Loan FAQs

What about personal loans?

The advantage of a personal loan is that it is a fixed amount with regular repayments; this makes it much easier to budget for.  The disadvantage of a person loan is that some loans may penalise you for repaying early with an early charge fee.  Whilst with secured loans you risk loosing your property... [more]

What if I want to pay off my loan early?

If, after having taken out a loan, your circumstances change and you wish to repay your loan early you will have to ask the lending company for a “redemption” or “settlement” statement- this will detail how much you have to pay to redeem the loan. The lending company will permit you to repay the loan early. You will not ( unless the loan only has only a few months to run) be required to pay all of the interest... [more]

What happens if I pay my loan early?

If your circumstances have changed soon after having taken out a loan and you wish to repay your loan early you will have to ask the lending company for a “redemption” or “settlement” figure/statement- this will detail how much you have to pay to redeem the loan. The lending company will permit... [more]

What if my application is delined?

Sometimes a lender may not wish to lend. This may be for a number of reasons. The lender may think you cannot afford the loan, if it is a secured loan, your property may not be of sufficient value. A lender does not have to tell you why you have been refused a loan but you can ask them for the name and address of any credit reference agency used and they will supply this information free of charge... [more]

What is a secured loan?

A secured loan gives security to the lender , not to you the borrower. Any loan which requires the borrower to provide the lender with security other than just a promise or guarantee to pay.  The security might be any number of things including; 1. The deposit of goods 2. The retention of ownership... [more]

Can I cancel the loan?

There are lots of different types of loan, and many different agreements. Check the terms and conditions of the loan agreement to find out if they state that you have the right to cancel. If the agreement does not say that you have the right to cancel then you are unable to do so. It is also worth remembering... [more]

Consolidation loans and remortgages

Debts come in many forms, including bank overdrafts, credit cards store cards and loans. When you have multiple debts it can be difficult to keep track of your spending and you may be paying high interest rates. One option would be to get a new loan to pay off all these existing debts... [more]

Debt consolidation loans

If the loan is not going to be used for debt consolidation then best not to say that some or all of the proceeds will be used for this purpose. An important part in the approval process for many lenders... [more]

If I change my mind can I cancel a loan?

If you want to cancel a loan, there are many variables, depending on where you signed. Look carefully at your loan agreement- if the agreement does not say that you  have a right to cancel then you cannot do so. To give further example, with an unsecured  loan, you cannot cancel if you signed the contract... [more]

Lending companies and your information

It is usually the case that lending companies tend to make wider use of your information than brokers do. As this is the case, alongside any lender documents you should receive a statement from the lenders informing you of their plans with what to do with your information. The statement is commonly found near any signature box, or clearly placed on the front page. If the information is not to be found then... [more]

Personal loan - what factors to consider

You must check all costs.  For fixed term borrowing, such as personal loans, and flexible borrowing, like credit cards, you should compare the annual percentage rates (APRs).  Loans with high APRs are more expensive than loans with low ones, as you would expect, but with credit cards, if you expect to pay off the balance in full every month, you wont pay interest, so you can ignore the APR.  However, you must... [more]

Regulated loans

If you are applying for a secured loan or mortgage of up to £25,000 the law requires you to be given copies of the loan agreement (and all relevant documents) in order that you can read the documents carefully and consider the loan properly, you will have seven clear days to study the documents... [more]

Secured loan vs unsecured loan

This will depend on the terms of the loan. Many lending companies will only lend if security is provided. Very often the interest rate will be lower on a secured loan than on a comparable unsecured loan. A secured loan may offer more flexible repayment periods. In many instances secured loans can be repaid over a longer period with a lower monthly repayment. It is important that you read any loan agreement... [more]

Secured loans

A secured loan is a loan that is secured on property. In most cases this property is usually the customer’s home. Even though there may already be a mortgage secured on the property, a lender can take a second charge behind the first charge being held by the mortgage company. Secured loans will... [more]

Unregulated loans

This consideration period protection is only available on loans of £25,000 or less. If the loan is for more than £25,000 this protection (consideration period) is not provided. It might seem odd that you have statutory protection for loans below £25,000 and not for larger loans or mortgages. The law supposes that this protection, as provided within the Consumer Credit Act 1974, is not needed for larger loans of £25,000 and above as it is more likely that borrowers will take legal advice before agreeing to borrow... [more]