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Even though they are one of the simpler financial products available in the UK, buying or researching loans products is not always that straightforward. There are literally hundreds of potential lenders from which you can choose each with differing rates and repayment terms.
However, there are two main types of loan that are available in the UK, unsecured personal loans and secured homeowner loans:
Unsecured personal loans are repayable on a monthly basis at a fixed rate of interest. They are not linked to any underlying security, such as your home, meaning that the lender will have little option buy to sue you in the county courts to recover their money in the event that you fail to repay the loan.
Secured homeowner loans or second charge mortgages as they are sometimes known, are personal loans that are secured by a second charge on an already mortgaged property. With this type of loan, your home is at risk if you do not keep up with your repayments.
All loan products are advertised with an APR, or Annual Percentage Rate. The APR on a loan reflects the true cost of a loan to you, taking into account the loan interest rate and any additional charges. This makes it easier to compare loans with different up-front charges and introductory discounts, meaning you can make an informed choice when you decide which one to take out.
Hopefully this loans guide and glossary should give you all the information you need to make an educated, informed purchase decision.
Click the links below to access the different topics in the guide:
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UK Loans Guide: