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About Fixed Rate Secured Loans
As the name implies a fixed rate loan gives customers the opportunity to have their repayments and the interest rate charged fixed for a set period of time. This is usually for the first 1 to 5 years of the term though longer is sometimes possible. At the end of the fixed rate period the loan is charged at the lenders standard variable rate.
What are the advantages of a Fixed Rate Secured Loan?
The main advantage of this type of loan is that repayments will not go up during the fixed rate period if interest rates rise. The disadvantage is that repayments would not go down if rates fell. In times of uncertainty it can be useful to know exactly what you will be required to pay each month. It makes budgeting easier when there is no fear of a sudden price hike.
Fixed rate loans tend to be slightly more expensive than variable rates so customers should weigh up the pros and cons carefully before deciding which type of loan to apply for. The difference between the two is typically not a lot nevertheless it can be an important factor when deciding which one would suit you best.
We can offer advice on the suitability of this type of loan compared to the many other types that exist. There is a lot of choice nowadays and this can be confusing. We explain pros and cons in easy to understand language and follow the strict rules laid down by the Financial Conduct Authority designed to offer customers assurance & protection.
For more information please contact one of our Advisers on 01902 585020.
2 out of 3 borrowers get a lower rate than our representative example of a regulated secured loan below:
Mortgages and Remortgages
£80,000 over 240 months at an APRC OF 4.3% and a discounted variable annual interest rate for two years of 2.12% at £408.99 per month followed by 36 payments of £475.59 and 180 payments of £509.44. The total charge for credit is £39,873 which includes a £995 broker / processing fee and £125 application fee. Total repayable £119,873.
Secured / Second Charge Loans
£63,000 over 228 months at an APRC OF 6.1% and an annual interest rate of 5.39% (Fixed for five years – variable thereafter) would be £463.09 per month, total charge for credit is £42,584.52 which includes a £2,690 broker / processing fee. Total repayable £105,584.52.
£4,000 over 36 months at an APR OF 49.9% (fixed) and an annual interest rate of 49.9% would be £216.21, total charge for credit is £3,783.56. Total repayable £7,783.56.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Written terms available on request. Loans are subject to affordability status and available to UK residents aged 18 or over. Promise Money is a trading style of Promise Solutions Ltd. Promise Solutions is a broker offering products which represent the whole of the specialist second mortgage market and is authorised and regulated by the Financial Conduct Authority – Number 681423.
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