There are many sort of loans and these can come in the form of unsecured and secured loans ,but for homeowners it is sensible to use their homeowner status to borrow at low interest rates by means of remortgages and secured loans.
Secured loans and remortgages are of course only available to homeowners as they both need to be secured on property, and they are great ways for homeowners to raise money which can be spent on just about anything..
Other things to be considered when thinking if remortgages or secured loans are better.
Secured loans should be the loan taken out by homeowners who are in the first few years of a tie in period with their existing mortgage provider. In the tie in period there is an early repayment penalty if the mortgage is repaid and replaced with another mortgage that is a remortgage.
This penalty can be extremely high and can be many thousands of pounds in charges as the penalty is from 2% to 5% of the outstanding mortgage balance. If you have a mortgage of say 250,000, the penalty would be from 5,000 to as much as 10,000. Therefore to remortgage within a tie in period would be crazy and a low rate secured loan would be the better option.
For example if a great bargain of a private sale of your dream car crops up or something similar meaning that you need the funds speedily the secured loan is the better option as it takes half the time of a remortgage to obtain. Remortgage can take up to six weeks, and a secured loan can be arranged in half this time..
If neither speed does not apply, a remortgage could well be preferable as the interest rates for a remortgage are normally lower. At this moment in time if the homeowner has at least a 40% deposit interest rates of under 2% are currently available.
Secured loans, although certainly more expensive than remortgages mean that remortgages are often more popular.
By now it must be apparent that there are pros and cons with both remortgages and secured loans, and personal circumstances are always relevant as to which is better.