How to do an Exact Comparison of Home Improvement Loans UK!
Taking a serious look at secured loans can be a confusing experience. There are so many choices being offered by lots of banks and building societies. However, do not let all of the choices scare you away. When you know how to compare loan products, you will find it is not so difficult to find and obtain affordable and powerful home improvement loans - UK property owners do it all the time.
The thing to remember is that comparing loan products is a lot like comparing car insurance. You have to look at not only the bottom line price, but also the additional costs and the overall value of what you are getting. To that end, there are three important things that should form the basis of your comparison:
- representative APR
- loan terms
- loan-to-value (LTV) ratio.
You will notice that lenders advertise a representative APR on their secured loan products. This number should not be confused with the standard annual percentage rate (APR) we are normally used to. A representative APR is a combination of the standard APR and all the additional fees and charges assessed by banks. The combination of all these things is known as the ‘total cost of borrowing’.
A representative APR is the most important thing to look at when searching for affordable secured loans. That being said, just because a lender advertises a certain representative APR does not mean you will be approved at that rate. You may end up at a higher rate. Second, it pays to know the details about all of the additional charges and fees. The best home improvement loans UK come with minimal additional costs above and beyond the interest you pay.
The advertised loan terms relate to how much time you have to repay your loan. This is an important number inasmuch as it will directly affect your monthly payments. For example, a £50,000 loan with a 10-year repayment term will cost you more per month than one with a 25-year term.
When comparing terms, it is helpful to know what your monthly budget will allow for payments. You can use an online payment calculator to determine how much a specific home loan will cost you every month. This will tell you what representative APR and term to look for. It is a quick and easy way to target the lenders most likely to give you a cheap, affordable deal.
Lastly, do not assume that you will automatically be able to borrow up to the total amount of equity you have in your home. There is also the LTV ratio to consider. Banks use this ratio as one of the determining factors in measuring how much risk they are assuming by making a loan. A combination of a low LTV ratio and poor credit could mean you are eligible to borrow substantially less than what your equity allows. Ideally, you are looking for loans with the highest LTV ratio possible.
Be sure to compare as many lenders and loan products as you possibly can. Every loan you include in your comparison represents another opportunity to get the best deal. If you have questions about a particular loan product, do not hesitate to contact our team of friendly secured loan experts. Our experts offer free advice, have instant access to a whole of market panel of lenders and a thorough understanding of each lenders products, charges and underwriting criteria. We are here to help you get the best deal possible and are not tied to any particular lender. Our favourite lender is the one offering you the best deal.
When you diligently compare, you can make the best use of affordable home improvement loans. UK lenders are ready to make you loan offers based on your credit rating and the equity in your home. At Secured Loan Expert, we believe you should take advantage of secured loans for home improvements. These can provide the cash you need to make your home more enjoyable while also increasing its retail value.
For free professional help and advice on any aspect of secured loans call our friendly team of experts today.
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