Secured Loans - How To Find The Best Interest Rate And Save Thousands Of Pounds

Author: Steve D Jackson

There are many different reasons for obtaining a secured loan, from paying for home improvements to consolidation of debts to lower monthly payments. Quite often the need to borrow money is urgent and this is when people tend to rush into a loan agreement without fully understanding all the options available to them. Finding a lender for a secured loan is a major decision and hastiness can often times result in costly mistakes that could have been avoided. Let us look at how to avoid making one of the most common mistakes and save yourself thousands of pounds.

One of the most common costly mistakes made by people looking for a secured loan is accepting a higher interest rate when they could have qualified for a much lower rate. There is a wide range of Annual Percentage Rates (APR) in the UK loan market. Too often when someone is under stress to obtain some money, or if they have bad credit, they make the mistake of accepting the first offer that comes along. This can result in paying a lot more money in interest charges than necessary and can in the long run cost thousands of pounds extra. Let's look at an example:

For a loan comparison example let us take a £25,000 loan over a 15 year term. If you received a 10.5% APR instead of an 8.5% APR over the course of the loan, you would be paying an extra £5,430 in interest! Even a 1% difference in APR would save you £2,753. It quickly becomes clear that a small change in interest rate can make a huge difference in the amount of money you keep in your pocket.

Sometimes the lowest APR isn't the lowest APR

Be careful of websites and lending companies that advertise unusually low APR rates. There are unscrupulous lenders out there that offer very low initial APR's that down the road turn into very high APR's. Another common practise is to advertise a very low APR but it is then mandatory to purchase the companies payment insurance. This hidden fee of having to take the mandatory insurance can turn an advertised APR of 6.4% into an actual APR of 9.0%.

How to find the lowest APR Secured Loan

So what is the easiest way to find the lowest APR secured loan and not get ripped off? The best advice is to use the services of a good secured loan comparison site. One advantage of using a good comparison service is the ability to instantly compare over 250 loan plans and options provided by the top lenders and high street banks. Having a comparison of quotes matching your specific requirements is key to finding the lowest APR possible. The best online comparison sites also offer the advantage of no search fees, no obligation and most importantly no initial credit check.

By taking the little extra effort to do your research when choosing a secured loan provider, you will avoid making costly mistakes and save yourself thousands of pounds.

Steve Jackson is a freelance writer who specializes in loans and financial services. He is currently assisting Secured Loan Review UK as a finance specialist. The Secured Loan Review offers continually updated loan comparison sites and resources on finding the lowest UK Secured Loan rates available. For more information please visit http://www.securedloanreview.co.uk

Mortgage Loans: Save Thousands With a Couple of Bucks

Author: Kate Ross

With slightly higher monthly payments you can pay off your mortgage sooner and save thousands on interests.

Shorter Repayment Programs

By requesting a shorter repayment program, you’ll definitely get a slightly higher monthly payment, but that increment can be as little as $30 to $60 which implies $1 or $2 a day. It’s not such a big sacrifice and you’ll be paying off your debt sooner. Besides, a year less of mortgage payment is a year less of interests because interest rate is calculated annually.

Moreover, a shorter repayment program has an additional implication: Since the money owed will be repaid sooner, the lender is taking a lower risk by lending the money and thus, the interest rate charged will also be lower. So, you won’t only be saving money due to shortening the repayment program and thus the interests, but the interest rate will also be lower making you save thousands of dollars with each quarter of a point of interest.

Lower Interest Rates

Depending on the loan length, the loan will carry a higher rate or not (The longer the repayment program, the higher the risk and thus the higher the interest). However, the rate will also depend on whether you choose a fixed or variable rate and whether you have a good credit score or not.

Nevertheless, you should always know that you can save money by shortening the repayment program or by prepaying the mortgage loan provided there are not penalty clauses in the loan contract that increase the cost of the loan if you decide to prepay. If so, you should check to see if you are really saving money by prepaying.

Refinancing Your Home Loan

All the above is important if you are planning to take a home loan. If that’s the case, you need to make sure that you are not overpaying a huge amount just to get a lower monthly payment that will save you only $30 or $60 a month. A little sacrifice every month can save you a lot of money on the long run (money you can invest to generate additional income).

However, if you already have a mortgage loan and you are ruing because you closed on a deal that is definitely not to your advantage, you don’t need to worry as you can always refinance your home loan so as to get better loan conditions and seize the benefits that are explained above.

Refinancing is a simple process: you take a loan that is secured on the same property as your previous mortgage on condition to repay the previous loan so the new one remains the only loan for which the property acts as collateral. You just need to make sure that by doing so, you are actually saving money because the costs of refinancing may be higher than what you save by getting better terms.

--- Kate Ross is a professional consultant at Speedybadcreditloans with fifteen years in the financial field. She helps people in the process of securing personal loans, mortgage, refinance or consolidation loans and prevents consumers from falling into financial scams. Also, you can click here to read more useful articles on this and other financial issues.