Secured Loans - So What Are They?
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James Copper
Apr 26, 2013, 7:41:23 PM4/26/13
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Please consider this free-reprint article written by:
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Article Title: Secured Loans - So What Are They?
Author: James Copper
Word Count: 543
Article URL: http://www.isnare.com/?aid=143234&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=143234
Easy Publish Tool: http://www.isnare.com/html.php?aid=143234
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Secured loans are loans that a borrower secures with collateral. Collateral is something that the lender can seize to use to pay off the debt should the borrower default. Lenders prefer secured loans since there is some safeguard that no matter what they will get at least part of their money.
The two most commonly recognized secured loans are home loans and auto loans. In both cases the loan is secured with the item being purchased. Should the borrower fail to pay the lender will take ownership of the home or auto and then resell it to recoup their money.
Getting a secured loan is much easier because the lender does not have to assume as much risk as with an unsecured loan. They will still check credit reports and require borrowers to meet certain criteria; however, the whole process is much easier than with an unsecured loan.
Lenders also like secured loans because the borrower has something at risk too. Instead of the lender assuming all the risk, the borrower now shares in that risk and so they are more likely to honour the contract. The borrower is fully aware should they default that they are at risk for losing their collateral.
Also if you suffer from credit problems, such as county court judgements, bankruptcy and defaults then it is a lot more difficult to obtain unsecured credit. But as said previously with a secured loan the lender has security and will be more willing to lend on this basis. The same is true if you are self employed and have trouble proving your income.
Secured loans can be obtained for any purpose. However, as mentioned home loans and auto loans are the most common. These things, though, can be used as collateral for other loans. With homes, they build equity, which is essentially the value of the home minus what is still owed on it.
Homes go up in value over time, so home owners can borrow against their equity. This is still using their home as collateral. Autos on the other hand depreciate, or go down in value as time goes on so they are usually not acceptable for use as collateral except for the case of an auto loan.
Other things can be used such as investment moneys, expensive jewellery and other things of value, as long as the value meets or exceeds the value of the loan and the item is not going to go down in value.
People get secured loans for many reasons. They get them to make home improvements, consolidate debts and buy new items. As long as the loan is secured with collateral and the borrower pays according to the contract, the secured loan is a great resource.
Secured loans can be risky for borrowers, but they are also good because they are easier to get. However, the borrower must always keep in mind that they have risk involved in a secure loan.
Lenders are not hesitant to take collateral should the borrower default. As long as a borrower intends on honouring the contract then there should be no problem with a secured loan.
About The Author: James Copper is a mortgage broker with over 30 years experience. He works for http://www.any-loans.co.uk as a secured loans advisor. In his spare time he writes on all areas of financial services and investments.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=143234
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Message delivered directly to members of the group:
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*****************************************************************
Please consider this free-reprint article written by:
James Copper
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=143234
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=143234
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: Secured Loans - So What Are They?
Author: James Copper
Word Count: 543
Article URL: http://www.isnare.com/?aid=143234&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=143234
Easy Publish Tool: http://www.isnare.com/html.php?aid=143234
*********************** ARTICLE START ***********************
Secured loans are loans that a borrower secures with collateral. Collateral is something that the lender can seize to use to pay off the debt should the borrower default. Lenders prefer secured loans since there is some safeguard that no matter what they will get at least part of their money.
The two most commonly recognized secured loans are home loans and auto loans. In both cases the loan is secured with the item being purchased. Should the borrower fail to pay the lender will take ownership of the home or auto and then resell it to recoup their money.
Getting a secured loan is much easier because the lender does not have to assume as much risk as with an unsecured loan. They will still check credit reports and require borrowers to meet certain criteria; however, the whole process is much easier than with an unsecured loan.
Lenders also like secured loans because the borrower has something at risk too. Instead of the lender assuming all the risk, the borrower now shares in that risk and so they are more likely to honour the contract. The borrower is fully aware should they default that they are at risk for losing their collateral.
Also if you suffer from credit problems, such as county court judgements, bankruptcy and defaults then it is a lot more difficult to obtain unsecured credit. But as said previously with a secured loan the lender has security and will be more willing to lend on this basis. The same is true if you are self employed and have trouble proving your income.
Secured loans can be obtained for any purpose. However, as mentioned home loans and auto loans are the most common. These things, though, can be used as collateral for other loans. With homes, they build equity, which is essentially the value of the home minus what is still owed on it.
Homes go up in value over time, so home owners can borrow against their equity. This is still using their home as collateral. Autos on the other hand depreciate, or go down in value as time goes on so they are usually not acceptable for use as collateral except for the case of an auto loan.
Other things can be used such as investment moneys, expensive jewellery and other things of value, as long as the value meets or exceeds the value of the loan and the item is not going to go down in value.
People get secured loans for many reasons. They get them to make home improvements, consolidate debts and buy new items. As long as the loan is secured with collateral and the borrower pays according to the contract, the secured loan is a great resource.
Secured loans can be risky for borrowers, but they are also good because they are easier to get. However, the borrower must always keep in mind that they have risk involved in a secure loan.
Lenders are not hesitant to take collateral should the borrower default. As long as a borrower intends on honouring the contract then there should be no problem with a secured loan.
About The Author: James Copper is a mortgage broker with over 30 years experience. He works for http://www.any-loans.co.uk as a secured loans advisor. In his spare time he writes on all areas of financial services and investments.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=143234
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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