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The
site for information on:
personal loans
secured loans
unsecured loans
remortgages
debt consolidation |
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UK
SECURED LOAN FAQ
What
is a secured loan?
A
secured loan is a personal loan which is normally only open to home owners.
In a typical secured loan, the home is used as security against the loan.
What
happens if I am unable to maintain my secured loan repayments?
If,
for whatever reason, you are unable to maintain your loan repayments then your
home will be at risk.
How
does a secured loan differ from an unsecured loan?
As
the name suggests, a secured personal loan
requires the borrower to put up their home as security, an unsecured
loan does not. As the home is being used as collateral, a secured
loan presents a greater risk to the borrower than an unsecured
loan, because a secured loan presents
less risk to the loan company, however, they tend to present greater benefits.
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What
are the benefits of a secured loan?
One
of the main benefits of a secured personal loan
is that, typically, they offer a cheaper interest rate than unsecured
loans, the cheaper interest rate reflects the reduced risk involved for
a loan company in providing a secured loan.
Approval
for secured loans also tends to be easier
to come by. With a secured personal loan,
you are basically betting your house that you can repay the loan, which are good
odds for the loan company, as a result you are likely to be approved.
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What
are secured loans used for?
Secured
personal loans can be used for a variety of reasons, including:
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home improvements - with the overall aim of adding to the value of the home,
a loan is taken out to carry out home improvements. |
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debt
consolidation - a loan is taken out to pay off existing debt, thus consolidating
the debt into one manageable, longer-term loan repayment. |
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mortgage
arrears - a loan is taken out to cover arrears in mortgage repayments, or
to convert current mortgage repayments into a longer-term, more manageable loan
repayment. |
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car
finance - a loan is taken out to finance the purchase of a new car, as the
terms of a secured personal loan are more attractive than other car finance options. |
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adverse
credit - a loan is taken out with a specialist loan company, who, despite
adverse credit records and problems being approved for a personal loan with other
loan companies, are willing to approve a secured personal loan. |
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