Getting a secured loan for a large amount of money can be a stressful time, but it doesn’t have to be that way if you know the basics and go into meetings or applications with a clear idea of what you want.
Follow the top tips in this guide and secure the loan that you want without any of the hassle.
Firstly, consider how much money you want to borrow. If you are borrowing a large amount the best way to get a good interest rate with a small loan arrangement fee is to go for a secured loan, where using a house is the most usual way of offering the lender security. These loans are only available to those who can offer the bank security of some kind, hence being able to borrow larger sums of money.
If you don’t need to borrow that much then considering the amount you need against where the cut off points are for different interest rates is worth spending some time on. For example if you only need to borrow £7,000 but the interest rate changes favourably when you borrow £8,000 then it might be best to borrow the larger amount. Particularly if there are no early repayment fees as then you can get the better rate and use the additional money to simply pay off a chunk earlier than agreed.
Work out a number of different scenarios yourself before speaking to anyone about your loan. If you know you want to borrow £5,000 then what repayment terms suit you best? It is likely that you will be asked how much you can pay off each month or how long you would like to take the loan out over. Make sure that you go into your application process with some idea of your monthly cashflow situation and therefore how much spare money you have to use to pay off the loan.
It is always better to take out a loan over a longer period, pay slightly more interest but never default than stretch yourself to the limit and make yourself sick with worry every month about whether or not you can afford to pay.
Terms and Conditions
Before you apply at a certain bank or credit lender, shop around using internet search engines and see just what the difference is in different loan options. If you have a paid bank account, then it might be better to take a loan out with the bank you currently use as you may get preferential rates due to your paid current account.
There are also lots of bargains to be had on the internet although do make sure that your loan is coming from a reputable company and isn’t a well designed scam of some sort. If you are left with any uncertainty then avoid the lender and find somewhere else or you could risk making a costly mistake.
AUTHOR Derek Sall
Derek has a Bachelor's degree in Finance and a Master's in Business. As a finance manager in the corporate world, he regularly identified and solved problems at the C-suite level. Today, Derek isn't interested in helping big companies. Instead, he's helping individuals win financially--one email, one article, one person at a time.