Secured loan
Secured loan is a loan secured by collateral. The lender cannot put a stake in the collateral as long as the borrower is regular in paying the monthly installments on the secured loan.
Unsecured loan
These loans are granted without any collateral. The unsecured loans are usually offered at a higher rate of interest. Bad credit history is not preferred by lenders in offering unsecured loans.
Mortgages
Mortgages are usually taken in order to acquire house or property. It includes first, second and third mortgages. The mortgages are repaid through monthly installments inclusive of the principal and interest.
Remortgage
Transferring the mortgage to another mortgage lender in search of better rates of interest, lower repayments, changing the type of mortgage is known as remortgage. It is also known as mortgage refinancing.
Bad credit history
The customer is adjudged as bad credit history if the following happens:
- individual voluntary arrangements
- mortgage or loan arrears
- self employment
- bankruptcy
- County Court Judgements (CCJs)
APR (annual percentage rate):
Annual percentage rate is the cost of credit expressed in terms of a yearly rate. This is used to compare the rates of the amount of interest and the various fees that are included. Comparisons regarding the various kinds of fees are possible through APR.
Loan calculators:
Websites of loan providers provide loan calculator to help customers calculate the monthly repayments on the loan.
County court judgements:
If the customer fails to pay the debt, loan or mortgage in full, then the lender reports the matter to the county courts. If the customer pays up the debt within a month of the notice then the CCJ will not be registered with the credit reference agencies. If not, then CCJ will be registered and will be in the credit file of the customer for 6 years.
Individual voluntary arrangements:
An individual voluntary arrangement (IVA) is a formal agreement between the applicant and the creditor to whom one owes a debt. The IVA is the arrangement through which the debt is to be repaid within a certain period of time, normally 5 years. It is generally appropriate for people who are unable to make their monthly repayments in full but who do have some money to give to their creditors each month.
Collateral:
Any asset or property that is pledged against a loan by the borrower to protect the interests of the lender is known as collateral or security. Collateral is the lender's security for loans made and may become property of the lender if the borrower fails to repay.
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