Saturday, February 23, 2008

Secured Loans

Secured Loans are loans which requires some asset (e.g. a car or property) from the borrower as collateral in which it allows the creditor to take the property in the event that the debt is not properly repaid. In exchange, the creditor may offer a loan with attractive interest rates and extended repayment periods for the secured debt than those of the unsecured ones. Generally, the law that allows for secured loans will provide the procedure of public auction whereby the property may be sold at public auctions or other means of sale. By extension, the law also gives the borrower the right to redeem the property by arranging a late payment for the debt but keep the property. This is the reason why it is wise to always keep communications line open with the financial institution or company that we are dealing with.

Secured loans can be acquired for more long term purposes such as renovating your homes, paying for a wedding or other special occasions, taking your dream holiday of a lifetime or to buy a new car. Care is needed when one is thinking of purchasing a new car. Think too whether you are really paying for the car per se or are you paying for the alloy wheels, cruise control or a DVD player
as these items adds up to the total loan you may need to pay for. The suggestion is to shop around for the best deal to finance your car to avoid paying over the odds. You can read the news item here.

1 comment:

  1. I weighed up the pros and cons of a secured loan against an unsecured one. I checked out eComparison and other price comparison sites to help me decide. I went for a secured loan due to lower repayments even though my home could be at risk.