Cheap Secured Loan Rates from the Whole of the Market

Michelle Tuvey Michelle Tuvey | Loan Underwriter

If you have seen one advert for a cheap secured loan, you've seen them all, right? Wrong. All loan adverts must include certain types of information in order to comply with regulations, but that does not mean all loans are created equally. In fact, they are not. There are plenty of differences between lenders and the secured products they offer.

There is a lot more to loaning money than the average consumer knows. For example, lenders began talking about Representative APR's as of 2011. Nonetheless, how many consumers know what a Representative APR is? In order to get the best loan rates possible, consumers need to understand the terms spoken by the banks. Let us talk about some of those terms.

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Interest Rates

Prior to 2011, companies advertising fast secured loans only had to disclose the standard annual percentage rate (APR). That rate is the amount of interest charged to the outstanding balance of the loan on an annual basis. However, APR alone does not take into consideration all of the costs of borrowing. Banks may charge all sorts of fees on a secured loan, including:

  • arrangement fees
  • property valuation fees
  • fees for registering consent of a second charge
  • administrative fees relating to land registry searches, credit searches, staff costs, etc.

The law now requires lenders to include all known costs as part of the total cost of lending. Therefore, the Representative APR is a combination of the standard APR and all of the additional costs. The Representative APR is obviously higher than the standard APR.

Most of the related fees do not change from one consumer to the next. It is money spent by the lender to complete the financial transaction. However, the standard APR will be different. It is determined by a number of factors including the amount of money borrowed, the length of the loan term, and the consumer's credit history and ability to repay.

Getting Cheap Loan Rates

Now that you know of little more about interest rates, the next question is one of getting the cheapest rates possible. You do that by comparing. There are many companies claiming to offer cheaper rates from the whole of the market, but there is no way to know without comparing them side-by-side. That is where our website and free advice becomes an invaluable resource.

When you compare offers side by side, you can see not only the Representative APR, but also loan terms, maximum loan amounts, and LTV ratios. This is the information that you need to decide which loan is the best for you. Again, let us define the terms:

  • Loan Terms – The loan term is the length of time you will take to repay the loan. The longer the term, the more money you pay in total.
  • Loan Amounts – Lenders advertise minimum and maximum loan amounts. This is the total amount of money they are willing to lend based on the value of a home.
  • LTV Ratio – The loan-to-value ratio is simply a measurement of how much a lender is willing to loan based on the value of the home being used as collateral. Lenders measure this in order to protect their own financial interests.

Obtaining a cheap secured loan from a reputable lender does not happen by accident. It is a process that requires thorough and deliberate research on the part of the consumer. We encourage you to take the time to fully understand and appreciate how secured loans work before you begin applying. As great as these loans are, the one drawback is that you could lose your home if you fail to repay what you borrowed.

If you are ready to begin looking for a loan, Secured Loan Expert can help. Our website contains a lot of helpful information that should answer most of your questions about long-term financing. It is our goal to make sure you are well informed so that you might make a wise financial decision. Our free advice is available to anyone and our experts can find the best deals that suit your individual circumstances from the whole of the market in a few minutes. Our team will help you compare the offers and choose the best deal and create and submit an optimised application that gives you the best chance of gaining approval to get the cash you need.

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