What is a Secured Loan?
What is a Secured Loan?
A Secured Loan allows a debtor to secure finance by providing some of collateral as security. Hence, the name 'Secured Loan'. The security usually provided is a property or some kind of asset. By putting up your property as collateral, you entering into a legal agreement with the bank or lender. This agreement would state that if you fail to keep up the repayments of your borrowings, the property may be repossessed. The lender would then sell you property in order to recoup their money.
If you have racked up a large amount of debt on your credit cards or taken out loans and are struggling to make the repayments, a Secured Loan may be a good solution for you. With secured loans you can borrow a lot more than you would be able to with an unsecured loan. This could vary from as little as £3,000 to as much as £50,000 or even more depending on your circumstances. You would be expected to put up some kind of asset for security, usually a property. This would allow you to pay off you unsecured debts and save on all those nasty interest levels and charges.
Secured Loan monthly payment
Your monthly repayments on your Secured Loan would depend on the current interest rates, your agreement with your lender and the period you borrowed it over. Other factors may include your credit rating and history. If you have a low credit score and struggle to obtain credit, then a Bad Credit Loan may be an option for you, although these are usually set at a very high interest rate and meant for short term borrowing only. These are considered a risky for of debt help.
Easier to obtain
Secured loans are sometimes easier to obtain that other forms or finance because they are what they say they are… ‘Secured’. Lenders see it as less risky if you are willing to secure collateral i.e. a property or asset to borrow money. In some cases you may be able to get a better interest rate than an Unsecured Loan, again this depends on your asset value and circumstances. Self employed people usually find it easier to obtain a secured loan than an Unsecured Loan. This is because their income usually fluctuates on a month by month basis and this is seen by the lenders as inconsistent and a high chance you will miss payments or not pay the money back at all. Whereas with a Secured Loan you have an asset the lender can repossess if you fail to keep up repayments.
Secured Loan Professional Help
If you would like more information on Secured Loans or would like to apply for one give The UK Debt Advisor a call on 0800 043 2027 or use our free call back form.