Most people are familiar with the term, loan, and at sometime or another many will have borrowed by this means.
With the majority of people owning cars these days, a car loan is something which most people are well acquainted with, and most know the way to go about obtaining this kind of finance.
Some may contact their own bank with a view to obtaining a personal loan for the purchase of a car, while others prefer to get a loan from the garage from which they intend to make their purchase.
Often when someone wants to go on an extra special holiday to celebrate an important event in their life, but the trip costs more than they have, they again take a trip to the bank to make an application for a holiday loan.
As these holiday loans are totally unsecured, they can be difficult to obtain because if the borrower defaults on his monthly repayments, the lender has no way of receiving his money back, and often the loan can be for a fairly substantial sum, as it is not unknown for people to borrow as much as £ 20,000 for this purpose.
Another kind of loan that most people know about is home improvement loans, as most of the population these days wants to maintain their property to a very high standard ..
Very few are content with a basic home, and demand the best of everything, both for the inside and outside of their home, with sunken baths, expensive power showers, garden rooms, and state of the art kitchens are the order of the day.
Once again banks may be prepared to grant a loan for home improvements or funds can be sought from the company undertaking the work.
However there are disadvantages in obtaining money by all the above methods whether we are talking about obtaining these loans from a bank, a car dealership or a home improvement company.
For example holiday loans from a bank must normally be paid within a year which can lead to repayments being high every month, and banks always ask for several estimates when it is a question of home improvements.
When obtaining finance for a car from the supplier, a deposit of about 30% is required, and of course the buyer is tied to the one dealership.
The drawback in paying for home improvements via a loan from the home improvement firm is the interest rate charged, as it is normally in the region of about 25%.
There are however two main means of raising finance for these and many other purposes and these are by arranging a secured loan or a remortgage which are both very cost effective and do away with the need for a deposit when buying a vehicle and there is no need to go to the trouble of providing estimates when you want to carry out improvements to your home.
These two homeowner loans can be used as cheap ways of raising funds for almost any reason, and as well as paying for anything that you could possibly want, they are also excellent at saving money by using them as consolidation loans that combine all high interest debts into one single much cheaper payment every month.
Therefore by far the best loans for homeowners are secured loans and remortgages.