In today's economic climate, where credit is no longer available as before, it is helpful to know what your options are before applying for a loan.
Secured Loans
A secured loan is a loan that is secured on your property and is available to people who have a mortgage on their property and also have sufficient equity in their property. You can also apply for a ‘loan without proof of income’ (also known as darlehen ohne einkommensnachweis in German language).
The maximum LTV (Loan Amount) allowed at this time is 85% if the credit rating is good. Your total loan and mortgage debt should be less than 85% of the value of your property.
One of the main advantages of secured loans is that lenders are more likely to lend you money because they will charge a second fee on your property (behind the fees your mortgage lender charges), which makes the loan a safer promise for them. , if not, you are doing your standard duties. You can also borrow a larger loan amount for a longer period than unsecured loans.
Unsecured Loans
Unsecured loans are loans that are taken according to your personal circumstances. The lender will review your income, expenses, and creditworthiness.
Even though loans are unsecured, lenders are more likely to lend to homeowners than to tenants for the simple reason that if they fail to meet your obligations, the lender appears to be charging a fee to repay your money on your property.
Unsecured loans are usually offered in smaller amounts, usually up to £ 15,000, and for shorter terms, they are only available to people who have good credit experience without CCJ default or other bad credit issues.