SECURED LOANS - COMPARE SECURED LOANS ONLINE

What are secured loans?

A secured loan is effectively a loan which is 'secured' on the basis of a significant asset – usually a home. What this means is that if the applicant owns his home or at least a portion of it; he can receive a large loan against this asset.

What are the advantages of secured loans?

As the borrower has put up a significant asset as collateral against the loan, the lender considers the loan to be less of a risk and so is more likely to lend a large amount. As there is less risk to the lender, then it is usually quite easy to obtain the loan needed (dependant on the value of the asset of course.

What are the risks involved with secured loans?

Secured Loans are riskier for the borrower than an unsecured or personal loan; as if you fail to make your repayments, you run the risk of losing your property. If you want to borrow a loan of EG £1,000 to £50,000 you may want to try an unsecured loan first. A loan can be a big commitment. Before taking out any loan you should seek independent financial advice as all loans involve a level of risk and everyone’s situation and requirements are different. Always be fully aware of what you are applying for and weigh up all the pros and cons before committing.

Choosing a secured loan

The interest rate is one of the most important things to think about when choosing a secured loan. The Annual Percentage Rate (APR) is the amount of interest you have to pay on the loan. When you take out a loan you have to repay the amount you borrowed plus this interest. Essentially, the lower the APR on the loan the cheaper it should be. The interest rate will vary depending upon how much you borrow and for how long. Unfortunately, the loans with the best interest rates will be given to people with the best credit ratings so the interest rate is often based on your credit score.

Be sensible with the amount you borrow

Before taking out a secured loan you should work out exactly how much you want to borrow and for how long. It also worth considering what sort of repayment options suit you. You should only borrow what you need even if you can borrow more than you want. The length of time you borrow for will affect how much you will pay each month. Essentially, the longer you have the secured loan for, the more interest you will pay but the monthly repayments may be reduced. A loan could be more expensive if you are paying it back over a longer period of time. With this in mind, you should try to borrow for the shortest period you can afford to keep costs down.

Finding secured loans

The best way to find the secured loans is to take the time to research different lenders; Research is the key to getting the right loan. There is a huge range of loan options so you should shop around to find the right loan that suits your needs. Online searches and comparisons can be really useful especially as some deals are available exclusively online. You should be aware of the full terms, conditions and features of different loans and make sure you know exactly what the interest rate is so that you know what you have to pay and when, which should help you budget effectively. Some other aspects to consider include whether the lender allows you to pay back your loan early if you need to and whether they offer a payment break but remember this can be costly.