If you think that a mortgage is beyond you because even with a term of 25 years the payments are too high, then maybe you should consider getting a lifetime loan. These loans are literally for life, unless you pay them off before your death. They allow you to get property that you might otherwise struggle to finance, whilst keeping your monthly payments low. Although they have some benefits, there are risks involved too. If you are unfamiliar with lifetime loans, then here are some facts about their problems and advantages.
What is a lifetime loan?
A lifetime loan is just like it sounds; a mortgage loan that you can use indefinitely without paying back regular payments. You take out the mortgage and then pay back a minimal amount each month. If the mortgage is not fully paid by the time you are dead, then the remaining money is taken from the house’s value.
Flexibility with money
One of the primary advantages of a lifetime loan is that it allows you flexibility to pay back your mortgage. If you can afford to pay back large amounts at some point, then you can do so. However, if you do not wish to pay back more than the minimum amount you do not have to. This allows you to be flexible with your spending, and can help you to maintain a good level of cash flow throughout your life. This is especially useful when you are older and do not have a large regular income.
Costs of a lifetime loan
In general, lifetime loans have similar rates to other mortgages, with rates between 6 and 8%. Although you can probably find a cheaper rate with a traditional repayment mortgage, the rates for lifetime loans are very good considering the flexibility they offer you.
Drawdown facilities
Another advantage of lifetime loans is the ability to borrow more money at a later stage of the loan. Once you have paid back some of the equity into your home, or your house price increases, you can withdraw more money. This allows you to get a cheaper loan than you would normally, and can save you payments on credit cards and other loans. Some lifetime loans only allow you to borrow more money in the first ten years, although more and more are allowing people to withdraw more funds at any time, as long as they have the equity in their home to do it.
Paying after death
The biggest problem with lifetime loans is that you end up leaving your debt to someone else. In the worst-case scenario, your house price reduces, meaning your relatives are left with debt even after the house is sold to pay off the mortgage. Although it leaves you flexibility, unless you pay off your mortgage your relatives will be left with little in the way of inheritance, and may even inherit your debt. Lifetime loans can be a great in terms of flexibility, but if you want to leave something for your relatives you either have to pay off the mortgage when you can or you need to find a different type of mortgage loan.

Peter Kenny is a writer for The Thrifty Scot Please visit us at Homeowner Loans and Bad Credit Remortgages
Visit http://www.thriftyscot.co.uk/


Debt consolidation with secured loans
One out of every seven debtors in UK depends on consolidating their debts with loans when they find it difficult to manage their debts. According to the survey conducted by a reputed financial website, six million Britons have taken out debt consolidation loans in the last three years to resolve their debt problem. The research reveals that on average, debt consolidation loans taken out by the Britons stand at £13,000 with 360,000 people borrowing more than £50,000.
However, individual insolvencies are increasing rapidly in UK, making lenders sceptical about granting debt consolidation loans without security. In case they grant this type of loan, they generally charge a very high APR. Debt consolidation secured loans offer a better alternative to the loans without collateral. One can get easy approval for this type of loan, as they are preferred by the UK lenders. Since the risk borne by lenders is zero in these loans, they offer it at low rate of interest.

In order to take a secured debt consolidation loan, one needs to offer collateral. Any property of significant value can be used as collateral. However, most lenders prefer a home with reasonable size of equity available in it. Once the security is attached to any loan, the borrower becomes eligible for some most useful benefits. Among them, mention must be made of the following:
The borrower is allowed to take out a relatively large amount. So, he can go for consolidating bigger debts.
A comparatively lower APR is charged from the borrower. So, the overall cost of the loan remains low and he is not laden with heavy debt burden.
The repayment terms of secured debt consolidation loans are mostly in favour of the borrower. He is provided with longer repayment term and smaller monthly instalments.
In addition to the above, one can get easy approval for this type of loan despite a poor credit history. Thus, debt consolidation with this loan remains accessible to credit challenged borrowers.


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Unsecured loans: the people’s loan
Unsecured loans are doubtless the most popular loan in the UK. Recent trends suggest that secured loans are gaining swift ascendancy in the loan market. However, that still does not negate the impact of unsecured loans.
Unsecured loans do not require the borrower to put any collateral as security in order to avail the loan amount. Here, the borrower does not face the risk of losing his collateral, in case of an inadvertent default. The court option can still be exercised by the lender, but that may take a lot of time. Apart from the risk-free nature of this loan, there are other advantages, too, with unsecured loans UK.
Unsecured loans UK are processed relatively faster than secured loans. This is primarily due to the lack of collateral evaluation in case of an unsecured loan. Unsecured loans are ideal for short-term purposes. In other words, they can be used to meet exigencies that include, but are not limited to, funding vacations, home improvements, paying children’s education fees etc. The money one gets with unsecured loans can be deployed as per the borrower’s discretion. Of course, it is best that the funds be used for purposes that are within lawful boundaries.
With unsecured loans, one can borrow up to a maximum of £15,000, with a repayment period of a maximum of ten years.
There are a few disadvantages with unsecured loans. One is the relatively higher rate of interest with this loan type. With collateral absent, the lender looks at cushioning the risks inherent with these loans. However, with proper research and comparison, it is possible to get an unsecured loan with feasible rates and conditions. One can also get bad credit loans in the unsecured form. However, these loans will have a distinctly high rate of interest.
Still, it is important to note that the APRs are in any case higher than that of secured loans. Also, the loan amount that can be borrowed with unsecured loans is smaller, and big-time monetary needs cannot be met by these loans. To get the best deal, one has to do thorough research and compare loans that are available in the market these days.

About the author:The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done masters in Business Administration and is currently assisting online-unsecured-loans as a finance specialist. For more information please visit at http://www.online-unsecured-loans.co.uk