When we start thinking that why do we need to borrow money, we all feel like there are a million reasons for it. Your eyes are glued to the new car in a showroom? You need money to finance it. Do you want to enjoy an exotic holiday with your family? You need money undoubtedly. Whatever is the reason, money plays an integral role in it. When you are a homeowner and you need money, you may find offers that will need you to put your home as a security to apply for the loan. But there are lenders out there who offer unsecured homeowner loans. That means you do not have to use your home or personal property as a security when you are applying for the loan. These loans are unsecured and therefore, these are not tied to any collateral. The lenders who offer such loans willingly take the risk by lending money without any security and that is the reason these loans have high rates of interest as compared to other secured ones.
In this article, we will discuss:
- What is an unsecured homeowner loan?
- 5 reasons to borrow a homeowner loan
- The bottom line
What is an unsecured homeowner loan?
An unsecured homeowner loan is a type of personal loan that can be borrowed without using any collateral. Typically, lenders offer you to borrow an amount between the range of £1,000 to £35,000 for one to seven years. Choose the repayment period as per your affordability and budget so that you do not end up missing a repayment. Wondering what you will lose if you miss a repayment? Well, you may not lose your home but your credit score may be impacted adversely. To protect your score from any possible damage, keep up with the repayments. Ensure you make all the repayments on time and in full.
5 reasons to borrow a homeowner loan
The best thing about this loan is that a borrower has the freedom of using it for basically any purpose. However, you must not take out this loan if you intend to lend the money to someone else, or if you want to use this money for investing in the stock market. Top 5 and good reasons for borrowing an Instant Homeowner Loan are listed below:
#1 Debt Consolidation
If you have multiple debts that you are fiddling with and you are constantly seeking some financial breathing space, then consider simplifying your debts. Merge all your existing debts into one. That means for all the debts that you have, you do not have to make multiple repayments. This is a single-interest loan that will serve your purpose. Rather than paying different interest rates for different loans, pay only one loan with a single rate of interest.
#2 Home Improvements
It is quite essential to keep up with the current demands of your home. It may need improvements and repairs from time to time. Keeping your property in the right state will help you in climbing the real estate ladder easily. Moreover, your home is most likely to be one of the biggest investments of your life, therefore, you need to make changes for maintaining its lifecycle. The amount that you receive from a homeowner loan can be used for making necessary upgrades to your property such as replacing the existing boiler, changing the faulty pipelines, giving your garden a new makeover, converting the loft and upscaling your kitchen.
#3 Fund your Holiday
Most of us have the dream to travel the globe but we know the reality. Travel is not free and therefore, we need money to turn our dream into reality. If you want to spend some time with your loved ones and need to go on a once-in-a-lifetime holiday, then you may use these funds to finance the expenses of your holiday. Using your credit card is not considered wise because according to a recent survey 19% of Brits do not realise that they have to pay transaction fees, withdrawal fees, and spending fees, every time they use their card while abroad.
#4 Flexible and Easy to Apply for
Whether you are looking for Homeowner Loans in Birmingham or any other part of the United Kingdom – it doesn’t matter because you will find a plethora of options online. Most of the credit providers and brokers keep the process of application simple and easy to provide the borrowers with a seamless borrowing experience. All you have to do is visit their website, fill in the application form and choose the amount that you need to borrow and decide how long you need to repay the loan. Submit the application form and sit back and relax. The lenders will run a few verifications and assess your loan affordability to make their decision.
#5 Quick Availability
Most of the lenders give an instant decision to help borrowers save their time and efforts. So, if your loan application is approved by the lender, they may transfer the funds to your bank account within a few minutes. However, this is not guaranteed as it depends on the lender and your bank. But generally, it doesn’t take much time for a lender to transfer the loan amount. Hence, these loans are great financial tools for emergencies when you are in need of quick money.
The bottom line
A debt if managed responsibly can yield fruitful results. To be a responsible borrower, know your own affordability. It is your primary concern to know whether you can afford to repay the loan or not. If you do not feel that you can make all the repayments on time and in full, it is better to consider other alternatives of borrowing money such as asking your friends and relatives for some monetary help. These loans are undoubtedly helpful but if you are not sure about the repayments, then your credit score may be damaged severely and that will restrict you to borrow money in the future for up to six years. So, be careful while borrowing money.