Home equity or mortgage refinance: Which should you choose?

Looking to refinance your first mortgage and take cash out at closing? Consider another option.

When the prime rate is below the average rate charged on 30-year fixed mortgages, consumers looking to tap their home equity may find it cheaper for them to get equity loans or lines of credit. Besides costing thousands of dollars less in closing costs, the rates on these loans may be lower than first mortgages. Although home equity loans and lines of credit are currently attractive, they aren't always the best option.

It can be beneficial to someone who knows they'll pay it off in a few years or who'll want to move out in a couple of years. But, if you need a longer time to pay off in order to keep payments reasonable, and can't afford a five-year or 10-year repayment schedule, a mortgage may be best.

First mortgage rates traditionally are the lowest rates around. Banks and loan investors feel the most secure with these loans because they have first lien position, meaning they'll get first rights to any money generated if foreclosed.

When first mortgage rates are lower than equity loan rates, it usually makes sense for a borrower to tap equity by going through a so-called cash-out refinance. In that process, the customer refinances the first mortgage, increases the balance and receives the difference between the old and new balances in cash at closing.

But rates don't always behave normally. Equity loans can actually end up being cheaper than first mortgages, even though most equity loans are riskier because they're usually in the second-lien position. The reason lies in the way banks set rates on various home loan products. Most first mortgages are bundled into mortgage-backed securities, or MBS, and sold into the secondary market via Fannie Mae and Freddie Mac.

When the Fed cuts rates, it usually helps the economy recover. So bond traders start to drive mortgage rates higher in anticipation of an eventual recovery, even though the Fed may still be cutting the rates it controls directly and the economy hasn't improved yet.

Home equity loans work differently, though. For one thing, banks have more say over the rates charged on those because they typically keep the loans on their books, rather than sell them off to third-party investors. Additionally, banks use yields on shorter-term bonds, such as two-year or five-year Treasuries as a guideline for their equity loan rates rather than yields on long-term MBS. Those shorter-term yields are much more sensitive to the level of the Fed-controlled fed funds rate than they are to the long-term economic outlook.

As for home equity lines of credit, most banks set their rates based on the shortest-term market rate of all, which is the Wall Street Journal prime rate. It moves in lock step with the fed funds rate.But equity loans and lines of credit usually come without closing costs, so they can be $2,000 or $3,000 cheaper than first mortgages.

So who should go for an equity loan or line of credit rather than a cash-out refinance mortgage? Consumers who plan to pay off their loans in a reasonable amount of time or who don't need to borrow much money may find an equity loan or line of credit the better than a cash-out refinance mortgage.

Regardless of bad credit or no credit, give our home equity loan lenders a chance to serve you and offer free refinancing interest rate quotes. A home equity loan is a great way to get a low interest, long term loan to pay off bills. But if you're a non-homeowner, consider credit counseling.

Ideas for using a home equity loan:

Refinance your home as a way to obtain other property, and use the equity as a construction loan to develop new real estate for a vacation home. If; for example, you want to purchase real estate as a second home or vacation site, you could use the equity in your home to purchase property. If there's enough equity, you could buy land plus a manufactured home, instead of obtaining a separate real estate and mobile home loan. Or, you could use the equity as a RV loan, a boat loan, or for other recreational purchases.
Having legal problems and need a large cash loan? Use your home's equity to fund your lawsuit loan.

Have children? Use your home's equity for a college loan. You may be able to get lower interest rates, better repayment terms, and a better tax deduction than by extending a long term student loan.

Using home equity often offers the lowest interest rate, versus that charged by an unsecured loan, and refinancing approval is much easier than an unsecured loan, even for bad credit people.

Secured Loans in the UK

It is often essential to raise finance for major purchases including for example house related investments such as adding a conservatory or a loft extension. One method for raising this finance is to borrow money with security put down against the loan. This effectively guarantees the loan by assigning rights to the security in the event of a loan default. Such a loan backed by collateral is usually called a secured loan.

One of the most frequently used assets as security in such an arrangement is a house, or that portion of the equity in a house which is not already granted as security for other loans. This type of loan is usually quicker to arrange and more attractive interest rates are available as it is a safer proposition for the lender. In nearly all circumstances the lender will be able to recover their money. Because of the lesser risk profile of the secured loan it will often be attractive to those with a less than perfect credit history. The secured loan is therefore an option for those with equity tied up in property who are seeking low interest rates or have experienced problems getting an unsecured loan, or for whom an unsecured loan is not otherwise an option.

Secured loans can usually be arranged without punitive fees like those which a standard remortgage will attract. For this reason it is often a preferred route for those seeking to release capital from their real estate investments.

The capital which a secured loan releases can usually be used for any purpose including home improvements, buying a car, take a once in a lifetime holiday, and management or consolidation of other debts. By consolidating many short term debts into one larger long term secured loan the monthly payments to service the debt can be substantially reduced making a significant difference to the month to month finances of the debtor.

Secured Loans are available from high street banks and building societies as well as specialist lenders.

Rise in secured loans to fund DIY projects

A rise is expected in secured loan applications as homeowners focus on carrying out renovation and DIY work rather than moving, one lender said today.

Pink Home Loans said people will stay in their current property because of the current market situation and would take out a secured loan to renovate their kitchens, bathrooms, bedrooms and gardens.

Associate director of marketing and IT Neil Hoare said there are two traditional rises in applications for secured loans each year – one after Christmas when consumers are looking to consolidate credit card debts and one around April.

"Intermediaries are focusing on alternative ways of generating income and secured loans have become a real asset in the intermediary market," he said.

According to research carried out by Halifax this month, nearly one in three (28 per cent) of homeowners are planning on carrying out home improvements in the next 12 months to add value to their property.

Nearly half (44 per cent) believe the work will add up to £5,000 to the value of their homes.

