Secured Loans - The Facts And The Basics
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James Copper
Apr 26, 2013, 10:00:51 AM4/26/13
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Please consider this free-reprint article written by:
James Copper
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Article Title: Secured Loans - The Facts And The Basics
Author: James Copper
Word Count: 576
Article URL: http://www.isnare.com/?aid=140183&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=140183
Easy Publish Tool: http://www.isnare.com/html.php?aid=140183
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Credit can be confusing. There are many different types of credit and understanding them before borrowing is important. Secured credit is one of the most popular types of credit and usually the easiest to get. Secured credit is when you place an asset up as collateral for the loan. Basically, if you default on the loan the lender takes ownership of whatever asset you used as collateral.
Secured loans can be closed end or open end. Closed end loans are usually just called a loan. With this type of secured loan the collateral is usually what you are getting the loan to buy and the lender holds ownership over it until the loan is completely paid.
Some examples are auto loans and home loans, where the lender is the owner of the auto or home until it is fully paid off. An open end secured loan is often called a line of credit. This type of loan is secured with a deposit of either cash or an asset. An example is a home equity line of credit where you use the equity in your home to get a loan.
The difference between the two types of secured loans is really in the details. A closed end loan is usually the only way to buy very expensive items, like a home. The bank is investing a large amount of money and by retaining ownership of the home they are guaranteed to be able to recover at least part of their investment should you default on the loan.
An open end secured loan is a common option for people who are having credit troubles. Many credit card companies offer special cards that require a deposit. In this case the credit card company is guaranteeing they will get their money should you default.
The basic idea of a secured loan is for the lender to protect themselves. Even for people with excellent credit, large loans are a risk to the lender. By having that security of a deposit or asset the lender is guaranteeing that they will not lose everything should you end up not paying the loan. Secured loans are common place in the world of home ownership.
Almost every home owner at least starts out with a secured loan, called a mortgage. As mentioned, credit card companies are developing cards to help those with less than perfect credit get their credit in order. These secured cards are becoming a great option for those wanting to rebuild their credit.
Secured loans are often the easiest loans to get because of the fact the lender has something to recover should you default. Lenders are still going to be picky, though. They will still check your finances and your credit. Even though they have that deposit or asset, does not mean they will automatically give you a loan.
In some instances, like with auto loans, even though they retain the ownership of the auto, should you default, they will not necessarily be able to get all their money back. This is because the value of the auto will go down with time and will not be worth as much as it was when you bought it.
A secured loan may be your best option, but it is wise to keep in mind that you still must qualify, even for 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 things financial.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=140183
*********************** ARTICLE END ***********************
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Message delivered directly to members of the group:
publish-the...@googlegroups.com
*****************************************************************
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=140183
- 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=140183
- 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 - The Facts And The Basics
Author: James Copper
Word Count: 576
Article URL: http://www.isnare.com/?aid=140183&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=140183
Easy Publish Tool: http://www.isnare.com/html.php?aid=140183
*********************** ARTICLE START ***********************
Credit can be confusing. There are many different types of credit and understanding them before borrowing is important. Secured credit is one of the most popular types of credit and usually the easiest to get. Secured credit is when you place an asset up as collateral for the loan. Basically, if you default on the loan the lender takes ownership of whatever asset you used as collateral.
Secured loans can be closed end or open end. Closed end loans are usually just called a loan. With this type of secured loan the collateral is usually what you are getting the loan to buy and the lender holds ownership over it until the loan is completely paid.
Some examples are auto loans and home loans, where the lender is the owner of the auto or home until it is fully paid off. An open end secured loan is often called a line of credit. This type of loan is secured with a deposit of either cash or an asset. An example is a home equity line of credit where you use the equity in your home to get a loan.
The difference between the two types of secured loans is really in the details. A closed end loan is usually the only way to buy very expensive items, like a home. The bank is investing a large amount of money and by retaining ownership of the home they are guaranteed to be able to recover at least part of their investment should you default on the loan.
An open end secured loan is a common option for people who are having credit troubles. Many credit card companies offer special cards that require a deposit. In this case the credit card company is guaranteeing they will get their money should you default.
The basic idea of a secured loan is for the lender to protect themselves. Even for people with excellent credit, large loans are a risk to the lender. By having that security of a deposit or asset the lender is guaranteeing that they will not lose everything should you end up not paying the loan. Secured loans are common place in the world of home ownership.
Almost every home owner at least starts out with a secured loan, called a mortgage. As mentioned, credit card companies are developing cards to help those with less than perfect credit get their credit in order. These secured cards are becoming a great option for those wanting to rebuild their credit.
Secured loans are often the easiest loans to get because of the fact the lender has something to recover should you default. Lenders are still going to be picky, though. They will still check your finances and your credit. Even though they have that deposit or asset, does not mean they will automatically give you a loan.
In some instances, like with auto loans, even though they retain the ownership of the auto, should you default, they will not necessarily be able to get all their money back. This is because the value of the auto will go down with time and will not be worth as much as it was when you bought it.
A secured loan may be your best option, but it is wise to keep in mind that you still must qualify, even for 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 things financial.
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=140183
*********************** 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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