by: Allison Thompson
When you hear the word “cheap” what does it conjure up for you? Can it be the pair of shoes that you are wearing or the new house that you purchased not long ago? So no matter what the product is having something of a better quality but at a cheaper rate, how often would you not jump at the chance to possess something like that. If you are that type of person, then may be it is time for you to look at getting a “cheap secured loan”. These kinds of loans have been specifically set up to fulfill a persons financial requirements. Often such loans will help a customer to obtain a cheaper and more accessible rate than any other loans that are currently available.
However, a secured loan is a loan where the borrower must place collateral against the amount of the loan that they have taken out. The collateral they use can either be a house, car or any other related asset and works as security on behalf of the borrower. A cheaper secured loan is a secured loan which is provided to the borrower at a lower rate of interest than normally provided by the lender and certainly this type of interest rate is always an added benefit to any borrower. Often these type of loans the lending company or bank will offer the borrower a longer repayment period, which is often an additional benefit to those borrowers who choose to opt for these types of loans.
Often a cheap secured loan can be used for a variety of purposes such as the borrower wants to purchase a new car, or take a vacation or it may be that they want to make some improvements to their home. Some people even use such loans for consolidate debts that they already have into one easy to manage account.
Often such secured loans come at a lower rate of interest than normal loans because they are secured against the borrowers property and will often have the added benefit of a flexible repayment period. With such loans one can often borrower a larger sum of money and the loans offered can range from £5,000 to £100,000. However, the amount being offered really depends on the security being offered by the borrower. As mentioned previously such loans will provide the provider with an extended repayment period and because of this the borrower often gets a cheaper interest rate and can pay the loan back over a longer and more easily manageable period of time. Often the period time in which the loan has to be paid back generally ranges from between 5 to 25 years.
You can easily obtain a cheap secured loan from the many different banks, lending societies and financial institutes that are around. But the best method of obtaining a cheap secured loan is by going online. Using this method the borrower has access to a large number of loans that are available from trusted lenders. This method allows a borrower to look at and read the terms and conditions of the lenders loan facilities and thus make a qualified assessment of all the facilities that are available to them.
If you would like to learn more, please visit http://www.centrallendingservices.com.
Monday, February 19, 2007
Finding the Best Private Student Loan
by: Dave Fitzgerald
Students who do not meet federal requirements for financial need can use the route of a private student loan. Apply for a private loan is free. The loan is based on the student's creditworthiness and not the need for aid as does the federal loans. Many lenders offer private student loans to students or their parents and the application process is simple and free. The loan requirements are usually less stringent and the repayment options are affordable for young professionals. A private student loan is a great way to finance the education of any student that needs financial help. Below you will find things that you should know and things you should consider. Things You Should Know: 1. Student loans can be used not only to pay the fees but also for lab fees, dues for associations and housing. 2. A student can have an educational loan even though the tuition is covered by a grant. 3. A student who is eighteen years or above in age, can apply for a student loan. 4. Most of the student loan is deferred for repayment until the student completes the education or leaves the school. Things You Need To Consider: 1. Private loans for students are not given without a co-signer or a credit report. 2. Credit unions give student loans if a vehicle or a boat is provided as collateral. 3. During the cumulative credit period, a student has the option of paying or not paying the interest part of the loan. It should be noted that paying the interest on the loan while attending school will significantly reduced the amount due when the student starts paying the loan after leaving the institution. 4. Student loans are to be repaid in ten years. Nevertheless, longer repayment facilities are provided to large student educational loans. It is not difficult to finding lenders, because most financial institutions offer some form of student loan. Always take the time to investigate lenders in your immediate area and find out exactly what kind of loans they offer. Compare the different interest rate and terms to get the best offer available.
About The Author
Dave Fitzgerald is a freelance publisher living in Glendale, Arizona. He publishes articles and reports in various ezines and provides information on student loans. For more information about loans and lenders come visit http://www.DelveIntoStudentLoans.com.
