If you are looking to borrow more than an unsecured loan will allow you to, perhaps to consolidate a large amount of debt or to make some home improvements, you may be eligible for a secured loan.
A secured loan is available to people who have an asset, such as a property, which they can pledge as collateral against the loan. This means that this asset could be sold by the creditor to regain money if repayments are not made and the borrower defaults.
Due to securing the loan, through pledging an asset, lenders are more likely to be competitive as they have the security there. This could mean that you will end up making lower repayments even if you have a less than perfect credit history. This may also be the best choice for you if you are a homeowner and either self employed, or if you have recently changed job, as these factors can also work against you when applying for loans.
However, secured loans are often long term so may not be the right choice for you if you are looking to pay your loan back over a shorter period of time. If not, ensure that you are 100% certain that you will be able to continue making repayments over a number of years, possibly up to around 25, depending on the amount that you borrow.
As with all loans, if you are facing problems with repayments it is worth talking to the lender to see if reduced payments can be made for a short while or if your repayment schedule can be changed. This is far safer than ignoring problems with repayments if they arise as often a solution will be found.
If you decide that a secured loan is the right option for you ensure that you shop around for the best deal. You can do this easily through a loans comparison website such as www.Best4Loans.com by completing a short online form or call them on 0161 429 5398.
By Sasha Davison
16th January 2014
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