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What is a secured loan?
A secured loan is where you borrow money and the loan is secured against an asset such as your home or car. This means that should you fail to meet the monthly loan repayments, the lender can seize the asset in order to get their money back.Secured loans tend to be more favourable if you are looking to borrow larger amounts of money. Interest rates tend to be more attractive than if you borrowed the money as an unsecured loan. This is because the lender has a ‘guarantee’ that he will get repaid in the form of your asset.
What is an unsecured lender?
An unsecured lender is a company that provides a loan without asking for some form of security (such as your home or car). Unsecured loans can be quicker to arrange but will cost more in interest than a secured loan.This is because the unsecured lender is taking a greater risk as should you default on loan repayments, the lender cannot seize your assets in order to get repayment.
What is an arrangement fee?
An arrangement fee is something that is charged by a lender or broker when you take out borrowing such as a loan or mortgage. It is to cover their costs in arranging the lending. Some lenders will offer this free of charge in order to attract new customers.
What is Equifax?
Equifax is one of the major credit referencing agencies in the UK. Equifax pulls together all your credit data from various sources to create a report that shows your personal credit history – ie your credit file. When you apply for credit, lenders will check your credit file to see your financial history. You can request a copy of your report at any time to check that all is in order. The Equifax website has lots of useful information on making credit decisions and protecting yourself from fraud.
What is an arrear?
An arrear is a legal term and is used to describe where you are behind in payments on a credit agreement. Someone will be “in arrears” from the date their first expected payment is missed.The term tends to be used when describing late payment of rent, mortgage, credit cards or personal loans as well as child support and taxes.