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General Notes - Meaning of loans terms .
FLEXIBLE LOAN
A flexible loan is probably the ideal agreement for most people. The loan provider usually charges a slightly higher interest rate for this service, but gives you the option of changing repayments on the loan to vary the duration of the loan, or you can take a payment holiday if you go through a tough patch, or you can top up your loan with a new agreement. The chance to change every part of the loan agreement as you go along makes this the best loan out there for many people. You are usually subject to a variable interest rate with this type of loan, and you will also need a good credit rating to get a flexible loan.
FIXED INTEREST RATE LOAN
A Fixed-rate loan is an agreement between yourself and the loan company where the interest rate is set at the beginning of the loan, so you know exactly how much your monthly repayments will be and for how long. Even if the Bank of England interest rates change your repayments will always stay the same. At a time when interest rates are low (they are now) it can be a great advantage to agree to a fixed rate low interest loan and have the security of knowing that even if the interest rate doubles over the next five years (it has happened in the past) your repayments are locked at the original rate.
VARIABLE INTEREST RATE LOAN
A variable rate loan means that the loan company will vary the interest rate according to base rates set by the Bank of England. Most people are wary of signing up to this type of loan other than for mortgages, as no-one can predict what might happen to the economy over the period of, say, a five-year loan - if interest rates rise what started as a cheap loan could turn out very expensive in the long run.
LOAN FOR BAD CREDIT RATING
If you have a bad credit history or have CCJ's (County Court Judgements) against you then you will be classed as having a bad credit rating. Some brokers deal in secured and unsecured loans for bad credit cases and can also help you find a mortgage. Be aware that you could risk further damaging your credit rating if you apply for loans but are rejected - every loan provider will run a credit check on you before approving a loan.
HOME IMPROVEMENT LOAN
If you're taking out a home improvement loan then some of our loan providers offer a deferred first payment - agree your loan and start working on your home knowing that the first repayment isn't due for three months. If you take the time to browse through the rates on offer we'll try to point you towards the best loan for you, be it low interest, high flexibility, debt consolidation, or whatever you need. A home improvement loan can be a sound investment as you are putting your money into the one thing you are confident can yield a good return. Home improvement loans are very popular at present as people use this type of loan to either improve their property and thus enhance the home they live in, or to capitalise on the re-sale value prior to marketing a property they wish to sell.
BANK LOAN
You have probably received letters through your door from your bank offering you a personal loan, but before you apply for a bank loan you should check cheap loan comparison tables in sites recommended in our links. Even if you already have a bank loan then check the repayments and have a look at our loan providers to see if you could take out a consolidation loan to pay off the bank with a cheap low interest loan and save money. Many feature several high street banks who will lend you money via an Internet application at a reduced interest rate. The banks can offer these "internet only rates" because by applying online you save them money in marketing and administration costs.
CAR LOAN
If you're taking out a car loan then many providers have special deals - Virgin offer a discount on a new or nearly-new car, and Cahoot offer a special low-rate loan which defers some of the purchase price until the end of the loan period, leaving you free to sell the car, trade it in, or keep it and extend/pay off the loan. One of the most popular reasons for a loan is to purchase a new car.
DEBT CONSOLIDATION LOAN
If you owe money on a variety of different financial services, i.e. credit cards, store cards, overdraft, bank loans etc. then you are probably paying too much in interest charges. By taking out a debt consolidation loan you can pay off all of your outstanding balances and reduce them to one regular low interest loan repayment, leaving you free to either pay everything off more quickly or, reduce your monthly payment and regain control over your finances.
UNSECURED LOAN
The most popular loan taken out in Britain in an unsecured personal loan where the loan company will assess your personal circumstances and credit rating to make a decision as to whether they can offer you a loan, or if you are considered high-risk, what interest rate to charge you. The alternative is a secured personal loan where the repayment of the loan is guaranteed by the value of your house or other assets.
The above is an explanation of loan types and description of loans terminology . Commonly asked FAQ's - Loans questions answered is to be added shortly .
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