All About Secured Loans

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.

---

Payday Loans or Cash Advance Loans - Useful After a Bankruptcy

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

Is a Microloan Right for You?

If you've been tossing around an idea for a small... Read More

Federal Housing Administration (FHA)

FHA loan programs:FHA AccessFHA Cal GoldFHA Rural GoldFHA Mutal Mtg.... Read More

A Guide to Common Loan Terms

Many people may wonder about common loan terms? words and... Read More

Why Choose a Personal Loan?

Are you wondering why choose a personal loan? One of... Read More

Cosmetic Surgery Loans ? Discovering How It Feels to Look Your Best

Market research of UK's cosmetic surgery ascertains the fact that... Read More

A Little Lesson on Loans

The opportunity to spend money is everywhere. There is no... Read More

Guide to Personal Secured Loans

Here is a useful guide to personal secured loans. A... Read More

Making Your Business Happen with a Commercial Lender

If your home business is starting to overflow from the... Read More

Guide to Secured Personal Loans

Here is a useful guide to secured personal loans. A... Read More

Unsecured Loans

The term unsecured loan relates to a loan which is... Read More

Are You In The Market For a Car Loan?

Car loans are a tempting way to purchase a new... Read More

Payday Loan and Cash Advance Lenders Online - How To Compare Them

When searching for a payday loan company online to get... Read More

Bridge Loans: Everything You Wanted To Know

As the name implies, bridge loans fulfill a vital need... Read More

If You?re Looking For Low Cost Car Finance, Loan Companies Offer Some Great Deals

These days having a reliable and safe vehicle to drive... Read More

Secured Loans vs. Unsecured Loans ? Choosing Between the Two Diverse Ends

Often in our search for finance options, we are led... Read More

Buy Now And Really Pay Later!

With UK personal debt breaking through the £1 Trillion mark... Read More

Is Getting A Personal Loan With Bad Credit Impossible? Think Again

A bad credit history is like having contracted an infectious... Read More

5 Things Pensioners Applying for a Loan Should Remember

Are you a pensioner applying for a loan? Here are... Read More

Cash Advance Company - Comparing Payday Loan Companies Online

Comparing payday loan companies online saves you time and money.... Read More

Payday Loans - Ways to Keep Your Costs Low

Payday loans offer a fast and easy solution to financial... Read More

Should You Get A Pay Check Advance?

At some point in your working life, you may find... Read More

Military Loan and Military Loans

Military loans are made available to active servicemen and retirees... Read More

Quick Cash Advance Payday Loan - Get it Free or Cheap

If you are looking at getting a payday loan or... Read More

How to Get a Secured Loan UK

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

Should You Ever Take a Payday Loan?

Payday loans have many names -- cash advances, signature loans... Read More

Military Loans ? Serving Financial Need of Those who Serve the Country

Military loans are overcoming financial difficulties for army personnel who... Read More

What Is A Payment Protection Plan?

A Payment Protection Plan is an insurance cover you would... Read More

A Look at Common Types of Loans

People sometimes wonder about common types of loans, especially with... Read More

Secured Business Loans ? Equipping Your Business Blueprint With Concrete Groundwork

Somebody once said, 'Business is not financial science; it's about... Read More

Loans For Unemployed - Employing Home For A Solution To Unemployment

If the statistics for the quarter ended April 2005 are... Read More

Personal Loans for Unemployed ? Liberating You from the Tangles of Unemployment

Like most of the contingencies (the after effects of unemployment... Read More

Cash Loans for Unemployed ? for an Instantaneous Response to Needs of the Unemployed

Unemployment is generally supplemented with several other vices like poverty... Read More