An individual voluntary agreement (IVA) is a suitable solution if you’ve found yourself in overindebtedness.

It’s a legally binding and formal agreement between you and your creditors to repay all or part of your debt over a specified time.

To ensure you don’t worsen your situation and can consistently make monthly IVA payments, IVAs come with certain conditions you must accept, including restrictions on taking out further loans.

Let’s explore how you can secure a loan with an IVA.

Can I Take Out Loans During An IVA?

While your IVS is ongoing, you can’t borrow more than £500 without permission from your insolvency practitioner (IP), who sets up and manages the IVA.

The restriction includes both formal and informal loans.

You must contact your IP if you need a loan greater than £500 when faced with a sudden expense or emergency. They’ll need you to explain why you need the loan and discuss your options with them. If your IP feels that the loan is warranted, they’ll permit you.

The restriction ensures you don’t get into further debt and keeps your IVA running smoothly. You’ll be going against the IVA terms if you take out a loan larger than £500 without the permission of your IP. You risk termination of your IVA if you do, and you can face legal action against you.

Check Today's Best Rates >

Will The IVA Affect My Credit Rating?

Details of your IVA will remain in your credit file for six years from the date the IVA starts, and this will negatively impact your credit rating. Even with permission from your IP, you’ll find it difficult to access credit in the short term.

Details of IVAs remain in a public register called the Individual Insolvency Register for the length of the IVA. Anyone can check this register, including lenders, when you make a loan application.

It may be hard finding a lender willing to lend to you since having an IVA means you’re already struggling with debts. Even if you do, they’ll likely charge high interest rates and include some string terms.

Traditional and high street lenders like banks will likely reject your application automatically once you fail their credit check. You’ll have better chances with specialised lenders who provide loans to borrowers with bad credit, and you can only access them through lending brokers and advisers with a whole of market access.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

IVA Early Settlement Loan

There are occasions where you may be able to settle your IVA early with a full and final settlement and free yourself from its constraints. Usually, after three years of the IVA, you can get a loan to pay your IVA off early. It releases you from the IVA and helps build up your credit score.

You’ll need to offer your creditors one lump sum and ask them to agree that no further monthly payments will be required from you once you pay. Although your IVA will be considered complete, keep in mind that:

• The IVA will remain in your credit file for six years from the start of the IVA.
• You may still find it difficult to access loans and credit options straight away.
• You’ll have to repay the loan you take out to settle the IVA early.

You’ll need to inform your IP that you wish to settle your loan early and discuss it with them. If your IP feels the offer is reasonable and likely to be accepted by your creditors, they’ll arrange a variation meeting. It’s usually proposed when changes need to be made on the original terms of the arrangement.

You must be clear and transparent in your proposal about where the money is coming from to assure them it’s from a legitimate source and not included in your IVA like your inheritance. Similar to the original IVA proposal, 75% of your creditors by value must agree to your lump-sum offer for it to go ahead.

Various lenders offer IVA early settlement loans, and you can contact them once you have permission from your IP and creditors. You’ll find that they have criteria you must fulfil to be eligible, like the amount of time the IVA has been active, any current arrears or the number of missed IVA payments.

Check Today's Best Rates >

How Much Would I Need To Settle My IVA Early?

The amount needed to settle the IVA arrangement will be different for each individual because no two IVAs are the same. The amount can depend entirely on how much is left on the arrangement, and it may be up to your creditors.

It’s wise to aim for offers as close to the amount you owe as possible. It’s up to your creditors whether they accept your offer, and you must ensure the early settlement does not disadvantage them. If creditors reject your early settlement offer, you’ll simply continue making IVA payments as originally agreed.

Other Funds That Can Settle Your IVA Early

Money gifted by a friend or family member can also settle the IVA early. A lump sum provided by a third party to settle the IVA early is usually accepted. You’ll need to discuss it with your IP and provide some information about them before they approach your creditors, and this can include their ID, consent and proof of funds.

Note that windfalls received during your IVA are normally paid into the arrangement in full. Such injection of extra funds doesn’t automatically reduce your IVA length, and you’ll continue making monthly payments.

However, depending on the amount you can pay as a lump sum, the length of your IVA can reduce, especially if you’re able to pay your creditors back in full plus the IP fees. A variation meeting isn’t necessary for such scenarios, and you can simply complete your IVA.

Can I Borrow From Friends And Family During My IVA?

The same rules apply for informal loans, and you’ll be restricted from borrowing above £500 during your IVA, even if it’s from friends and family. If you can’t make do without a loan, then you can talk to your IP for permission and guidance.

Borrowing from family and friends is usually discouraged during the IVA because it can easily impede the progress of your IVA. You’ll likely show preferential treatment towards them and pay them back first, which can upset the other creditors and cause your IVA to fail.

Securing A Loan As A Homeowner During Your IVA

As a homeowner with equity in your property, you may be required to remortgage in the final year of the IVA. Your home’s value is usually taken into account as part of your IVA, and in the final year, you must get a valuation to determine how much equity is in it.

If the valuation shows more than £5000 equity in the property, you’ll be required to remortgage to raise a lump sum that goes into the IVA. However, you’ll not be required to sell your home.

The IVA places a limit on the amount you’re expected to raise by remortgaging based on the value of your home and the amount of mortgage you already have. If the new mortgage would extend beyond the existing mortgage or your state retirement age, then you’re not expected to remortgage.

You’ll simply continue making the usually monthly IVA payments for the remaining twelve months if you can’t remortgage.

Secured Loan With IVA Final Thoughts

Getting a loan with an IVA can be challenging and even impossible at times. It’s only advisable when there’s no other choice, and you simply need to contact your IP for advice and permission for loans above £500.

Give Mortgageable a call today at 03330 90 60 30 or contact us to speak to one of our friendly advisors.

Secured loans involve providing a valuable asset or property as collateral for loan repayments, and lenders may require various documents as proof of ownership, income, and affordability.

It’s crucial to have everything you need ready to avoid delays and expedite the process.

Let’s explore everything involved in applying for a secured loan in the UK.

Information Needed For Secured Loan

The lender will need a few details to confirm you’re eligible for a secured loan.

These include:

• Details of the property you’re using as security, such as the valuation or address
• Your full name and proof of ID, date of birth, and address
• Your monthly income
• Your employment status, whether it’s self-employed, full-time, or part-time
• Affordability through your income and outgoings and how you’re going to repay, whether it’s through rent, income, or sale

Check Today's Best Rates >

How Secured Loan Applications Work

With secured loans, you can borrow money against the value of a property you own or are looking to buy. You can use the house you live in to secure the loan in the form of a second mortgage, especially if you need to raise funds for things like home improvements, debt consolidations, or other financial needs.

