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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 early redemption penalty?
An early redemption penalty is a financial penalty that you have to pay should you settle lending such as a loan or mortgage early. When looking for credit, it makes sense to check out the early redemption clause. That way you can see how much you could be liable for should you decide to pay off the borrowing before the end of the agreed term.
What is a credit score?
A credit score is a method that potential lenders use for calculating the credit worthiness of an applicant. They will look at the applicant’s credit report, the information on their application and the actual borrowing required. They will then use a mathematical scoring system to evaluate the amount of "risk" involved in lending to the applicant.
What is a CCJ?
A CCJ actually means County Court Judgement. This is a judgement made in a County Court against someone who is in debt to a third party (an individual or company) or where they have failed to meet the terms of a credit agreement.The Judgement will set an affordable payment plan so that the debtor can repay their debt. CCJ’s are held on public record and will affect the debtor’s chance of getting further credit for up to six years.