Here are some useful secured loans tips. Secured loans enable most homeowners to borrow capital against
value of their property. A secured loan is where amount you borrow is secured against value of your home. This is a loan that's secured on your property, which, if you already have a mortgage is also known as a second charge. So, providing you have equity in your home and can afford repayments, chances are you will be able to borrow against it. A secured loan is a convenient way of borrowing a larger sum of money and repaying it over a longer period of time than is usually possible with an unsecured personal loan. In simple terms a “secured” loan gives security to lender, not to you, borrower. It is any loan which requires borrower to provide lender with some form of security other than just a promise to pay.
A secured loan is usually provided with a lower interest rate than an unsecured loan because you will have secured your property against it. They are normally quicker to arrange because lender has some security to offset against loan should you default on repayments. A Secured loan enables homeowners to borrow capital and offset risk against value of their property. This means that you are effectively using your property to guarantee loan.
Secured loans have a range of distinct benefits over other types of borrowing. Because of lower risk to loan provider, they pass on reduced interest rates to property owners. However, they've got more to offer than just attractive Annual Percentage Rates (APR).
Secured loans come with all sorts of flexible repayment terms that will make it easier for you to repay, so it's important to read small print. Clauses to keep an eye out for include: ‘payment holidays' whereby you can halt repayments for an agreed period of time, and favourable redemption charges - so you won't be penalised if you want to pay loan back early.
The amount you can borrow ranges from £5,000 up to £75,000 although some lenders will consider lending more. The loan is usually repaid monthly over an agreed term of between five and twenty five years depending on your circumstances and how much you can afford as your monthly payment. The most important consideration is that you can afford monthly repayments. Obviously better your credit history and individual circumstances will affect rate which is offered to you.
