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Viewed: [190] | Comments: [0] | 3-02-2010, 22:01
A secured loan is a loan in which the individual borrower pledges a tangible asset such as a property or a car as collateral against a loan. The borrower will usually get a favourable rate of credit; as well as be able to borrow a larger amount than on a normal personal loan. This is because the lender has the legal option of taking the asset if the loan is not repaid. So the lender has security on the loan, and therefore acquires less risk.
Why should you consider a secured loan with this risk?
Generally there are three reasons a borrower would opt for a secured loan:
* It is easier to obtain as the lender has security on the loan.
* The borrower can borrow a larger amount of money.
* The loan can be repaid over a longer period (up to 20 years, although a longer term increases total interest.
The loan can generally be used for any purpose, including paying all your other debts so that payments are in one manageable outgoing and with a more favourable interest rate.
Please remember though: THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR LOAN.
Why should you consider a secured loan with this risk?
Generally there are three reasons a borrower would opt for a secured loan:
* It is easier to obtain as the lender has security on the loan.
* The borrower can borrow a larger amount of money.
* The loan can be repaid over a longer period (up to 20 years, although a longer term increases total interest.
The loan can generally be used for any purpose, including paying all your other debts so that payments are in one manageable outgoing and with a more favourable interest rate.
Please remember though: THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR LOAN.