Unsecured debt in the United Kingdom from credit card balances, car loans, overdrafts, etc., have so far claimed over £4,000 per individual. Correspondingly, the number of personal finance companies has increased and each claims to offer a better deal in terms of interest rates and more flexible terms of repayment. The increased competition has given borrowers a better choice so they shop around for more suitable terms of repayment and a competitive interest rate. Whether it is to get around a temporary cash crunch or to tide over a financial crisis, one has many options and the financing companies are simply eager to be of service. We list below some types of loans to assist you in choosing a suitable one.

Types of Loans :

Car Loan – Car loan, which is taken out to buy a car, can be obtained from your car dealer, but one can’t assure you’ll get the best deal. Other options are: you can either go for straight loan/ hire purchase or Personal Contact Purchase (PCP). In a straight loan/hire purchase, you can’t own the car unless you’ve paid the loan. On the other hand, in PCP you can walk away with your car after paying upfront the amount which can be followed by monthly payments and closing amount.

Bridging Loan - Selling your home and buying a new one isn’t an easy task. If your timing isn’t right you may have to pay for the new house even before you sell the old one. At this point you can apply for Bridging Loan. This scheme will help you borrow money for a short term and repay the amount borrowed along with the interest once you sell your home.

Consolidation Loan - Making your monthly payments on your debts can be an asking task if you’ve a few credit cards and some personal loans in addition to your mortgage. Debt Consolidation loan lets you borrow enough money to pay-off all your current debts, excluding your mortgages. You get a smaller interest rate and thereby it reduces your monthly payments. However, you should ensure whether you can afford this new payment, as consolidation loans are secured on your home.

Tenant Loans - If you’re renting accommodation, you’ll not be able to borrow money secured on your home. In such case Tenant loan helps you to borrow money in absence of security on the loan. However, you’ll have to propitiate the lack of security on the loans with higher interest rates.

Bank Loan - Bank loan is available from the banks and the loan money received helps it to pay the interest on the savings and deposits of its customers. It’s the difference between the interest they pay out and the interest they charge which helps them make money.