Category: Secured Loans

How to compare secured loans

The vloan amount may be secured by the borrower’s property. One should understand the difference between various types of secured loans. If the purpose of taking out a loan is to improve the borrower’s property, the loan is classified as a home improvement loan. The house can be renovated so that its value will be much higher. No one can argue that the better the condition of the house, the higher its value is.

Homeowner loans are supposed to be used for a new house acquisition, but according to the terms of this loan, your present house is put down as collateral for the loan amount you are given. If a borrower fails to pay in time, the risk of foreclosure becomes relly high. Obviously, the risk of secured loans for lenders is minimal and they are ready to offer better rates and more convenient repayment terms to borrowers.

For instance, if you are daydreaming about purchasing a new car, a secured loan will give you lower rates and exceptionally beneficial repayment terms.

If you decided to purchase a new house, the loan you should take out is called a mortgage. You will be repaying a mortgage for a long time (up to 25 years), but the monthly rates will be significantly lower. However, in conformity to the mortgage terms), the risk of the foreclosure is not lower than in the case of homeowner loan.

One more financial term you should know is refinancing. It is also a loan of a secured type and it is designed to help borrowers who have difficulties repaying their existing loan debt. But refinancing can be quite risky as the borrower gets into more debt. Thus, refinancing loan is a great option only when a borrower has temporary troubles with loan repayments.

There are special calculative program services designed to help borrowers compare secured loans. They let borrowers see the difference between deals in a flash and choose the most appropriate one for them. The loan amount you could qualify for depends on your credit record, monthly income, your needs, etc. While making loan comparisons online, choose the deal that seems to be the best one in your financial situation. However, keep in mind that refinancing is a risky affair and talk to the specialists to make sure you are not kept in the dark about the loan terms.

How to get a secured loan.

Before tying yourself into a secured loan you should have no doubts that you cannot do without this loan.

If you are 100% sure, your next step would be to find a lender (a traditional bank preferably). Try to take advantage of numerous ways of search such as yellow pages, ads, newspapers, magazines, online search engines. After that you should talk to bank agents and get to know the details of loan deals they have on offer. When you finally select a loan provider, you need to sign a loan agreement also known as statutory lien.

Note that such agreements are secured by different types of loans. If the loan provider has a security interest in the assets the borrower is going to acquire (for example, a vehicle, house appliances, etc.), this is called a Purchase Money Security Interest (PMSI) loan. If the loan provider has a security interest in the assets that already belong to the borrower, this is called a Non-Purchase Money Security Interest (NPMSI) loan.

Ideally, you’d better visit a loan professional and ask him to check all the terms of your loan agreement. The interest rate must be the first thing to be checked. If you do all of the abovementioned actions, you can safely apply for a secured loan.

Some Pitfalls Associated With Secured Loans.

If you are five minutes away from applying for a secured loan or if you are just considering it, read about a couple of potential pitfalls that can take you off guard during the payment period. One shouldn’t think that lenders would shut their eyes to the borrower’s late loan payments or non-payments and can seize your house if it serves as a security for your loan.

So, this is the pitfall number one you might be confronted with. In fact, foreclosure is certainly one of the most heart-breaking and dramatic outcomes of taking out secured loans. In case your car, yacht are seized, this is called repossession. Not all borrowers know that their assets can be subject to repossession due to late payments. They might think that repossession can be initiated only in case they can no longer make repayments, but they are greatly mistaken.

However, lenders wouldn’t jump for joy if borrowers force them to initiate foreclosure and repossession. Such events translate into undesirable publicity for banks and numerous checks by regulators. No bank would like this. Thus, we made it clear that foreclosure and repossession bring about problems not only for the borrowers, but also for loan providers. If you need to manage through tough times and can’t make repayments in time, call the lenderbank and explain your situation.

If you have been given a mortgage (a large amount for the acquisition of a new house), the bank will probably be understanding and excuse your nonpayment for some time. However, when you finally restart your payments, the lender may ask you to pay additional money as a kind of penalty.