A new kitchen tops the list of which project homeowners think will increase the value of their property the most, followed by a new bathroom , redecorating, an extension and a conservatory.

Credit unions could help those looking for cheap finance

The ability to get affordable finance has really diminished over recent months as a result of the global credit crunch, which has resulted in poor credit conditions and reduced access to finance.

Many people have found that getting an unsecured loan through their bank is now too expensive, or in some cases is impossible due to the tighter credit conditions in place.

Officials are now suggesting that many consumers may find that a credit union offers the ideal solution to their borrowing needs, enabling them to borrow small amounts of money for a very low rate of interest.

Officials state that this is a far more sensible solution than turning to doorstep lenders that charge a very high rate of interest.

One official said: “Credit unions offer a great alternative to money shops and payday loans for people needing small loans over relatively short periods. Credit unions charge no more than two per cent on the reducing balance of a loan and many charge just one per cent, which would mean that £1,000 taken out for a month and paid back weekly would accrue just £5.76 in interest at one per cent.”

She also said: “I would recommend that anyone needing a small loan first looks to their own bank or building society or credit union for a loan, rather than using doorstep lenders or money shops, if they want a good deal. Credit unions are not as well known in Great Britain as they should be but they are basically financial co-operatives which aim to get the best deal for their members. In the US and Ireland, for example, credit unions are very much mainstream financial institutions with millions of members.”

Why unsecured loans suit some people

There are two main categories of loans available these days, and these are secured and unsecured loans.

There are a number of different loan types within these two categories, such as consolidation loans, wedding loans, car loans, home improvement loans, and any purpose loans.

The eligibility requirements for secured and unsecured loans are different, so eligibility will be dependent upon your circumstances as well as other factors.

Many people that own their own homes decide to opt for a secured loan, as they find this a more affordable way of borrowing money. This is because the repayment periods that are offered with secured loans are far longer than with unsecured loans, which means that you can spread your borrowing over a longer time period and therefore keep your repayments down as much as possible.

You can enjoy some competitive rates of interest on secured loans although the actual rate of interest that you will be charged will depend on a number of factors, including your credit rating. One of the reasons many homeowners may opt for a secured loan is because these loans are more accessible to those with damaged credit than unsecured loans

However, it is important to remember that a secured loan can be a high risk if you are unable to keep up with repayments, and even if you are able to make repayments there is still the risk of falling into negative equity if house prices fall – this is where you end up owing more on your property than the property is actually worth.

However, the major risk with secured loans is that you could risk losing your home if you are unable to keep up with repayments, as these loans are secured against your property.

Unsecured loans, on the other hand, are entirely contract based and are not secured against any asset, which means that you do not risk losing your home if you are unable to meet the repayments – although you still risk damaging your credit rating.

Unsecured loans are available to both homeowner and non-homeowners that have a good credit rating. However, the lending levels are lower than with secured loans, and the repayment periods are shorter, which means that you may have to make higher repayments each month because your loan is spread over a shorter term.

This said, there are many people that prefer to have an unsecured loan – or are only eligible for a secured loan – so although the interest rates on these loans are said to have gone up by a significant level since the onset of the credit crunch last summer, they are still proving popular amongst those that are able to get them.

Of course, it is important to remember that in the current financial climate lenders have really tightened up on their lending criteria for unsecured loans and therefore you may experience more difficulty when it comes to getting a low cost loan.

Despite this many people may still prefer to opt for an unsecured loan over a secured loan. Those that do not own their own homes have no other choice but to opt for an unsecured loan, as they cannot qualify for a secured loan.

Some people may have access to both loan types but may prefer an unsecured loan because of the shorter repayment periods on offer, which means that they will be out of debt more quickly, as you can choose terms as short as one year, whereas most secured lenders offer loan terms starting at three years.

There are other reasons why borrowers may opt for an unsecured loan over a secured one. First of all you may not want to risk falling into negative equity, particularly at a time when house prices are set to fall, which means that many people could see the value of their homes plummet.

If you borrow against the equity in your home in the form of a secured loan and then house prices fall you could find yourself owing more on your home than the actual market value of the home.

Some people may simply prefer not to risk their homes by securing a loan against the property, and therefore prefer to borrow on an unsecured basis where no assets are at risk.

It is important to remember that whilst an unsecured loan does not pose the same level of risk as a secured loan in terms of the security of your home, you will be risking your credit rating and your financial future if you fail to keep up with repayments on the loan.

You should therefore always make sure that you can comfortably afford the repayments on the loan before you commit, and always discuss with your lender if there comes a time when you are unable to keep up with repayments on the loan.

Why unsecured loans suit some people

There are two main categories of loans available these days, and these are secured and unsecured loans.

There are a number of different loan types within these two categories, such as consolidation loans, wedding loans, car loans, home improvement loans, and any purpose loans.

The eligibility requirements for secured and unsecured loans are different, so eligibility will be dependent upon your circumstances as well as other factors.

Many people that own their own homes decide to opt for a secured loan, as they find this a more affordable way of borrowing money. This is because the repayment periods that are offered with secured loans are far longer than with unsecured loans, which means that you can spread your borrowing over a longer time period and therefore keep your repayments down as much as possible.

You can enjoy some competitive rates of interest on secured loans although the actual rate of interest that you will be charged will depend on a number of factors, including your credit rating. One of the reasons many homeowners may opt for a secured loan is because these loans are more accessible to those with damaged credit than unsecured loans

However, it is important to remember that a secured loan can be a high risk if you are unable to keep up with repayments, and even if you are able to make repayments there is still the risk of falling into negative equity if house prices fall – this is where you end up owing more on your property than the property is actually worth.

However, the major risk with secured loans is that you could risk losing your home if you are unable to keep up with repayments, as these loans are secured against your property.