Students who do not meet federal requirements for financial need can use the route of a private student loan. Apply for a private loan is free. The loan is based on the student's creditworthiness and not the need for aid as does the federal loans. Many lenders offer private student loans to students or their parents and the application process is simple and free. The loan requirements are usually less stringent and the repayment options are affordable for young professionals. A private student loan is a great way to finance the education of any student that needs financial help. Below you will find things that you should know and things you should consider. Things You Should Know: 1. Student loans can be used not only to pay the fees but also for lab fees, dues for associations and housing. 2. A student can have an educational loan even though the tuition is covered by a grant. 3. A student who is eighteen years or above in age, can apply for a student loan. 4. Most of the student loan is deferred for repayment until the student completes the education or leaves the school. Things You Need To Consider: 1. Private loans for students are not given without a co-signer or a credit report. 2. Credit unions give student loans if a vehicle or a boat is provided as collateral. 3. During the cumulative credit period, a student has the option of paying or not paying the interest part of the loan. It should be noted that paying the interest on the loan while attending school will significantly reduced the amount due when the student starts paying the loan after leaving the institution. 4. Student loans are to be repaid in ten years. Nevertheless, longer repayment facilities are provided to large student educational loans. It is not difficult to finding lenders, because most financial institutions offer some form of student loan. Always take the time to investigate lenders in your immediate area and find out exactly what kind of loans they offer. Compare the different interest rate and terms to get the best offer available.
About The Author
Dave Fitzgerald is a freelance publisher living in Glendale, Arizona. He publishes articles and reports in various ezines and provides information on student loans. For more information about loans and lenders come visit http://www.DelveIntoStudentLoans.com.
NextStudent Offers PLUS Loans for Graduate and Professional Students
by: Jeff Mictabor
According to Phoenix-based NextStudent, a premier education funding company, the proliferation of graduate and professional programs has led to new sources of education funding designed to benefit these goal-orientated students who are, in essence, beginning their career by continuing on in their education. As the job market in the United States continues to generate a need for applicants who are highly competitive in specified fields from technology to the ever-growing medical field, undergraduate students across the country are beginning to feel the squeeze as graduate and professional degrees become “must-haves” for even intermediate and entry-level positions. The decision to continue education onto the graduate and professional level is one that oftentimes comes with considerable financial stress because of the continued financial obligation. However, NextStudent’s Graduate PLUS Loan (http://www.nextstudent.com/) Program may allow borrowers to fund up to the full cost of their education (less any financial aid received), including living expenses, books, supplies and even computers. NextStudent now offers a PLUS Loan Program for graduate and professional students with rates starting as low as 8.5 percent. The Graduate PLUS Loan Program features the same benefits directly to graduate and professional students that parents of undergraduate students receive from traditional PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp). Because NextStudent Graduate PLUS loans are federally sponsored, they offer many of the perks of traditional PLUS loans, including eligibility for federal student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp), tax-deductible interest and a variety of repayment options. Eligibility and Credit Resolution NextStudent offers a simple online application process through E-Signature, and many prospects who apply online qualify within minutes. Also offered is a “second look” for borrowers who receive an initial denial because of unresolved credit issues. NextStudent has a PLUS Credit Resolution Team that has an 87 percent success rate at resolving borrowers’ credit issues, resulting in funded PLUS loans. Graduate PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp) easily are accessible to many students. To qualify a student must be a U.S. citizen or an eligible noncitizen. Although a credit check is required, many students with limited or no credit history still qualify for Graduate PLUS loans. Flexible Repayment Options and Aggressive Incentives With all the great incentives offered by NextStudent and its Graduate PLUS Loan Program, now is the right time for students to take the next step and go for their graduate degree. NextStudent Graduate PLUS loans offer several repayment options including deferred repayment while a student is enrolled in school at least half time, and there are no prepayment penalties, ever. There also is a 3 percent cash rebate at repayment on the remaining principal balance after the first 12 months of consecutive on-time payments when student borrowers pay through Auto-Debit. In addition, a 2 percent interest rate reduction is available after the first 48 months of consecutive on-time payments when student borrowers pay through Auto-Debit. Student borrowers receive a .25 percent reduction when they choose repayment through Auto-Debit. NextStudent, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp) programs, and college savings plans. The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion. For more information about NextStudent and its student loan programs, please visit the company’s Web site at http://www.nextstudent.com/.
