What is a Secured Loan?
In non-technical terms, a secured loan is an affordable type of finance that is only available to homeowners or mortgage holders. When you apply for a secured homeowner loan product online, you will need to provide security to the lender in the form of a residential or commercial property that you own or have equity in. This serves as a guarantee should you find yourself unable to meet the repayments – although a responsible lender will only consider repossessing the property as a last resort.
Unlike other types of finance such as personal loans and credit card products, secured loans usually offer much lower interest rates and factors such as the borrower’s credit history play a much less significant role in terms of influencing the lenders decision to approve the application.
Advantages of Secured Loans
Unsecured loans are ideal for those who are looking to borrow a considerable amount of money over longer periods. At a time when most people find themselves turned down for unsecured credit such as payday loans and other types of personal finance, the number of secured loan applications approved is substantially higher. Provided you have sufficient equity in the property you offer as security, and you can realistically afford the repayments, you should find little difficulty in terms of being approved.
Typical Uses of Secured Homeowner Loans
You can use a secured loan for practically anything. Whether you are looking to finance home improvements, pay for a once-in-a-lifetime holiday or reduce your monthly outgoings by consolidating your existing debts, a secured loan can be an enormous help. The repayments are typically taken from the borrower’s bank account on a monthly basis via direct debit and the length of time that the loan is paid back over is left for you to decide – with flexible repayment options ranging from 5 years to 25 years – depending on your personal needs and circumstances.
Why Choose A Secured Loan?
There are a many good reasons why you might choose to take out a secured loan over an unsecured product. For a start, the likelihood of being approved for a secured homeowner loan is much higher than with any other loan product – particularly if you are self-employed or if you have been turned down for finance in the past. Additionally, the amount you can borrow when applying for a homeowner loan is also much higher than with the vast majority of other loan products. You can also borrow for longer which means that the repayments are much more affordable.