There are a range of options out there when it comes to finance that you can use to improve, repair or upgrade your property. From run of the mill loans to payday loans, refurbishment loans and even very specific finance such as boiler finance (source: Gas Safe) for very specific purposes.
However, each of these types of finance have their benefits and potential pitfalls and therefore it is very important to double check that the finance you apply for is right for you and your needs.
It should be considered by all prospective borrowers, that failure to ensure your suitability for a finance offering and not being stringent and repaying the said loan on time and in full can leave you lingering in debt and will often hard your credit rating. However, managed correctly and with all the repayments and contract terms fulfilled you will have no problems.
These loans are very well-know. They work by borrowing an amount of money (usually anywhere upward of £100) and repaying it all in one go at the next pay day. A major benefit of these loans is that the money can be available and in your account in a matter of hours and repaid on time, they work as very good ways to fill a potential gap in the interim.
For example, say your boiler breaks down in the height of the winter and the quote you get to repair it is £500. You may be living on a tight budget and therefore will not have that amount of money available to you. Therefore, you apply for a payday loan to cover that cost and repay the loan plus interest at the end of the month as soon as you get paid.
Whilst the interest on these loans is higher than that of traditional loans, their availability and wider acceptance of customers means that even those who have been previously rejected can be accepted for a loan.
This type of finance is very specific and as the name suggests, it is designed to finance a boiler. This generally applies to new boilers. The way this works is as follows. You need a new boiler and the total cost is £1,700 including installation. As in the case of the payday loan borrower, you are unable to afford this outright, but should the boiler go, you will be without hot water and heating and it needs to be done.
Mediated by specialist brokers, who work with the credit providers, you apply for boiler finance taken out over a 60-month (5 year) period. You need to provide a deposit of 50% of the cost value (in this case £850), which is significantly cheaper than the entire cost and the loan covers the rest.
The lender agrees to terms whereby you repay a monthly amount for the duration of the loan to repay the remaining amount plus interest, amounting to as little as around £18 per month, covering the outstanding £850 and around £220 covering the interest.
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