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Find out more about loans and grants!

It can be very confusing when trying to decide on loans and grants, what all of it means or understanding the fine print. This can make it very daunting and many people either rush in and sign their life away or miss out on what could almost be theirs. Take a look below for all you need to know to understand the bank or institutions jargon.

Starting off with understanding loans, it is first important to understand all the terms used on the contract which you would later sign and be legally bind to - therefore extremely important. A loan in itself is a debt, money (or sometimes a material object) that the lender (the bank, financial party, credit union or private loan company or loan shark) gives to the borrower (you), on the understanding you are obliged to pay back in the same equal amounts on a regular basis (installments) usually weekly, fortnightly or monthly that when it is fully repaid will also include interest - or a percentage more of the original amount you first received.

Generally loans are either secured - which means you pledge an asset such as your car or house, if you cannot meet the loan repayments. Unsecured loans are usually a smaller amount, where you do not need to secure any assets - these are generally a bank account overdraft or credit card.

It is wise then to shop around for companies with a good reputation and a low interest rate before deciding on a loan. Take a look at hsbc.co.uk or sainsburys.co.uk for a low interest rate.

A grant however is a completely different agreement. It is when a party such as the Government, a Foundation or a Trust give money or funds to an educational institution (University on behalf of a student to cover fees) or a small business to help them start up. An application is needed, usually in writing, and certain requirements must be met to qualify. Grants do not have to be repaid and will generally only last 1 - 3 years.

Take a look at energy saving trust for a grant towards your  insulation, heating and boiler from the government, or direct.gov.uk for information on educational grants.

 

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