According to Phoenix-based NextStudent, a premier education funding company, the proliferation of graduate and professional programs has led to new sources of education funding designed to benefit these goal-orientated students who are, in essence, beginning their career by continuing on in their education. As the job market in the United States continues to generate a need for applicants who are highly competitive in specified fields from technology to the ever-growing medical field, undergraduate students across the country are beginning to feel the squeeze as graduate and professional degrees become “must-haves” for even intermediate and entry-level positions. The decision to continue education onto the graduate and professional level is one that oftentimes comes with considerable financial stress because of the continued financial obligation. However, NextStudent’s Graduate PLUS Loan (http://www.nextstudent.com/) Program may allow borrowers to fund up to the full cost of their education (less any financial aid received), including living expenses, books, supplies and even computers. NextStudent now offers a PLUS Loan Program for graduate and professional students with rates starting as low as 8.5 percent. The Graduate PLUS Loan Program features the same benefits directly to graduate and professional students that parents of undergraduate students receive from traditional PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp). Because NextStudent Graduate PLUS loans are federally sponsored, they offer many of the perks of traditional PLUS loans, including eligibility for federal student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp), tax-deductible interest and a variety of repayment options. Eligibility and Credit Resolution NextStudent offers a simple online application process through E-Signature, and many prospects who apply online qualify within minutes. Also offered is a “second look” for borrowers who receive an initial denial because of unresolved credit issues. NextStudent has a PLUS Credit Resolution Team that has an 87 percent success rate at resolving borrowers’ credit issues, resulting in funded PLUS loans. Graduate PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp) easily are accessible to many students. To qualify a student must be a U.S. citizen or an eligible noncitizen. Although a credit check is required, many students with limited or no credit history still qualify for Graduate PLUS loans. Flexible Repayment Options and Aggressive Incentives With all the great incentives offered by NextStudent and its Graduate PLUS Loan Program, now is the right time for students to take the next step and go for their graduate degree. NextStudent Graduate PLUS loans offer several repayment options including deferred repayment while a student is enrolled in school at least half time, and there are no prepayment penalties, ever. There also is a 3 percent cash rebate at repayment on the remaining principal balance after the first 12 months of consecutive on-time payments when student borrowers pay through Auto-Debit. In addition, a 2 percent interest rate reduction is available after the first 48 months of consecutive on-time payments when student borrowers pay through Auto-Debit. Student borrowers receive a .25 percent reduction when they choose repayment through Auto-Debit. NextStudent, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp) programs, and college savings plans. The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion. For more information about NextStudent and its student loan programs, please visit the company’s Web site at http://www.nextstudent.com/.
Making this Bad Credit Loan the Last You’ll Ever Need
by: Julian Thornton
If you are suffering from bad credit in any form, you probably want to do everything you can to clean things up so you can enjoy the world of good credit again. After all, in the media and from talks with the majority of mortgage brokers and big lenders, chances are you’ve been told that bad credit won’t get you anywhere – ever. The great news is that’s rubbish! Working in the bad credit mortgage industry, I personally know that people with bad credit are securing mortgages – good ones with reasonable interest rates – every day. You can too, and when you do, it’s important to decide immediately that this bad credit loan will be your last – ever!
This Bad Credit Loan will be the Last!
It might sound depressing saying that something will be the very last ever, however when it comes to bad credit loans, I’m pretty sure you’ll agree with me that it’s a good thing to decide that it will be your last. That’s because once you secure your bad credit loan, you will be well on your way to cleaning up your financial house to make sure you achieve good credit and a financially secure situation again – or perhaps for the very first time! After saying this, perhaps you are saying, “Yeah Julian, all very well and good for a money expert like you to say, ‘make this bad credit loan your last’, but I have a history of bad credit and poor money decisions”? My response to that is, “So what!” Even with the strongest history of poor money management, bad credit mortgage experts worth their salt can work with you to change your bad money habits and turn them into good ones that will result in lasting financial security. Hold me to that, because now I’m going to show you how!
How to make this Bad Credit Loan Your Last one Ever!
Sure, I’ve made a pretty amazing statement in the previous section, and now I’m going to show you how you can ensure this bad credit loan is the very last one you’ll ever have because it’s going to be the last one you’ll ever need!
