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Secured loan and Repayment Calculator

==>What is a secured loan?

Simply put, they are a loan only available to property owners (or mortgage holders), where the lender can forcibly sell your house to get its money back if you can't repay. The 'secured' bit means the lender gets 'security' not you, as if there are problems, it can repossess your home.
When we normally talk about personal loans from a bank or building society, these are unsecured, which means there's no automatic link to your home (so non-homeowners can borrow this way too).
Sadly it is becoming more common that for those in financial difficulty even unsecured lenders can get what's called a 'charging order' on your home. This effectively means they have a call on the money from the sale of your house.
This doesn’t automatically mean it can push repossession though, there’s another court stage they’d need to go for and the courts are much more reticent to grant it on charging orders. Yet even with this, it's much more difficult for lenders to take your home if its unsecured.

Why would anyone want a secured loan?
  • Easier to obtain. Unsecured loans are almost always cheaper for those with decent credit scores, but secured loans provide lenders with, well… security, so they're more willing to lend to poor credit scorers.
  • Big borrowing is possible. The maximum unsecured loan is £25,000 yet secured loans can be £75,000.
  • Borrowing over a longer period. Secured lenders prefer loans to last longer to help offset hefty set-up costs, usually from five to 20 years. Unsecured lending is usually one to seven years. Borrowing for longer does reduce the monthly repayments, but substantially increases the total interest repaid.

£10,000 loan at 10%
Monthly Repayment
    Total Repayment
 Total Interest Cost
                5 years                £212          £12,720        £2,720
                10 years         £132         £15,840          £5,840
                20 years         £96         £23,040        £13,040

Contrary to glossy TV ads secured loans aren't an easy option for those with heavy debts. A home isn't something to gamble with. These are purely loans of last resort. The only good reason for using them is to cut existing debt costs. Those considering secured loans for new borrowing or purchases should simply not do it.

  • Credit Card Balance Transfers. Credit cards are ‘unsecured' and, used correctly, the cheapest borrowing possible, especially when shifting debt to new Balance Transfer offers. Also read Cheap Credit Card Loans.
  • Unsecured Loans: Cheaper and less risky for those who can get them. Full details: Cheap Personal Loans.
  • Check Credit Reference Files: Those rejected from unsecured lending without an obviously poor credit history should check their information held by the credit reference agencies Equifax, Experian and Call Credit isn't erroneous. Full details: Your Credit Rating.
  • Use savings: The interest paid on savings is usually far less than interest charged on borrowing, so paying off debts with savings makes sense. Traditional logic does say always have an ‘emergency cash fund'. I disagree. After paying off debts, don't cut the credit cards up, lock them away strictly in case of a substantial emergency. If no emergency happens you're quids in, and can then start a cash emergency fund. If it does, use the cards and you're no worse off than when you started, and you've saved substantial interest costs in the meantime. Full details: Pay Off Your Debts With Savings.
  • Credit Card Shuffle: It's possible to cut the interest rate on existing debts even without getting new products. Many credit cards allow existing customers to move other debts to them at special rates. Correctly shifting balances and prioritizing repaying expensive debts first creates substantial savings. Full details: Credit Card Shuffle.
  • Budget & Reduce Outgoings: Massive Money Saving is possible on everyday spending by moving to better products. See the Money Makeover and The Money Diet for ideas. Budget effectively to allow quicker and easier debt repayments with the Budget Planner.
  • Remortgage: Mortgages are simply a special type of secured loan with cheaper rates. Borrowing the money on your existing mortgage, or remortgaging to a new cheaper deal is a valid option, but isn't always correct. Mortgage debts are paid off over a long time, and 5% over 20 years is more expensive than 10% over five years. Plus you may be forced to increase your life assurance and other associated costs if mortgage debts increase. Those without flexible mortgages (which allow quick repayments) may sometimes be better off with a secured loan. Full details: Find the Best Mortgage, Remortgage Guide.
  • Debt Counselling: For those consistently struggling with debts and meeting repayments, free personal help is invaluable. Do it as quickly as possible, the longer you leave it the worse it gets. Avoid commercial debt management companies.
    A number of completely free, charity-based or publicly-funded bodies offer a fantastic service: StepChange Debt Charity (formerly CCCS), National Debtline, Citizens Advice Bureau and the Community Legal Advice and if you are considering taking out an IVA please read my full IVA Guide first to check if it's right for you.
 ==>Loan Repayment Calculator for free

This free loan calculator allows you to calculate and break down monthly repayment figures for a secured or unsecured loan. Choose the loan amount, the annual interest rate (percentage), the number of years and any initial deposits or end-of-term balloon payments.

What is a secured loan?

A secured loan is a loan in which the borrower pledges an asset (e.g. a car or property) as collateral for the loan.

What is an unsecured loan?

Unsecured loans are monetary loans that are not secured against the borrower's assets. These often take the form of credit card debt, personal loans, bank overdrafts, credit facilities or corporate bonds.

What is a balloon payment?

A balloon payment is a large, lump-sum payment made at the end of a long-term loan. It is commonly used in car finance loans as a way of reducing monthly repayment figures. Be aware that once you reach the end of your loan period, that balloon amount becomes payable.

What is APR?

APR stands for Annual Percentage Rate and is an important factor in determining the overall cost of a loan. You can use APR to compare different personal loan offers. When you arrange a loan with a finance company, their offer can include extra fees associated with the loan. The APR figure takes all of that into account, giving you an easy percentage interest rate to allow you to compare and shop around. It is generally said that the lower the APR rate is, the better it is for you. Advice from the FSA (UK) is available on their website.

What is the formula for this loan calculator?

This loan calculator uses the following formula to calculate loan figures:
Monthly payment = [rate + rate / ( (1+rate) ^ months -1) ] x principal loan amount

 To see how this Calculator works. Just visit below mentioned site;


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