Secured loans are loans which you can borrow from a lender against your asset. The asset can be anything like a car or your house. These loans are cheaper than unsecured loans as you are providing an asset as a security, this is less risky for the lenders. However, if you fail to make your repayments on time or miss any, you are risking your house or a car. Your asset can be at the risk of repossession, so be sure that you can afford the repayments of secured loans.
How Much Can I Borrow with Secured Loans?
“How much can I borrow with secured loans” the most important question that comes in your mind when applying for a loan.
With a secured loan, you can borrow any amount from £10,000 to £500,000. However, it also depends upon the value of your asset, such as your car or a house. Depending on it you can borrow a secured loan.
People can make use of secured loans for any expenses like house remodelling(renovation), to buy a car or any other major expense. This loan can also be used for consolidating your debts from any other form of borrowing. You can consolidate your unsecured loans, credit cards, etc.
Why Should You Apply for Secured Loans?
Go for secured loans if you want to take care of any major expense. You should apply for these loans, because with them;
- You can get lower interest rate compared to the unsecured loans
- You’ll be able to borrow a large sum of money
- Even if you have a bad credit score you can borrow secured loans as you are providing an asset as collateral
- You have a lot of time to pay the loan easily without missing on any instalments
Risks of Secured Loans
Do not miss any repayments of a secured loan. If you due to some reason fail to make repayments for several months, you are putting your house at risk of repossession. If nothing works, the lenders have no option but to seize your car or house whichever you have borrowed a loan against.
Secured loans have variable interest rates. Your interest rate may increase if the lender decides to increase his base rates. So, you should keep this in mind whenever you are applying for this loan.
There are additional charges and fees that you need to pay for getting secured loans. It can be – clerical fees, administrative fees, broker fees and any other charges or fees that are required to borrow a secured loan. So, keep this in mind when applying for a secured loan.
Whenever you go for a secured loan, be sure you understand all the terms and conditions of the loan agreement before accepting it.
What is a 12 Month Loan?