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