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Secured
Personal Loan Facts
A secured personal loan is a loan where, typically, the home is used as collateral
against the loan, meaning that your home is at risk if repayments are not met.
Because a secured personal loan offers the loan company more security, secured
personal loans tend to be easier to gain approval for and offer lower interest
rates than unsecured personal loans.
Secured loan uses include; home improvements, debt consolidation, mortgage arrears,
car finance and adverse credit. |
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UK
SECURED LOANS
What
is a Secured Loan?
A
secured loan is a personal loan which is generally consigned to
home owners. In a typical secured loan, the home is used as collateral
against the loan, meaning that should you be unable to maintain the loan repayments,
your home will be at risk.
As
the home is being used as collateral, a secured personal loan presents
a greater risk than an unsecured personal loan.
In many cases however, a secured personal loan presents greater benefits.
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What
are the Benefits of a Secured Loan?
The
main benefit 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 tends to be easier to come by. With a secured personal
loan, you are essentially betting your house that you can repay the loan,
which are good odds for the loan company, as a result they are more likely to
approve you.
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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 - a loan is taken out to carry out home improvements, with the
aim of adding to the overall value of the home. |
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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
previous adverse credit issues and problems being approved for a personal loan
with other loan companies, are willing to approve a secured personal loan. |
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