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FAQ
Frequently Asked Questions
1. How will my house/property be valued?
Different lenders have different approaches to this issue.
2. My house/property is jointly owned by my husband/wife/partner – is this a problem?
Not necessarily. Joint loans can be made and lenders can even insist on them. You should be aware however that changes in your living arrangements (for example, divorce or separation) could affect your ability to manage your loan.
3. At what point in the application process – and not before - will I be legally obliged to continue?
You are under legal obligations when funds are released following your acceptance of a loan offer.
4. How will the money actually be paid to me?
This is usually done by bank transfer or by cheque.
5. What is APR?
Annual Percentage Rate (APR) is the rate of interest actually applied to your loan.
6. What do the different forms of interest mean?
If your interest is fixed, this means it will not change while you repay your loan even if the bank base rate changes. You will therefore pay the same amount each month, so making it easier for you to budget.
If your interest rate is variable, it will rise or fall with the bank base rate and your monthly payments will also rise or fall.
A typical rate is one a lender offers to most borrowers – your exact typical rate will depend on your circumstances.
7. What is meant by repayment breaks or holidays?
Exactly what they say – there are some lenders who will allow you not to repay your loan for a while, either by delaying the start of repayments (deferred repayment) or by allowing you a period of non-repayment at a later agreed time. You should note, however, that a repayment holiday is not an interest holiday – interest will continue to mount up on the money you owe and this may well mean larger monthly outgoings when you resume repayments.
8. Apart from interest, what else can I expect to pay?
If you repay (or redeem) your loan before the agreed final date you can in most cases expect to be charged, just as you could be with a mortgage. If you are confident from the start that you will pay your debt off early, you might be able to agree a deal with no settlement costs – but you can expect to pay a higher APR. In either case, however, the Consumer Credit (Rebate on Early Settlement) Regulations 1983 state that if you make an early settlement, you should not have to repay all the outstanding interest on your loan.
In addition you may well be charged a fee for arranging and setting up your loan. This could be anything up to 10% of the amount borrowed, depending on your credit history and how convincingly you can provide proof of your income.
9. Can I pay extra or higher monthly installments?
Usually, yes, and as a result you will be paying the same monthly interest on a smaller sum owed. If you repay your whole loan early, however, you’ll most likely be charged as we explained in 8 above.
10. Can I take out extra loans?
Usually, yes. So long as everything is proceeding smoothly with your original secured loan, many lenders will be happy to consider a second loan, although some will want to wait longer than others before doing this.
11. As a customer, what sort of protection am I offered?
The Consumer Credit Act 1974 has strict regulations relating to unsecured loans up to £25,000. Otherwise, payment protection insurance policies are available to cover both borrower and lender in cases where a borrower is prevented from making repayments through sickness, accident, unemployment or even death. Such policies can be costly and, as their content varies, they should be read carefully. Preferably you should shop around before reaching a final decision on such an important issue.
You might also check that you are dealing with companies that are bound by the FISA (Finance Industry Standards Association) guidelines on confidentiality, as well as being registered under the Data Protection Act (DPA).
It is also important that you should feel comfortable with the arrangements that are made for you – your personal loan officer should discuss carefully with you the amount you’re wishing to borrow and your repayment period, and should in no circumstances be encouraging you to commit to anything that might cause you difficulties.
12. If I am refused a loan, can I have access to the information used?
Yes. You can apply to the credit reference agencies for a copy of your record. There may be a small fee of between £2 and £10.
13. Will my employer be contacted?
Not without your agreement, unless you are unable to produce satisfactory pay slips or a P60. If you cannot prove your income, you may well be asked to consent to an approach to your employer. This would be to confirm basic details of your employment and would not involve any details of your loan request.
14. What if I have difficulties in repaying my loan?
Contact your lender at once. If possible, contact your lender as soon as you even anticipate difficulties in order to give everyone the best chance of sorting your problems out.
15. Can you tell me more about debt consolidation?
Many lenders say that the majority of their borrowers are seeking to do precisely this – roll up existing debts into a single larger debt that is, however, easier to manage. We’ve made it clear elsewhere on this site that various forms of poor credit history do not necessarily disqualify you from a secured loan. You can, for example, have a loan to clear up your CCJs in total or in part – but you do not necessarily have to clear up your CCJs either before or after receiving your loan. The same could apply to mortgage arrears. What you do need to understand, however, is that although your debt could be more easily managed in the form of a single secured loan, your total costs may well be higher in the long term.
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We are licensed under the Consumer Credit Act 1974 to carry on the business of consumer credit, consumer brokerage, debt adjusting and debt counselling, credit reference agency and canvassing off trade premises. Our Consumer Credit Licence Number is 587232.
Enquiries generated via this website are passed on to Financial Advisers, Mortgage Brokers, Licensed Credit Brokers and Lenders.
Divadani Finance and Divadani Loans are trading styles of Divadani Limited.
Company registration number 5256587. VAT registration number 877 4798 45.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. |
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