A secured loan can also involve a buy-to-let mortgage where you buy a property intending to rent it to tenants. It’s wise to consider how much you can comfortably repay without financial strain before borrowing because the loan is always secured against the property.

Once you qualify, the lender places a lien on your property, giving them a legal right to seize it if you default. If you fail to repay or fall back on repayments, the lender can repossess the property and sell it as a last resort to recover the loan.

You risk losing your home or property, so you should never take out more than you can afford.

Secured Loan Process

The process of getting a secured loan usually involves the following steps:

Fact-Finding

Most secured loan processes usually start with fact-finding, where the lender confirms your basic details, including your name, address, date of birth, employment details, property type, and loan requirements.

The lender assesses whether the loan is appropriate for you and ascertains that you meet the basic requirements before requesting more information.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Searches

Although a secured loan is less risky for lenders, it usually requires a hard credit check. Credit searches are performed to assess your creditworthiness and how well you’ve handled or repaid loans or credit in the past.

Apart from credit searches, a land registry check is also performed on the property you’re eyeing to determine whether any potential issues exist that can affect the loan.

The findings from such searches can influence the terms of the deal, and the lender may make adjustments resulting in higher or lower interest rates and loan to value ratio (LTV).

Valuations

These involve determining the value of the property in question, and you can arrange it yourself, or the lender can do it. Nowadays, most valuations are done automatically using different technologies. However, some need to be done manually, which involves site visits by surveyors.

Depending on the property location and availability of the surveyor, it can take a few days plus a few more to write up and confirm the report. Such valuations enable the lender to determine the loan to value (LTV) ratio, which is the ratio of the loan to the property’s value.

Final Checks and Documents

The lender needs to conduct various checks at the final stage. It may also include their solicitors and senior management, who conduct quality checks or fraud checks before lending to you.

Once this is done, they’ll likely send you an agreement to review and sign. After the process is complete, the lender will transfer the funds into your account.

How Long Does It Take To Get A Secured Loan?

Depending on the lender and how quickly you respond and provide the required information, getting a secured loan can take 2 to 4 weeks. You can find lenders who offer an entirely online process from application to disbursement, expediting the process.

Others still prefer receiving and sending out documents through the post, requiring more time. The time required can depend on how quickly you can get the necessary documents signed and delivered to the lender. It can also depend on how long the lender needs to process your application and perform the required checks.

Some lenders provide borrowers with a seven-day reflection period. You’re given seven days from the day of your application to change your mind and back out without incurring any charges.

Secured Loans Vs. Unsecured And Personal Loans

Unlike secured loans, unsecured and personal loans don’t require you to provide any property or asset as collateral for loan repayments. Lenders mainly concentrate on your affordability and creditworthiness when determining your eligibility.

Your monthly income and expenditures determine such affordability. Your credit and income are vital for approving unsecured loans, and you’ll need to show proof of consistent employment and income. However, some specialist lenders also consider those with bad or non-existent credit provided they can afford the requested amount.

Unsecured and personal loans usually take shorter processing and payout than secured loans because no property valuations and checks are required. They also feature less paperwork, and you can have your application approved in a matter of minutes and paid out in a few hours!

Is It A Must I Own The Property To Get A Secured Loan?

No. Secured loans work by using equity, which is the amount of the mortgage you’ve already paid off, as collateral for the loan. You can borrow based on the equity of the property that you own.

If you’ve already paid off the mortgage and own the property outright, you can borrow more significant amounts with a secured loan and get better terms and interest rates.

The value of your collateral should be greater or equal to the loan amount to be accepted. It ensures the lender can recover the loan amount if you default or fail to make repayments.

Check Today's Best Rates >

How Property Type Can Affect A Secured Loan

Lenders will have different policies and requirements depending on the property you have or want to get. Specific residential categories can have more challenges than others, involving more paperwork or higher deposits for the loan or mortgage.

A 20% deposit is usually standard for attractive secured loan deals when buying properties, which would involve an 80% LTV ratio. However, if the lender considers the property higher risk, they’ll require you to come up with a higher deposit.

For example, if you’re looking for a secured loan for newly built homes, you may face certain restrictions where the lender requires you to work with particular construction firms or builders.

Properties with non-standard constructions may also present additional challenges that require more documentation and paperwork. Such properties include:

• Ex local authority properties
• Properties above other commercial properties
• Properties are constructed unusually, such as those with thatched roofs or pre-fabrications
• Studio flats or apartments that are very high rise
• Properties where hazardous materials like asbestos are used in the construction

You may find it challenging to access suitable secured loan deals with such properties, meaning you may get higher interest rates or need a higher deposit.

What Documents Do I Need For A Secured Loan? Final Thoughts

It’s vital to consider the risks involved in secured loans because you can lose your home if you fail to repay.

Ensure you only borrow based on your affordability and accurately provide all the information the lender needs.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Loans and other credit options usually fall under two main categories, secured and unsecured.

The main difference is the presence or absence of collateral, a form of security for the lender against non-repayment by the borrower.

Here’s everything you need to know.

What Is A Secured Loan?

A secured loan involves borrowing money against an asset you own.

The asset acts as security or collateral that the lender can repossess to recover the advanced amount if you can’t repay the loan.

Most lenders use property like your house as security. You can also secure a loan on other valuable things like your car, electronics, expensive jewellery, or other assets.

Lenders face less risk with secured loans because they can use the asset to recover their funds if they default.

They’re more willing to advance higher loan amounts and low interest rates because they know you’ll be motivated to repay to avoid losing your asset.

Lenders will place a lien on the asset you use as security, giving them the legal right to repossess it if you default. When you fall back on repayments or default, they can repossess your asset and sell it as a last resort to recover the advanced amount.

A lender will require that the asset’s value be greater or equal to the advanced amount to ensure they can recover the loan amount if necessary.

They’ll also need it to be maintained or insured under certain specifications to maintain its value. It can include having home insurance for properties used in mortgages or car insurance coverage for auto loans.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Pros And Cons Of Secured Loans

Pros

• You can borrow larger amounts
• Longer repayment periods can translate to lower monthly repayments
• They feature low-interest rates
• Easier to qualify for even if you’re self-employed or have a bad credit history

Cons

• You can easily lose your home or asset if you fail to repay
• Some secured loans feature variable interest rates, which can increase your monthly repayments
• You may end up paying more interest overall because of the extended repayment period.
• They can feature other costs like arrangement fees or other set-up costs you have to factor in when working out the loan’s total cost.

Check Today's Best Rates >

Types Of Secured Loans

Homeowner or home equity loans

These refer to loans secured against your home and involve large sums you repay over long periods of 3 to 25 years.

Logbook loans

They’re secured against your car, and you can borrow 50% or more of your vehicle’s value. They can have high-interest rates and last up to 5 years.

