Cash loan or mortgage loan?

The renovation or purchase of real estate is a considerable investment. Many people who decide on such an undertaking do not have enough cash to undertake it. The option for them is a cash loan or mortgage loan. Which of these two financial products is worth choosing?


What to look for when applying for a loan?

What to look for when applying for a loan?

Customers pay primarily to the cost of credit. And it would seem that they are doing the right thing. In this respect, a mortgage will always be more favorable. However, it is worth remembering that we are primarily on the road to getting money from a mortgage. Setting a mortgage on real estate is a possibility to get a loan on more attractive terms. Definitely such a solution carries a lot of risk. In the event of difficulties with repayment, the bank can collect the property without any obstacles.


How much will you borrow?

How much will you borrow?

When deciding to take a loan, we should consider first of all how much we will borrow. If you need more cash (over $ 50,000), you may need a mortgage. The maximum amount we can apply for under a mortgage depends on the bank itself, the cost of the investment, as well as our financial standing. Cash loans allow us to borrow even small amounts. The minimum limit depends on the bank’s individual offer. The maximum, however, on the source and amount of income. In some banks it may amount to as much as $ 500,000.


When can we take a mortgage?

When can we take a mortgage?

A mortgage is a special-purpose loan. In practice, this means that we can only take it if we can clearly specify and document the purpose of the loan. The money awarded to us for the mortgage will not be transferred to our account. We will not receive them in cash. They go directly to the seller’s account. However, there is an exception to this rule. If the money from the mortgage will be used to cover, e.g. renovation costs, we will have to document their use by settling with the bank.

In this respect, the mortgage is in considerable opposition to the cash loan, in which we receive the money in a form suitable for us and it can be used for any purpose.


Cash loan – much more expensive

Cash loan - much more expensive

The lengthy mortgage procedure can deter some customers. When submitting an application for a cash loan, we do not have to wait long for the bank’s decision. Unfortunately, the lack of collateral in the form of a mortgage makes it much more expensive than a mortgage. Compared to a mortgage loan, the loan interest rate ranges from 10 to even 40% per annum. Where in the case of a mortgage we can count on interest rates ranging from 8 to 10%.

The undeniable advantage of a cash loan is also the minimum of formalities. If we decide on the offer of the bank in which we have an account, most likely, we will only need an ID card to conclude the loan agreement.

Jobless Credit – A Quick Credit

Information is not up to date!

The credit is usually issued against a pay slip, pledge or other security that the bank will take less risk when you issue the loan. However, there are unsecured lenders who therefore choose people who do not work or earn seasonal income. In this article we will look at the advantages and disadvantages of the fast credit services provided by Hypocredit – a 4Finance Group lender (this Latvian company also owns SMS credit), as well as a look at situations where you may prefer this credit.

Why choose Hypocredit fast credit?

Why choose Hypocredit fast credit?

Unlike other fast credit providers, Hypocredit does not require a job certificate but income. The amounts involved are also higher – Hypocredit issues loans up to 1500 USD. This amount is the highest among retail lenders in Latvia. In addition, the loan has a repayment term of up to 24 months.

In comparison, 9 out of 10 Latvian lenders examined are granted credit for up to 30 days, with the option of extending the term for payment. Not to mention the fact that some lenders give only a loan of 150 to 200 USD, against the already mentioned 1500 USD offered by Hypocredit.

The other features of Hypocredit are similar to those of other fast credit providers – the credit is issued within approximately 15 minutes; a bank account and an active mobile phone number are required to complete a loan. The company also puts a special emphasis on not disclosing your personal data to others, which seems self-explanatory and applies to all firms in the industry.

Hypocredit disadvantages

First credit on Hypocredit is not free. This is understandable because the amounts involved are large. The interest rates are the same or more favorable than those of other major lenders.

When to give preference to Hypocredit?

Looking at the two main benefits of a Hypocredit loan – the availability of a job without credit, as well as the relatively high loan amount – you can see that Hypocredit credit is suitable for larger purchases, for example, if you don’t want to spend your savings. The fact that the loan does not require unnecessary documents makes it convenient, for example, for people with seasonal or non-contracted work.

Do I qualify for a loan in the UK?

It is best not to live beyond your means and spend only as much as you earn. However, sometimes we are in a situation where we need additional resources. Then we often ask ourselves whether the bank will give us a loan in the UK?

Generally, it is harder to borrow money in the UK than in Poland. Especially if we don’t live in this country for too long. It also depends on which bank you apply to. There are also special non-bank companies that give higher interest but have lower requirements. However, the general conditions for taking a loan in the UK are as follows.

