Easy Online Loan | How Easy Is It?
What is an easy online loan?
Easy online loan can mean a number of different things and consumers should be careful they know what they are getting into before applying for one. Whereas it could mean a personal loan, which is repayable every month but has nothing to do with your home, if it is for borrowing of £25,000 or more, an easy online loan can also mean a secured loan which can bring with it far more serious consequences.
How can an easy online loan be a secured loan?
If an easy online loan is a secured loan, it can also be referred to as a second charge loan. Although it is not a mortgage, a secured easy online loan works in the same way in that if you default on repayments, your home is at risk and could potentially be repossessed. By contrast, if you default on payments on an unsecured easy online loan, although your credit rating will be damaged, your home is left out of the equation.
What's the benefit of an easy online loan that is secured?
Due to the value of the average UK property shooting up in value by 179 per cent in the last 10 years - from £70,000 at the end to 1997 to £195,000 today, according Halifax - record numbers of homeowners have applied for an easy online loan. This is because there are a number of reasons why an easy online loan can make better sense than remortgaging and releasing the equity.
Firstly your mortgage could still be subject to tie-ins which, if broken, could result in thousands of pounds in early repayment charges. Secondly your circumstances may have changed since you were initially granted your mortgage - such as a reduction in your salary - and, while an easy online loan provider is willing to lend against the new equity, your existing mortgage provider is not.
It could also be that you need the money urgently and applying for an easy online loan, rather than going through your mortgage lender can be a lot faster.
What are the downsides of an easy online loan?
Despite its terminology, an easy online loan is not the type of borrowing to be taken lightly. As borrowers are often limited in choice when they apply for an easy online loan the interest rates payable are more expensive than on a standard residential mortgage. What's more an easy online loan may not seem so easy if you find you cannot keep up repayments and your home is at risk.
Before applying for any easy online loan, homeowners should also be aware that, while loans below £25,000 are regulated by the Consumer Credit Act (CCA), secured loans above this amount are without regulation, meaning you will have limited recourse if you are unhappy with either the product or the easy online loan provider.
But the biggest downfall of any easy online loan that is secured against your home is that it may not be the best solution for your circumstances. This is why it is crucial to seek advice first from a broker like the Secured Loan Centre that has relationships and experience with a range of easy online loan providers. It can then apply for the right loan on your behalf, saving you time, effort and money.
