An increasing number of people are turning to pension loans when they need money. Applying for a pension loan can be one of the fastest and easiest ways of acquiring money, without the hassle that people often put up with when applying for traditional loans. Aside from the fact that it may be easier to get pension loans, the terms and conditions for them can be more flexible compared to traditional loans. Pension loans can also provide you with a lump sum of money after approval, so the waiting time may be shorter as well.
There are several organisations which will provide you with an approval one day after applying for a pension loan. It is truly one of the easiest loans to apply for and acquire, especially when you need the money for emergency purposes.
Here are a list of reasons why a lot of people nowadays resort to borrowing against their pension rather than applying for a personal loan in a traditional way from banks and other financial institutions:
Pension Loans get quick approval… no if’s and no buts
A pension loan is a kind of secured loan. This means that you can get approval for a loan more easily, as you have your pension as a form of collateral. Unlike unsecured loans you have the option of either repaying your debt before the date of maturity, or allowing the lending party to take your future pension payments. This can be an an easier pill to swallow. Unsecured loans can provide people with as much freedom without any collateral, as long as they have a good credit rating. This means that without collateral, provided that they have a fairly good credit rating, they can borrow money or purchase goods and services without anything to back up their presumed debts. Although this provides more freedom, the interest rates for unsecured loans are high. The repayment takes a longer time as well, since there are finance charges and other miscellaneous fees included in the principal balance. The higher the interest rate, the longer time it takes for individuals to fully pay off their debts.
Pension loans behave in a different way. You can get a loan today provided that you have a form of collateral, in this case your pension, to cover the loan (in case you default on your payments). Several organizations provide loans of 15% to 50% of the applicant’s future pension payments. You can also choose how much of your future pension payments they can take away per month.
Pay off your debts with Pension Loans
You can use your pension loan for a myriad of reasons. There’s no inquiry as to what the funds will be used for, as long as the reason is acceptable and is not in any way against the law. If you need funds for debt consolidation, to pay your bills, or even to pay for your mortgage payments, a pension loan is a great source of funding to pay off debts which you have right now.
If you’re planning to start a business, good for you! A loan against a pension is a great source of capital for opening a business as well. With a good business strategy and adequate funding coming from your pension loan you can build a small business and make it bigger through your efforts and determination. You can profit and make big bucks by using your loan as start-up capital for your business. Not only will you profit from your business, you don’t even have to worry about your future since you already have extra money to spare for your future.
You can even apply for a pension loan to clear out your credit card debts. Being free from credit card debts with soaring interest rates will make it easier for you to move forward into the future. There’s no need for you to pay unnecessary interest rates, money which you do not originally owe the bank. The fact that pension loans often do not have interest rates mean that you are only paying for the original amount that you owe them. As long as you agree to the terms or repay your debt before the maturity date, there will be no added fees and penalties that you need to worry about in the future.
Hassle-free repayment options
Applying for a pension loan is easier when compared to applications for unsecured loans from financial institutions. There are organisations which provide you with an estimate of how much loan they can provide you for a specified amount of time. If you need a big amount, only a small amount from your pension loan will be released to the lending party. If you are in need of £10,000 worth of cash today, you can always make special arrangements that a year’s worth of your pension payments will be taken off from your whole pension fund. This is a quick and easy arrangement which you can arrange with the lending party.
There are terms however, before you can get approved for a pension loan. Most lending organisations don’t do credit checks but they do check the amount of pension payments that you are receiving or will be receiving in the future. Typically a minimum of £10,000 worth of pension is needed before the lending party approves your loan. There are also limits to the maximum amount of money that you can borrow. This is a good thing, since you can be sure that you will still get pension payments once you pay off the loan.
Pension loans are a fast and simple source of needed funds when you have a less than perfect credit score. In this financial climate, where so many people are experiencing financial difficulty, pension loans are a great source of money to meet your current needs. No interest rates, no hidden charges, plus you still get to use your pension payments in the future once you have repaid your debts.
What happens when you fill in the form?
We are an “introducer” to pension release and pension loans companies in the UK. We do not offer any financial advice, and neither do they. But they will help you to find out whether a pension loan is available, and explain both the benefits and any potential disadvantages. If you are at all unsure, we strongly recommend that you discuss the information they give you with a qualified Independent Financial Adviser (IFA).
We constantly check the market looking for the best schemes for you –
- We only work with UK pension companies, so that they are covered by UK legislation.
- Wherever possible, we check that the companies have obtained a written legal opinion from a UK Barrister or QC to indicate that their “pension loan” or “pension release” schemes are in-line with all current UK legislation
New companies are popping up every day, offering loans against pensions, and the FSA (Financial Services Authority) has recently issued warnings to be cautious when dealing with such companies. We only work with companies who are well-established in this field –
a) “Pension Loan” companies can often help if your current pension value is £10,000 – £50,000. There are different options, but in general they offer a “pension loan” of 5% to 50% of the current value of your pension fund.
b) We also work with a specialist “pension release” company who can help you to release up to 90% of the value of your pension, in a tax-efficient way. They only deal with pension funds (or a combination of smaller funds) that are over £50,000. Their product originated in 2005 and is fully disclosed to HMRC. They also have excellent reviews from previous clients. Here is an example –
from AJ, Birmingham
I am writing to thank you for all the help you gave me over the last few months in transferring my pension and helping me through the process. I could not have done it without your help. If I have any friends in a similar position in the future or just need help I will certainly recommend your company. Many thanks once again.