It’s quite easy and straightforward to achieve this, so here goes:
• Find a bad credit mortgage expert who knows what they are doing: It is critical that you choose to work with a reputable bad credit mortgage expert! Good specialists in bad credit mortgages will secure competitive mortgages for people with all sorts of financial problems. Sounds drastic right? It gets better! These experts don’t just secure their clients a good home loan though. They also make sure their clients are prepared to succeed both now and into the future.
• Good money management: If you are dealing with a credible bad credit mortgage expert, and you aren’t mortgage ready when you walk through their doors for the first time, they work with you to get you ready. It’s all about good money management, and no, it’s not rocket science. It is discipline though. You make the decision to turn from your bad credit ways and you stick to that decision. Then you go to a bad credit mortgage specialist for your credit redemption! Sounds pretty dramatic, however it’s true. Bad credit isn’t the end, because every day bad credit clients prepare for a better financial future and secure home loans – even people with personal bankruptcy! The reality is that for every financial problem, there is always a solution. That solution is good money management. Reputable bad credit mortgage experts teach every client they work with, how to regain control of their finances, and for some it may be the very first time they have that control. These specialists teach their clients how to keep control as well, which prepares the client for a successful financial future. Once a bad credit mortgage specialist secures a home loan for their client, they will also walk away with a plan to follow that will ensure they will find a life of good credit at the end of the rainbow.
• Get a bookkeeper: A bookkeeper will really help you to keep on top of your financial situation, so find a good one and hire them! At least this way you will be up-to-date with everything and know what money is coming in and what money is going out.
• Stick to your cash flow plan: You are paying a certain amount off your mortgage each month according to your budget. You must stick to your budget. One way to ensure you never go beyond your budget is to donate what you deem to be a significant amount of money, to a cause you do not support. For instance, if you have a fear of birds, donate money to a bird society. Do this even if you go over budget by just a few dollars. It will keep you disciplined.
• Stay Motivated: Think about what you want to do once you are financially stable and secure. Pin photographs of your dream home, car or holiday destination on your corkboard, so you can see it as you work. Set goals and remind yourself of them. Try reading rags to riches stories as well, because they will definitely inspire you. All of these things will help you stay on track.
How to Get Your Last Bad Credit Loan Ever!
Forget the banks, because they won’t touch anybody with bad credit! Find an experienced bad credit mortgage broker who will work with you so you’ll get a great home loan to suit your needs, and the guidance you need to ensure your financial future is bright. Say goodbye to bad credit once and for all!
If you are suffering from bad credit in any form, you probably want to do everything you can to clean things up so you can enjoy the world of good credit again. After all, in the media and from talks with the majority of mortgage brokers and big lenders, chances are you’ve been told that bad credit won’t get you anywhere – ever. The great news is that’s rubbish! Working in the bad credit mortgage industry, I personally know that people with bad credit are securing mortgages – good ones with reasonable interest rates – every day. You can too, and when you do, it’s important to decide immediately that this bad credit loan will be your last – ever!
This Bad Credit Loan will be the Last!
It might sound depressing saying that something will be the very last ever, however when it comes to bad credit loans, I’m pretty sure you’ll agree with me that it’s a good thing to decide that it will be your last. That’s because once you secure your bad credit loan, you will be well on your way to cleaning up your financial house to make sure you achieve good credit and a financially secure situation again – or perhaps for the very first time! After saying this, perhaps you are saying, “Yeah Julian, all very well and good for a money expert like you to say, ‘make this bad credit loan your last’, but I have a history of bad credit and poor money decisions”? My response to that is, “So what!” Even with the strongest history of poor money management, bad credit mortgage experts worth their salt can work with you to change your bad money habits and turn them into good ones that will result in lasting financial security. Hold me to that, because now I’m going to show you how!
How to make this Bad Credit Loan Your Last one Ever!
Sure, I’ve made a pretty amazing statement in the previous section, and now I’m going to show you how you can ensure this bad credit loan is the very last one you’ll ever have because it’s going to be the last one you’ll ever need!
