Nowadays people need to raise secured finance for major purchases, for example adding a conservatory or a loft extension, or our most popular loan request - debt consolidation. The easiest way to secure this finance is to borrow money with security put down against the loan. This guarantees the loan payments are secured by assigning rights to the security in the event of a loan default. Such a loan backed by collateral is usually called a secured loan.
The most frequently used asset as security is a house, or that portion of the equity in a house which is not already granted as security for other loans. Equity can be calculated by taking the amount outstanding on the mortgage from the market value of your property.
This secured type of loan is usually quicker to arrange and more attractive interest rates are available as it is a safer proposition for the lender. In nearly all circumstances the lender will be able to recover their money. Because of the lower risk of the secured loan it will often be attractive to those with a less than perfect credit history. The secured loan is therefore an option for those with equity tied up in property who are seeking low interest rates or have experienced problems getting an unsecured loan, or for whom an unsecured loan is not otherwise an option.
Secured loans can usually be arranged without punitive fees like those which a standard remortgage will attract. For this reason it is often a preferred route for those seeking to release capital secured in the equity in their property.
The capital which a secured loan releases can be used for almost any purpose including home improvements, buying a car, a once in a lifetime holiday, and a popular request for a secured loan is for consolidation of other debts. Consolidating many short term debts into one larger long term secured loan the monthly payments to service the debt can be substantially reduced making a significant difference to the month to month finances of the debtor.
Secured Loans are available from high street banks and building societies as well as specialist lenders. We can search over 500 secured loans for you if you complete our short loan application form. |
