Britain’s major High Street banks have always offered both private and business customers alike an array of loan options. The problem is that in all instances, heavy restrictions have applied.
In the case of unsecured personal loans, smaller sums of cash are made available for everyday and business borrowers alike for a variety of common applications. However, you’re immediately countered out of the running if you don’t have a strong credit history.
Over in the secured loans arena, major banks typically restrict their lending services to conventional mortgage products. In which case, enormous initial deposits and a good credit score could stand in the way of your application.
So while it’s true to say that Britain’s major lenders offer a diverse portfolio of loan products, they’re not always the most accessible. Nor are they the most flexible or convenient – particularly when time is a factor.
Exploring the Alternatives
When you consider the way major lenders continue to scrutinise applicants primarily or even exclusively on their credit histories, you begin to wonder whether they’re in-tune with contemporary society. It’s becoming increasingly difficult to maintain a flawless credit report, when even the slightest oversight here and there can make its mark.
The same can also be said for conventional secured loans, such as mortgage products. First-time buyers, movers and commercial property investors alike simply don’t have the means to pull enormous deposits together in a realistic period of time. You’re interested in a £300,000 property and could easily cover the monthly repayments, but you’re nonetheless expected to hand over a 20% deposit. That’s a full £60,000 you simply don’t have access to.
In the meantime, the UK’s ‘alternative’ financial service sector is going from strength to strength. Far from following the same traditional norms, a new generation of dynamic modern lenders is turning the whole thing on its head. Specifically, every barrier that stands in the way of affordable lending for the responsible borrower is being removed. Sensible restrictions of course still apply, but it’s no longer a case of being disqualified from the outset for having imperfect credit.
Or in the case of a secured loan, for not having the means to hand over an enormous deposit.
New-Generation Secured Loans
For the most part, the alternative lending sector in the UK isn’t interested in unsecured personal loans. Where smaller sums of cash are required for everyday purposes, there are already dozens of viable options to explore. Credit cards, overdrafts, payday advances and so on. Instead, it’s a case of revolutionising the provision of secured lending services for personal and business borrowers alike.
What makes the difference with these new-generation financial service providers is their exclusive focus on what really matters. When a secured loan facility is granted, the value of the loan and all applicable borrowing costs are secured against the applicant’s collateral. In the event that the borrower is unwilling or unable to repay the loan as agreed, their assets become the legal property of the lender.
By securing the loan on viable property, this type of lending is considered comparatively low-risk. As a result, there’s no realistic requirement for the applicant’s credit history or financial status to be extensively scrutinised. Nor is it necessary to demand significant deposit payments.
From bridging loans to commercial property finance to auction finance and so on, there are various secured lending facilities available that bypass the usual restrictions. It’s simply a case of using an online secured loan calculator to determine which of the available options best suits your needs, before approaching a specialist broker for a whole-of-market loan comparison.
It remains to be seen if and to what extent the UK’s new-generation lenders enter the unsecured personal loans market. In any case, they’re already attracting private and professional borrowers in record volumes, as general High Street lending criteria becomes continuously more complex and restrictive.
Article provided by – iConquer