Everybody has to manage money, be it the weekly shop or a multi-million pound contract at work. Most people have some form of debt, accrued through either planned or unexpected spending. It can be a difficult task to manage multiple debts with several credit suppliers, ensuring that payments are made on time to avoid penalty charges.
There are two main types of loan, secured and unsecured. A secured loan is when the lender is given a legal right to an asset belonging to the borrower, so that in the case of a default on payment, the lender can repossess the asset and recover their costs from its subsequent sale. An unsecured loan differs in that no asset security is required; loan limits are based on the individual's credit history and ability to meet the proposed repayment schedule.
The total personal debt in the UK at the end of June 2007 was 1,345 billion GBP. Debts that are spread on credit cards, store cards, bank overdrafts or personal loans can be consolidated into a homeowner loan, allowing you to the spread the repayment schedule over a longer period according to your individual circumstances.
A homeowner loan differs from other forms of loan as it secures the debt against the value of the owners' property. This often results in a homeowner managing to obtain a larger loan then they would be able to through an unsecured method. This can be useful to pay off other debts and consolidate them in one long term payment plan or to borrow additional funds for other projects.
Many people dream of having more space and moving to a larger home and with demand exceeding supply of properties, house prices have hit new highs and the rise is expected to continue. Some owners are exploring new ways of getting more space by considering the option to extend their current home. By securing finance with a homeowner loan you could build an extension to your existing home, making financial savings by avoiding having to pay expensive estate agency fees, stamp duty or removal costs as incurred when moving properties.
During 2006 there were over 2.3 million new cars registered in the UK. As a viable means of commuting and transporting the family, cars are common place throughout society today, but they are a major financial cost, often second only to a mortgage. Many buy a new car by taking an unsecured loan to pay for their purchase, however a homeowner loan could prove to be a more financially viable option.
Whatever your motivation, if you own your home you will have the option of getting a homeowner loan which may save you money in comparison to unsecured loans. It doesn't cost anything to investigate, so find out if a homeowner loan could help you to improve your financial circumstances.
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Paul McIndoe is an online, freelance journalist. He lives in Edinburgh with his two dogs.
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