A homeowner loan is a type of personal loan that an individual who owns a home can borrow. There are two types of homeowner loans – secured and unsecured. If you are a homeowner and planning to take out a loan, you should know the difference between secured and unsecured homeowner loans before deciding to borrow.
Secured Homeowner Loans UK
A secured homeowner loan, sometimes called a home equity loan, takes the value of your existing property into consideration when you apply for it. You have to offer your home as a security to the lender when applying for a loan.
Advantages of a Secured Homeowner Loan
- Loan Amount
You can borrow a large amount of fund because lenders are confident that they are going to get back the money either from loan repayments or by selling the property.
- Interest Rate
The interest rate for secured loans is comparatively less than the interest rate for unsecured loans. The simple reason for this is that the lender is taking on less financial risk than the risk involved with unsecured loans.
Unsecured Homeowner Loans UK
An unsecured homeowner loan is a type of personal loan where you don’t have to put your house as security. Also, you don’t have to provide any guarantor to the lender to borrow funds. In short, these loans are no guarantor loans. That is why they fall under the category of unsecured loans in the UK. These are sometimes called Homeowner Consolidation Loans as you can use it to consolidate all your existing debts into one.
Advantages of an Unsecured Homeowner Loan
- No security required
Like with secured homeowner loans, your home is at stake if you fail to make the repayments, the same is not the case with unsecured homeowner loans. If by any chance you fail to make the repayments, your property won’t be at risk. Please note that payment of these loans are necessary else there will be a negative impact on your credit score.
- Easy and Quick
Applying for this loan is comparatively easy as the whole process is online. You need a swift internet connection. Lenders may transfer the funds on the same day if everything goes right.
A borrower can take out a homeowner loan, either secured or unsecured, keeping in mind the repayments and the risks involved in both. Your credit score can be damaged if you fail to make the repayments of an unsecured homeowner loan. Moreover, it will become difficult for you to borrow a loan for the next 6 years. While with a secured homeowner loan, your property will be at risk and you may lose it if you don’t repay. Borrow a loan basis your financial needs and make sure you keep up with the repayments.
To apply for an unsecured homeowner loan, Click Here.