of pounds for those with a significant amount of credit.
An example of this is that if a person has credit card balances totalling £40,000, the minimum payment monthly is £1,200 per month, a home improvement loan of £20,000 with a typical APR of 25% will cost about £400 a month over a ten year period.
A secured debt consolidation loan of £60,000 to clear this credit would cost half that sum over a ten year period, after which the debt would be completely paid off. If paying only the minimum of 3% of the balance of the credit cards , there would be another 16 years left, as experts reckon that credit cards take 26 years to clear if only the minimum payment is paid monthly.
In addition to being very cost effective for debt consolidation, secured loans and remortgages are normally the cheapest way of funding many objects from weddings, holidays, etc. right up to paying for a holiday home.
This all serves to make these two homeowner loans the most beneficial means of borrowing money.
Before discussing this, it is essential to explain the meaning of secured loans and remortgages.
They both fall into the group of loans known as homeowner loans and this is due the fact that they require a concrete form of collateral, namely the property of the borrower.
Remortgages and secured loans are very similar in most respects, with the major difference between them being that a secured loan is a stand alone product that ranks behind the first mortgage and a remortgage replaces the current mortgage.
With their very low interest rates, with secured loans starting at 7.9% APR and remortgages even lower at from less 2%, they are low cost means of borrowing.
The most important aspect in the interest rate granted by the lender is the equity in the property, with equity being the difference between the value of the property and it's mortgage balance. The more equity the homeowner has available, the lower the interest rate will be.
The 7.9% rate is only available for secured loans at 60% LTV or less, and the same applies to remortgages.
Much money can be saved by these homeowner loans when they are used for debt consolidation which means the rolling of a number of credit card debts and personal loans into one single payment every month.
If someone has several loans and credit cards to pay every month the amount can be saved by debt consolidation can be tremendous, and can save hundreds of pounds monthly or even thousands of pounds for those with a significant amount of credit.
An example of this is that if a person has credit card balances totalling £40,000, the minimum payment monthly is £1,200 per month, a home improvement loan of £20,000 with a typical APR of 25% will cost about £400 a month over a ten year period.
A secured debt consolidation loan of £60,000 to clear this credit would cost half that sum over a ten year period, after which the debt would be completely paid off. If paying only the minimum of 3% of the balance of the credit cards , there would be another 16 years left, as experts reckon that credit cards take 26 years to clear if only the minimum payment is paid monthly.
In addition to being very cost effective for debt consolidation, secured loans and remortgages are normally the cheapest way of funding many objects from weddings, holidays, etc. right up to paying for a holiday home.
This all serves to make these two homeowner loans the most beneficial means of borrowing money.
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