With the various loans that are available why decide to choose a secured loan that puts your property up as collateral?

Well the fact is, because your loan is secured against your property the lender assesses this type of loan as a lesser risk than other loans. This makes secured loans a lot easier to obtain. A secured loan also allows you to borrow larger amounts, and to repay the loan over a longer period-up to 25 years. Because there is less of a risk for the lender they often offer the loan at a reduced APR than an unsecured loan.

The lender may also be more flexible in offering secured loans to people who have found it difficult to get unsecured loans in the past. If you are self-employed, maybe have no past work record, or if you have an unfavourable credit history such as CCJ's or defaults, the secured loan may be an option worth considering.

Even if you don't own your home outright you can still apply for a secured loan. If you have a mortgage and have repaid some of the outstanding amount, then you can put that portion of the property you own, up as security.

The interest rate on a secured loan depends on various things: the amount you want to borrow, the period of your loan and your own individual circumstances. It is worth remembering that you do put your property at risk if you default on payments on a secured loan. You can also insure your payments against things like sickness or job loss, to give you piece of mind.

So to recap-Some of the benefits of secured loans are:

You can borrow large sums of money
You can repay over a longer period
Lower interest rates than other types of loans
Lower monthly repayments than an unsecured loan

Posted 01/04/2009 17:05:34