What is the difference between a secured loan and remortgage loan? Which will best suit your needs when you need additional funds in your life? Knowing the basics of a remortgage loan and a secured loan is the best starting point to decide between the two options.
- What is a secured loan? This is a loan that will use your home or property as a secured item. You are basically putting your property up as collateral in the event you default on the loan. The lender is “secured” in that they will receive their payments either through monthly means by the borrower, or by seizing the property put up as collateral for the loan.
- A secured loan has some advantages such as typically lower interest rates, longer repayment terms, larger loan amounts, and less than perfect credit is typically welcome to apply. Choosing a secured loan is a good choice when you need a large sum of money for items like home improvements, or to consolidate debts.
- Another type of loan is a remortgage. To qualify for a remortgage loan, you must already own a property with another active mortgage. A remortgage will allow you to switch from your current mortgage to a new mortgage with different rates. You keep your home, you just change your mortgage payments!
- People typically utilize a remortgage when they need a large sum of money. This can be expenses like high interest rates debts, building a large extension on your home, or even if you are struggling to make your current mortgage payments. At times, a remortgage will lower your monthly payments, and make your mortgage more manageable for your pocketbook.
- To take advantage of a remortgage, you must own a home with an active mortgage. Like a secured loan, you will go through a credit check, and this is where things can become a little tricky for individuals with less than perfect credit. Just like a secured loan, there are companies that will work with you to see if you qualify for a remortgage opportunity.
These are a few things to keep in mind when you need to decide between a secured loan or remortgage. There are many mortgage companies in the UK that offer both options to individuals ready to apply for a new opportunity. A UK Bad Credit Mortgage is the answer for applicants looking for fair interest rates, and various options on different remortgage loans.