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Choosing the right loan for you cn become a headache. Here at APH we have tried to explain the basic factors about secured loans, unsecured loans and debt consolidation loans.
Individuals who may find it difficult to get a cheap loan will probably be:
- Self Employed
- Company Directors
- Individuals with poor credit history
- Individuals with CCJs
In the cases above, the lender will usually either decline the application for an unsecured loan or simply increase the interest rate (or load it). A secured loan maybe a better option for the above if you have a mortgage and have assets or equity. This poses less of a risk to the lender.
Secured loans are usually a shorter term (usually up to 10 years) and have slightly higher interest rates as there is more risk to the lender if you fail to make repayments.
Unsecured loans are predominantly longer terms with lower interest rates, however the amount of interest you pay back in the long run can be higher due to the length of the term (usually 10 - 25 years)
Debt consolidation loans can be either secured or unsecured depending upon the amount of debt you need to consolidate and your personal circumstances.
Individual Voluntary Arrangements - IVA's
An IVA is a formal agreement involving you and your creditors. An Individual Voluntary Arrangement allows you to discuss your debts with those you owe money to and come to a mutual agreement on making reduced payments to go toward the total amount of your outstanding debt. This will usually be a percentage of that amount and in general, the total debt would be classed as settled after a 5 year period. | 
