If you have never had the need for a personal loan, you may wonder what a secured loan is. A secured loan is a loan that has collateral standing up for the loan which ensures the lender that you will pay your payments. With a secured loan, you may have to give your car title to the lender until you finish paying the loan off. This is called a lien against your vehicle, and secures the amount of money that you borrow from the financial institution.
A secured loan normally has a lower interest rate and a longer period of time to repay the loan than an unsecured loan does. If you own property you can use that for collateral if you need a secured loan. Many people have a need for a secured loan since the lower interest rate and longer repayment period make it easier to pay back the loan.
A home loan is a type of secured loan; the lender holds the deed to the home until the last payment is made and then the homeowner will receive the deed to the property. There are varying interest rates for secured loans so it is a good idea to shop around and get the best interest rate and terms that you can.
A new car loan is a secured loan also. While the buyer is making payments the financial institution will keep the title to the car. After it is paid for, the owner of the car will receive the title and then be able to sell trade or keep the car if they wish. A secured loan is a necessity for most people who want to buy a home or a new car. You can also get a secured personal loan if that is what you need money for. Secured loans can help build your credit history while helping you obtain the things in life that you want and need.
What Is A Secured Loan?
Posted - 02 Nov 2009 : 12:57:32 AM
