What is a secured loan?
A secured loan is when you the borrower takes a loan out measuring against the equity or value in an asset such as your home or car. Therefore, the lender can balance any potential risks when lending. If you default (non-payments) the lender then has the right to take possession of the asset, the asset may then be sold to regain some or all of the loan amount outstanding.
Benefits of the Best Secured Loans
A secured loan serves two purposes and can benefit both parties.
You may benefit as you will receive more favourable terms than that of an unsecured loan. The amount a creditor can lend will be higher, you may receive more attractive loan rates and credit may be extended; however it may hinge on the equity and value of the asset.
A secured loan is of benefit to a lender as they are relieved of the financial risks involved because it allows a lender to take possession of the asset in the event you default (non-payment).
Types of Secured Loans
Fixed for Term Secured Loans
A fixed term secured loan allows you to have the same monthly repayments over a set period of time. You will find it easier to budget and manage to have only had to pay back the arranged amount.
Variable Rate Secured Loans
A variable rate secured loan means that your interest may fluctuate. The interest rate paid on the loan will synchronise with the Bank of England base rate or market movements. Unfortunately, this can be confusing and implicate problems regarding repayments. Interest rates could rise and make your repayments difficult to pay back.
Short Term Fixed Rate Secured Loans
The interest on a Short term fixed rate secured loan will remain the same over an agreed period of time. Once the agreed period ends the interest rate will go back to the variable rate. This can also be confusing as the amount to be repaid will rise or fall depending on the national rates but only after the fixed rate period ends.
How much can you borrow?
The amount you can borrow depends on your assets value and free equity. Your personal life circumstances will also come into account. Secured Loans generally range from £5000-£200,000. We do not offer or promote Secured Loans, however using the Secured Loan Calculator a Personal Loan may offer the solution the customer requires.
Monevo and Wefindanyloan.com recommend to seek out as much information and advice before taking out any type of Loan. Here’s a couple of sites to help you along the way: