Tag Archives: secured loan
Introduction to Simple Pathway for Secured Loans
Secured loans are backed by some asset of the borrower as security. The duration of a Secured Loan can be just as long-term as most of the mortgage deals in the market. The amount of loan depends on the assets you are putting up. Secured loans can be taken to set up a new business where you are sure that you will be able to maintain a flow of the monthly installments.
The installments of secured loans can last up to three decades. The interest rates of secured loans are very low. Before you decide to go for a secured loan, be absolutely sure that you will be able to handle the repayments, on time and in full.
Loans secured against property that is already mortgaged are known as second charges, whereas loans secured against a property owned outright with no existing mortgage in place are known as first charges. You can be asked to pay a penalty incase you end up paying your loan earlier than the due time. This has to be checked in the policy of the lender.
Secured loans are much easier to obtain than unsecured loans. There is because there is a sense of security by the asset kept with the lender. In case the borrower is unable to pay, the assets form a protection for the amount lent by the lender. You need to be employed before taking secured loan to pay your monthly installments. They are also useful for larger amounts or where the applicant requires a longer repayment period.
Lenders charge interest on the amount you borrow, which is referred to as the A.P.R (Annual Percentage Rate). However, if you wish to shorten the payback period, you can make extra payments on the loan towards a shorter term.
Secured Loans can be taken from lending institutions either by visiting one of their branches, through a written application or through online websites. There are a lot of opportunities available on the net. However, a proper study should be done on the best deal that is being offered. It will help you to compare the A.P.Rs of different loans, as this is a good way to determine how competitive they are.
Another fact to be kept in mind is that a lender will check for previous background before accepting to give you the loan. Secured Loans are easy to get and does not require any complex procedure.
How important is payment protection for a secured loan?
Your home is one of your dearest and most treasured possessions. So, taking loans against your home is definitely to some extent putting your home at risk. But, at times, when you need money to fund major concerns, you may require hefty amounts at low rates of interest. In such cases, only a secured loan can get you what you need and that too with flexibility in repayment terms.
So, how do you ensure that any future event won’t risk your house? You may decide to be regular with your monthly loan instalments, but can you guarantee what happens in the future? Definitely not! Future is unpredictable and so; one should not take any chances, especially when it comes to your home. So, why not take a payment protection scheme on your secured loan and protect your collateral.
All secured loan lenders provide the PPI that stands for Payment Protection Insurance. To define, PPI is the credit insurance that provides life insurance that pays a lump sum towards a loan upon the death, sickness, job loss, that makes the borrower incapable of paying the loan further. Thus, PPI helps the borrower in the following ways:
A secured loan is pledged against the borrower’s home and so, he should always opt for a PPI scheme. So that in case his is unable to keep up with the payments in future, the insurer will pay the outstanding debt to the creditor. The instalments you pay regularly to the insurer will be returned to you after the maturity of the loan. In case you decide to take the insurance cover from the same lender from whom you are availing your secured loan, there is a possibility that you may be able to get a refund back of your PPI at the end of the loan tenure in case its not been used.