Unsecured loans, on the other hand, are entirely contract based and are not secured against any asset, which means that you do not risk losing your home if you are unable to meet the repayments – although you still risk damaging your credit rating.

Unsecured loans are available to both homeowner and non-homeowners that have a good credit rating. However, the lending levels are lower than with secured loans, and the repayment periods are shorter, which means that you may have to make higher repayments each month because your loan is spread over a shorter term.

This said, there are many people that prefer to have an unsecured loan – or are only eligible for a secured loan – so although the interest rates on these loans are said to have gone up by a significant level since the onset of the credit crunch last summer, they are still proving popular amongst those that are able to get them.

Of course, it is important to remember that in the current financial climate lenders have really tightened up on their lending criteria for unsecured loans and therefore you may experience more difficulty when it comes to getting a low cost loan.

Despite this many people may still prefer to opt for an unsecured loan over a secured loan. Those that do not own their own homes have no other choice but to opt for an unsecured loan, as they cannot qualify for a secured loan.

Some people may have access to both loan types but may prefer an unsecured loan because of the shorter repayment periods on offer, which means that they will be out of debt more quickly, as you can choose terms as short as one year, whereas most secured lenders offer loan terms starting at three years.

There are other reasons why borrowers may opt for an unsecured loan over a secured one. First of all you may not want to risk falling into negative equity, particularly at a time when house prices are set to fall, which means that many people could see the value of their homes plummet.

If you borrow against the equity in your home in the form of a secured loan and then house prices fall you could find yourself owing more on your home than the actual market value of the home.

Some people may simply prefer not to risk their homes by securing a loan against the property, and therefore prefer to borrow on an unsecured basis where no assets are at risk.

It is important to remember that whilst an unsecured loan does not pose the same level of risk as a secured loan in terms of the security of your home, you will be risking your credit rating and your financial future if you fail to keep up with repayments on the loan.

You should therefore always make sure that you can comfortably afford the repayments on the loan before you commit, and always discuss with your lender if there comes a time when you are unable to keep up with repayments on the loan.

Student Loan

Student loans are the most cost effective on the market, and in keeping with that, one of the most popular too. If you’re young and considering further education, it’s pretty likely that at some point or another, you’ll need to take out a student loan.

The government has done its best to provide supervision to the financial needs of students, and banks are doing the same with a wide range of student loans. The first thing to distinguish as a separator between a student loan and any other is the interest rates. They’re as low as they come.

These kind of loans only grow at the inflation rate, and as a precautionary measure, the government has restricted any inflation rises from effective the rates too dramatically. The maximum possible interest that you’ll be paying on a student loan is 1% above the Bank of England’s national rates. Don’t worry about that though. You can expect to be enjoying repayment interest rates as low as 2%.

The great thing about such completive rates is that you don’t have to worry about paying off your debts in a hurry. Life as a student is tough at the best of times and the wallet can be threadbare on many occasions, so not having to worry about extreme interest rates in a major advantage. You only have to compare a student loan to the interest that you’d be paying on a 14.9% APR contract. The value soon shines through.

If you’re an under-graduate, you can borrow up to a maximum of £4,405 in a calendar year. This should be more than enough to take care of any financial difficulties. Those fortunate enough to live in London even receive an extra £1,500 bonus. Not bad for them!

So what are the major concerns with this type of loan? The most obvious worry would have to be that students don’t get too carried away with the low interest charges. University life, in particular, has the potential to spill out of hand with immense spending in a tiny period of time.

After your graduation, the government will automatically take 9% out of your earnings when you break the £15,000 salary mark. You don’t have to worry about arranging this. It’s all set up by the financial bigwigs and the money will be transferred directly from your wages. It can take a long while to clear debts, but with the interest hovering so low, you don’t need to worry about it too much.

Of course, having graduated university and moved in to employment, it’s unlikely that you’ll have the financial responsibilities that others will have. You should be able to make a serious dent on those debts and clear them in reasonably quick time.

Student loans are a forced deal for many young adults. It’s quite rare that teenagers will have sufficient funding to go through further education without having to call on help from a loan at some point. That’s not to say that it’s not possible. But if you’re looking for a loan which does more good than harm, the student loan is definitely it.

Car Loan

As anyone that has every had an unreliable vehicle will know, there is nothing worse than trying to get on with life when you have a car that is continually breaking down, refusing to start, and causing you stress and worry every time you get behind the wheel.

You find yourself constantly late for work, late for appointments, and in some cases could even be risking your own safety by driving such a vehicle.

The inconvenience of severe damage to your car following an accident can also be stressful, and in the case of older cars or in cases where you do not have fully comprehensive insurance cover it may not actually be worth shelling out for repairs to be carried out on your vehicle.

The good news is that those looking to buy a new or newer car, whether it is to replace an old vehicle or whether it is a first car, can enjoy a choice of finance options, with a choice of car loans available from a variety of lenders.

Many people feel obliged to take the finance that is offered from the car dealership that they get their car from, but you should bear in mind that in many cases this is the more expensive option, and with a little forward planning you can get a far better deal by shopping around for a car loan that offers reasonable terms and interest rates rather than being pressured into taking out finance through a dealership.

Taking out an independent car loan also means that you can enjoy the luxury of choice, as you will be able to purchase your car from anywhere, whether it is a private sale, from a dealership, or even from a family member or friend.

There are many different lenders that offer car loans, from Internet lenders and banks to specialist lenders, and even supermarkets these days.

The key to getting an affordable car loan is to ensure that you shop around and look for the best interest rates and terms, and you should do this well in advance of your purchase so that you have time to find the best loan, get your application processed, and get the money into your account ready to make your purchase.

When you take out a good value car loan you will be able to enjoy a wider choice of vehicles as well, as you will have the money ready in your account and can then look at vehicles from any seller that fit into your budget.

