Money is one of the fundamental needs of our day-to-day lives. It is the ultimate medium for all the transactions that take place across the globe. Running short of it can always manifest numerous problems – which can affect the way we live. To fill this shortfall, the lending culture came into place and lenders started offering loans to people who needed additional money to manage their expenses. It all started in ancient Greece where pawnbrokers used to lend money to borrowers by keeping it secured by using a collateral. That way the risk for a lender was comparatively less. However, with the evolution of technology, unsecured credit lending came into the market with – credit cards. In 1966, Barclay introduced the “Barclaycard” – UK’s 1st credit card. And soon, lenders evolved the way of borrowing by offering unsecured credit lending in the UK.
Homeowner Loans in the UK are also a type of unsecured personal loan which is taken by the borrowers without offering any collateral. Also, a few lenders do not ask for a co-signor to vouch for the borrower while availing a loan. Now let us focus on the safety aspect of this much-talked credit product.
How Safe is a Homeowner Loan?
Generally, there are 2 types of homeowner loans (i) Secured and (ii) Unsecured. A secured homeowner loan is sometimes referred to as a home equity loan. The value of your property is taken into consideration while you apply for this loan and your property is used as collateral until you repay the loan to the bank or credit union. However, an unsecured homeowner loan allows you to borrow money without having to offer anything as collateral. These loans are taken out for a short period – that generally lasts up to 12 months.
The safety depends on the choice you make while choosing your loan. It is necessary to choose and deal with a lender or a credit broker who is registered by the Financial Conduct Authority (FCA) in order to take the first step towards choosing a safe product.
As these homeowner loans are unsecured in nature, your property is safe. Thus, it can be concluded that there is no risk of collateral damage. The only matter of concern here is – your credit score. If you fail to make the repayments on time, your credit score may be ruined. And with a bad credit score, it becomes challenging to borrow money.
Alternatives to Homeowner Loans in the UK
If you do not feel like opting for a homeowner loan, you may browse through the other available alternatives that may serve your purpose. A few of the top purposes of a personal loan are:
- Debt consolidation
- Home improvement
- Buying a car
- Paying for school fees or any other emergency expenses
- Financing a vacation
- Funding the cost of a wedding
- Using the amount to purchase any household products
You may choose any short-term personal loan as the loans do not have any restriction on the usage. It can be used for these personal financial troubles easily. But ensure the repayments. It is always considered wise to borrow what you can afford to repay and thus, create a repayment strategy before you enter into a legal agreement with the lender.
How to Apply for a Homeowner Loan?
You can easily apply for a Homeowner Loan online with 786 Loans. We are registered by the FCA and deal with registered lenders only. We’ve designed our application process to ease the process of applying. It will only take a few minutes to apply for a loan with us. Click here.