Bez ohľadu na to, aký druh úveru uvažujete vybratí, it is always absolutely crucial that you do your homework. You must read and re-read the small print, hunt for any hidden terms and conditions and know exactly what you are signing yourself up for. It is all too easy to concern yourself simply with the amount of money you are borrowing and forgetting that the money doesn’t actually belong to you and it will definitely need paying back.
Perhaps the biggest disadvantage of taking out a secured loan is the risk factor. When you take out a secured loan you are taking out an agreement with the loan company that they are able to use your home as security, should you miss a repayment. Meaning, as a worse case scenario, you could lose your home and be made homeless. Nanešťastie, if you need to borrow a large sum of money, taking out a secured loan may be your only option. You must weigh up the pros and cons based on your financial situation and if you are still in doubt as to what course of action to take then you would be best off speaking to an independent financial adviser.
Although secured loans do have the advantage of allowing a larger amount of money to be borrowed, it does mean that the interest rates will be higher and spread over a longer period of time, resulting in the total interest paid back being significantly higher. This may not be something that concerns you, especially if you are in need of a large sum of money quite quickly and you are attracted to having a fixed monthly repayment scheme set in place. It is advisable to work out how much you are borrowing set against how much you will end up paying back in interest. You will probably be quite shocked and it may alter your decision about the type of loan you take out.
Because unsecured loans require the borrower to have a good credit history, if you are someone whose credit history is much to be desired, you may well be faced with having no choice but to opt for a secured loan. One of the advantages of a secured loan is that they are easier to qualify for, but this should not be the only reason you apply for one. Always explore all of your options first and remember that interest rates, terms and conditions on both secured and unsecured loans can vary widely so it is essential to shop around and find the best deal for you.
A worrying and increasing problem when trying to repay secured loans is finding the money without it affecting how much money you have left to pay off other day-to-day bills. The national UK debt is currently around the £1 trillion mark and rising, with many UK homeowners experiencing difficulties with money. The temptation then arises to continue applying for more loans to pay off existing loans which they cannot afford repayment on, spiraling into worsening financial problems.
You must always, check in the terms and conditions whether there are any extra charges or early repayment penalties. Don’t be confused by any of the jargon, they may also be listed as; early repayment charge, early repayment penalty, early redemption fee, redemption charge or financial penalty.
Although it may seem like a good idea to pay off a loan earlier than planned, for example if you suddenly come into some unexpected money, beware of any early repayment penalties. There is no set amount as to what this fee will be, but it is usually equivalent to one or two month’s interest. The loan company will also take into account how early you have paid off your loan. The earlier it is the higher the charge so watch out! Consider whether you might want to pay off a loan before it reaches the end of its term and if this is the case then keep an eye out for a more flexible loan.
The Internet is saturated with comparison websites, which offer you the opportunity to find the best loan company for you based on the criteria you give them. They’re free, they’ve done all the hard work for you, so use them! Sometimes when you do your research thoroughly, you will be faced with terms and conditions that only serve to confuse you further, but use the Internet to research these terms. It will take you time, but well worth doing if you don’t want to risk slipping into greater financial difficulty because you have missed some vital information.