First and second charge mortgage

First charge mortgages are loans taken out when you have no existing mortgage. Second charge mortgages involve setting up a separate agreement from your existing mortgage with the same lender or a different one.

Vehicle finance

These loans are secured against a vehicle you’re looking to purchase but don’t already own through a finance agreement. It can last from one to five years, and you’ll only own the vehicle after you’ve made the final payment.

What Is An Unsecured Loan?

Unsecured loans are cash loans that don’t require you to provide your assets as collateral or security. You simply borrow money from the lender as a lump sum and agree to repay the amount plus interest over a pre-agreed time frame.

Because there’s no security involved, they tend to feature higher interest rates, and you can incur additional charges if you make late repayments of miss one. How much an unsecured loan will cost you will depend on how risky a borrower the lender considers you to be.

It’s usually referred to as risk-based pricing and can be influenced by things like:

• The amount you want to borrow
• The period you need for repayments
• Your income
• Your credit history

Although the risk is lower for the borrower, it doesn’t mean you can default without consequences. The lender can initiate legal actions against you to recover the loan amount, and your credit score will be impacted negatively when you miss repayments.

Pros and Cons Of Unsecured Loans

Pros

• Offer more flexibility than secured loans
• The borrower faces no risk to their property or assets
• They feature quick application and approval that provide quick funds in a hurry

Cons

• You need good creditworthiness to qualify for the best rates in the market
• They can be more expensive than secured loans
• They often feature smaller loan amounts than secured loans

Types of Unsecured Loans

Personal loans

These allow you to borrow a lump sum that you repay in instalments over a pre-agreed time frame. You can use the funds however you like without restriction.

Guarantor loans

These involve incorporating the help of a responsible friend or relative who agrees to repay the loan when you can’t. They’re suitable if you’ve found it difficult to get approved for a loan independently. The guarantor must have a good credit history and stable finances to qualify.

Cash advances

A cash advance is a short-term loan where you get a portion of your next income before receiving it. It usually features small amounts that provide you with some bridging cash to make it to the end of the month. They’re usually repaid within a few days or weeks on the day you get paid.

Risks Of Secured And Unsecured Loans

Both secured and unsecured loans come with certain risks. These include:

• If you miss repayments, make late repayment or default, you can damage your credit score.
• You may be tempted to borrow larger amounts than you can afford, which can put you in financial strain or hardship as you struggle to repay.
• You may incur late fee penalties if you make late repayments or early settlement fees if you pay off the loan early. Ensure you carefully understand the terms of the deal to avoid penalties.
• Legal action can be taken against you if you default on the loan. You’ll be considered to have defaulted if you miss payments for three to six months.

Check Today's Best Rates >

Should I Choose A Secured Or Unsecured Loan?

Picking the right loan option for you can make borrowing easier, cheaper and lower risk. Various things to think about include:

• Why do you need to borrow

Why you need the money and how you intend to use it can determine the right loan option for you. For example, the right loan to buy a home will always be a mortgage. Other reasons you may need a loan include buying a car, consolidating debt, financing a holiday, or making a large purchase.

• How much do you need

The amount you require can also determine the appropriate loan for you. Generally, secured loans offer larger amounts and are a great option if you want to borrow more, while unsecured loans offer small amounts that are easier to repay.

• How long do you need to pay back?

Most secured loans offer longer repayment periods than can go over ten years. With unsecured loans, you’ll get from one to seven years, but some lenders are flexible and can offer longer periods.

Unsecured loans are excellent if you plan to pay the amount back quicker. Remember, the longer the period, the more interest you’ll pay overall. You’ll also need to make higher monthly repayments with shorter periods.

• Your circumstances

Situations like having bad credit or being self-employed can limit the number and types of loans you can access. A strong or positive credit history allows you to choose from all kinds of loans.

Secured And Unsecured Loans Final Thoughts

Whether you’re taking out a secured or unsecured loan, you must carefully consider your circumstances and how much you can realistically afford. When possible, unsecured loans are usually the best option because they feature less risk to your home and assets.

Give Mortgageable a call today at 03330 90 60 30 or contact us to speak to one of our friendly advisors.

Getting rejected for a loan can be discouraging, especially when you’re in urgent need of funds.

There can be many reasons why this can happen, and it’s essential to understand why before making any other credit applications to avoid damaging your credit history.

While some lenders will tell you why your application was rejected, they don’t always have to, even when you ask.

Let’s explore some common reasons why loans are denied and what you can do to get your next application approved.

A Poor Credit Rating

Nearly all licensed, reputable lenders will look into your credit as part of your loan application assessment.

Your credit rating is essential in getting your loan approved since it tells the lender how you’ve handled credit in the past.

A low score is usually a red flag for many lenders, and it’s wise to check your credit score to see where you stand before applying for a loan.

Sites like ClearScore or Experian allow you to check your credit score for free.

Although all bad credit is pooled into one, there can be varying levels of bad credit.

You may have defaulted on a past loan, or you simply applied for too many loans in the past.

Depending on the issue, you can find specialised lenders who help borrowers with a less-than-perfect credit history.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Insufficient Income

Responsible lending requires that lenders only advance loans you can afford to pay back without getting into financial hardship.

Such affordability is usually assessed by looking at your income and monthly expenditures. You’ll have little chance of approval if you apply for a large loan with a low or inconsistent income.

Ensure you only apply for loans you can afford to repay based on your income and outgoings.

Work out the repayments for the amount you’re applying for to determine if they’re manageable based on your current income.

Non-existent Credit History

Even without a credit history, lenders will consider you a bad credit borrower.

With a non-existent credit history, lenders have no way of knowing what kind of borrower you are. It’s often the case with young adults who are yet to build their credit history, or you recently moved to the UK and can’t transfer your credit history across borders.

Consistent bill payments or applying for a credit card can help you build your credit history. Some phone companies even report to credit reference agencies, and paying them on time can improve your credit score.

Check Today's Best Rates >

Outstanding Debts

If you currently have several outstanding debts or loans you’re repaying, it can be alarming to potential lenders, especially if you’ve maxed out your credit. It’s wise to put more effort into reducing your current debts before applying for a new loan.

Errors In Your Credit Report

Mistakes or errors in your credit reference file can lead to automatic rejections among some lenders.

That’s why it’s essential to check your credit report and ask for a copy of your file if possible. If you spot any mistakes, you can write to the credit reference agency and ask them to correct them.

You may be required to provide enough evidence to support your case, and within 28 days, the issue on your report will be investigated.

Excessive Loan Applications

If you’ve been consistently making loan applications even while getting rejected, you’ve probably been damaging your credit without knowing. Recurrent applications look bad, regardless of whether it’s to the same lender or different ones.

Successful and unsuccessful applications register search markers on your credit file. You shouldn’t keep making applications once you’re rejected before remedying the causes. You can also restrict yourself to lenders who only conduct soft credit searches that don’t appear on your credit file.