It’s quite easy and straightforward to achieve this, so here goes:
• Find a bad credit mortgage expert who knows what they are doing: It is critical that you choose to work with a reputable bad credit mortgage expert! Good specialists in bad credit mortgages will secure competitive mortgages for people with all sorts of financial problems. Sounds drastic right? It gets better! These experts don’t just secure their clients a good home loan though. They also make sure their clients are prepared to succeed both now and into the future.
• Good money management: If you are dealing with a credible bad credit mortgage expert, and you aren’t mortgage ready when you walk through their doors for the first time, they work with you to get you ready. It’s all about good money management, and no, it’s not rocket science. It is discipline though. You make the decision to turn from your bad credit ways and you stick to that decision. Then you go to a bad credit mortgage specialist for your credit redemption! Sounds pretty dramatic, however it’s true. Bad credit isn’t the end, because every day bad credit clients prepare for a better financial future and secure home loans – even people with personal bankruptcy! The reality is that for every financial problem, there is always a solution. That solution is good money management. Reputable bad credit mortgage experts teach every client they work with, how to regain control of their finances, and for some it may be the very first time they have that control. These specialists teach their clients how to keep control as well, which prepares the client for a successful financial future. Once a bad credit mortgage specialist secures a home loan for their client, they will also walk away with a plan to follow that will ensure they will find a life of good credit at the end of the rainbow.
• Get a bookkeeper: A bookkeeper will really help you to keep on top of your financial situation, so find a good one and hire them! At least this way you will be up-to-date with everything and know what money is coming in and what money is going out.
• Stick to your cash flow plan: You are paying a certain amount off your mortgage each month according to your budget. You must stick to your budget. One way to ensure you never go beyond your budget is to donate what you deem to be a significant amount of money, to a cause you do not support. For instance, if you have a fear of birds, donate money to a bird society. Do this even if you go over budget by just a few dollars. It will keep you disciplined.
• Stay Motivated: Think about what you want to do once you are financially stable and secure. Pin photographs of your dream home, car or holiday destination on your corkboard, so you can see it as you work. Set goals and remind yourself of them. Try reading rags to riches stories as well, because they will definitely inspire you. All of these things will help you stay on track.
How to Get Your Last Bad Credit Loan Ever!
Forget the banks, because they won’t touch anybody with bad credit! Find an experienced bad credit mortgage broker who will work with you so you’ll get a great home loan to suit your needs, and the guidance you need to ensure your financial future is bright. Say goodbye to bad credit once and for all!
Thursday, February 15, 2007
Legislation and Governing Bodies of the Secured Loans Industry
Author: Adrian Hudson
Learn about the regulations and bodies affecting the Secured Loans market
Introduction
The Secured Loans market is often referred to as ‘Unregulated’, but what does this mean? This article will attempt to answer this question by looking at the both official and non-official governing bodies that have an affect Secured Loans. It will also briefly discuss the various Parliamentary Acts that incorporate legislation affecting the Secured Loans or Second Charges market. The target readership for the article is either those involved in the Finance Industry, specifically secured loans, or members of the public with a general interest in Consumer Credit legislation which may affect them.
The Office of Fair Trading (OFT)
The Office of Fair Trading, or O.F.T as it is more commonly referred to, is responsible for a number of key areas with the ultimate aim of protecting the consumer. It has three main purposes. These are the enforcement of Competition and Consumer Protection rules, the analysis of markets to make sure they are working and communication to consumers, businesses and the government.
In terms of Secured Loans there are a number of areas the O.F.T deals with that affect the way that operators in the market promote themselves. The first of these is by administering Consumer Credit Licenses. With the rapid growth in people taking out credit in the early 1970s an act of parliament was passed in 1974 called the Consumer Credit Act and it is under this at that Consumer Credit Licences are granted. If an entity advertises promotes or brokers Secured Loans it must have a Category C Consumer Credit License. On application the O.F.T will investigate all people connected to the business applying to ensure that they are all people worthy of issuing or guiding people to enter into credit. There is a general misconception in the market that the Consumer Credit License is only required if the Secured Loans Company offers loans less than £25,000, but the Act clearly states that a Category C license is required for businesses that provide credit of ANY amount secured on land.
Other areas the O.F.T deal with that affects secured loans are there enforcement of other elements of the 1974 Act and also the updates to the Act which occurred in 2004 - these are the ‘Agreements Amendment’, ‘Disclosure of Information’ and ‘Early Settlement’ Consumer Credit Acts.
