Finance and Bank Loans

In all matters concerning raising finance for the kinds of items or expeditions mentioned here, it is always worth seeing an independent financial advisor. This applies to all areas of life including investing in items, insurance of valuables (such as collectables or anything which has set you back and become financially important), borrowing (for future purchases) and saving (towards that one big purcahse you've always had your eye on). Then of course, further down the line you have retirement but I can't stress engouh it is never too early to consider retirement planning.

Whilst it is all very well to try to follow the generic governmental advice of trying to save more and borrow less, keeping a savings account with a significant amount of money in is not an easy task in life when so much maintenance is require around the car and home. Not to mention the purcahse of the home itsself. In looking for a mortgage it is always worth seeing more than one financial advisor and not allowing yourself to be swayed into using one over another without carefully considering what each has never. Never make any committment to any particular advisor off the back of one meeting.

The idea to keep out of debt again is great advice but in the reality of the world, everyone needs to borrow, such as for mortgages as mentioned, but for any number of personal needs such as a new car, home improvements, and the support of children. A loan can give a great deal of freedom if income is steady for the borrower and can provide a significant lump sum from the borrower in order to get those things which life demands. There are various different types of loan which fall broadly into the two categories of secured and unsecured. Unsecured loans do not require any asset to be put up, such as your home, and therefore nothing can be repossessed instantly for any outstanding payments. Because of the difficulty involved in recouping money owed, the lender considers unsecured loans a higher risk and as such the interest rate is higher. That is to say, for every pound or dollar bollowed you have to pay a higher percentage back in the long run. The lower the risk, the less the lender expects back in the long run. The other downside of an unsecured loan is that the lenders are prepared to put up less money up front due to the higher risk so loan amounts are smaller.

The opposite to a secured loan is, of course, an unsecured loan. The borrow provides an asset such as a house (mortgage) or a car against the cost of the loan. If the borrower defaults significantly on payments then the lender can seise the item

One major factor in assessing your likely loan amount and risk is your credit score which is derived through your past financial record with regard to loans and payments. If you have a tendancy to miss loan payments your score will be effected negatively. If you have savings and are a high earner your score will be good. Getting a loan is like a balancing act of the right amount, versus the outgoing for the borrower each month, versus the risk for the lender based on credit score. Other factors come in to play, such as the length of the loan which is negociable but a factor as far as the lender is concerned, again with regard to risk in getting their money back as soon as possible.