With an affordable car loan you can look forward to the benefits of a more reliable vehicle without the worry of continually breaking down or having to shell out for repairs, which can really help to ease the strain when it comes to getting safely from A to B.

With such a great choice of car loans from a range of reputable lenders, finding something to suit your budget as well as your needs should prove no problem at all, making it more affordable and more viable to invest in a newer or even a brand new vehicle.

Poor Credit Loan

It’s a well know fact that lending agencies work together to produce credit reports for customers, and ultimately, a credit rating. This is essentially a score of how trustworthy you are when it comes to paying back your debts and loans.

For many people, it can be hard to find a loan if they have a bad credit history. The agencies are famous for sharing their reports with each other and if you stick out like a sore thumb, you’ll find yourself charged either a sickening interest rate or rejected altogether.

So what can you do if you’re being dragged down by your credit history?

Thankfully, there are several lenders offering loans catered for people with blotched records. As you can probably imagine though, these loans aren’t quite as appealing as the deals on offer to a valued trusted customer.

The first obstacle you face is the amount of money that a lender will be willing to credit you with. If you have a history of failing to make repayments, it’s unlikely that you’ll be given the freedom to draw out a huge chunk of money.

You’ll also have to put up with high interest rates, whichever bad credit loan company you opt for. With the mainstream lenders refusing to do business, high interest rates are the price that you’ll unfortunately be required to pay.

So in a way, you could argue that these scrap-picking lenders are working in a vicious cycle. They take the people with bad credit reports and offer them loans which in many ways, can be harder to pay off than the original debt that wrecked their ratings!

It’s not a nice circle to be trapped in but if you find yourself in such a situation, take peace from the fact that proving yourself as a reliable customer will improve your rating.

If you keep up with repayments and get the cheques to the right people before deadlines, you’ll find that your credit report illustrates this and in some cases, you’ll find the interest rate takes a dive. If at the very worst, you’ll stand a greater chance of getting a proper loan in the future.

There are two types to contend with; an unsecured loan and a secured loan. Contrary to the names, it’s the secured loan which offers the most uncertainty.

If you take out a secure loan and fail to make the repayments or fall behind, you could find yourself receiving a visit from the bailiffs or facing repossession altogether.

An unsecured loan offers slightly more protection and you can’t be directly attacked where your personal assets are concerned, but the interest rates are likely to be higher again.

If you’re desperate for a loan, a bad credit company is probably going to be seen as your last resort. It’s possible to turn your fortunes around, but you must keep on top of the debts. Don’t let whatever spoiled your rating bring you down. If you fail a second time, you could find yourself at the bottom of the loan heap!

Personal Loans

Personal loans are loans that are designed to be used for any purpose and are available on a secured or an unsecured basis depending on your needs, preferences, and circumstances.

A secured personal loan is one that is available to those with their own home, as these loans are secured against the equity in the home.

An unsecured personal loan, which are those often available via traditional high street lenders, is available to those living with friends or family and those renting a property as well as to homeowners that prefer not to take out a secured loan.

With a personal loan you can use the money for one of a range of purposes, and this could be anything from a luxurious holiday or new car to paying for an education or funding a dream wedding.

The interest rates charges on a personal loan can vary depending on whether you opt for a secured or unsecured personal loans and also depending on other factors, such as your credit rating, your circumstances, and the lender that you go through for your loan.

The repayment periods can also vary, but you will find that a secured personal loan offers far longer repayment periods than an unsecured personal loan.

The amount that you can borrow on personal loans will also depend on a number of factors, such as your income and expenditure, your credit rating and history, and if the loan is a secured one, the level of equity in your home, which can be worked out by taking away the balance of any outstanding mortgage or other secured loans from the market value of the property.

As with all loans, the longer your repayment period the less you will have to pay each month, as you will be spreading your loan over a longer term, which can help to keep repayments down. However, you will also pay more interest overall when you spread the loan over a very long period.

Although many people use their credit cards to pay for a large or special purchase such as a holiday or perhaps some expensive jewellery for a loved one, it can often be more sensible to use personal loans for these types of purchases.

This is because the interest rates on credit cards can be far higher than personal loans, and also the repayments on personal loans are more structured, so you know what you will be paying each month and when the debt will be clear.

If you don’t want to be in debt for too long then you can opt for unsecured personal loans, where you can take your loan out over a shorter period and make higher monthly repayments to get it cleared quickly.

When taking personal loans it is also important to consider whether you want a fixed rate. Most unsecured lenders offer their personal loans on a fixed rate basis, and this makes for easier budgeting as it means you make the same repayment every month throughout the term of the loan, other than the final repayment, which may be slightly more in order to make up any unpaid interest.

If you decide to consider secured personal loans, you should bear in mind that these are secured against the home and therefore failure to keep up with repayments could result in you losing your home.

Your credit history and rating will seriously affect your ability to get personal loans, and most people with a poor credit rating will find that they cannot get unsecured personal loans, and may therefore have to turn to secured loans, which means that they will have to own their own home with some level of equity in it.

Debt Consolidation Loan

Debt consolidation loans are popular for their ability to combine other debts in to one monthly payment. You’ve probably heard the endless television commercials about consolidating your outgoings, and there does seem to be a large market for this kind of financial action.

There are many reasons why you might wish to consolidate your debts. Consider the idea that you have several outgoings, all at different monthly fees, all with different deadlines to be received by. Is that going to help you sleep easily?

It can be a time consuming business to keep on top of a loan, and even more consuming to keep on top of several different debts. By consolidating, we can take out another loan and pile the debts together.

Don’t expect your outgoings to suddenly disappear in a puff of white smoke, we haven’t got that far yet. But it is a great way to loosen the responsibility on your shoulders and grab control of the situation.

Of course, there’s also the chance that your debts are working at different interest rates. Some may be fixed, others may be variable.

