Why Choose a Secured Loan?

What makes a secured loan better than one of the other types available? Why would anyone in their right mind put up their home as collateral?

The fact is, secured loans are seen as less of a risk by lenders than unsecured loans. This makes them easier to get approval for if you have a less than perfect credit history, and because you have your home as security some lenders also offer a lower APR, and agree to repayment terms over a longer period of time – sometimes up to 25 years.

You can also get secured loans for larger amounts depending on your circumstances, so you can use the money for bigger things – renovations, a new car, or the holiday of a lifetime.

It's worth shopping around for a secured loan. Your usual high street banks may offer them, and this is as good a place as any to start looking, but don't take their first offer – check several companies on the internet to see what their rates are – especially if you have bad credit. You may find yourself paying a higher interest rate if this is the case, but there are loan companies that cater for those with a bad credit history.

The only major criteria for obtaining secured loans is that you must be a homeowner. Because the loan limit is calculated by the amount of equity in your home – which is the amount you have already paid off your mortgage – this is what gives the loan the security. If you take out secured loans and do not keep up the repayments, the lender has the legal right to repossess your home to absolve your debt.

Source:http://www.articlesbase.com/loans-articles/
why-choose-a-secured-loan-278943.html