Secured loans are often better loan options
Posted by vijayvinson on February 26th, 2013
Many people, when they think of loans, can only think of personal loans. But have you considered the present financial market scenario? The banks are not doing well and they have become extremely tight fisted when it comes to approving and disbursing loans. Personal loans are unsecured loans and they are much difficult to get than secured loans. Banks today go through all kinds of checks before they approve someone’s personal loan application. Even getting a secured loan from a bank has become extremely difficult now. Thus more and more people are now turning towards private lenders for getting loans. Is this harmful? Well it depends on who the lender is.
If you have been looking for loans then you would know what a secured loan is. Secured loans are those loans where you need to offer some kind of collateral. It is the opposite of an unsecured loan where you don’t need collateral – a credit card or a personal loan for example. With a loan with collateral you get some great benefits that are not available with unsecured loans.
Benefit 1 – a secured loan gets approved much faster than an unsecured loan. Since you can offer collateral against the loan the lenders don’t waste time to approve and disburse the loan.
Benefit 2 – you can get a secured loan even when you have a negative credit rating. There are many people that are facing extreme hardships due to the bad economy prevailing in the Eurozone. People have lost jobs or they have had to bear with pay cuts and this has had a direct bearing on their loan paying capacity. But many secured loans don’t consider credit ratings. The lenders only consider the collateral.
Benefit 3 – the rates of interest on secured loans is often lower than rates of interest on unsecured loans. The lenders know that they have your collateral as a fallback if you don’t pay the loan and hence they are willing to charge you less for the loan. However, you will be charged more as interest if your credit rating is very poor.
Benefit 4 – when you take a collateral loan you generally don’t become a defaulter. This is because you know that your house is the collateral for the loan and it will be repossessed if you don’t pay your loan EMI. This helps you in the long run because regular payments on collateral loans ensure that the credit ratings of individuals go up.
Who can you reach out to when you need collateral loans? Don’t worry – there are enough lenders out there that can offer you these loans on collaterals. It is just that you may want to look through the profiles of the lenders before you apply for a loan. Since the private lenders are extremely fast when it comes to approving and disbursing loans it is best to decide on the lender and then apply.
Secured loans are good for you in many ways. You can use a secured loan for any financial need but ensure you close it.
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About the Authorvijayvinson
Joined: June 1st, 2012
Articles Posted: 256
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