How are you maintain a budget when rates are skipping all over the place and you don’t know what’s what. By using debt consolidation, you can turn all those differing rates in to one single interest-rate.

It’s likely that the interest rate will be high, although you can get special 0% bonuses for set time frames. These act as an introductory incentive more than anything.

Both variable and fixed debt consolidation loans are available. Variable rates are by far the most actively used loans and they have the potential to go both up or down. It’s nice to know that only one of your repayments is gaining interest, rather than a whole filing cabinet full of them!

And once again, you can expect to find both secured and unsecured debt consolidation loans. If you have a mountain of debts to take care of, it’s likely that only a secured loan with be suffice.

These kind of loans offer extra money and lower interest rates - but they come with the additional burden of having to secure the loan. To secure a loan, you’ll have to link it to your assets , and normally your home.

Unsecured loans offer less money and are a good option for consolidating lots of mini-debts. They don’t come with the stress of having to tie your property in to the equation, and you have a certain degree of the flexibility.

What a lender is willing to offer you will be determined largely by your credit report. If you have a good history, you’re more likely to be offered an unsecured debt consolidation package. If your record is tainted, you could end up having to put your home at risk.

Debt consolidation offers peace of mind more than anything. It’ll take you longer to pay off your debts, but on a monthly basis, you’ll have much less to worry about. It’s also possible to make savings due to the consolidated interest.

Secured Loan

Secured loans are specialist loans that are available only to homeowners, and this is because these loans are secured against the home. For many people secured loans offer an affordable and effective way to borrow money and raise finance, allowing them to unlock the equity in their homes without having to actually sell up and move on.

With secured loans it is extremely important that carefully consider whether this is the right loan for you, as failure to keep up with repayments could result in you losing your home. It is vital that you make sure you can comfortably afford the repayments, bearing in mind that interest rate hikes can affect the variable rate on these loans and therefore can affect your monthly repayments.

There are both pros and cons to taking out secured loans, and homeowners that are considering this type of loan should weigh up both the pros and cons in order to determine whether these loans are right for them.

There are a number of providers of secured loans for consumers to choose from, and it is also worth remembering that the interest rates, repayment periods, and terms and conditions can vary from one lender to another, and therefore if you are planning to take out a secured loan you should make sure that you compare quotes and loans from a number of lenders in order to find the right one for your needs.

Consumers that take out secured loans are able to enjoy increased borrowing power compared to unsecured finance, which tends to allow loans of up to £25,000.

You can borrow far more than this with most secured loans, although the amount that you will ultimately be eligible to borrow will depend on your personal circumstances, your credit rating, your income, and the equity in your home.

You can work out the level of equity in your home by deducting any outstanding mortgage or other loans secured on the home from the market value of the property.

The repayment periods offered on secured loans are also way longer than those offered on unsecured loans, which typically offer repayment periods of up to seven years.

The longer repayment periods offered with secured loans means that you can spread your loan over a longer period, and this in turn means that you can reduce the amount that you have to repay each month.

The main disadvantages with this are that you will be in debt for a long time if your take your loan over a longer period, and you will pay more in interest overall over the term of the loan.

Of course, the other main disadvantage with secured loans is that the loan is secured against the home, and therefore if you stop making repayments on your loan for whatever reason you may find that your home is at risk.

Before committing to a secured loan you should carefully look at your options and decide whether this is the best option for you. Your decision should be based on the amount that you wish to borrow, the amount that your can afford to repay each month, and even your credit rating.

Often those with poor credit that cannot get unsecured finance find that they are eligible to take out secured loans providing they are homeowners.

Some secured loans have terms and conditions that result in anyone that tries to pay off the loan early being financially penalized.

This is why you should always check the small print on secured loans before you sign up, as this will ensure that you don’t get any nasty surprises a few years down the line.

Renewable Energy Trust

The Renewable Energy Trust seeks to maximize environmental and economic benefits for the Commonwealth’s citizens by pioneering and promoting clean energy technologies and fostering the emergence of sustainable markets for electricity generated from renewable sources.

The Trust provides financial assistance to individuals and businesses for solar panels and wind turbines at their homes and facilities, works with communities to incorporate green design into schools, helps emerging clean energy businesses flourish in the Commonwealth, and much more.

The Trust works through a variety of programs geared towards these different groups to provide many avenues for the Commonwealth to become greener. Choose your group below to see which programs might be right for you.

molecular nanotechnology

Manufactured products are made from atoms. The properties of those products depend on how those atoms are arranged. If we rearrange the atoms in coal we can make diamond. If we rearrange the atoms in sand (and add a few other trace elements) we can make computer chips. If we rearrange the atoms in dirt, water and air we can make potatoes.

Todays manufacturing methods are very crude at the molecular level. Casting, grinding, milling and even lithography move atoms in great thundering statistical herds. It's like trying to make things out of LEGO blocks with boxing gloves on your hands. Yes, you can push the LEGO blocks into great heaps and pile them up, but you can't really snap them together the way you'd like.

In the future, nanotechnology will let us take off the boxing gloves. We'll be able to snap together the fundamental building blocks of nature easily, inexpensively and in most of the ways permitted by the laws of physics. This will be essential if we are to continue the revolution in computer hardware beyond about the next decade, and will also let us fabricate an entire new generation of products that are cleaner, stronger, lighter, and more precise.

It's worth pointing out that the word "nanotechnology" has become very popular and is used to describe many types of research where the characteristic dimensions are less than about 1,000 nanometers. For example, continued improvements in lithography have resulted in line widths that are less than one micron: this work is often called "nanotechnology." Sub-micron lithography is clearly very valuable (ask anyone who uses a computer!) but it is equally clear that conventional lithography will not let us build semiconductor devices in which individual dopant atoms are located at specific lattice sites. Many of the exponentially improving trends in computer hardware capability have remained steady for the last 50 years. There is fairly widespread belief that these trends are likely to continue for at least another several years, but then conventional lithography starts to reach its limits.

