UK Finance Agreements Guide

Incase you aren’t familiar with different types of available UK loans I have put together this quick summary.

  • Secured loans are secured against property (usually your house), and if you cannot pay the loan then your house may be repossessed.
  • Unsecured loans do not give the lender charge over your property, but attracts a higher interest rate as it is a higher risk for the lender.
  • Guaranteed car loans are a ‘hire purchase’ type agreement where the loan is secured against the car. This is the most expensive kind of loan discussed here, with the highest interest rate; there may be insurance premiums to pay also.
  • Remortgages are a loan which is drawn against the equity in your house. These loans generally replace the existing mortgage on your house with a new (larger) one, and are secured on your home. They are usually an economical way to borrow larger sums of money for home improvements etc. Also available are bad credit remortgages for those with a bad history, possibly looking to consolidate their existing finance agreements.

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