Which Loan is Best for You?
There are many different reasons why you may need a loan. You could be using the cash to buy a new car, start up a business or simply pay off outstanding bills. There are many different financial solutions available, and depending on the purpose of the loan there could be an option which is more suitable than another. The decision is also based on how much money you need to borrow, and how quick you can pay it back. Let’s take a look at some of the different loans available and which one suits you best.
Personal Loan
A personal loan is usually unsecured, and is available from most high street banks. The amount you can borrow will depend on your credit history and many banks will now also check your income to see if you can comfortably afford the repayments. Interest rates on personal loans can be remarkably high, which makes them unsuitable if you only need to borrow a small amount of money, or if you plan on paying it back at a later stage.
If you are thinking of borrowing money to invest in property or a renovation, you may like to consider bridging finance instead. It’s a lot easier to be approved for this type of finance, regardless of your circumstances or credit score – however you do need to own a property and this is offered as security to a lender. This is a short term finance solution available to individuals or limited companies.
Business Loan
As the name suggests, this type of loan is for businesses or entrepreneurs setting up a new business. You could need extra capital to invest in stock or machinery, or perhaps renovate a property or expand. Being approved for a business loan from a bank is becoming more and more difficult, but there are alternative finance options available.
Crowdfunding
Rather than borrow from one strict financial institution (a regular bank) you now have the option to lend money from a group of small investors. This lowers the risk for the lenders as they aren’t lending the full amount alone. To qualify for this type of peer to peer lending, you usually need to own a profitable business with good records, but you can choose from a secured or unsecured loan.
Buy to Let Funding
If the reason you’re looking for finance is to buy a property to let, then there are tailored financial solutions for this situation. A buy to let bank mortgage may not be appropriate, but you could benefit from buy to let funding from premium lenders. This is the same as a long term commercial mortgage, but without the application hassle you’d experience at a high street bank.
Have you found the best loan for your circumstances? Get in touch with our financial experts at Genie Lending who can advise further.
