What is Secured Loan?
What exactly is a “secured loan”? A secured loan is a loan secured on your property. The secured loan provides some form of security or collateral, regardless of whether it is mortgaged or owned outright. You can often borrow larger amounts with loans secured on property potentially up to 500,000. Cheap secured loans have interest rates that are normally lower than with an unsecured loan because of the lower risk to the lender. This is the reward the lender will give you for the security that you give them. An unsecured loan simply means that there is no “security” for the lender as in the case with a secured loan, and this therefore means a higher risk for the lender. An unsecured loan therefore relies only on your previous credit history to asses if you are likely to repay the loan.
Secured loan lenders will look at this but also look at the amount of security or equity in your home. This means that they are usually a lot more flexible in their underwriting criteria. Therefore you are more likely to be accepted for a secured loan if you have had previous credit problems or are not the conventional applicant e g you...
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