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Frequently Asked Questions
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Advantages of Secured
A personal secured loan is a personal loan that is secured by an asset
like a boat or a car. Such loans can offer many benefits, some of which
are listed below:
Secured personal loans are loans that are offered to individuals rather
Interest rates for this type of loan will generally be lower than for
other unsecured loan products including bank overdrafts and credit cards.
Therefore taking out an unsecured personal loan makes good financial
sense. Such a loan can potentially offer significant cost savings.
Whenever we take out a secured loan we give a personal guarantee to the
lender we choose that we are intending to repay our debt. This isn't just
a question of signing an agreement and promising to do our best. We put
our personal property as well as our credit rating behind our agreement.
So, if we stop making repayments on our secured loan, the lender can
simply take its money from our secured property. This, as you might
imagine, presents less of a financial risk to the lender and that is why
we get such good interest rates! Secured personal loans are normally
quicker to arrange because the lender has some security to offset against
the loan should you default on the repayments.
Other advantages of Secured personal
- They are easier to obtain than unsecured loans. The added security
that this type of loan gives the lender means that even those with a
less than perfect credit history can get hold of a Personal secured
loan with relative ease.
- They are generally offered with more favourable terms than other
types of loans. With Personal secured loans it is also far more likely
that you will be able to borrow a larger amount of money and pay it
back over a longer period of time.
- You are able to free up equity that would otherwise remain dormant
in your property, letting you make use of capital that would otherwise
- The interest rates are often considerably lower than those offered
on unsecured loans. They will enable you to get your hands on money
that would otherwise take a long time to save up, allowing you the
freedom to spend it on whatever you want.
- They can be used for any purpose such as; paying off debts, making
home improvements, buying a new car, luxury holiday or anything you
There are also some risks associated with a secured personal loan and
you should be aware of these before proceeding.
Firstly, you should never borrow so much cash that your repayments in
themselves are beyond your personal income. If you're unsure at how your
finances will cope with the loan you need then talk to a loans specialist
to get some advice.
Secondly, you should think about taking out some kind of payment
protection insurance policy for your secured loan. Things can happen that
stop us making repayments and managing our finances - with this sort of
plan behind you you'll have no problems. It will, under certain
circumstances, simply take over your repayments for you for a while.
There are two main things you should look out for with this type of loan.
First of all you should always deal with a reputable lender that makes
the whole loans process as easy as possible for you.
Then you need to take a long and hard look at
costs. A loan is, at the end of the day, just a loan. You borrow a
certain amount and then pay back more to make it worthwhile to the lender
to give you the cash in the first place. The lower your interest rate,
therefore, the less 'extra' cash you'll pay back.