Most adults need to take out a loan at some point in their life. The challenge is finding the right loan option that matches your specific needs. Whether you’re looking to reduce your debt, or borrow money to start a new business, there are quite a few loan options available in the UK.
Debt Consolidation Loans
Paying multiple loans at one time is very costly, but a debt consolidation loan can help lower your debt obligations and free up monthly cash flow. Instead of sending your money to several different companies every month, the debt consolidation lender pays off those debts and arranges one loan to be paid on a monthly basis. The payment is usually offered at a reduced rate. It is much less frustrating having to pay back only one debt, rather than multiple debts. When used properly, debt consolidation loans are excellent money management tools that have even prevented people from losing their homes.
Remortgage Loans
The mortgage that worked for you in the past might not work for you today and that’s where remortgage loans come in. A remortgage is basically a new loan that replaces your existing mortgage, which allows you to take advantage of a lower interest rate and get a reduced monthly mortgage payment in return. Remortgaging can save you money every month and it can also be used to tap into accumulated equity in your home to pay for home improvements, or to pay off debts. Remortgaging is only possible if you actually have value in your home and in some cases a deposit of up to 20% may be required to get a remortgage deal.
Small Business Loans
The biggest challenge to starting a business is coming up with start-up funds for supplies and other overhead costs. In the UK, you can apply for a small business loan worth between £50,000 and £1,000,000. Before applying for a small business loan, take the time to carefully calculate projected start-up costs and document those costs in a business profile. Present your estimated start-up expenses to a lender, along with bank statements and financial paperwork required by the lender. Collateral is often a requirement to secure a small business loan in the UK. That means the bank will have the right to seize your cash, or property, in the event the loan isn’t repaid.
Fiona Harris is a freelance finance writer, specializing in finance and green energy. Her articles regularly feature in a number of UK blogs. You can email Fiona at fionaharriswrites@gmail.com.