Everything You Need to Know About a Secured Loan

If you're not familiar with the term, a secured loan is a loan which requires a security deposit of some kind (also known as collateral) to protect the lender against nonpayment. The secured loan is the preferred type of loan for lenders who deal with people with bad credit, but is also used when purchasing certain types of property (such as an automobile or real estate.) Interest rates tend to be lower with a secured loan than with an unsecured loan (which doesn't require collateral, but charges higher interest rates to cover the additional risk.)

Types of collateral

Just about any property with value can be used as collateral for a secured loan, though some types are more common than others. Jewelry and rare coin collections can be used as collateral for some loans, though they are usually held by the lender to help protect them from theft or loss. Automobiles and real estate are popular forms of collateral, and lenders usually allow you to keep them while you repay the loan? you simply turn over the deed or title and the lender is given a legal claim to the car or house in case you should default on you secured loan (which is a fancy way of saying that you don't pay it back.) Car financing and mortgages are both forms of secured loans, in which the automobile or real estate that you're buying with the loan serves as the collateral for the lender.

How a secured loan works

When you get a secured loan, the lender will either take your collateral or process your collateral so that they have a legal claim to it. You will receive the money for the loan, which is often somewhat less than the value of the collateral? that way if you should default on your secured loan then the lender will still be able to get their money back. When you repay your loan then the lender will either return the property that you submitted as collateral or they will present you with a release? which means that they no longer have any legal claim to the property and you can prove it. Should you default on your loan, however, then after attempting to collect the debt the lender will be free to repossess and sell your collateral in order to get their money back.

Shopping for a secured loan

Before deciding on a secured loan, you should shop around and compare your options. Look for the lender that offers the lowest interest rates and borrow only the minimum amount that you need to get by. After all, the less you borrow with a secured loan then the less you have to pay back? and the lower your chances of losing your collateral.

You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

---

How to Find Cheap Loans UK

For the individual in need of cheap loans UK, it... Read More

Secured Loans Guide

Secured loans are becoming increasingly popular due to their flexibility.... Read More

Meeting the Balance of Agricultural Financing

Agriculture loan guaranteesFor better understanding of the agricultural loan guarantee... Read More

How to Get a Secured Loan UK

Living in the United Kingdom, you might find yourself in... Read More

To Find The Right Loan You Must First Find The Right Lender

We have found internet shoppers to be the savviest in... Read More

Making Cars Accessible Through Secured Car Loans

Enervated by the hectic schedule at the work place, traveling... Read More

Student Loans Are The Life Preserver Of The Education System

A loan is the reason many students are able to... Read More

Short Term Loans...are they right for you?

With less than a week before she was to receive... Read More

Payday Loans or Cash Advance Loans - Useful After a Bankruptcy

Payday loans, also known as cash advance, are a useful... Read More

Fast Payday Cash Loans

Do you need fast cash to get your car fixed... Read More

Overnight Cash Can Be Yours

It's possible to receive up to 500 dollars cash overnight... Read More

Car Loans - Shop Around, Compare Offers, and Watch The Small Print

Getting a loan to buy your new car is, you... Read More

Cash Loans: The Good, the Bad, and the Debt-Free

Happiness is what they're selling. Relief from the crushing weight... Read More

Why Choose a Bridging Loan?

Listed below are some of the reasons for choosing a... Read More

User Guide to Payday Loan Terminologies

Are you approaching towards a payday loan cash advance? Is... Read More

What is a Home Improvement Loan?

A UK Home Improvement Loan Can Give You The Home... Read More

How to Finance a Small Business

Confused by how to finance a small business? One key... Read More

Finding the Right Online Loan for You

If you're looking for an online loan, you might be... Read More

Searching for the Perfect Car Loan

Credit Unions have long been known as the place to... Read More

Quickest Payday Loans - Things To Look For in a Cash Advance Company For The Fastest Loan Processing

To find the quickest payday loans, you need to look... Read More

No Income Verification Loans ? When Income Doesnt Show on Paychecks

Financial statements, salaries, income proof, documents, paycheck, W-2 forms, 1099's... Read More

Christmas Loans ? A Gift on the Occasion of Christmas

It is still a few weeks to Christmas and every... Read More

Secured Personal Loans: Constructive Structuring for Financial Success

Credit relationships in a social system form an intricate web... Read More

A College Loan Will Finance Your Education!

A college loan has given people all over the United... Read More

Refinance Your Car Loan - 3 Tips For Refinancing Your Auto Loan Online

Refinancing your car loan is an ideal way to lower... Read More

Secured Loans House the Most Positivistic Consequences of Loan Borrowing

One of the most enduring myths of loan industry is... Read More

Finding an Auto Loan with Bad Credit

Finding an auto loan online is easy regardless of you... Read More

A Brief Look at the Origins of Lending

When trying to discover the origins of lending you might... Read More

Benefits of a Home Owner Loan

There are many benefits for choosing a Home Owner Loan,... Read More

Taking the Time to Find the Best UK Loans

When looking for UK loans, it's always important to take... Read More

The Basics of Finding a Loan for People with Bad Credit

If you've ever tried finding a loan for people with... Read More

A Payday Loan Or Cash Advance Can Be A Life Saver

A payday loan or cash advance can be a life... Read More

Debt Consolidation Tips

Here are some useful Debt Consolidation tips. Debt consolidation is... Read More