A secured loan is applicable widely. It can be taken for a number of purposes from house improvements, medical purposes to wedding ceremonies. And the best part is that even a person with bad credit can apply for secured loans.
A secured loan is a loan that is secured by a collateral. A collateral can be any asset of value. The asset has to be handed over to the lender if the borrower is not able to repay the loan amount. The collateral is an assurance to the lender that he won’t lose all his money in case the borrower fails to pay the loan money. In that case, the lender can take the asset, sell it and get his money back. This is a very safe approach of getting a loan as there is no fear of any type of legal action by the lender. The worst that can happen is that the borrower may lose his asset.
Most often it is the lender, who benefits from a secured loan, as the amount lent by the lender is generally less than the value of the asset. Also, there may be heavy discounts on some assets. For example, only 50% of the borrower’s investment portfolio might be recognized by the lender for a collateral loan. This improves their chances of getting all their money back if the investments lose value somehow.
If the assets lose value for any reason, the borrower might have to pledge more assets to keep the collateral loan. Likewise, the borrower may be responsible for the full amount of his collateral loan, even if the bank takes all his assets and sells them for less than the amount owed.
Also, longer the time period of repayment, higher is the rate of interest charged. Though, the amount of monthly repayments can be decreased in this way but the interest rates increase. Early redemption penalties may be charged by some secured loan lenders. These penalties are charged to penalize those who can repay early because the lender is missing out on a sizeable chunk of interest.
The repayment terms of secured loans are more than the terms of an unsecured loan. Some may be even up to twenty years. The interest on secured loans is often variable and can go up or down according to the base rate and the terms of the lender. This makes them a variable rate debt. What might sound like an attractive rate today may not be so attractive in five or ten years' time.
My experience working with Mr Pedro ( A Loan Officer) was a pleasure. He was completely upfront about the costs and whether the deal made sense financially. In fact, when I explained my situation, he advised me not to refinance unless the current terms improved even though it cost him business. When he later contacted me about a better deal, I jumped at it because he had earned my trust. "Definitely made me feel confident that I was working with a great loan company / great business person who knew his worth of business lines.
ReplyDeleteI will advies anyone here looking for any kind of loan to contact Mr Pedro because he and his company helped me with a loan at the rate 2% which was very impressive.
I had Mr Pedro contact Office Email on .... pedroloanss@gmail.com