Then there can be a problem associated with refinancing. You could obtain a refinancing loan to repay your debt in time. Consequently, you’ll owe a much larger amount, but the repayment term will be much longer. Of course, it’s better to avoid refinancing loan at all, but if you are driven to the wall, refinancing gives you so much needed time and helps you keep the house from foreclosure. Refinancing is beneficial only when you temporarily can’t afford making loan repayments regularly. If your financial problem seems to last for a long period of time, don’t even think about refinancing.

Finally, the worst scenario is when foreclosure cannot be avoided. Some borrowers might persuade the lender into an agreement about putting off the terms of foreclosure or to being given extra time to make repayments. But in many cases the best option for borrowers who face foreclosure is to sell their house to repay the loan. After all, it’s much better than to go through foreclosure. One more thing you should also be aware of is that no borrower loses their house at once. In most cases it’s a gradual process and borrowers are given some time to make payments. The borrower has the right to discuass the terms of reinstatement with the lender. The lender determines the cost of your house and your payment abilities.

When it comes to selling a house, it can get really complicated! If the money you got from selling your house cannot cover your outstanding loan debt, the lenders will suggest that you file an application for the reinstatement program intended to help you repay the rest to the lender. In case you sell your house for a much higher price, you will lose your house rather fast because no reinstatement program would be offered to you.

To avoid unpleasant outcomes of taling out secured loans, you should be well informed about all the pitfalls associated with them. In addition, you should go to a good lawyer and check out all the terms of your agreement. You won’t regret it.

Secured loans for people with bad credit.

When we talk about secured loans for poor credit holders, two notions must be cleared out – “secured loans” and “poor credit”. Secured loans are loans where are put down as collateral for the loan. Poor credit holders are individuals who had difficulties repaying loans in the past or just were unable to make repayments on time. In some cases poor credit history is supposed to mean that the borrower couldn’t have paid the loan in full by the pre-agreed date. There are specialized institutions in the UK that were set up to control and record credit history. Each borrower’s failure to make repayment is recorded in special documents (for example, in the Act of bad credit history). The term “secured loans with poor credit” should be understood as secured loans given to borrowers with less than perfect credit history.

In fact, it would be quite challenging to get approved for a secured loan if you belong to the category of borrowers with bad credit history. In most cases lenders are unwilling to give secured loans to such borrowers because of the great risk assumed. However, your best strategy would be to provide different kinds of valuable security – it will give you an opportunity to get the loan faster and in a less stressing way. In this case, the collateral should be really valuable. It will serve as a kind of guarantee for lenders that if you turn out to be irresponsible borrower and stop making regular repayments, your house can be sold for a high price and the bank won’t lose anything.

If you are a bad credit scorer and want to take out a secured loan, you’d better contact online agencies to get to know all the ins and outs of your borrowing desicion. Such informative service is provided throughout the UK by a great number of companies. The purpose of the loan can vary and depends on the borrower’ needs. You can get the loan to make some house improvements, to pay for a vacation of your dream, or to become the owner of a new house or apartment ( in the last case your loan would be classified as bad credit homeowner loan), etc. Homeowners can be eligible for quite large sums of money ( up to £50000 for a period up to 15 years).

The mission of our company is to help people with a bad credit record who are looking for an affordable secured loan option. There are lenders who will agree to give them even unsecured loans. Still, secured loans are more attractive to borrowers with bad credit history due to long repayment terms (up to 25 years), relatively low interest (currently used 10.8%-11%) and a large loan amount (up to £100.000).

If you decide to arrange a loan through our company, you can expect the whole procedure to be completed as fast as possible. It will take you no more than two hours. It’s up to the borrower to decide what to spend the loan for.

However, there is still some risk involved. So, if you don’t want to become homeless or lose your lands due to foreclosure, try not to fail making regular repayments according to fixed agreement. If you succeed in making the repayments according to your loan agreement, you’ll have your credit history improved. Naturally, it’s better to be in the category of good credit scorers as it’ll help you get better credit with more attractive terms.