Actions To Take If You Can’t Get A Loan

Improve Your Credit History

Your credit history is one of the most likely reasons you can’t get a loan. Improving your credit score before you apply for a loan can significantly improve your chances of approval. You can do this by:

• Taking out small amounts you can quickly repay on your credit card and repaying on time without fail.
• Register the electoral roll as a voter. It can help in your verification among credit reference agencies.
• Have utility bills in your name, even if you’re sharing a house with others.
• Set up direct debits for bills to ensure they’re always paid on time without delays.

Reduce Any Outstanding Debts

Try to reduce or pay off any existing debts before applying for a new loan. Existing debt is another common reason why borrowers can’t get a loan because lenders may not believe you can handle paying off too many debts at the same time. Consider how you can plan and budget better to pay off all your obligations or find alternative sources of income.

Find Alternative Sources Of Funds

Don’t make more applications once you’ve been rejected. Multiple applications damage your future credit chances, and it’s better to find an alternative source for the funds you need. Selling off old items, borrowing from a friend or family member, or starting a side hustle can provide an alternative avenue for cash flow.

Find Specialised Lenders

Nowadays, you can find lenders who specialise in helping all kinds of borrowers in the UK. Specialised lenders will consider your application and approve your request whether you have low income, bad credit, or no credit history.

Instead of concentrating on your credit history, such lenders focus on your affordability based on your income and expenditures. They provide personalised offers suitable to your circumstances to help you get the funds you need.

You’ll not find such lenders advertised and your best bet to access them is through brokers and advisers. They can help you find suitable lenders who will likely approve your request based on your circumstances, and this saves you both time and money.

The best part is that you get access to loans without worrying about your credit score, which will help improve your credit when you repay on time.

Check Today's Best Rates >

Provide Security

Having security involves providing a valuable asset used as collateral for the loan. With security, the risk to the lender is significantly reduced. If you fail to repay the loan, the lender can repossess the asset and sell it as a last resort to recover any outstanding balance.

The lender knows you’ll be motivated to repay to avoid losing your asset and will be more than willing to advance the loan regardless of your credit history. Assets you can use as security include your home, car, stocks, electronics and equipment or valuable jewellery.

Remember, you risk losing your assets when you default, so only borrow what you can afford to repay.

Incorporate A Guarantor

If you’ve found it challenging to get approved for a loan independently, a guarantor can help open the doors to borrowing for you. Having a guarantor involves incorporating a responsible person in your life in the loan application. It can be a trusted friend or family member with a good credit history and stable finances.

The guarantor agrees to repay the loan when you can’t, effectively ‘guaranteeing’ the loan and reducing the risk for the lender. With a guarantor, you can find better deals and terms than if you applied for the loan on your own. Since it’s such a big ask to a family member or friend, it’s vital you only borrow what you can afford to avoid getting them into trouble.

Why Can’t I Get A Loan? Final Thoughts

The lending world has made great leaps and bounds to provide all UK residents with access to financing despite their borrowing history.

Most online lenders are very flexible, and a lending broker or adviser can help you find a suitable solution based on your circumstances.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

A £30,000 loan can have a dramatic impact on your life and help you cover a wide range of purposes and desires.

£30,000 is a large amount to borrow, and it can be secured or unsecured depending on your credit history and lender.

To many, a £30,000 loan is the proverbial shining light at the end of the tunnel because it makes it possible to afford things you would otherwise have to save for many years for. Here’s everything you need to know about £30,000 loans.

How Does A £30,000 Loan Work?

You can apply for a £30,000 loan online through a quick application process that only takes a few minutes. They usually involve an agreement between you and the lender where you promise to repay within the agreed timeframe.

Once you’re approved, your application will be processed usually in a short time frame. You’ll then receive a lump sum and repay the money plus interest over the chosen term until the loan is settled.

Check Today's Best Rates >

Most lenders offer fixed interest rates for £30,000 loans, and they’re usually repaid in monthly instalments. This means the interest and monthly payments will remain the same for the entire loan term.

When assessing your application, lenders will consider your monthly income and expenses to determine affordability.

They’ll also look at your credit history, which will tell them how you handle your finances and your likelihood of repaying the loan.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Uses Of A £30,000 Loan

You can use a £30,000 loan for any purpose without restrictions. Common uses include:
Personal And Business Needs

You can use a £30,000 loan to finance different personal financial needs, whether large or small. You can accomplish what you desire or buy what you need now and pay later through affordable monthly payments.

A £30,000 loan can help you buy a home, car, land, advance your education, finance your dream wedding or take your family on vacation or a holiday retreat. You can use it to invest in yourself and acquire new skills to advance your career.

A £30,000 loan can give you the boost you need to get started if you have a business idea but no funds for capital. If you already have a business, the occasional cash injection may be necessary.

With a £30,000 loan, you may be able to cover the costs of current and future business needs. It can help you get new stock, resources, and equipment or when you need to expand your business or relocate.

Home Improvements

Home improvement projects can be very costly, but with a £30,000 loan, there’s no need to worry. It’s an excellent way to re-invest in your property and improve its curb appeal and value. Whatever home improvements you desire, a £30,000 loan can provide the finances you need to cover the costs.

You can use it to achieve your goals, including a new bathroom, kitchen, extensions, or conversions. A £30,000 loan can also come in handy when you need to carry out urgent home repairs or maintenance like replacing an entire roof, buying new shingles or exterminating a termite infestation.

Check Today's Best Rates >

Consolidating Debts

It may feel like you don’t have a way out as you struggle under the weight of multiple high-interest debts, but you do. You can use a £30,000 loan for debt consolidation where you combine and pay off multiple outstanding debts at once using the proceeds from the loan.

If you owe money on various debts with high interest rates, you can use a £30,000 loan to cover the total amount. You can eliminate the debts from different creditors and remain with only one lender to deal with.

Instead of making multiple payments to different creditors every month, you’ll be making one manageable monthly payment.

It will allow you to catch your breath, and you’ll benefit from reduced costs and the simplicity of a single loan.

£30,000 Loan with Bad Credit

Lenders may still consider you for a £30,000 loan even with bad credit. Even if your credit score is because of late payments, defaults, or county court judgement (CCJs), a £30,000 loan is still within reach.

Many understanding lenders in the UK will consider you even if you’ve had an Individual Voluntary Agreement (IVA) or are currently on a debt management plan.

Instead of focusing solely on your past financial troubles, lenders who specialize in lending to bad credit borrowers will consider your current circumstances. Working with a loans advisor can help you find specialized lenders who help borrowers with bad credit access financing solutions.

