Loan Tips and Resources

What is a Secured Personal Loan?

A secured personal loan is the generic term for a loan. Essentially, a secured personal loan is one that is secured against your property.

It is a low interest loan designed exclusively for homeowners. What this means is that, by taking out a secured loan, you are using your house to guarantee the loan repayments. A Secured Personal Loan enables you to make use of this asset which will provide security for your loan.

Secured personal loans are the best loans for homeowners, of course there is a greater risk attached to this loan as the home is put up as a collateral. The home is under risk if the repayments are not paid duly. If you continually fail to make repayments on a secured loan, you could be putting your house at risk.

Because the risk is lower for the lender than on an unsecured loan it is possible to get better interest rates than on a loan that is not secured on a property. This is also the reason that lenders are able to offer higher sums than for unsecured loans.

So, why do people take out secured personal loans? Well, firstly you may want to borrow money in order to increase your home's value by making improvements to your home. Others may take on a debt consolidation loan, which means that you take on a large loan for a long period, which pays, off your other loans and credit cards and you end up paying a smaller monthly payment than you were paying with all of your other loans together.

Many people choose secured loans as opposed to unsecured loans because the interest rate is often lower. Typically secured loans are offered at low interest rates, as the risk taken on by the loan company is less.

The application process is a lot longer with secured loans than with unsecured loans, due to the fact that your loan provider will need to value your home.

However, it is easier for you to be approved for a secured loan because you are using your home as security. It is very likely that your loan is far smaller than the value of your home, so the loan provider will view it as less of a risk.

With a secured personal loan you can borrow from 5,000 to 75,000 with low monthly repayments. Loans secured on property can be repaid over a period of between 5 years and 25 years .

A Secured Personal Loan has the following advantages:

Offers a flexible and fast way of raising cash

Loans are available for most purposes including clearing other expensive credit commitments

Since your property is used as security for the loan you will be able to take advantage of the special interest rates available

There are usually no valuation or legal fees to pay

Choice of sum borrowed at a monthly repayment you feel able to manage comfortably

Loans are available over a relatively short term

You may freely reprint this article provided the author's biography remains intact:

About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

Related Links:

Getting the Best Auto Loan Rates

Payday Loans The Legal Loan Sharking Industry

Where to Look for the Best Secured Loan

Latest Banking & Loans News

Email Scams - Don't Drop Your Guard
20 Nov 2008 at 3:04am
I recently heard of somebody falling for an email scam. Even though you've heard it a hundred times, email scams can catch you off guard. When you're busy...

Mint.com Adds SMS Feature
19 Nov 2008 at 4:41am
Mint, the personal finance aggregator, just made an upgrade. They've added an SMS feature you can use to check your account balances quickly and easily from your mobile phone. By...

Regulators Battle Over Bailout Funds
18 Nov 2008 at 4:47pm
The FDIC and Treasury bosses battled today over how bailout funds should be deployed. FDIC chief Sheila Bair proposes that part of the $70 billion be used to help homeowners avoid...

Financial Firms Slash Jobs
17 Nov 2008 at 10:29am
As the mortgage crisis evolves, banks are cutting jobs: Citi cuts 50,000 JP Morgan mulls layoffs Fidelity lays of 3000 Whether you love the financial institutions or you hate them, it is sad to...

Your Bank Isn't Merging
14 Nov 2008 at 1:02pm
The phone rings. They tell you that your bank has merged (or it's another bank failure) and they need your account information. Is it legit? Of course not. ...

Peer to Peer Lending Activity
14 Nov 2008 at 2:05am
How much activity is there in peer to peer lending? A lot. Why not look at the numbers. P2P-Banking.com recently published total loan history for the major peer to...