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E-insolvency can assist with all types of loan

Loans, overdrafts and buying on credit are all ways of borrowing. Different methods of borrowing suit different types of people and situations. Whatever type of borrowing you choose, it's important to make sure you'll be able to afford the repayments.

A loan is something you borrow from someone willing to lend it.  However, in the highly regulated world of financial markets, things are not that easy.  As a result, “loans” involving money have a variety of names, depending on the intended use of the proceeds.

Alternatives to loans:-

IVA (Individual Voluntary Arrangement) if you are refused a loan

If you have enough money left over after paying your priority creditors and essential expenses, you may be able to arrange an Individual Voluntary Arrangement (IVA).

 An IVA is a legal agreement with creditors (usually non-priority creditors) to repay your debts. This could either be in part or in full. The arrangement is negotiated, written up and checked regularly by an independent solicitor or accountant called an Insolvency Practitioner. Not all the creditors have to agree to an IVA as long as the creditors to whom you owe 75% of your debt agree.

Debt Managment Plan to clear debt if you are refused a loan

If you have enough money left over after paying your priority creditors and essential expenses, you may be able to arrange a debt management plan.

A debt management plan is an arrangement with your creditors to pay back the debt by regular instalments. Instead of you speaking to your creditors yourself to arrange the plan, a Debt Management Company (DMC) does it for you. Usually you have to pay for this service although there are some DMCs who will do this for free.

Bankruptcy to clear debt if you are refused a loan

If you have a debt problem, you might have a number of options for sorting it out. One of these might be bankruptcy.
Bankruptcy is a court order that you can apply for if you are in debt. Once you have been made bankrupt, you don't have to deal with the people you owe money to (your creditors). An official called the Official Receiver takes control of your money and property, and deals with your creditors.
Remember, bankruptcy might not be your only option and it might not be the best one for you.
Remember also that someone you owe money to could make you bankrupt even if you don't want this.

Protected Trust Deed to clear debt in Scotland if you are refused a loan

A trust deed is a formal arrangement with your creditors, used in Scotland where a debtor grants a deed in favour of the trustee which transfers their assets to
the trustee for the benefit of creditors.

Provided certain conditions are met, the Trust Deed may be registered as "protected", thereby preventing creditors from petitioning for the debtor's sequestration or taking any other steps to recover debts due to them. Financial and personal circumstances vary, so the consequences of signing a Trust Deed will be different for each individual or partnership.

Remortgage if you are refused a loan

If you have enough money left over after paying your priority creditors and your essential expenses, you could think about taking out a loan to pay off your non-priority debts. This is called a consolidation loan. You can use a consolidation loan to pay off things like credit card debts and loans.

Personal Unsecured Loans

Probably the mainstay of loans is the personal unsecured loan.  As it name suggests, a personal unsecured loan is money that you borrow from a bank or building society.  As part of the loan agreement you agree to repay the principal of the loan (the amount borrowed) plus interest (the lender’s profit).  In most cases you’ll agree to repay the loan in equal [monthly] repayments.  However, you do not agree to provide any security, in the case that you default on your repayment. 

The upside of an unsecured loan is that the lender cannot repossess the item that you have bought with the proceeds of the loan, nor can they enforce against any of your other assets.
The downside of an unsecured loan is that, in return for the lender’s greater risk factor, you’ll likely be paying a higher level of interest than is the case with a secured loan.  You also need to be a little careful: the concept of an “unsecured” loan is a misnomer. 

 In fact, in most cases, you’ll need to declare what the loan is for, and if you do happen to default the lender will likely bring an action against you to seize the assets.  Consequently, if you think it is unlikely that you’re likely to default, to reduce the costs of the loan, it’s probably just as well that you take out a secured loan.

Personal Secured Loans

Obtained in the same way as a personal unsecured loan, the main difference being that you agree to provide the lender with security, in the case that you default.  “Security” can come in many forms (for example, share certificates, car, boat, plane, even cash bank accounts); however, these days banks prefer this security to be a charge over your house.
The upside of a secured loan is that interest rates and costs are usually lower – as the lender still has recourse to funds in a worst case scenario.
The downside to a secured loan is that you run the risk of losing the asset if you cannot repay the loan.

Other types of loans

Depending on your needs, you may also come across the following types of loans, which are more specific to the application of the proceeds of the loan: car loans, student loans, home improvement loans, holiday loans, bridging loans, debt consolidation loans.  Essentially, all of these work in the same way as a secured or unsecured loan.|