The following is a guest post.
Things are at last looking up. Well, at least for those wishing to secure a five figure loan they are! With interest rates currently at an all-time low, there can be no better time to borrow money, provided it’s a decent sum. Unfortunately, its a slightly different situation for those seeking a smaller loan. Whilst rates from lenders such as Yorkshire Bank and Sainsbury’s Bank are incredibly appealing on loans over £10,000, the vast majority of low-end loans come with at least a 10% interest rate on loans over £3,000. And whilst there are a few notable exceptions (namely independent small loan companies such as 1st Stop), many are now seeking other alternatives to the personal loan. Some of the potential avenues are as follows.
One of the oldest types of loans available, gold loans were originally a very popular source of money in both rural and semi-rural areas. Recently, they are experiencing a bit of a renaissance, and it is easy to understand why. With gold loans, there are zero processing charges or repayment fees. Furthermore gold loans provide instant liquidity against one’s jewellery without having to sell it away. As gold loans do not require a previous credit history, they are fast becoming a popular choice for those with blank credit or bad credit ratings.
Secured Homeowner’s Loans
With a secured homeowner’s loan, you put forward your home as up front collateral in return for an often sizeable loan. You can generally always borrow much more money with a secured loan than you could from a personal one, obviously because your house acts as a sort of guarantee of payment. And whilst this is a last resort for many (being that most do not wish to borrow against their own home), interest rates are very low and loans can often be paid back over a long period. Of course, you want to be absolutely sure that you will be able to make the payments before risking your home.
Weigh Up the Pros and Cons
All of these methods clearly have their advantages and disadvantages. Take your time in considering what works best for your current situation. It may be that a small personal loan is manageable, provided you get a reasonable interest rate. If not, you may find that one of the above is a safer alternative.