Written through digital marketing agency GoUp!, I wrote this set of blog posts for UK online remortgage platform loan.co.uk. The tone of voice is accessible and explanatory, guiding users through their options and answering commonly searched queries on a range of remortgage-related situations. Blog post for online remortgage platform loan.co.uk.
Need £20,000? How to raise money fast, safely.
We outline some of the most popular options for raising large amounts of money safely.
How to raise money fast? No matter how prudent, at some time or another just about everyone wrestles with this question. While we’d all like to have a chunky ‘rainy day’ reserve on hand to be called upon in emergency, for many people that’s not possible. Even for those who manage it, the amount needed will often simply be greater than the amount in reserve.
As we always advise at Loan.co.uk, the most important thing when considering how to raise money fast is to explore all your options and to decide on the most suitable solution for your situation.
Two homeowners with good incomes needing a new roof? One person without income wanting a month in the Caribbean? Life-saving but expensive surgery for your dog? A desperate desire to refurbish a 30 year old kitchen? These are all very reasonable reasons to be looking at how-to raise money fast, but the answer could be different in each case.
Let’s assume you’ve already looked at what savings you have, or what items of value you have that you might be ready to sell to unlock some funds. And let’s also take it you’ve considered whether friends or family might be able to help. So… what are your options if, for example, you need to raise £20k fast?
Using Secured loans to raise money fast.
If you own a property in which you have a worthwhile amount of equity (eg if you own a house worth £250k on which you have a £100k mortgage and so own £150k of the equity), then it may well be possible for you to arrange a secured loan, using some of that equity as security.
Secured loans – also known as homeowner loans and second charge mortgages – are a separate loan from either your current mortgage lender or another lender entirely. A secured loan doesn’t disturb your existing mortgage in any way, even though it, too, is using some of the value of your property as security.
One big advantage of this is that you will not incur any changes associated with the mortgage borrowing in setting up the new loan. The two simply co-exist.
If you do own your home, use our secured loans calculator to get an instant view of how much you’d be able to raise through a secured loan.
How much and how safe?
Secured loans are available to homeowners only. So if you do own your home, or part of it, consider these points to judge whether it could be a good way to raise money fast.
- Get up to 85% of the value of the equity you own in your home.
- Safe for secure-income homeowners needing to borrow less than half of the value of the equity they own in their home.
- Not safe for those with only small amount of equity in their home, or those at high risk of inability to maintain payment of additional monthly costs.
- Like any loan secured on your home, this is potentially at risk should you fail to keep up agreed payments on the loan.
Using Unsecured loans to raise money fast.
An unsecured loan may turn out to be an excellent option if you do not own a home against which you can raise money fastthrough a secured loan.
Essentially, an unsecured loan – also known as a personal loan – is simply a loan which a lender agrees to make to you on the basis of your credit rating and the answers you provide to its questions while applying.
Because the loan is not backed up by the lender taking a charge over your home, it will usually be a little more expensive, but so long as you can afford the payments involved to pay back the capital sum plus interest over a short to medium timeframe (usually between 12 months and 5 years), this can be an excellent answer to the question of how to raise £5k, £10k, or even of how to raise £20k.
Unsecured or personal loans can be particularly useful for paying for things like a special holiday, an unexpected vet bill, a used car or your contribution to the cost of a wedding, where you feel you just need a period of a few years to pay the loan off.
How much and how safe?
You do not need to own a home to take out an unsecured loan. Consider these points to judge whether it could be a good solution to the question of how-to raise money fast.
- You can potentially borrow up to around £50k as an unsecured loan. However, what you are actually offered will be governed by your credit rating, by the number of months you plan to repay over, and by how much you can afford to repay each month.
- Safe for people with a realistic need for the borrowing, secure income, a reasonable credit history and a responsible approach to their own budgeting.
- Not safe for those with a questionable reason for needing the money, uncertainty of their ability to keep up repayments, or poor ability to manage their own finances. If you default on an unsecured loan, your credit score may be adversely affected for years to come.
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