Types of Adverts

Advertisements are divided into three types, with different rules applying to each:

- simple advertisements. These give just the name of the advertiser and an indication that they're in the business of giving loans or credit. They're the sort of advertisements that might appear on a business card or a complimentary book of matches, say.<> - intermediate advertisements. These must give a certain amount of information - for example, name of the advertiser, phone number and/or address for getting a written quotation, conditions attached to the loan such as the need for security or insurance, or a requirement to open an account from which repayments are to be made. Where the credit is for a fixed amount to buy particular goods, the cash price of the goods must be shown for comparison and also the cost of the loan expressed as an Annual Percentage Rate (APR - see p. ). The advertiser can choose to include certain other information as well to give a better picture of what's being offered

- full advertisements. These must include a great deal of information, including name and address of advertiser, the APR, any conditions such as the need for security, any restrictions on who can take out the loan or credit, the amount of any advance paym>Secured loans 'Secured' means that the lender has a right to certain of your assets if you fail to repay the loan as agreed. Commonly, such loans are secured against your home. The rate of interest charged on secured loans is usually lower than for other loans, because the lender runs a lower risk of being out of pocket.

Secured loans don't just include a bank or building society mortgage to buy your home; many credit firms and credit brokers advertise these loans for any purpose whatsoever. And, with the huge rises in house prices during much of the 1980s, banks and other lenders have marketed 'equity release' schemes which let you borrow money against the security of the difference between the market value of your home and the mortgage still to be paid off.

Despite the rather grand name, equity release schemes are essentially little different from other forms of secured lending.

The important thing to remember about any secured loan is that, if you default, you could lose your home.

WARNING The law requires advertisements to state the need for any security. But such statements are often hidden away in the tiniest of print, and the words used don't necessarily make the situation clear. Research by the National Consumer Council in 1987 found that an alarming number of people thought the word 'secured' was an indication of the stability of the lending organisation rather than a description of the type of loan. In some advertisements, 'Homeowners only' is prominently displayed, but it's not clear that's because their home will be needed as security. New regulations under the Consumer Credit Act are due to be introduced. These will require advertisements for secured loans to carry a 'health warning' saying 'Your home may be at risk if you don't keep up payments' or similar words. In the meantime, always check carefully whether a lender requires security - especially if the loan looks relatively cheap.

For more on Types of Mortgages - Click Here

Advertisements For Loans And Credit

Low-cost finance - special deals', 'preferential, quick and trouble-free finance', 'quick loans - any purpose'. Nowadays, there seems no end to the offers of loans and credit. There are special loans for members of motoring organisations, for credit card holders, special deals for doctors, and credit for students. If you can't yourself think of a reason for taking out a loan, the advertisements will help you with suggestions of second cars, holidays in the sun, or the kitchen of your dreams. And if you're already struggling to cope with a backlog of debts, there are plenty of advertisements encouraging... see: Advertisements For Loans And Credit

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