Secured Loans: Fetching a Fair Deal

By: TA Honey

Going for a loan but apprehensive? Fetching a fair deal when it comes to loans may look like a tough nut to crack. Here are a few basic facts you must know before signing a deal.

Choosing between an unsecured loan and secured loan, a borrower will have greater ease obtaining a secured loan though unsecured loans are more popular. A secured loan is a loan backed by a collateral considered as security in lieu of amount borrowed from a lending body. A secured loan apart from being easily available also carries a lower interest rate and one can borrow a greater sum since one is rendering a security for the amount borrowed. Repayment mode also varies a little from unsecured loan where since the risk for the lender is higher for the lender. Taking the circumstances in consideration one can borrow a loan amount up to 125% of property's worth.

While going for a secured loan one can borrow an amount ranging from ?3,000 to ?50,000 though depending on lender's discretion the lending amount can be doubled. The period of repayment depending on the amount borrowed, your circumstances and the value of the property can be decided to be up to 25 years. Though a majority of high street banks and building services offer personal loans services some of the traditional banks may provide a homeowner loan.

Specialist loan providers and brokers too may facilitate getting a loan in case you may need their services. Annual Percentage Rate is a factor of the extent of your equity in the property you commit as security, credit history and personal circumstances. Secured loans is covered by The Consumer Credit Act 1974. The act covers a loan amount up to 25,000 in UK. For securing the repayments you may opt for mortgage protection or income protection plan though it might turn out to be an added pillion.

Secured Loans
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