A secured loan is a loan agreement in which the borrower pledges property as surety for the loan; hence they are also known as homeowner loans. If the borrower continually defaults on loan repayments, the lender may take action to reclaim the debt including selling the property.
Advantages and disadvantages
With something as valuable as your property at stake; lenders know that you are likely to stick to the agreement. Add in the extra financial security provided by your property and it's easy to see why lenders regard you as low risk. As a result you can expect interest rates one or two points lower than with an unsecured loan, you can borrow greater amounts; anything up to 125% of the equity in your property, and you can spread the loan over a longer term.
The main disadvantage of a secured loan is the attendant risk of losing your property. You need to be absolutely sure that you understand the terms and conditions of the agreement and that you can meet loan repayments. If you find yourself in financial trouble most lenders will be sympathetic and do everything that they can to help reschedule repayments. After all, the last thing they want is to face a lengthy court case incurring hefty legal fees. However, it's important to understand that your property is at risk.
Should I take out a secured loan?
Before you take out a secured loan, think carefully about what you need it for. Secured loans can make astute financial sense in the right circumstances, for example: if you want to consolidate a number of smaller expensive debts, such as credit cards, into a single monthly payment. However, if you intend to use the loan for purchase, such as a new car or holiday, it would be wiser to start saving.
There is a convincing argument for arranging a secured loan to pay for home improvements; as this will add value to your property. However, any pay-back will be in the long-term and depends on the buoyancy of the property market.
Finding the best deals
Everybody knows that there are great loan deals available on the Internet; the difficulty lies in finding them. Unfortunately there are no real short cuts and the key is to do as much homework as possible first.
Start by getting in touch with a number of brokers (make sure they are FISA registered) and see what they can offer you. Larger brokerages can be motivated by hitting sales targets and you may find that they try to push a particular lender.
FISA regulations stipulate that lenders may not initiate contact for seven days after sending the initial loan agreement. This 'cooling off' period is to allow potential borrowers to consider their options. Use it carefully to compare brokers. Remember that you are under no obligation until you have signed the loan agreement.
Don't be fooled by unrealistic loan offers made over the phone. Unscrupulous lenders often promise unrealistic rates in the hope of getting their hands on your pay slips. Once they have your documentation; loan conditions are often then revised. If this happens to you; go elsewhere.
If you are still having difficulty finding a suitable loan; consider approaching and Independent Financial Advisor.
Michael Stepney is part of the team at First Aid Finance; one of the UK's leading secured loans brokers. For more advice or a secured loan quotation visit their website at First Aid Finance.
Title loans have the same features as a secured loan,... Read More
People sometimes wonder about common types of loans, especially with... Read More
If you thought your home is worth nothing except for... Read More
Online cash advance companies offer a convenient and speedy application... Read More
Living in the United Kingdom, you might find yourself in... Read More
Often in our search for finance options, we are led... Read More
Bad credit payday loans may seem like an oxymoron phrase,... Read More
Here is a useful guide to secured loans. A secured... Read More
If you find yourself in a situation where you need... Read More
For those in the market for a loan UK ,... Read More
Big financial goals, no security to supply - it is... Read More
1. Property information. The application begins with a section on... Read More
Refinancing your loan is one of the best kept secrets... Read More
So you have decided you want a motorcycle and you... Read More
Trying to get a bad credit personal loan can be... Read More
Scene one: you are sitting on your office desk surrounded... Read More
Finding debt consolidation loans with bad credit can be quite... Read More
Different types of loans are available for almost every aspect... Read More
Worried about how to apply for a business loan? Although... Read More
A Homeowner Loan is a way of using the equity... Read More
Here is a useful guide to the bad credit personal... Read More
The secured loan is favoured by many UK residents seeking... Read More
If you've been tossing around an idea for a small... Read More
A personal secured loan is the generic term for a... Read More
Locating the cheap personal loans that you're looking for isn't... Read More
If you need a fast way to get an emergency... Read More
You've probably spent years thinking that your dream car is... Read More
Confused by how to finance a small business? One key... Read More
What will it take for you to get a low... Read More
No Credit Check Payday Cash Advance Loan - Benefits to... Read More
Since the invention of the first self propelled car by... Read More
If you're shopping around for a cheap debt consolidation loan,... Read More
Loans that are secured against property are called secured personal... Read More
Is factoring a type of loan?No. Even though invoice factoring... Read More
If you're looking for a UK secured homeowner loan, you... Read More
If you're shopping around for a cheap debt consolidation loan,... Read More
The conception of wedding has changed over the years. Its... Read More
In the arena of loan borrowing, there is hardly an... Read More
A car loans after a bankruptcy is one way to... Read More
In this second installment, we will further examine what kinds... Read More
A Personal secured loan can offer many benefits, some of... Read More
The long awaited paycheque is finally here. However, the reverie... Read More
Finding cheap loans isn't always easy? it seems like every... Read More
Over recent years, personal loans have become a popular solution... Read More
Can I Ask my Family for a Loan to Pay... Read More
Under the microscope loans for military really are different from... Read More
Here is a useful guide to Personal loans. What is... Read More
The internet is a great place to find the right... Read More
If you're looking for a secured loan, there are several... Read More
Listed below are some of the many reasons why you... Read More
A UK Home Owner Loan Can Unlock Your Capital To... Read More
Motorcycle loans for military with bad credit aren't hard to... Read More
Most any large city has a number of small shops... Read More
A commercial business loan is designed for a wide range... Read More
No faxing payday loans are the wave of the future.... Read More
Listed below is a guide to loan terms. It is... Read More
If you're looking to find an easy payday loan it's... Read More
Bad credit is like an ongoing battle for many loan... Read More
Here is a useful guide to Home Improvement Loans. What... Read More
What is man's greatest invention?Some of the latest gizmos would... Read More
If you're not familiar with the term, a secured loan... Read More
If you are considering getting a payday loan for the... Read More
Many banks actively encourage their clients with low balances to... Read More
Car loans are a tempting way to purchase a new... Read More
Meeting the requirements to get a decent hotel loan from... Read More
If you spend more than you earn on a regular... Read More
Loan |