If we are to continue these trends we will have to develop a new manufacturing technology which will let us inexpensively build computer systems with mole quantities of logic elements that are molecular in both size and precision and are interconnected in complex and highly idiosyncratic patterns. Nanotechnology will let us do this.

When it's unclear from the context whether we're using the specific definition of "nanotechnology" (given here) or the broader and more inclusive definition (often used in the literature), we'll use the terms "molecular nanotechnology" or "molecular manufacturing."

nanotechnology

"The Technology Roadmap for Productive Nanosystems charts a path beginning with current nanotechnology capabilities to advanced systems. The Roadmap is a first attempt to lay out a step-by-step course of development that must take place to move from one stage to another, with milestones for achieving each step. With the support and collaboration of our partners, The Waitt Family Foundation and Battelle, we identify the gap between the basic nanostructured materials of today, and the potential of productive nanosystems."

What to Look For in a Lender When you Need to Borrow Money

When you need to borrow money, you should never take the first loan from the first lender you contact. You do need to do your homework to learn what to look for in a lender so that you get the loan that best suits your needs and on the best terms possible.
The first thing to look for is a lender that will take the time to sit and discuss your options. This shows you that the lender is willing to give you free advice and is willing to work with you. While you will have to pay fess associated with the lender obtaining your credit report and in the event that you are buying a home or are using your home as collateral, you will have to pay for the appraisal.
But you should never have to pay for anything before you sign an agreement.
You should look for a lender to which you have easy access. Check to see whether the lender has a website. Most lenders with an online presence do have lots of information on their sites about borrowing and about the various loans they offer.
They also have the interest rate charged posted on the site. Most of these lenders also offer a free loan calculator so that you can experiment with various loan amounts and terms to see what your monthly payments would be in various circumstances.
Some lenders do require a down payment for a loan, especially a mortgage. However, there are lenders that have special promotions ongoing where you either do not have to make a down payment at all or only a fraction of what other lenders require. This does have its advantages and disadvantages.
In some cases, you may have to make the full down payment and then receive part of it back as cash back. Others will allow a small down payment when you agree to taking out private mortgage insurance, which is quite costly.
When you have the amount equal to what the down payment should have been paid off, you need to know whether the lender will automatically cancel this insurance or whether you have to try to get in contact with them and go through paperwork to have it cancelled.
While the rate of interest is an important factor in choosing a lender, you should always ask questions and read the fine print. Some lenders do offer an introductory rate just to get your business. You have to make sure this rate is not only for a short period of time.
You also have to look at the fees the lender charges for such things as appraisals and credit checks. These can add up and add to the outstanding balance of the loan. Even if the fees are not high, some lenders do require you to pay them upfront and will not add them to the loan.
This could cause you some financial distress if you do not have the funds to pay these fees.
When you do contact a lender about the possibility of obtaining a loan, you should ask for a printout of all the fees associated with borrowing the money. Then you can compare the fees of different lenders so that you do get the cheapest rates possible.
Locking in an interest rate is one way of ensuring that your monthly payments will not change for a specified period of time regardless of the market changes.
Most lenders do have this option, but you also have to ask whether or not there are any fees involved if you do pay off the loan before the end of this period or if you are permitted to make any additional payments throughout the year.

Credit unions could help those looking for cheap finance

The ability to get affordable finance has really diminished over recent months as a result of the global credit crunch, which has resulted in poor credit conditions and reduced access to finance.
Many people have found that getting an unsecured loan through their bank is now too expensive, or in some cases is impossible due to the tighter credit conditions in place.
Officials are now suggesting that many consumers may find that a credit union offers the ideal solution to their borrowing needs, enabling them to borrow small amounts of money for a very low rate of interest.
Officials state that this is a far more sensible solution than turning to doorstep lenders that charge a very high rate of interest.
One official said: “Credit unions offer a great alternative to money shops and payday loans for people needing small loans over relatively short periods. Credit unions charge no more than two per cent on the reducing balance of a loan and many charge just one per cent, which would mean that £1,000 taken out for a month and paid back weekly would accrue just £5.76 in interest at one per cent.”
She also said: “I would recommend that anyone needing a small loan first looks to their own bank or building society or credit union for a loan, rather than using doorstep lenders or money shops, if they want a good deal. Credit unions are not as well known in Great Britain as they should be but they are basically financial co-operatives which aim to get the best deal for their members. In the US and Ireland, for example, credit unions are very much mainstream financial institutions with millions of members.”