Stability is the key to getting a loan in the UK

Stability is the key to getting a loan in the UK

First, the bank will look at how long we live at one address. Frequent changes of the flat do not affect our credibility. Therefore, the longer we live in a given place, the better for our creditworthiness. You should also remember about regular repayment of all liabilities. This is the basis. And this is about both bill payments and the rent or subscriptions we have. All this will be checked. Any overdue arrears will work against us. The bank wants to know that it is dealing with someone who easily meets their obligations.

We also remember that not only do we have to regulate payments on time, but also do not have too many of them. If it turns out that, apart from the rent or bills, we have many other obligations, our creditworthiness will be lower. The bank not only looks at how much we earn, but also what amount we actually have every month. If we spend a significant part of the payment on various subscriptions, it will be more difficult to pay installments.

It may seem illogical, but the fact that we have always spent only as much as we have and never took a loan in the UK diminishes us in the eyes of the bank. Institutions of this type prefer to lend money to people who have borrowed in the past and have repaid it without any problems. Therefore, for example, our creditworthiness will increase if we have a credit card. Of course, only if we have not exceeded its repayment deadlines.

All other repaid loans also work in our favor. Another condition may seem strange, but it is very easy to meet. Well, it’s easier to get a loan if we are registered in … the voter list. For the bank, it is a signal that we are connected with a given place and rooted in it. This, as you know, increases in his eyes the chances that we will not run away from repayment. And of course, the basic condition: permanent work. The longer we work in a given place, the easier it is to get a loan. The type of contract also affects creditworthiness. Of course, it’s better to have an employment contract than to be a self-employed person or work as a temporary employee.

Loan in non-bank companies

Loan in non-bank companies

The more money you want to borrow, the higher your requirements. It is also usually harder to get a loan in banks than in loan companies. For example, the conditions to be met to get a loan in the UK are very easy to meet. Of course you must be of legal age, live in the UK, have a bank account and earn at least £ 750 net per month. So it turns out that the vast majority of Poles in Great Britain qualify for it. These types of loans are a good option when the bank refused us and we need money for emergencies.

It is worth taking loans for short periods, then the costs will not be too high. However, you should remember about repayment, because penalties in the event of delay can be very large. Before applying for a loan, it is worth checking in advance whether we can count on it. It must be remembered that any refusal of the bank reduces our credit standing. Therefore, you must measure your intentions.

Loan for own apartment

Loan for own apartment

However, there is a moment when, after a few years of renting, we want to buy our own flat in the UK. There are people who have been successful enough to have their money set aside for this purpose. However, let’s face it, they represent a very small percentage. The vast majority of us must take a mortgage, or Mortgage. Because the amount of money borrowed is very large, the bank’s requirements are correspondingly higher.

We have to take into account much more formalities and complications of the whole process. Much greater creditworthiness is required than for smaller amounts. Unfortunately, you have to take into account the stricter restrictions. Our revenues will be scanned even more scrupulously. For example, in the case of entrepreneurs, profits from the last three years are examined. In the case of an employment contract, this period is obviously shorter. The bank can check what part of the earnings is certain and which is variable, e.g. resulting from tips or sales commissions.

Additionally, our expenses are also examined. We must show all credit card and account statements we have. Our creditworthiness will sometimes be affected even if we eat out. An indispensable element is having a deposit, i.e. some saved amount, which is a minimum of 5 percent. property values. Of course, the more you save, the better, because the loan terms will be much more favorable for us.

Unfortunately, it is not the case that we will get a mortgage on any property. What matters is even the material the building is made of. It may be that the walls must be made of bricks and the roof is made of tiles. When we want to buy a flat in a big slab, we can be refused. The same applies, for example, to areas at risk of flooding. It is worth consulting an experienced broker. Thanks to it, we can submit an application that will be positively considered and we will not lower our credit standing.

Credit in the UK – the less you borrow, the easier it will get

Credit in the UK - the less you borrow, the easier it will get

As you can see, it is relatively easy to get a loan in the UK for smaller amounts. It’s worse when we want to buy a house or a flat. These restrictions are largely due to the experience of the economic crisis that hit the global economy ten years ago. It was caused by the fact that banks provided mortgage loans too easily. They were taken by people who were unable to pay them back later and the system collapsed. Let’s think twice before we get any credit.

Let’s also remember that the so-called cooling-off period. It consists in the fact that we usually have 14 days from signing the contract to re-think your decision and withdraw from it without incurring any costs. If you have already decided to take out a loan, it is worth visiting our website devoted to loans in the UK.