Are Secured Loans The Sensible Option?
Secured loans maybe easier and faster to obtain than many other
loans, but there are a number of potential dangers with getting
secured loans. If you are in need of a loan, but are unsure if
a secured loan is the right way to go, then this article can
help you. Knowing more about secured loans and their dangers
will help you to decide if secured loans are the sensible
What are secured loans?
Secured loans are loans that are granted because you put up
some form of security behind the credit, usually in the form of
your house. Amounts usually range from between £3000 and £50000,
and repayment terms range from 3 to 25 years. The amount that
you can borrow and the interest you pay will depend on how much
equity you have in your property, which is the amount you have
already paid towards your property’s value.
Are there any advantages?
There are many advantages to secured loans. One such advantage
is that you can have the loan approved much more easily than
other loans, especially if you have poor credit. This is
because you are providing the lender with security in the form
of your property should you not be able to make repayments.
Secured loans also allow you to borrow more money over a longer
period of time than you would be able to do with unsecured
personal loans. If you know that you can make the repayments,
then a secured loan will give you more favourable terms, which
is always the aim when taking out any form of credit.
So what are the problems?
Despite their advantages, there are also many dangers with
secured loans, most notably the danger of losing your home. If
you cannot repay the loan, then the lender can recover the loan
amount through the sale of your property. Although you may be
able to make the repayments right now, if you become unemployed
or your income decreases, then you may end up with serious
financial problems. If you can, it may be better to get an
unsecured loan, credit card or remortgage than to secure credit
against your property. Financially overstretching yourself will
lead problems, so it is important that you think carefully
before taking out a secured loan.
Are they worth it?
Knowing whether or not you should get a secured loan really
depends upon your situation. Secured loans are most suitable
for debt consolidation or for making home improvements. They
are also the best source of finance for people with poor
credit. However, in most cases secured loans should only be
used as a last resort, and other types of loans should be
reviewed first to see if they could meet your needs. Whatever
your situation, you should think carefully about your ability
to repay the loan. If you do this, then using a secured loan
will be much less problematic and will give you the credit that
About The Author: Peter Kenny is a writer for creditcards-gb
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