Types of Loans available in UK
With the current economic conditions and the market predicting worse, it is thus necessary to put aside some money for emergency. An emergency can strike at any time and during such a crisis you can rarely trust a bank to provide you a loan. Moreover, you need to be aware of the types of loans available in the UK so that you do not get duped in any manner and land up repaying an exorbitant amount with a rather high interest rate, which is not exactly appropriate for your cause.
Thus, it is necessary to learn as much as you can about the kind of loans that are available and also about the interest rates that are prevalent in the market to save yourself from being cheated.
What are the types of loans available in the UK?
There are a number of loans that are available in UK. However, there are two specific categories into which it is widely divided. They are:
- Secured loans:
For this kind of loans, the borrower commits some asset as collateral. For example, if a person borrows money, let’s say £30,000 to buy a house, and then the house can be listed as collateral. The rate of interest can be around 10.15% and is variable. This will then be acquired by the lender if the person fails to repay the loan, within the specified time limit.
- Unsecured loans:
These kinds of loan can be acquired from lenders by people who have a bad credit history and do not require an asset as collateral. They generally range from £1000 to £25000. Moreover, the interest rate depends directly upon the time period it will take for you to repay it back.
These loans are generally supplied by most lenders and we help you to find just the right kind for your purpose.
- Mortgage loan
This is a very common type of loan that is opted for by most British people. In this, you have to list your property or house as collateral. Usually, the interest rates for this kind of loans around 5.6% per year for an amount of £90,000. Again, there are different rate available, like tracker rate, variable rate, etc. from which you can choose.
- Non recourse loan:
This is a type of loan where a property can be listed as collateral for which a borrower needs not to be responsible. However, the loan has to exceed the amount of £50,000 for it to be approved.
This can be futher categorised into diffeernt sections. It comprises of a number of other loans like car loans, house loan, guarantor loan, payday loans, etc. These have variable conditions based on the kind fo loan you opt for. Like for example, for a guarantor loan, you can borow within the range of £1000- £7500.
- Subsidised loan:
This loan has its interest reduced by some hidden subsidy and is especially applicable for students who are pursuing their education. It ranges between £10000 – £15000 with an interest rate of 25% to 30%.
- concessional loans:
Also known as soft loan, this is granted on generous terms by cutting down the interest rates or relaxing the term for repayment.
- Short term loans:
They do not have any fixed term and have a floating interest rate based on the market.
So go ahead and opt from one of these types of loans available in the UK and we will help you choose the best out of them.