Whether it be a holiday, consolidating credit card debt, financing home renovations, or a car, we can access loans which will help you manage your debt and reduce financial stress.
Once free of this stress you can start developing a long term investment and debt reduction strategy.
Not sure where to start? That’s where we help you. Contact Utopia Mortgage Broking today, and let us help you with your personal loan needs.
The four important loan categories:
Secured Loans
A secured loan is when the item you’ve purchased with the borrowed funds is held as security/collateral against the loan. For example, if you purchase a car, that car is held as security. If you do not meet your loan repayment schedule, the purchased item can be repossessed and sold to settle the debt.
For large purchases, secured loans are of relatively low risk to the lender, and as such, interest rates are lower than for unsecured loans.
Unsecured Loans
With an unsecured loan, there is no collateral held as security against the borrowed funds. As there is no security held against the loan, the interest rates are generally higher than for secured loans.
Variable Loans
If you take out a variable loan, the interest rate may change throughout the life of the loan.
When interest rates fall, the loan repayments reduce, and when interest rates rise, loan repayments increase.
Fixed Loans
With fixed loans, the interest rate stays the same for the life of the loan or the fixed term (depending on the loan agreement). This makes it easier to plan your repayments in your budget, as you will always know what the loan repayments are going to be.
The downside of a fixed loan is that as interest rates reduce, your interest rates and loan repayments will stay the same.