Improving Your Chances of Approval

If you have a bad credit score or are finding it difficult to get approved for a £30,000 loan, you can improve your chances or approval and get reduced interest rates by:

Providing Security

You can secure a £30,000 loan by pledging one of your valuable assets as collateral for loan repayments, usually your home. The lender will place a lien on the collateral and acquire the right to seize it and sell it as a last resort to recover the loan if you default.

With security, lenders know you’ll be motivated to repay the loan to avoid losing your assets. If you’re using your home as collateral, a home visit will not even be necessary, thanks to online property valuation, and you won’t need to contact your mortgage company.

A secured £30,000 loan is more accessible if you have a bad or non-existent credit history. You’ll get favourable terms and easy monthly repayments that will improve your credit score in no time.

Check Today's Best Rates >

£30,000 Loans for Bad Credit Final Thoughts

A £30,000 loan can help you cover high costs and expenses now and let you repay in easy monthly instalments over a long period. It’s crucial to ensure you can comfortably repay the loan before you commit, especially if you’re securing it against your home.

Even with bad credit, you can greatly improve your credit scores by diligently making repayments on time. Ensure you have a reasonable monthly budget and avoid additional debts before repaying the loan in full.

Give Mortgageable a call today at 03330 90 60 30 or contact us to speak to one of our friendly advisors.

Loans against your house allow you to borrow large sums of money and get access to the funding you need when you need it. A loan against your home is the same as a secured loan.

Unlike unsecured loans, secured loans may allow you to borrow considerable sums at a lower interest rate even if you have bad credit.

Read on to find out everything you need to know about taking loans against your house.

How Do Loans Against Your House Work?

Loans against your house are loans that use your property as collateral. You can only take out a loan against your house if you own all or part of your home in what is known as equity in your property.

The lender will use the value of your property or the equity to determine how much you can borrow up to a certain percentage of the value.

The value of your house acts as the security for the loan, and you must pay off the loan each month over an agreed time frame.

If you fail to keep up with repayments, you risk losing your home because the lender can take action to repossess and recover the outstanding debt.

Check Today's Best Rates >

When you apply for a loan against your house, the lender will want to see if you’ve built up equity in your home if you don’t own it outright. It involves having paid off part of your mortgage or having a home that’s increased in value.

Lenders will also look at your credit score and monthly income, and outgoings to determine affordability. They’ll use this information to decide how much they can advance to you and the interest rate they’ll offer.

Types Of Loans Against Your House

You can take out different types of loans against your house, including:

Secured Loans

These are loans secured against the value of an asset, in this case, your home. They’re also called homeowner loans, and they feature large amounts and more extended repayment periods than standard loans.

Second Mortgages

Also called a second charge mortgage, this is a secured loan that uses the equity or capital in your home as collateral. The amount you can borrow on second mortgages will depend on the difference between your home’s value and the amount you owe on your first mortgage.

It’s completely separate from the first mortgage and is an excellent way to access further advances or extra funds without remortgaging. You’ll have two mortgages to pay off on your home, and if you fail to repay either the first or the second, you risk losing your house.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Remortgaging

Remortgaging involves switching to a new mortgage provider without moving from your current house. You may be able to obtain a better deal with your existing lender or switch to a new lender.

Remortgaging is suitable if you’re looking for a better deal, want to fix your rates or need to take money out of your property.

Remortgaging can help you find better terms and lower rates, and the amount you can borrow will depend on your financial situation.

Features Of Loans Against Your House

A loan against your house is ideal if you’re looking for a large sum you can repay over a more extended period. Features include:

High Loan Amounts

Loans against your home enable you to borrow more considerable sums of money than unsecured loans. The value of your property or equity will influence the amount you can borrow. The more valuable your property is, the more money you can borrow.

Low-Interest Rates

A loan against your home is less risky for lenders, making them more willing to advance a loan at more favourable interest rates. Repayments will also be spread over long periods, further reducing the interest rate. Since lenders will make their money over the long term, they’ll happily offer attractive interest rates.

Check Today's Best Rates >

Instalment Payments

With loans against your home, you can often borrow over longer periods than personal loans. You’ll repay in small manageable monthly instalments. Repayment plans are outlined right from the outset, making it easy to plan for monthly payments.

The instalments include a percentage of the principal amount plus interest spread evenly over the loan’s duration.

Uses Of Loans Against Your House

It’s risky to borrow against your home, and you should only consider it when there are no alternatives. Loans against your house are suitable for large projects, including:

Home Improvements

Home improvement projects are an excellent way to re-invest in your property, increase its value and curb appeal. Such projects can guarantee a lucrative deal when you decide to sell, but they can be expensive.

You can take out a loan against your house to cover the costs of your desired home improvement project. You can use the funds to finance a new kitchen bathroom, extensions, conversions, renovations, home maintenance or needed repairs.

Personal And Business Needs

You can borrow against your property if you need more money than standard personal loans and want long repayment periods. The funds can help you make large purchases like buying land or a second property.

If you have a business idea but no funds for capital, a homeowner loan may help you get started. You can also use it to inject cash into your business to finance needs like resources, stock, equipment, expansions or investments in new premises.

Loans Against Your House with Bad Credit

You may qualify and get approved for loans against your house, even with bad credit. Your property will significantly reduce the risk for the lender because they can reclaim the outstanding debt by repossessing your home if you default.

It’s a more accessible option if you’ve found it challenging to get a loan because of your credit score. You can borrow more considerable sums for longer, and the easy repayments will help to improve your credit score.

Read our complete guide on how do secured loans work? 

Loans Against Your House Final Thoughts

Loans against your property can give you access to large amounts, more extended repayment periods and favourable interest rates. However, they come with the risk of losing your home as the lender has a legal claim to your property if you default.

It’s crucial to ensure you can comfortably pay on time every month throughout the loan’s term, even when your circumstances change.

Give Mortgageable a call today at 03330 90 60 30 or contact us to speak to one of our friendly advisors.

Borrowing against your house involves taking out a homeowner loan. You can find lenders in the UK who offer homeowner loans from £1,000 to £2.5 million.

However, the amount you can borrow against your house will depend on several factors, including:

• The property’s value.
• The equity you have in the property.
• Your credit history.
• Your affordability.
• The LTV ratio.

When you borrow against your home, you’ll be able to get higher amounts than you could with an unsecured loan. The risk to the lender is reduced because they can repossess the property and sell it as a last resort to recover the owed debt if you default.

Lenders will look at your monthly income and outgoings to determine how much you can afford to borrow. They’ll also often look at your credit score to determine how well you handle your finances and debt repayments.

A bad credit score may not necessarily disqualify you from borrowing against your house, but it can influence the amount and interest rates lenders are willing to offer.

The equity you own in your home will highly determine the amount you can borrow rather than the worth of your house. This is especially significant if you have a mortgage on your home.

Check Today's Best Rates >

What Is House Equity?