The main differences between a secured and unsecured loan

Whilst both secured and unsecured loans serve essentially the same purpose, which is to provide consumers with finance to fund a range of purchases and purposes, there are a number of differences between these two loan types, as well as different eligibility criteria to consider.
If you are looking for a loan you need to decide whether you are looking for – or are eligible for – a secured or unsecured loan and as part of determining which option if the right one for you it is important to compare the main differences between these two loan types.
Taking on a loan that is not right for your needs and circumstances can prove expensive, and you therefore need to do all that you can from the start to try and get the right loan.
There are some keys differences between these two loan types, and amongst the important areas that you need to compare are:
Eligibility requirements
In order to be eligible to take out a secured loan you will need to be a homeowner, as these loans are secured against the equity in your property. You do not necessarily have to have good credit, as these loans are lower risk to the lender due to their secured nature.
You will need to meet certain other eligibility requirements, such as financial and employment status.
On the other hand, you do not have to be a homeowner in order to take out an unsecured loan, as these loans are based on trust and contract rather than being secured against an asset.
However, because the risk to the lenders is higher with these loans you will need to have a good credit rating in order to be eligible for an affordable unsecured loan. Again, there are other factors that will come into play when it comes to eligibility, such as your income, outgoings, financial and employments status, age, etc.
Borrowing levels
You will find that the borrowing levels between secured and unsecured loans can vary considerably, although the exact amount that you can borrow will depend on a number of factors.
If you are looking for an unsecured loan you will find that the maximum amount available is £25,000 in most cases. However, the amount that you are actually eligible to borrow will depend on your existing debts and outgoings, your income, your financial and employment status, your credit rating, and a number of other personal factors.
With a secured loan the borrowing levels can be substantially higher, but again the amount that you are actually able to borrow will depend on a variety of factors. Because these loans are secured against the equity in your home the level of your equity will help to determine how much you are entitled to borrow.
Other factors will also be taken into consideration when deciding how much you can borrow, such as your financial and employment status, your age, your credit history, etc. If you are looking to borrow a substantial amount of money and you have a high level of equity in your home then a secured loan is probably going to be your most promising choice.
Repayment terms
The repayment terms offered in secured and unsecured loan are very different. With an unsecured loan you will find that most lenders offer repayment periods of around one to five years, although there are some lenders that will offer seven or even ten year repayment periods depending on how much you are borrowing.
For most people an unsecured loan usually means a relatively short repayment period, which means that your monthly repayments will be higher so that you can repay the loan within the sorter period.
With a secured loan the repayment periods are much longer, and you may be able to take your loan over a twenty five year term, although you can still opt for a shorter term if you wish, such as three years.
These longer repayment periods mean that you have more time to pay your loan, and therefore your monthly repayments will be lower.
Bad credit
If you are looking to take out a secured loan then you may find that you are accepted even if you have bad credit and have been turned down for unsecured credit.
This is because these secured loans provide less of a risk to the lender due to their secured nature – however you will pay a higher rate of interest than someone with good credit.
If you are after an unsecured loan then you will have to have good credit in order to get an affordable deal on an unsecured loan. These loans are not secured against any asset, and therefore lenders have to be more careful about who they lend to when it comes to unsecured loans.

How To Go About Finding the Most Suitable Loan

When you need money for any occasion, the first option is to go to the bank and apply for a loan. What most borrowers don’t realize is that there are several types of loans they can get, and each one has different repayment terms and interest charges.
If you need money and have the ability to make monthly payments, you won’t have any difficulty obtaining the loan. However, most loans do have a clause in the agreement specifying whether or not you can make additional payments or pay the loan off in a lump sum earlier than the end date of the term.
If you know that you will have the money to do this before the term is up, you should make sure you read the fine print and ask questions about whether or not there is a charge for early repayment. This is the case with many mortgages.
Fixed loans are usually the cheapest because they have a set term and a set monthly payment. The interest rate is set when you sign the loan agreement and you can feel safe in knowing how much your payment will be for the duration.
If the interest rates are high at the time you borrow the money and you expect that within a year they will be decreasing, a variable rate loan might be the best one to choose. While this means that your monthly payments may be different each time, you will have the option of switching to a fixed rate loan when the rates do drop.
Also, in a variable rate loan, the interest rate usually stays the same for a period of time, such as six months, before it changes.
Flexible loans allow you to make payments in addition to your monthly payment. You can make several payments within a month or you can make a lump sum payment. Some of these loan plans allow you to take a payment holiday and not make a payment one month of the year so that you can use this money for other needs.
However, there is no holiday from paying the interest and the amount accumulated during the holiday month is added to the outstanding balance. There are also loans that require you to make the interest payment for the month during which you need extra cash, so you just won’t be paying anything off on the principal.
Lines of credit are another way to obtain money when you need it. These are loans in which the lender allows you to use up to a specified limit of cash. It is set up as a separate bank account and you only make payments on the amount that you use. The monthly payment is usually a percentage of the balance, so the payment could be different each month.
This payment includes the interest. A line of credit usually carries a lower rate of interest than a fixed or variable rate loan. You can make payments in any amount provided they are at least the amount of the required payment, and you can pay off the outstanding balance at any time without penalty.
The good thing about borrowing money on a line of credit is that it is always there for you to sue. When you pay it off, you don’t have to go back to the lender to apply for a new loan.
If you own your own home or have been paying your mortgage for a few years, you have equity built up in the home. This is the difference between what you owe on the home and the price at which it is appraised to sell on the real estate market.
You can borrow this amount of money in the form of a home equity loan or a home equity line of credit and use it for whatever you wish. It doesn’t have to be used for making improvements to the home.
An interest only loan means that you are only required to pay the interest on the loan each month. However, you can pay higher amounts so that the principal of the loan gradually starts to decrease.

What is a Commercial Loan?

Commercial loans are bank loans that are granted to different types of business entities. In some cases, the commercial loan is extended to assist a company with short term funding for basic operational functions, such as meeting payroll or purchasing supplies that are used in the production of the goods manufactured and sold by the company. At other times, the commercial loan may be utilized to purchase new machinery that is directly connected to the operation of the business.
The commercial loan is often thought of in terms of a short-term source of cash for a business. Some bankers offer a commercial loan format that is known as a renewable loan. Renewable loans allow the business to secure necessary funds, repay the balance within terms, and then roll the loan into a second or renewed period. This type of commercial loan is often employed when a company needs funds to secure resources to handle large seasonal orders from customers while still providing goods to other clients.
As with most types of loans, the credit worthiness of the applicant will play a major role in the securing of a commercial loan. The business normally must present documentation that proves the stable cash flow of the company, thus ensuring the lender that the loan can be repaid according to terms. If approved, the borrower can anticipate to pay a rate of interest that is in keeping with the prime lending rate.
One of the advantages to a commercial loan is that many banks offer these types of loans at very competitive rates of interest. Often, the rates will be lower than for other types of loans, especially asset-based loans. This means that the borrower will have a smaller amount to repay the lender.
As with all financial arrangements, local and national laws regarding the banking industry will dictate the structure and conditions associated with a commercial loan. Any company seeking a commercial loan would do well to work with the banking institution to evaluate the current working capital needs of the company and look at all possible loan solutions before making a formal application for the commercial loan.