For secured loans these act govern a number of things. The first of which is the way that organisations can advertise secured loans. The Acts have rules governing what can and cannot be said in an advertisement and also have stipulation over certain words that have to appear in the advertisement. For example the words “YOUR HOME MAY BE REPOSSESED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT” probably have to appear on most Secured Loans advertisements. The Acts also stipulate that the Annual Percentage Rate (APR) must appear on Credit dvertising and also given rules give its calculation (commonly known as the TTC calculation or total charge for credit).
There is a growing momentum of opinion in the Mortgage and Secured loans industry that at some time secured loans will be regulated by the F.S.A. With the already increased workload of the F.S.A it is more likely that an ‘official’ recommendation for their regulation by the F.S.A is more likely to come from the O.F.T
Financial Services Authority (FSA)
The Financial Services Authority, or F.S.A as it is more commonly know, is responsible for enforcing the rules of the Financial Services and Markets Act (FSMA) 2000. Contrary to popular belief it is actually a non-government independent body and is financed solely from the income it receives from the very organisations it legislates. Although it is accountable to Treasury Ministers it is operationally independent.
In terms of legislation affecting Secured Loans the F.S.A regulates activities in relation to payment protection insurance (P.P.I). So if a business helps customers buy or claim on payment protection insurance it is highly likely it will need to apply to the F.S.A to be regulated. In the Secured Loans market whether you need to be legislated by the F.S.A largely depends on your involvement in P.P.I. If an organisation simply acts as an introducer it is quite likely it does not need to be regulated, however it is always advisable to seek legal advice.
At the time of writing the FSA is very active in the area of P.P.I. It is presently looking into what happens to Insurance premiums when someone either settles a loan early or want to cancel only the P.P.I element of a secured loan. At the moment most insurance providers have a ‘no refund’ clause for both cases.
Another area the F.S.A deals in that may affect Secured Loans providers is their regulation of Mortgages. The FSMA states that if an authorised lender gets second charge loans business from an unauthorised lender then their advertisements must be approved by the F.S.A approved firm.
Finance Industry Standards Institute (FISA)
The Finance Industry Standards Institute (FISA) is a self-governing body set up independently by the industry to govern itself in the Secured Loans market. An annual subscription fee from its members funds FISA. It publishes a Code of Conduct for its Members that cover the standards it requires in advertisements. In essence these are guidelines that give the requirements of the O.F.T specifically for the Secured Loans sector. FISA also publishes a disciplinary procedure and warns in its documentation that it will enforce legislation on non-members, in the first instance by contacting the offending organisation and in the second instance by informing the relevant regulatory body.
FISA also conducts training courses every month or so. These cover the legislative requirements of being involved in the Second Charge sector. In the future the organisation plans to have three levels of ‘qualification’, these will be Foundation, Associate and Member, but it is waiting on developments in the O.F.T and F.S.A before it does this. One supposes whether this happens will also be influenced by the level of regulation that those two bodies impose on the Secured Loans sector.
Information Commissioners Office (ICO)
The Information Commissioners Office (ICO) enforces the requirements of the Data Protection Act (1998). Given that all businesses in the secured loans sector will at some time hold information about individuals they must be registered as a Data Controller with the ICO. In summary, the Data Protection Act ensures that all data kept on an individual (including employees) is accurate, fairly and lawfully processed, adequate relevant and not excessive, used for limited purposes, not sent overseas and is kept securely.
Other Regulatory Bodies and Secured Loans
Although the following organisations do not have a direct power or control over the secured loans market it is worthwhile mentioning them, not only for reasons of clarity, but also, as it is possible there will be changes in legislation, these organisations may later have more influence over the secured loans sector.
The Consumer Credit Trade Association (CCTA) is another independent body, but differs from FISA in that it deals with the whole Consumer Credit market. It also offers training courses, publishes regular newsletters and actively lobbies the Government about consumer credit related issues. In a world where we assume taking out credit is a relatively new phenomenon it is useful to note that the CCTA was founded well over a hundred years ago in 1891.