House or home equity refers to the value or portion of your property that you truly own. You’ll have 100% equity in your home if you own your house outright, but the proportion will be lower if you still have a mortgage.

You can easily work out the amount of equity you have in your house by subtracting the amount you have left in your mortgage from its current market value.

For example, let’s say you bought a house worth £300,000, put down a deposit of £60,000, and took out a mortgage to cover the remaining £240,000. In such a case, you would have £60,000 equity in your home.

Remember, the equity in your home grows over time as you continue to repay the mortgage and as the value of the property increases. If you’ve owned your house for several years and you’ve kept up with mortgage repayments, you likely have much more equity in it than when you originally bought it.

The more equity you have in your home, the more you’ll be able to borrow against your house.

The Loan To Value Ratio

The loan to value (LTV) ratio is an important metric that assesses the lending risk lenders carry by providing you with a loan. It’s an important figure for re-mortgagers and homebuyers, and it will have a considerable impact on your borrowing power.

The LTV refers to the size of the loan relative to your property’s value or the equity you have in the property, and it’s expressed as a percentage. It shows how much equity you have in the house you’re borrowing against or how much money would be left if you sold your home and paid off the loan.

The LTV is vital when determining how much you can borrow against your house because it assures lenders. Lenders use it as they consider whether to approve a loan and what terms to offer. If the LTV is higher, the risk is higher for the lender, and if you default, the lender is less likely to recover their money by selling your house.

All homeowner loans set a maximum loan to value ratio. If yours is too high, your loan may not be approved, or you may be required to purchase mortgage insurance which protects the lender if you default and they’re forced to foreclose.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Calculating the LTV

You can calculate your LTV by dividing the amount you wish to borrow with the equity you have on your house.

LTV = Loan amount / Equity

For example, if your equity is £300,000 and you want to borrow £180,000, the LTV would be 60%.

If you have an outstanding mortgage balance on your property, you must deduct the balance before calculating your LTV.

For example, if your home’s value is £300,000 and you have an outstanding balance of £60,000 on your mortgage, you have an equity of £240,000. If you want to borrow £180,000, the LTV will be 75%.

Check Today's Best Rates >

How The LTV Impacts Borrowing Against Your House

Interest Rates

The higher the LTV, the higher the interest rates since lenders will consider you as riskier. Therefore, you should aim for a lower LTV, which will reduce the interest rates and translate to lower monthly payments and less strain on your finances over the loan’s term.

Loan Amount

The LTV will determine your credibility, and the lower it is, the easier it becomes to qualify for more favourable terms, including higher loan amounts and low rates. If you’ve been paying off your mortgage and your home has risen in value, then your LTV will be lower, helping you qualify for better deals.

Can I Borrow Against My House With Bad Credit?

Yes. Even with bad credit, you can borrow against your house and get approved. The loan is secured against your property which significantly reduces the risk for the lender since they can repossess and sell the property if you default.

If you’ve found it hard to get approved for a loan because of your credit score, borrowing against your home may be an option. You may get access to higher amounts with easy repayments that will help improve your credit score.

Remember, like other forms of borrowing, your credit history plays a part in the lending decision. Lenders may charge you higher interest rates if you have bad credit or cap the amount you can borrow.

Check Today's Best Rates >

Other Costs To Consider

Valuation Fees

A valuation to ensure your house is worth the amount you’re borrowing may be necessary. The lender can arrange for this, but you may have to pay for it, and the costs may vary depending on your property’s location, value, or terms of the deal.

Insurance Fees

Lenders may require that you have your house insured, especially if the LTV is high. Insurance protects you and the lender when you’re unable to repay or any unfortunate event causes damage to the property’s structure.

How Much Can I Borrow Against My House? Final Thoughts

Borrowing against your house provides you with access to large sums of money depending on the equity you have in your property, your credit score, and your LTV ratio.

It also comes with the risk of losing your home if you fail to make repayments, so it’s vital to ensure you can afford the loan amount you’re requesting over the long term.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

APRC is the annual percentage rate of charge. It’s the interest rate associated with secured loans and mortgages.

Different secured loans often come with different rates, and it can be challenging trying to determine which loan offers the best value and is suitable for your specific needs.

In 2016, the Financial Conduct Authority (FCA) introduced the APRC to give you a more realistic view of how secured loans and mortgages will cost over the long term.

Here’s everything you need to know about APRC rates.

How Do APRC Rates Work?

APRC rates are expressed as a percentage, and they bring together all the charges of the loan, including fees and other costs.

The APRC is calculated as if you’ll keep the secured loan or mortgages for the full term without any changes.

The APRC rate will help you compare secured loans so you can understand how much any deal you’re considering will cost you. This ensures you make an informed decision among secured loan options and choose the best and most suitable deal available.

You can find secured loans that offer lower interest rates, known as an introductory rate, for the first few years before the rates revert to the lender’s standard variable rate. The APRC considers this and shows you the impact the different rates, together with any other charges, will have over the full term of the secured loan or mortgage.

Check Today's Best Rates >

Uses Of APRC Rates

The APRC rate gives you a glance at which lender provides the best deal after considering all the costs. The lower the APRC rate, the cheaper the loan.

Marketers will often try to persuade you to choose a specific loan option with attractive offers like low starting or introductory interest rates. However, once you consider all the factors, you may find that a once appealing offer is quite expensive compared to other lenders.

For example, once the introductory period ends, the lender may introduce high variable interest rates. The APRC helps you see that and ensures misleading offers with attractive starting rates do not sway you. With the APRC, you can compare secured loan costs from different providers using the same parameters.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Calculating The APRC

The APRC considers the initial or introductory interest rate and the long-term interest rate together with any other charges and calculates a percentage. The percentage tells you how much it would cost you every year if you stayed on the same deal until the loan is fully repaid.

The APRC rate combines factors specific to you, including the loan term, loan amount, credit history, and house value. Such factors are assessed at the initial application stage when checking your affordability and total loan cost.

Consider an example of a borrower who wants to buy a house worth £150,00o. With a £20,000 deposit, the APRC can help you compare two possible secured loans for £130,000.

• The first option offers an introductory rate of 2.99% for 24 months. It then increases to a standard rate of 4.94% for 18 years with arrangement fees of £250.
• The second option has a starting interest rate of 3.26% for 24 months. It then increases to a standard rate of 4.34% for 18 years with arrangement fees of £1,400.

At face value, the first option is very tempting. You may think it’s a no-brainer because it has a lower initial rate and fewer fees. Here’s where the APRC comes in handy. The first option would cost £218,026, while the second option would cost £205,829 when considering all interest rates and fees.

The APRC for the first option would be 4.6%, while the APRC for the second option would be 4.2%. Therefore, the second option would save you £12,000, making it the better and cheaper option over the loan’s lifetime.

