Debt consolidation is the act of taking one big loan to pay off other small loans charging high-interest rates. The primary objective here is to reduce the overall cost of debt in the long term. One loan is more manageable than multiple loans with monthly payments. When looking for a debt consolidation loan, remember that the type of loan you choose determines how much in interest you will end up paying. Unsecured loans attract high interests but loans against real estate are much cheaper as there is collateral for the lender to fall back on if you are unable to repay Our company of specialists has been organising debt consolidation loans in London for many years now. There is always an expert available to discuss your issue and how debt consolidation might be of help.
Advantages of Debt Consolidation
Many people in Ontario struggle with monthly credit card payments among other debts whose interest accrues, making it even harder to keep up. Debt consolidation loans in London are very attractive to such people and banks, as well as private lenders, offer them. These loans come cheap only because lenders deem them less of a risky investment Private lenders like issuing loans as registered mortgages as protection from the high risk posed by some borrowers. With a registered mortgage, the lender has a power of sale to activate and recoup their money. Mortgages are the best alternative to loans with interest rates between 19%-29%.The loans we offer are reasonable amounts that you can really use to redeem your credit score and straighten out your finances.
Reasons Why People Choose Debt Consolidation in London
People choose this alternative for myriad reasons including:
- Protecting Their Credit Score: Paying off pending bills, credit cards, and other personal loans is the first step to improving a poor credit score. You need a high score to get cheaper mortgages at better terms from institutional lenders like banks and credit unions.
- Lower Interest Rates: You need to clear all small debts using one big loan that charges lower interest eventually. Mortgages can save you lots of money, being the least expensive type of loan available.
- Affordable Monthly Payments: You can choose to spread payments over an extended period to enjoy lower monthly instalments.
Debt Consolidation Methods
Generally, we offer three debt consolidation options, which are mortgage refinancing, first and second loans on a property.
First Mortgage
As the name suggests, this is the first loan ever placed on that property. Equity is an important feature for lenders who need reassurance that they will recoup. The biggest advantage of a first mortgage is that low interests are charged and the loan is usually a lump sum as lenders are in this case confident there will be gains.
Second Mortgage
The loan taken after the first one on a property is equally important in consolidating debts. It might be more expensive than the first loan but it is cheaper than other available alternatives, making it a great tool for debt consolidation.
Mortgage Refinancing
If you feel as though the interest rates on an existing loan are too high, it is possible to break it and replace with a cheaper loan. Mortgage refinancing should save you money but ensure that breaking an existing loan leads to a fine of three months interest fees.
Private Lenders Offering Debt Consolidation Loans in London
Banks give loans at the best interest rates in London but only people who meet the minimum credit score requirement get to enjoy the privilege. Those who fall below 600 points cannot get bank mortgages while credit unions require 550 points from a borrower. If institutional lenders reject you, private lenders who don’t care about credit score will come to the rescue. The only difference with banks is that private lenders charge high interests to make sure they get as much money back as possible before a borrower fails to pay.
Even with a registered mortgage, it is risky to loan people with bad credit especially if it is the second mortgage. There might not be enough left for you after other lenders have recouped from the power of sale. Drawing from a large network of lenders our experts will get you several offers and even help you analyse them. You will emerge with a clear understanding of debt consolidation loans in London, which will go a long way in ensuring you, choose right.