The Intermediary Mortgage Lenders Association (IMLA) is an independent body that represents the views and interests of institutions in the generation of mortgage business through Intermediaries.
The Council of Mortgage Lenders (CML) is yet another self-governed body operating in the Mortgage Industry. In a similar fashion to the CCTA it is also involved with government with legislative issues, issues policy guidelines. It is also renowned for produces statistics about the UK lending market covering, amongst other things, arrears and repossessions, the number of mortgages being taken out and specifics like the number of buy to let mortgages being taken out.
To finish this section, there is one more independent organisation called the Association of Mortgage Intermediaries (AMI) who acts as the trade body for mortgage intermediaries.
Conclusion
Although the Secured Loans sector is commonly referred to as ‘unregulated’ this document has hopefully shown there is still a lot of regulation (both official and un-official) that affects and encompasses the secured loans sector. In the finance area where the UK has a reputation for being the most regulated in Europe it is only a matter of time before secured loans come under the umbrella of the FSA. It is believed that instruction for the FSA to take control of the secured loans market is more likely to come from the treasury rather than the FSA itself. What is certain is that the secured loans market will become more legislated in the coming years. One thing to note if you are going to business in the Mortgage or Secured Loans market that subscription to these organisations can add up to many thousands of pounds per year.
Learn about the regulations and bodies affecting the Secured Loans market
Introduction
The Secured Loans market is often referred to as ‘Unregulated’, but what does this mean? This article will attempt to answer this question by looking at the both official and non-official governing bodies that have an affect Secured Loans. It will also briefly discuss the various Parliamentary Acts that incorporate legislation affecting the Secured Loans or Second Charges market. The target readership for the article is either those involved in the Finance Industry, specifically secured loans, or members of the public with a general interest in Consumer Credit legislation which may affect them.
The Office of Fair Trading (OFT)
The Office of Fair Trading, or O.F.T as it is more commonly referred to, is responsible for a number of key areas with the ultimate aim of protecting the consumer. It has three main purposes. These are the enforcement of Competition and Consumer Protection rules, the analysis of markets to make sure they are working and communication to consumers, businesses and the government.
In terms of Secured Loans there are a number of areas the O.F.T deals with that affect the way that operators in the market promote themselves. The first of these is by administering Consumer Credit Licenses. With the rapid growth in people taking out credit in the early 1970s an act of parliament was passed in 1974 called the Consumer Credit Act and it is under this at that Consumer Credit Licences are granted. If an entity advertises promotes or brokers Secured Loans it must have a Category C Consumer Credit License. On application the O.F.T will investigate all people connected to the business applying to ensure that they are all people worthy of issuing or guiding people to enter into credit. There is a general misconception in the market that the Consumer Credit License is only required if the Secured Loans Company offers loans less than £25,000, but the Act clearly states that a Category C license is required for businesses that provide credit of ANY amount secured on land.
Other areas the O.F.T deal with that affects secured loans are there enforcement of other elements of the 1974 Act and also the updates to the Act which occurred in 2004 - these are the ‘Agreements Amendment’, ‘Disclosure of Information’ and ‘Early Settlement’ Consumer Credit Acts.
For secured loans these act govern a number of things. The first of which is the way that organisations can advertise secured loans. The Acts have rules governing what can and cannot be said in an advertisement and also have stipulation over certain words that have to appear in the advertisement. For example the words “YOUR HOME MAY BE REPOSSESED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT” probably have to appear on most Secured Loans advertisements. The Acts also stipulate that the Annual Percentage Rate (APR) must appear on Credit dvertising and also given rules give its calculation (commonly known as the TTC calculation or total charge for credit).
There is a growing momentum of opinion in the Mortgage and Secured loans industry that at some time secured loans will be regulated by the F.S.A. With the already increased workload of the F.S.A it is more likely that an ‘official’ recommendation for their regulation by the F.S.A is more likely to come from the O.F.T
Financial Services Authority (FSA)
The Financial Services Authority, or F.S.A as it is more commonly know, is responsible for enforcing the rules of the Financial Services and Markets Act (FSMA) 2000. Contrary to popular belief it is actually a non-government independent body and is financed solely from the income it receives from the very organisations it legislates. Although it is accountable to Treasury Ministers it is operationally independent.