Suitability Of APRC Rates

The suitability of APRC rates when comparing secured loan options will vary. When calculating the APRC, it’s assumed that you’ll keep the same secured loan or mortgage plus the lender for the loan duration. This can limit the suitability of the APRC rates.

You may want to move from your current home or compare other deals when your fixed term ends and switch to another lender with a more competitive deal.

It’s important to consider such factors before looking at different APRC rates, including how long you plan to stay on the property or life events that are likely to happen and impact your living situation.

If you don’t plan to stay with the same provider or will be actively switching, the initial rate will be more important than a high APRC. Since you plan to pay off the mortgage or secured loan early and get a new one when you move or switch, the initial rate will apply for a larger proportion of the loan than is shown in the APRC, which assumes you’ll be in the deal for the full term.

Check Today's Best Rates >

How Does Representative APRC Work?

The representative or headline APRC is the rate advertised with the assumption that all other factors are constant. Most people approved for the secured loan or mortgage product will pay this rate or lower. The interest you’ll be charged when you take out a secured loan or mortgage will depend on:

• The amount you’re borrowing.
• The period or term of the loan.
• Your circumstances, including your affordability and credit score.

Therefore, you may find a representative APRC advertised as 5%, but once the lender considers your unique circumstances and credit history, the actual APRC goes up to 9%. It’s vital to ensure you double-check the actual APRC once a lender approves your loan request.

APRC Vs. APR

The APRC can easily be confused with the APR because of the similar names and meanings. APR refers to the annual percentage rate and functions like the APRC. It can help you compare the total cost of loan products by showing a percentage of the interest cost you’ll pay on loans per year.

While the APR only shows the loan cost per year, the APRC shows the total cost of the loan once you repay it in full for the entire term.

APRC Final Thoughts

Think of the APRC as a tool that helps you compare secured loans and mortgages to find the best deal available. The lower the APRC, the cheaper the loan in the full term. The APRC assumes you’ll stick with the deal to the end. Always consider any possible changes that can affect your situation soon when using APRC rates to compare secured loan options

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

Calculating your income and expenditure helps ensure your budget is accurate. It’s an excellent way to organise your finances and gain better control of your cash flow.

There are many income and expenditure forms available on the internet.

They’re also called budget planners or budget calculators, and you should choose one that suits you best to understand your financial situation better.

Let’s explore everything about income and expenditure forms.

What Is An Income And Expenditure Form?

An income and expenditure form is a standard or common financial statement you can use to list all your income, debts, and spending every month. An income and expenditure form is similar to a budget in many ways:

• They both require filling in your income, obligations, and expenses.
• To gain a true reflection of your financial situation, you must be as honest and accurate as possible.
• They involve costs and expenses that have more priority than others.

Check Today's Best Rates >

Benefits Of Calculating Your Income And Expenditure

Calculating your income and expenditure is an exact method for analysing and understanding your finances. It will help you answer a few key questions, including:

Do You Spend More Than You Earn?

If you’ve found yourself building up debts or eating into your savings, you’re likely overspending. Spending more than you earn is a significant cause of debt spirals and severe problems for many UK residents.

A debt spiral involves a financially unhealthy lifestyle where you spend more than you earn, borrow to fill the gap, use most of your income to repay debts and keep borrowing to maintain the lifestyle. With all your income going towards debt repayments, you’ll have nothing left!

To regain control, you need an accurate idea of the scale and size of the problem by calculating your income and expenditure. It will help you see exactly where your money goes and identify areas where you could cut back spending.

What Can You Afford To Spend?

Calculating your income and expenditure gives you an accurate and realistic assessment of your monthly disposable income. It shows you where you’re spending to prioritise and alter what you do with your money so you can stick within your means.

Knowing what you can afford is useful when you’re thinking about taking out a loan. A standard financial statement or income and expenditure form is used and recognised by various lending and financial institutions. You can use it to show creditors how much you can realistically afford to pay them.

Most brokers and debt advice providers will initially ask you to complete an income and expenditure form when you’re looking for a loan or help with your debts. It allows them to assess your income and spending to provide the right advice according to your situation and connect you to suitable creditors.

Check Today's Best Rates >

What To Include In An Income And Expenditure Form

A typical income and expenditure form will have the following sections:

Your Income

In this section, you’ll fill in any money you regularly receive, including:

• Employment or self-employment income
•  Child or working tax credit
• Jobseeker’s allowance
• Universal credit
• Housing benefit
• Income support
• Pension payments
• Rental income
• Housekeeping from partners or dependants

Ensure you include all types of income you receive to provide an accurate picture of your situation.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Your Priority Bills

Household or priority bills are the most necessary expenses, and you must account for them. Failing to pay priority bills like your rent or mortgage comes with severe consequences like repossession or getting kicked out of your home. Priority bills can include:

• Mortgage, rent or secured loan payments.
• Utilities like gas, electricity and water.
• Council tax.
• Fuel like oil, gas or logs
• TV licenses.
• Logbook loans or hire purchases.
• Child maintenance.
• Magistrates court fines.
• County court judgements.

Other Spending

Although they’re also important, they’re not necessarily as crucial as household bills. They include:

• Car insurance or breakdown covers.
• Streaming and digital television services.
• Insurance for buildings and contents.
• Pension or life insurance.
• Internet and telephone.
• Maintenance and repair costs.
• Public transport.
• Accident or medical insurance.
• Professional or union fees.
• Education fees.

Other Living Costs

Living costs include anything you spend money on every day. You can work these out using an average from recent shopping receipt figures or bank statements. They can include:

• Individual and family food costs.
• Clothes and footwear.
• Toiletries.
• Opticians and dentists.
• Hairdressing.
• Emergencies and sundries.
• Prescriptions and medicines.
• Hobbies, sports and entertainment.
• School essentials and pocket money.
• Parking costs and petrol.

If you spend too much on non-essential living costs, creditors may require more information to determine whether it’s reasonable.

Non-Priority Debts

In the final section, you’ll list down the debts you currently owe and the payments that go towards them. The amount you give creditors depends on the surplus left after you’ve covered priority payments like household bills, living costs and other expenses.

Items considered as non-priority debts include:

• Credit and store cards.
• Unsecured loans.
• Overdrafts.
• Catalogue repayments.
• Payday loans.
• Arrears from properties you no longer live in.
• Arrears from service providers you no longer use like gas or electric.

Remember, non-priority debts can become priority debts if creditors pursue and are successfully granted a county court judgement (CCJ) against you by the court.

Check Today's Best Rates >

Expert Tips Before Calculating Your Income And Expenditure

Gather Receipts And Statements

Bring together all your receipts and statements to avoid guessing or estimating. The success of your endeavour will rely on actual income and expenditure costs.

