| You have probably heard the word 'secured loan', | | | | keep up your loan repayments can put your house at |
| 'second charge' or 'homeowner loan' being used | | | | risk' and 'your home is at risk if you fail to keep up your |
| especially in the world of finance. You may wonder | | | | loan repayments'. The main objective must be here to |
| exactly what is meant by these terms. Some people | | | | understand both the risks and rewards of a secured |
| think that secured loan say for the purpose of a car | | | | loan and to ensure that the repayments that you |
| purchase means that the loan is secured against the | | | | agree to are affordable. |
| car. They think that if the monthly loan repayments are | | | | Now that you understand the risks lets explore the |
| not made the car will be reposed. This is incorrect. | | | | rewards and opportunities that a secured loan can |
| What is conventionally meant by the term secured | | | | offer. As you are securing your property as a |
| loan is that the loan is secured against your property | | | | guarantee that you will repay the loan and make your |
| or rather the equity in your property. This means that if | | | | monthly repayments in return the secured loan lenders |
| you do not keep up your monthly loan repayments | | | | tend to offer you a very good overall deal. The |
| your property can be reposed and sold in order for the | | | | interest rates on secured loans can often be lower |
| lender to recover the debt. It works in exactly the | | | | than personal loans or unsecured loans or indeed |
| same way as a mortgage in this sense. | | | | credit cards or hire purchase agreements. Secured |
| However, in this event your mortgage company will | | | | loans are often offered with lower fees if not no fees |
| always have first right to the property to reclaim their | | | | at all. Secured loans can be offered over a longer |
| debt and what is left the secured loan company can | | | | term to make your repayment even lower and |
| access to recover their losses from your unpaid debt. | | | | certainly more affordable for you. |
| This is because your mortgage company will have first | | | | The amount you can borrow can be larger with some |
| charge and then the secured loan company will have | | | | secured loan lenders lending in excess of |
| the second charge registered with the land registry. | | | | £100,000 in any one transaction. Therefore |
| Don't let this scare you as it is unusual for matters to | | | | secured loans are often more suitable for large |
| go this far. Secured loan companies work hard to | | | | purchases such as holiday homes, extensions, home |
| ensure through calculations and underwriting criteria to | | | | improvements as well as consolidating all your existing |
| ensure that the loan is affordable for you. They also | | | | debt into one manageable monthly repayment. This |
| provide payment protection insurance so that the | | | | could give you the fresh start that you need. Secured |
| repayments will be made for you in the event of | | | | loans can be used for almost any purpose. Traditional |
| unforeseen circumstances like redundancy, illness or | | | | and common uses for the secured loan include debt |
| even death. | | | | consolidation, refinancing debts, home improvements, |
| This is why it is very important to consider payment | | | | car purchases, weddings to even once in a lifetime |
| protection on your secured loan. Do however, be | | | | holidays and cosmetic surgery. |
| aware of the risks as this is why the warning 'failure to | | | | |