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