A Secured Loan Can Save You Money
What is a Secured Loan?
A secured loan is any loan that is secured on
your home or property. It is any loan which
requires you to provide the lender with some
form of security other than just a promise to
pay. The security will be your property or home.
The property may be mortgaged or owned outright.
If you agree to a secured loan on your home, you
should remember that, although the property
remains in your possession, it can be
repossessed by the lender if the loan and the
interest are not paid according to the agreed
terms. The lender will then sell the property in
order to recover the money you borrowed plus any
additional costs incurred in recovering the
money.
Secured Loan Benefits
In many instances secured loans can be repaid
over a longer period with a lower monthly
repayment. The interest rate will be lower on a
secured loan than on a comparable unsecured
loan. A secured loan may also offer more
flexible repayment periods.
1. If you’re a homeowner, you may get a lower
rate through a secured loan using your property
as security. By taking out a secured loan, you
are agreeing to allow the forced sale
(foreclosure or repossession) of the asset in
order to pay back the loan. The risk to the
lender is reduced so the interest rate offered
is lower. This is why secured loans tend to be
cheaper than unsecured loans and other forms of
borrowing. The lender has the added benefit of
security, which provides protection in the event
of your inability to repay.
2. Secured loans are more easily accessible to
those with a poor credit record. This means that
persons who are self-employed, or who have
recently changed jobs, or who have adverse
credit (ccjs, arrears, defaults, etc.) can take
out a secured loan.
3. You can borrow larger amounts and repay over
a longer period. The amount available usually
ranges from £3,000 to £50,000, although some
lenders will consider lending more. Compare this
to unsecured loans where you're only allowed to
borrow up to £25,000. If you wish to borrow a
larger amount or if you require a longer period
in which to repay the loan, secured loans may be
the most suitable for you.
4. You can consolidate more expensive borrowings
into a single much cheaper monthly payment. You
may choose to take out a secured loan in order
to consolidate debts and replace high-interest
loans with a low-rate loan. The loans being
consolidated may include higher purchase loans,
unsecured loans and credit cards.
This article is the property of
www.1st-in-homeloans.com, which has been
offering home mortgage services since 2002. To
find out more visit
www.1st-in-homeloans.com
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