Essentials of Borrowing
Secured Personal Loans – What you need to know about?
Each one of us needs money to fulfill our personal needs. It could be to buy a dream car or to go out for a luxurious holiday. Do you know you can use equity in your home to get a loan? Yes, it’s true. Secured personal loans are tailored to help you meet your individual needs and desires by making your home work for you. Let me first explain, the word “equity”. Equity is defined as the difference between the price for which a property could be sold and the total debts registered against it.
Secured personal loan is a convenient way of borrowing large sums of money, with respect to equity in the home. Secured personal loans are available upon one’s property. Secured personal loans can be used to consolidate debts, which will help in managing debts effectively. Secured personal loans can also be used to make home improvements or for any other personal purpose. It solely depends on the borrower, how he/she decides to spend the loan amount.
Borrowing limit for a secured personal loan ranges from £5,000 to £75,000, although some lenders will consider offering upto £100,000. Secured personal loan is a simple method to generate extra cash. You can get a secured personal loan up to 125% of the value of your property. The secured personal loan repayment period may vary from 5 to 25 years, depending on how much you can afford as your monthly payments. Secured personal loan also offers convenience to repay the loan amount, as you desire with flexible repayment terms. The main benefit of a secured personal loan is that they are offered at cheaper interest rates than unsecured personal loans. The cheaper interest rate reflects the reduced risk involved for a lender in providing a secured loan. Lower interest rate helps in saving your hard earned money that can be put to other important uses. The interest charge on a loan is expressed as APR (Annual Percentage Rate). APR for a secured personal loan depends on the equity in the property and on one’s personal circumstances, for example any adverse credit.
Approval for secured personal loans tends to be easier than for unsecured personal loans as it is secured by borrower’s property. Thus, the lender is on the safer side. One can avail the benefits of a secured personal loan only if he or she owns a property. Homeowners with bad credit history or poor credit score can also enjoy the benefits of secured personal loan. Various banks, financial institutions and even online lenders provide secured personal loans. Do not rush! Shop around, collect loan quote from various secured personal loan lenders. Majority of the lenders give free loan quotes, but few lenders may charge nominal fees for it. Compare the loans quotes and look for the one that you find the best, matching your expectations. Secured personal loans work as a source of financing expenses of the homeowners. It gives an opportunity to homeowners to make use of the equity in their home.
Secured personal loans are offered at a cheaper rate of interest as it is secured against the property of the borrower.
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