Accuracy, Accuracy, Accuracy

We can’t emphasise this enough. Try to be as accurate as possible and avoid underestimating your expenditure. When you’re not sure, guess larger, not smaller. It will ensure you have funds leftover and you don’t fall short.

Stay vigilant of overlapping some types of spending in different sections to avoid counting them twice. If you include insurance in the other spending section, don’t include it again in living costs.

Don’t Forget About One-Off Spends

Whether it’s a birthday treat or a holiday, one-off spending will affect your expenditure costs. You can account for these by apportioning their annual costs into monthly amounts. If you include one-offs like holidays, don’t forget to subtract regular spending that wouldn’t occur. For example, if you’re abroad for a week, you won’t spend on regular petrol, parking or public transport costs.

Income And Expenditure Final Thoughts

Provided you’re honest, an income and expenditure form will give you an accurate assessment of your budget and show you what you can afford and where you spend more than you earn.

It will help you make the most out of your money, cut out necessary expenses, and stop running up enormous debts or over-commitments. If you already have debt problems, it will show you how much you can spare so you can make realistic offers to creditors.

Give Loanable a call today on 01925 988 055 and they will provide you with the best deals available to meet your circumstances and consider any credit history you may have. With their expert advice, they can guide you through the process and give you the knowledge and confidence it takes to acquire a secured loan that is right for you.

If you have read all the information on secured loans carefully and feel that you want to proceed with a secure loan, get in touch with one of Loanable’s secured loan experts by emailing hello@loanable.co.uk who can work with you to find the best deal for your needs and circumstances.

If you struggle with multiple, high-interest debts, a debt consolidation loan can give you a breath of fresh air and help you regain control of your finances.

Here’s everything you need to know about debt consolidation loans.

What Are Debt Consolidation Loans?

Debt consolidation loans are types of loans you use to streamline your debts into one for effortless monthly payments.

It can get overwhelming if you make different payments for various loans like credit cards, personal loans, store cards, or overdrafts each month.

Debt consolidation loans allow you to consolidate such debts and cover the total amount, so you’re only left repaying one lender instead of multiple creditors.

How Do Debt Consolidation Loans Work?

Debt consolidation loans relieve you from debts by giving you an affordable repayment period and reducing your monthly payments. The process is pretty straightforward.

The loan may allow you to get the funds needed to cover all your existing debts and pay them off at once.

Once you pay off all your creditors, all that’s left is one fixed-rate monthly repayment to the consolidation loans lender instead of multiple monthly repayments.

It may help you save money you’d spend on interest with multiple creditors. You’ll also get a reduced repayment amount that frees up your finances for other bills and a set repayment schedule for the entire loan period for easier budgeting.

You don’t have to balance several debts each month or borrow from one lender to pay the next with debt consolidation.

Check Today's Best Rates >

Suitability Of Debt Consolidation Loans

You have to consider whether debt consolidation loans are suitable for you, depending on your circumstances.

It’s right for you if you’re having trouble paying off multiple high-interest debts and you need a debt solution to get you out of the monthly panic and stress of trying to make ends meet.

A consolidation loan will make managing your finances much more effortless. It’s only suitable if the loan amount puts you in a better financial situation. Before taking out a debt consolidation loan, ensure you review your existing debts i.e interest rates, terms, balances etc.

Debt consolidation loans may be suitable if you don’t see a way out of multiple mounting debts, need to reduce monthly repayments, and get extra cash flow and control of your finances.

Even with a bad or poor credit history, many understanding lenders in the UK may help you acquire a debt consolidation loan provided you can afford repayments and are eligible.

Debt consolidation loans for bad credit borrowers may feature capped loan amounts or higher interest rates to reflect the higher lender risk.

Related quick help guides: 

• Secured loans brokers.
• Secured loans for pensioners.
• Secured loans for self employed.
• Interest only secured loans.
• Can I get a secured loan on a buy to let property? 
• Secured business loans.

Eligibility Criteria for Debt Consolidation Loans

Although each lender will have their criteria, some of the essential criteria considered include:

• You’re at least 18 years old.
• You’re a permanent UK resident.
• You can prove regular income or are employed.
•  You’re not bankrupt and haven’t applied for bankruptcy.

Advantages of Debt Consolidation Loans

You need to consider the different pros and cons of debt consolidation loans to make an informed decision. These include:

Reduced And Easy To Manage Monthly Payments

When you consolidate your debts, you get a reduced monthly repayment to one lender instead of struggling to repay different amounts to different creditors. The fixed monthly payment makes it easier to budget than various debts with different rates and repayment dates.

Check Today's Best Rates >

Easier To Get Out Of Debt

A debt consolidation loan features a single rate of interest that can make it easier to clear your debts sooner. With multiple loans with varying interest rates, most of your repayments go to servicing the interest instead of reducing your balance.

Peace Of Mind

The weight of multiple debts can drain you mentally and physically. It allows you to pay off all your existing debts and only deal with one lender with a debt consolidation loan.

Extended Repayment Period

Debt consolidation loans allow you to repay for longer, which reduces your monthly expenses. You’ll no longer have to worry about missing repayments or the mounting charges of short-term loans.

Disadvantages of Debt Consolidation Loans

Repayments May Not Reduce

Depending on how much you’re currently repaying and over what period, a debt consolidation loan may not reduce your repayments. Additionally, it will not erase your debts. It’s more like a new payment plan and not a form of debt settlement or relief.

You May End Up Paying More Overall

The amount repaid at the end of the term may be higher than the previous individual payments with a more extended repayment period. Therefore, you have to ensure a more prolonged period guarantees you peace of mind, and you can afford to make the repayments.

Considerations When Applying for Debt Consolidation Loans

Things to consider before or when applying for a debt consolidation loan include:

Repayment Cost

You need to decide whether consolidating your debts is a better option than making individual repayments. You can do this by comparing how much you’re currently paying vs. what you’ll be spending in the new repayment structure of a debt consolidation loan.

Affordability

Ensure you can comfortably make repayments over the chosen period without fail. Review your monthly income and how much goes to necessary expenses to determine what remains for loan repayment.

Check Today's Best Rates >

Credit Score Impact

Lenders run credit checks when you apply for any credit, which can lower your credit score. Closing debt accounts as you consolidate your debts will also impact your credit rating. However, with debt consolidation loans, the effect on your credit score is only temporary.

Over time it will help you improve your credit score thanks to affordable monthly repayments. As you repay each month, your credit score improves while showing lenders you’re a trustworthy borrower.

Debt Consolidation Loans Final Thoughts

While other debt solutions exist, debt consolidation features less severe consequences. It’s suitable if you’re looking for an extended period to repay and reduce monthly expenses that help you regain sanity and control over your finances.

Give Mortgageable a call today at 03330 90 60 30 or contact us to speak to one of our friendly advisors.