What are Secured Loans?

Secured loans are those loans that are protected by an asset or collateral of some sort. The item purchased, such as a home or a car, can be used as collateral, and a lien can be placed on such purchases. The finance company or bank will hold the deed or title until the loan has been paid in full, including interest and all applicable fees. Other items such as stocks, bonds, or personal property can be put up to secure a loan as well.
Secured loans are usually the best way to obtain large amounts of money quickly. A lender is not likely to loan a large amount without more than your word that the money will be repaid. Putting your home or other property on the line is a fairly safe guarantee that you will do everything in your power to repay the loan.
Secured loans are not just for new purchases either. Secured loans can also be home equity loans or home equity lines of credit or even second mortgages. Such loans are based on the amount of home equity, or the value of your home minus the amount still owed. Your home is used as collateral and failure to make timely payments can result in losing your home.
Other types of secured loans include debt consolidation loans where a home or personal property is used as collateral. Instead of having many --usually high interest-- payments to make each month, money is loaned to pay the original lenders off, and the borrower then only has to repay the one loan. This is not only more convenient but it will also save a lot of money over time, since interest rates for secured loans are lower. A debt consolidation loan usually offers a lower monthly payment as well.
On the other hand, unsecured loans are the opposite of secured loans and include things like credit card purchases, education loans, or bank notes, which usually demand higher interest rates than secured loans, because they are not backed by collateral. Lenders take more of a risk by making such a loan, with no property to hold onto in case of default, which is why the interest rates are considerably higher. If you have been turned down for unsecured credit, you may still be able to obtain secured loans, as long as you have something of value or if the purchase you wish to make can be used as collateral.

Personal loan guide

Personal loan small print
With so much competition in the marketplace, personal loan interest rates are falling. So to make loans profitable, providers often add hidden charges to a loan that may catch out those who did not read the small print. Read on to learn more about those hidden costs.
What is ‘Typical APR’, and how can it be tricky?
Typical APR is the headline interest rate figure lenders quote when advertising a personal loan. It’s tricky because although a lender may quote an Annual Percentage Rate (APR), which is the amount the loan will end up costing you including interest and charges, you may end actually paying more or less than that rate.
This is because many lenders calculate the typical APR of a personal loan in conjunction with a system called risk based pricing. This means that they assess each individual's circumstances and credit history before deciding what interest rate to offer the individual. Although a lender has to offer the typical rate to 66% of people that successfully apply, it is possible that you won't get this rate.
Personal loans and early repayment charges?
Repaying your personal loan early could cost you, rather than save you money. An early repayment penalty can be the equivalent to one or two month’s interest. The earlier in the term you repay your personal loan, the higher the charge.
But some providers have scrapped this charge, so it pays to shop around.
Ourloans comparison service shows which personal loans have an early penalty fee attached.
What is ‘PPI’ and do I need it?
While you may worry about paying a personal loan back should you lose your job or become ill, taking out Payment Protection Insurance (PPI) could be an expensive option. There are also many caveats with these policies and some people find they are not covered. Policies that only pay out if you are made redundant offer the self employed no cover.
Another issue is that many lenders add the full cost of the insurance to the personal loan at the outset, so customers have to pay interest on the cover as well the sum they borrow.
PPI is available via other independent organisations that charge vastly reduced premiums for the same cover, so this may be worth investigating should you feel that cover may benefit you.
A personal loan to suit you
So now you know all about what’s in the loan small print, you should be ready to choose your own personal loan. It couldn’t simpler, safer or easier. Just go now to our personal loans calculator.

Secured loans guide

What are secured loans?
A secured loan is a loan where you will be required to use your property as security against the loan, so the lender is able to balance the risk of lending to you. The amount that can be borrowed differs from lender to lender and your individual circumstances. The amount that can be borrowed, the term available and the Annual Percentage Rate (APR) will depend on:
the value of your property
your ability to repay the loan
your personal circumstances
You need to think very carefully about how you manage a secured loan. If you default on the loan you risk losing your home.

Prices were last updated on 25 May 2008
Loans do not include Payment Protection Insurance (PPI) and assume you have no adverse credit. Loans are those you can apply for online via uSwitch.com.
Who should choose a secured loan?
Secured loans allow you to borrow more and repay over a longer period than a personal loan – up to 25 years. They can normally be used for almost any purpose and as the lender has the benefit of security they can be offered to people who may be excluded from other loans. Borrowers who are self-employed, have recently changed jobs or have previous credit problems will be considered for a secured loan. They are also useful for borrowing larger sums or where the applicant requires a longer repayment period
How can I find the best secured loan?
Finding the best secured loan for your situation can be complicated as there are many factors for the lender to take into account. With so many providers offering secured loans, trying to compare them all yourself could take forever. Luckily uSwitch.com can do all the work for you with oursecured loans comparison service.
All you need to do is tell us a few details about the secured loan you’re looking for and your personal circumstances. It’s free, impartial and any information you give us will remain confidential and secure.
How can I be sure it’s the best secured loan for me?
As well as comparing the available secured loans, uSwitch.com refers you to a broker where appropriate to ensure you get the best possible deal. Some lenders prefer to only work through brokers. It is for this reason we have chosen to work with an approved broker as they will have access to a wider range of lenders and will use their expertise to match a secured loan to your circumstances.
Find a secured loan today
So now that you know all about secured loans, why delay? Let us help you find the best secured loan for you right now. Just go to our secured loans calculator.