Secured
Loans Explained;
At some point in their lives, most people will need to raise
finance for major purchases like for example, a loft conversion,
a new kitchen or an extension to a home. One way of doing
this is to borrow money which is secured against some form
of collateral. This collateral is usually your home or equity
in a house which is not already securing another loan. So,
if you have a mortgage for £200,000 on your property and the
value has now risen to £300,000, then you would have £100,000
in available equity.
Secured loans are quicker to arrange and competitive interests
are offered as there is less risk for the lender. These types
of loans can often be arranged without fees which are associated
with a typical remortgage. This makes it an attractive proposition
for people who are looking to release equity from their property.
And because there is less risk for the lender, secured loans
are popular with those with a less than perfect credit history.
Some use secured loans as an effective way of consolidating
debts and thereby managing debt. By consolidating many short
term debts into one long term debt, the monthly payments can
be reduced. Secured loans are widely available from most banks
and building societies. |
