Loans Blog

Spoiled kids who blow their 'allowance' on pre-shredded jeans and nauseating ringtones, go to their foolish parents with pathetically fake faces and get another ill-deserved sympathy hand-out. Teaching them nothing.

That now applies to the relationship between major financial institutions and the government, it seems. Having lent vast sums of money, that simply weren't there, to vast numbers of borrowers, who were only too happy to oblige, lenders have now gone to the government with their bottom lips out and their heads cocked to one side.

The result? The government has patted them on the head, said "There, there, little Timmy" and given them a £50billion bridging loan!

So what do the rest of us get as a reward for NOT hemorrhaging cash like there's no tomorrow? Oh, another rise in the cost of living. Thanks dad, I'm sure it'll make me a better person.

If the late great Roy Castle had been excited by debt consolidation, rather than world records, he might have written a song a bit like this:

Consolidation, consolidation,
Consolidation, that's what you need,
If you wanna beat those debts,
And reverse those loan regrets,
Consolidation's what you need.

If you wanna be a debt-trap breaker....

Common types of secured loan include home owner loan, debt consolidation loan, mortgage loan and second mortgage.

A bridging loan - or 'bridging finance' - is simply a short term secured loan, that can be arranged promptly to cover a shortfall in your finances. Typically, a bridging loan is used to finance the purchase of property, usually when the sale of an existing property is not completed in time to make payment on a new property.

No debt is a good one, but one of the worst kinds is the dreaded credit card - mainly because the interest rates on such debt can be cripplingly high.

One of the best solutions to get out of a credit card debt situation is to arrange a credit card debt consolidation loan. This kind of loan allows you to merge all your credit card debts into one single loan and lower the interest rate you pay on the debt. You will also have only the one lender to deal with instead of having to keep up with numerous lenders.

A bad credit loan can be a financial lifeline to anyone wrestling with a less than perfect credit rating. This kind of loan allows many people who find themselves in this situation to achieve their financial needs.

There are many all-too-easy ways to fall into a situation of bad credit; missing a payment, making a repayment too late, defaulting on a debt and plenty more... all these factors can easily lead to a poor credit history.

It is common thinking that people with bad credit have about as much chance of getting a personal loan as the UK has of experiencing a long hot summer this year.

Thankfully, this is not true.

A secured loan uses your property as collateral against the sum borrowed, so the risk to the lender is greatly reduced. In these circumstances, your credit rating is far less relevant so you may be surprised how easily you can arrange finance.

If you've ever had a temporary filling from the dentist, you'll know that it's a whole lot better than just leaving a big old hole in your tooth - even if it is for a relatively short period of time. The pain just wouldn't be worth enduring.

Well, a bridging loan does the same kind of thing; instead of having to suffer the pain of losing your dream property because you can't sell your existing one in time, bridging finance fills the gap - allowing you to make the new purchase ahead of the sale of your previous property. Then, all you do is pay back the loan when you sell the old place - simple and painless!

It's no walk in the park being a student these days. Chances are, by the time you graduate, you'll owe a serious amount of cash before you've even started earning any.

One solution to ease up the burden of repayments is to arrange debt consolidation. Of course, this doesn't avoid the fact that you'll still have to pay it all back eventually, but it can reduce your monthly outgoings and make things seem a little more worthwhile as you get on with building your new career.

To be eligible for a secured loan, you must own your own home. This is because a secured loan, as the name would suggest, is secured against the value of your property.

Your credit status is less important with this type of loan, as it poses less of a risk to the lender because of the security in the value of your home.

You will still need to qualify on other grounds as well - for example, your financial and employment status.

When Indian motor company, Tata, recently bought the Land Rover & Jaguar brands from Ford, they had to get a bit creative to come up with the readies.

If, like me, you get a bit twitchy borrowing a few quid off someone to tide you over until payday, then imagine arranging a bridging loan of $3bn to overcome a small cashflow problem!

Tata have arranged the bridging finance for a period of 15 months - imagine the interest on that!

A growing number of people are turning to debt consolidation to address their debt situation.

There are many benefits to consolidating debt, and this particular debt management solution is designed to make your finances more manageable whilst reducing your outgoings.

There are many consolidation loan options on the market, available on both secured an unsecured terms.

It's highly unlikely that Simon or Garfunkel will ever need to look into bridging finance, but if you're having trouble selling one set of bricks and mortar to fund the purchase of another one that you've already found, then a bridging loan is the perfect answer that'll leave you feelin' groovy!

It's generally regarded as a good thing that we live in a country where we can arrange a personal loan relatively easily, for virtually any purpose.

However, if you ask Timothy Kenealy, from Surrey, he is unlikely to agree. His 44-year-old wife, Zoe, recently took out a personal loan of £4,500 to have him killed by a hitman!

Mrs Kenealy said the loan was for 'home improvements' - this may have been true, in her opinion, but it's no conventional DIY job. Even more surprising is the fact that she was employed as a 'care worker' at the time!

If the plan had worked, she would have cashed in on her husband's £33,000 life insurance policy. However, the obliging neighbour - Lee Waite, 31 - who took £3,000 from Mrs Kenealy to arrange a hitman, foiled her plans by pocketing the cash.

Thanks to the greed (or compassion?) of Mr Waite, Timothy Kenealy's life was spared from the bullet of a 'Loan Gunman'!

According to a recent survey, conducted by uSwitch.com, 1 in 4 people who arrange a debt consolidation loan then go on to run up further new debts.

Almost one third of personal loans taken out over the past twelve months were for the purpose of debt consolidation .

The lesson is simple - a consolidation loan can often be the best way to become debt free, but you must ensure that the arrangement you make is realistic and affordable. You should also address the habits that got you into debt in the first place - if you have reached the point of becoming responsible enough to face up to your debt and do something about it, you need to keep this attitude to your future spending and not return to old habits. Your will power will be rewarded as you watch your debts shrink.

The Personal Loan Ranger says:

"Hey kids, always remember that your horse may be at risk if you fail to keep up repayments on a mortgage or any other loan secured against it."

First Direct has decided not to offer any further mortgages to consumers who are not already customers of the bank.

The reason is cited as a necessary move to enable the addressing of a backlog of requests for the bank's products after experiencing a surprisingly high demand.

Reacting to the news on the BBC web site, Doug Segal commented: "I think this is a sensible move by a bank that has historically been very fussy about who they give accounts to. It's media scaremongering...that turned the Northern Rock frame into a full-blown crisis when, if they had been quietly given a bridging loan, they could have probably resolved their issues without creating this atmosphere of banking mistrust and destabilisation."

James Fella, director of debt counseling service Thomas Charles & Co, has emphasised the need for individuals to take responsibility for relieving their own personal debt situation. A bank manager may be able to give consumers all the right financial advice, but it's up to the individual to follow it.

He added this advice on debt consolidation: "You could consolidate your debt with one loan thus reducing the monthly payments to make them more manageable and sit within your budget."

Financial expert David Kuo, of Fool.co.uk, has suggested that flexibility should be a key consideration for consumers when choosing a personal loan.

Advising that a flexible loan may currently be a better choice than a secured loan, Mr Kuo claims: "The option of flexibility will allow a borrower to repay a loan earlier and cut the total cost of the loan."