Benefits of secured loans

Financial analysts continue to say that secured loans are better than unsecured ones in many aspects. You probably know that a secured loan is a loan that requires some form of collateral in the form of an asset.

Royal Tunbridge Wells, United Kingdom (prHWY.com) February 26, 2013 - Financial analysts continue to say that secured loans are better than unsecured ones in many aspects. You probably know that a secured loan is a loan that requires some form of collateral in the form of an asset. The asset can be anything - property, car, jewellery or cash in bank and so on. As long as you have something of value you can get this loan from many lenders.


Some people believe that unsecured loans are better because the borrower has nothing to lose if they don't pay up. What can the lender do? Make a few calls or file a case in court. People make brave faces to say that they can deal with all of that. Ultimately they are taking the lender for a ride. And then they can settle the loan cheaply and get away with it.


But is it that easy? If a lender files a case against you it is possible that you lose every asset that you have. It is possible that you will lose your job. It is for certain that you will lose face in the community. And this is the age of computers. When you default on a loan the data is entered in your credit score. Apply for a loan in future and every lender will be unwilling to give you another loan.


A secured loan, on the other hand, makes you act more responsibly. You know you risk losing your car or home if you don't pay up and hence you are regular with the payments. And this positively affects your credit rating.


But this is not the only advantage secured loans have. Normally you get a secured loan even when you have a bad credit rating. The lenders, when they see that you have collateral to offer, don't mind lending you the money. It is true that the rate of interest goes up when you have a bad credit rating but at least you wouldn't have to tear your hair apart when you apply for loans and no one seems to be willing to give you one.


Talking of rate of interest it is common knowledge that a secured loan has a lower one. Personal loan interest rates and credit card interest rates are always on the higher side because the lender wants to make profit from the fact that they lend you money without any collateral. But it is different in the case of secured loans. If your credit rating is good you get better rates on these loans than any other loans. And the amount you can borrow as a secured loan is also on the higher side. It ultimately depends on the value of your collateral.


Many people use secured loans for consolidating their existing short and long term debts. This type of loan is a good option for those that are mired in debt. And with so many attractive benefits attached to it a secured loan is any day better than all other loans.


A http://www.appleloans.co.uk secured loan comes with benefits that are better than unsecured loans. When people take http://www.appleloans.co.uk secured loans they offer collaterals and hence credit rating doesn't always matter.

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Categories: Finance

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