If you are reconsidering large home improvement projects to enhance the value of your home but the credit crunch has bitten, then you may want to consider a home improvement loan.
If you are looking for a loan for your home improvement project at the cheapest rates then secured loans are the best option. A secured loan is a loan that is secured on your property and can be either on your main residence or in some circumstances a buy-to-let property. By providing the lender with some sort of security means that you, the borrower, will be offered a far lower interest rate with this type of loan than with an unsecured loan. This is because there is less risk for the lender. Since secured loans are secured on property, most lenders will consider your application even if you have a bad credit history, although a person with a bad credit history may pay a higher rate if you do have a bad credit history.
Many Finance companies will consider offering you the opportunity to secure your loan against your property only when you have an existing mortgage. If you do not have a mortgage at the moment and the property is your main residence, legislation does not allow for a secured loan to the be the 1st charge on your property. Loans secured against property that is already mortgaged are known as second charges, whereas loans secured against a property owned outright with no existing mortgage in place are known as first charges.
In terms of repayments, a secured loan often has a lower interest rate and more favourable repayment terms than an unsecured loan. Furthermore, with a secured loan it is more likely that you can borrow a larger sum of money and pay it back over a longer period of time. For instance unsecured loans may be restricted to a maximum £25,000, whereas secured loans can be considered up to £250,000 with some lenders.
And of course the loan can be used for any purpose, not just home improvements!