In terms of legislation affecting Secured Loans the F.S.A regulates activities in relation to payment protection insurance (P.P.I). So if a business helps customers buy or claim on payment protection insurance it is highly likely it will need to apply to the F.S.A to be regulated. In the Secured Loans market whether you need to be legislated by the F.S.A largely depends on your involvement in P.P.I. If an organisation simply acts as an introducer it is quite likely it does not need to be regulated, however it is always advisable to seek legal advice.
At the time of writing the FSA is very active in the area of P.P.I. It is presently looking into what happens to Insurance premiums when someone either settles a loan early or want to cancel only the P.P.I element of a secured loan. At the moment most insurance providers have a ‘no refund’ clause for both cases.
Another area the F.S.A deals in that may affect Secured Loans providers is their regulation of Mortgages. The FSMA states that if an authorised lender gets second charge loans business from an unauthorised lender then their advertisements must be approved by the F.S.A approved firm.
Finance Industry Standards Institute (FISA)
The Finance Industry Standards Institute (FISA) is a self-governing body set up independently by the industry to govern itself in the Secured Loans market. An annual subscription fee from its members funds FISA. It publishes a Code of Conduct for its Members that cover the standards it requires in advertisements. In essence these are guidelines that give the requirements of the O.F.T specifically for the Secured Loans sector. FISA also publishes a disciplinary procedure and warns in its documentation that it will enforce legislation on non-members, in the first instance by contacting the offending organisation and in the second instance by informing the relevant regulatory body.
FISA also conducts training courses every month or so. These cover the legislative requirements of being involved in the Second Charge sector. In the future the organisation plans to have three levels of ‘qualification’, these will be Foundation, Associate and Member, but it is waiting on developments in the O.F.T and F.S.A before it does this. One supposes whether this happens will also be influenced by the level of regulation that those two bodies impose on the Secured Loans sector.
Information Commissioners Office (ICO)
The Information Commissioners Office (ICO) enforces the requirements of the Data Protection Act (1998). Given that all businesses in the secured loans sector will at some time hold information about individuals they must be registered as a Data Controller with the ICO. In summary, the Data Protection Act ensures that all data kept on an individual (including employees) is accurate, fairly and lawfully processed, adequate relevant and not excessive, used for limited purposes, not sent overseas and is kept securely.
Other Regulatory Bodies and Secured Loans
Although the following organisations do not have a direct power or control over the secured loans market it is worthwhile mentioning them, not only for reasons of clarity, but also, as it is possible there will be changes in legislation, these organisations may later have more influence over the secured loans sector.
The Consumer Credit Trade Association (CCTA) is another independent body, but differs from FISA in that it deals with the whole Consumer Credit market. It also offers training courses, publishes regular newsletters and actively lobbies the Government about consumer credit related issues. In a world where we assume taking out credit is a relatively new phenomenon it is useful to note that the CCTA was founded well over a hundred years ago in 1891.
The Intermediary Mortgage Lenders Association (IMLA) is an independent body that represents the views and interests of institutions in the generation of mortgage business through Intermediaries.
The Council of Mortgage Lenders (CML) is yet another self-governed body operating in the Mortgage Industry. In a similar fashion to the CCTA it is also involved with government with legislative issues, issues policy guidelines. It is also renowned for produces statistics about the UK lending market covering, amongst other things, arrears and repossessions, the number of mortgages being taken out and specifics like the number of buy to let mortgages being taken out.
To finish this section, there is one more independent organisation called the Association of Mortgage Intermediaries (AMI) who acts as the trade body for mortgage intermediaries.
Conclusion
Although the Secured Loans sector is commonly referred to as ‘unregulated’ this document has hopefully shown there is still a lot of regulation (both official and un-official) that affects and encompasses the secured loans sector. In the finance area where the UK has a reputation for being the most regulated in Europe it is only a matter of time before secured loans come under the umbrella of the FSA. It is believed that instruction for the FSA to take control of the secured loans market is more likely to come from the treasury rather than the FSA itself. What is certain is that the secured loans market will become more legislated in the coming years. One thing to note if you are going to business in the Mortgage or Secured Loans market that subscription to these organisations can add up to many thousands of pounds per year.
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