Most of the loans we arrange at Promise are introduced to us by other brokers because they know we have the largest panel of lenders on the market and 30 years expertise in finding the best solution. You are cutting out the middle man by applying directly to Promise online today.
How do secured loans work?
Here are the key factors each lender considers in determining how much you can borrow and the rates they will offer.
Loan to Value (LTV)
LTV is the percentage of borrowing you secure against your property. For example, if your property is worth £100K and your borrowing is £50K your LTV is 50% (your borrowings divided by the value of the property).
The lower the LTV the better rates are likely to be available. However there are lenders which will lend up to 100% of your property value, even if you have had credit problems. An experienced adviser will match you with the best lender.
Example: if your property is worth £300,000 and your mortgage is £250,000 you could borrow another £50,000 with a secured loan which takes you up to 100% LTV. (There are lenders which will go up to 120% LTV – ask your adviser).
You will probably have already worked out what you can afford and this is a good guide. The latest regulations require that lenders can evidence you can afford the loan now and in the event of interest rates changing.
You will need to provide evidence of your earnings (payslips, accounts, tax computations, etc.) and your adviser will work out which product is suitable so you can afford it now and if your circumstances change. Each lender has different rules so speaking to an adviser is vital.
We have the largest panel to ensure our lenders offer a range of products to cater for all different types of credit history. Try our loan repayment calculator (below) which estimates your repayments based off various credit profiles.
If your credit history is perfect you could qualify for the lowest rates on the market. However, even if you have had arrears or CCJ’s over a year ago many lenders will still ignore them and offer very competitive / similar rates.
The more credit problems you have had the fewer lenders will be available. But, even if you have serious recent arrears, CCJ’s, an IVA or even been bankrupt, there are still lenders which will consider your application. Virtually any credit problems can be accommodated up to 75% LTV. However, with current arrears and CCJ’s you may still qualify for loans up to 100% LTV. Again our expert advisers will tell you.
Most loans of this nature are secured on residential property which is in mortgageable condition with a working kitchen and bathroom. Don’t despair if you have removed the kitchen etc. – our advisers could still find options. You can also secure your loan on buy to let, HMO, semi commercial or commercial property – even land. The property type will affect the lenders and rates available.
One size fits all?
You need the help of a skilled underwriter / adviser to take all of these factors in to consideration as one size doesn’t normally fit all and there are many other less impactful considerations in finding the best lender.
We have over 2500 loan plans available at Promise – our adviser’s expertise will help you find which one suits you best.
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.
If you have been introduced to Promise Money by a third party / affiliate, Promise may pay them a share of any fees or commission it earns. 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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